$TAK - a small PDUFA play for Nov 21-23

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This is my first post and my first Analysis of a stock, so please, don’t be sparing when picking it apart. It’s the only way I’ll learn!

  • Takeda Pharmaceutical: Japanese pharmaceutical company. It’s fairly large-cap (54 billion) with lots of drugs in its pipeline, and currently trading around $14.40. It doesn’t move much day-to-day (or week-to-week), but it did have a drop on October 6th from a hovering point of $17 to a new hovering point of $14 as news dropped that it was suspending two drug trials which led to analyst downgrades.

  • Catalyst: PDUFA coming up on either November 21st or 23rd for their unrelated drug Maribavir, which is used “for the treatment of post-transplant recipients with Cytomegalovirus infection in those resistant and/or refractory to prior anti-CMV treatment”. Interestingly, on October 7th, the day after their bad news day, they had a news release that the FDA Antimicrobial Drugs Advisory Committee voted unanimously to recommend the drug for such uses, which would seem to point to a favorable PDUFA decision.

  • GlobalData forecast Maribavir (trade name :Camvia) to have sales of $200 million from 2018-2023, but that’s an old forecast from 2018. An analysis from 2019 from the same group estimated it as only having global sales of $7m by 2027. An article from this Fall says that Takeda is “targeting collective peak sales of up to $1.4 billion” from maribavir and a lung cancer drug called mobovertinib. Not sure why the huge discrepancy between forecasts.
    In any event, it is an orphan drug that would be the first and only drug of its kind to treat this particular infection in these specific cases.

  • There was a post on WSB from February of 2021 about TAK in relation to Cathie Wood purchasing a buttload of the stock. The OP was trying to figure out why she would pick up over 21 million shares, and thought it could either be because it was an easy and safe spot for her to park cash that she doesn’t know what to do with since the price rarely fluctuates, or because she was expecting it to do bullish things. Well, the bullish things that he posited 9 months ago haven’t come to fruition, and I don’t expect this PDUFA to be that catalyst. Oh, and Cathie continues to scoop up shares of this stock.

In 2021, the only real movement for TAK was related to it being the partner of Moderna in getting MRNA’s covid vaccinations into Japan. There were a few scattered bumps related to phases of trials being reported and partnerships being entered, but nothing related to an FDA approval of their own drug (and Maribavir is only their drug because they bought the company that had bought it from another company which bought it from another company…this drug has a history!).

As for what I think might happen if it gets approval (and I think it will because of the Advisory Committee’s recommendation): it bumps up in price $1.50 to $16 if it’s lucky. Pie in the sky, it gets back to that $17 level it held for most of the Summer. Not gonna happen, but it did have a high of close to $20 in March when news about the Moderna vaccine in Japan was rolling.

Dec option at $15 strike is currently $0.20. Here are prices on Nov 24th (last day of trading before Thanksgiving) according to option strat:

  • $15 price it’s worth 0.36
  • $15.50, it’s worth 0.67
  • $16, it’s worth $1.07
  • $17, it’s worth $2.01

Dec option at $16 strike is currently $0.10:

  • $15 price it’s worth 0.14
  • $15.50, it’s worth 0.28
  • $16, it’s worth $0,50
  • $17, it’s worth $1.16

January options have a lot more open interest.
Jan $15 strike is $0.35:

  • $15 price it’s worth 0.55
  • $15.50, it’s worth 0.85
  • $16, it’s worth $1.21
  • $17, it’s worth $2.06

Jan $16 strike currently worth $0.13:

  • $15 price it’s worth 0.22
  • $15.50, it’s worth 0.38
  • $16, it’s worth $0.61
  • $17, it’s worth $1.25

Finally, for completeness sake, from the company profile: “Takeda Pharmaceutical Company Limited is a Japan-based company mainly engaged in the pharmaceutical business. The Company is engaged in the research, development, manufacture and sale of pharmaceutical products, General medical products, quasi drugs and healthcare products in Japan and overseas. The Company’s research and development functions are concentrated in four areas of oncology (cancer), digestive system diseases, rare diseases and neurology (neuropsychiatric diseases), as well as two business units of plasma fractionation products and vaccines. The Company is engaged in the improvement of pipelines at research and development centers located mainly in Japan and the United States.”

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Nice DD! I think PDUFA is def Nov 23:

https://www.businesswire.com/news/home/20211027006259/en/Takeda-Delivers-Strong-H1-FY2021-Results-Further-Growth-Momentum-Expected-Through-Fiscal-Year-End-Driven-by-14-Global-Brands

I think this could easy money. Theta decay will make those options a little cheaper even next week. I wish there would have been a little more excitement over the unanimous committee recommendation, but it could just be buyers wanting to make sure it gets approved and on time (FDA has delayed a few PDUFAs lately due to backlog).

That being said, I think I may have to play this. Not sure how much I’ll want to park in it, depends on how next week goes.

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Nice DD, reminds me of the TRIT play but less volatile (less upside but less downside perhaps)

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A dollar move could make some good money, what scares me is there always seems to be delays on pharma. I’m going to pick up a tiny position probably on thusday or friday

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Good luck. Bad news seems to move the ticker further down in comparison to good news moving the price up. Be careful with this one but it could be a big payout for you.

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Thanks for the feedback y’all. I have a small option position that I will slowly shed if the underlying price or IV elevates the option price before the 24th. I hope I can go to a half position by the 24th to play the actual news if there is any.

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A heads up (and sorry I didn’t catch this earlier): Cathie Wood has actually been shedding shares since mid October, according to Benzinga news posts that track her moves. Not that I’m playing according to her stock decisions, but it might account for certain large volume spikes if she’s dumping over 100k shares on some days.

Also, I see that the volume and OI on the 14, 15, and 16 calls for December have increased dramatically over the past two days. I want to let you know that I am no financial wizard, and please play at your own risk with small positions. We really have no idea if the PDUFA will go through, and how the stock will react if it does. The stock price and the IV fluctation is driving me batty while I wait for next week to roll around.

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Decided to enter a position today, a mix of Dec 17 14c and 15c. IV is still really low and the drop in share price since last week made them inexpensive. Hoping the PDUFA comes through tomorrow!

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What are the chances the pdufa comes tomorrow? Thinking about doing 14 and 15 calls as well.

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Are you asking about any kind of PDUFA decision coming tomorrow, or specifically a positive one? I haven’t been keeping track of PDUFAs for very long, but from what I’ve seen, PDUFA decisions, whether they are approvals or denials/CRL or extensions, don’t miss the scheduled date. Sometimes they come early, like it did for BMRN on Friday, but I haven’t seen any just evaporate.

So, yeah, I expect a PDUFA decision tomorrow. I’m just hoping it’s an approval, and that there is volume and movement to make the options go. The $15 calls can be had for 10 cents when IV fluctuates.

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They will get some type of communication by tomorrow. Either approval, denial, or extension. There have been some recently that have been pushed out by the FDA citing a backlog

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I’m thinking it may be a few more hours before we see anything on this. 2AM in Japan and FDA sends the communication directly to the company

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I’m patiently waiting for the fda results

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same here

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Wait no more!

https://www.fda.gov/news-events/press-announcements/fda-approves-first-treatment-common-type-post-transplant-infection-resistant-other-drugs

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They approved? Cool

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Looks approved. Hoping for some movement today.

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Not the jump any of us were hoping for. I think this may be a sell off of those that were expecting a big jump as well. At least the earliest calls are for Dec 17, hopefully we will get an upward trend until then.

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How does it get approved and nobody reacts to it…

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I think the problem here is the market cap is way too big. This drug getting approved means nothing in the grand scheme of things.