Rodman renshaw life sciences conference update 5 11-12


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Rodman & Renshaw presents a report in conjuction with Pharm3r about a data-mining project to crowd source opinions and in interest in new drugs on Twitter.

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Rodman renshaw life sciences conference update 5 11-12

  1. 1. Life Sciences ® CONFERENCE UPDATE Michael King, Jr. 212-430-1794 mking@rodm.comMay 11, 2012 Crowdsourcing AAN: Recap of R&R and Pharm3r Twitter SurveyWe are pleased to present the first report we are producing in conjunction with our colleagues at Pharm3r (“Farmer”).Pharm3r is a unique data-mining company that tags plain text in order to mine such disparate sources as chat boards, blogs, andTwitter feeds. Our first foray into this novel approach to crowd-sourcing opinions and views on various topics begins with the recent2012 American Academy of Neurology (AAN), which took place April 21-28 in New Orleans. While AAN deals with dozens of topics,Pharm3r gathered views on the 24 most common discussions. Relevant tweets were scanned for a predetermined list of topicsbetween April 20th and 30th. Each topic is also accompanied by a sentiment score. The frequency of discussion does not necessarilycorrelate with a positive sentiment. As can be seen in Figure 1, each category is also accompanied by a sentiment score (red, yellow,green). Sentiment scores are deduced based on text in each tweet (representative tweets are shown in Table 1). A tweet with a“neutral sentiment” might simply announce a presentation or relay specific results without intonating a positive or negative slant. Twittervolume is plotted against sentiment score in Figure 2.We view the combination of Twitter volume (number of tweets) and sentiment of those tweets as highly relevant data pointsin assessing interest in a drug within a period of time. The ability to view that interest compared to other relevant drugs at a time ofhigh interest and tweeting provide an opportunity for potential insight into clinician, patient, and investor interest. .Starting with multiple sclerosis (MS), the updated safety regulation in the US and EU spurred a significant volume of relativelynegatively tweets for Gilenya (fingolimod), while Lemtrada (alemtuzumab) and BG-12 tweets generated relatively highsentiment. Given the nature of the new recommendations for Gilenya, it is not surprising that the drug had such a relatively lowsentiment score (best seen in Figure 2.) The relative share of voice for the majority of the MS disease-modifying agents was similar,though laquinimod and betaseron were both outliers to the downside. In our view, the overwhelmingly positive sentiment (see Figure 3)of the Lemtradatweets was the most surprising observation in the MS space, given that we had felt the BG-12 and Gilenya stories haddominated the headlines. This may imply that interest in Lemtradais being overly discounted by the Street.Turning to therapies for Amyotrophic Lateral Sclerosis (ALS), CK2017357 (‘357) from Cytokinetics (CYTK, Market Outperform)bested Biogen’s dexpramipexole in both volume and sentiment. We focused our analysis of the ALS landscape on these twoagents. Despite the fast accrual of the dexpramipexole Phase III trial and what we believed to be significant interest in this molecule,‘357 from CYTK generated significantly more tweets (25x more) with a marginally better sentiment score, both on the day of itspresentation of Phase II results, as well as on April 29th, a few days after the presentation of results. We view CYTK’s performanceagainst both of these metrics as an incremental positive, despite the significant sell-off in the stock in the week following the AANconference.For a copy of the complete report from Pharm3r please contact your Rodman & Renshaw sales representative. The completereport is a forty-page powerpoint presentation comprising analysis of the twitter volume and sentiment within the MS, ALS, andParkinson’s therapeutic areas, as specified by a pre-determined database of drugs in development. We will host a conference call forthe clients of Rodman & Renshaw on Friday, May 11, at 10am. The dial-in number is 888-224-1075, conference ID 1135064. For definitions and the distribution of analyst ratings, and other disclosures, please refer to pages 7 - 8 of this report.
  2. 2. Life Sciences May 11, 2012 Table 1. Example of Tweets by Sentiment Positive Tweets Positive phase IIb data for BAF312 (siponimod) in MS #multiplesclerosis #MS #neurology #msnews #health #multscler Biogen Idec builds blockbuster case for new MS drug BG-12 New fingolimod data to be released at AAN: Results that support the efficacy and safety profile of Gilenya anti... Medical News: Parkinsons Disease Neuropsychiatric Features And Fatigue Respond To Transdermal Rotigotine Daclizumab for relapsing remitting multiple sclerosis.: CONCLUSIONS: Daclizumab is well tolerated in combination... Neutral Tweets Neurology Publishes Results From Pivotal Study of Eisais Investigational Epilepsy Treatment perampanel All about #Gilenya. Tagged on Negative Tweets Possibly had allergic reaction to Tysabri today: began with uncontrollable sneezing/red eye, & then I got hives. Then got IV Benadryl...cntd Patients Drop Natalizumab MS Drug, Face Relapse Risk - #AANAM from MedPage Today & RENSHAW EQUITY RESEARCH 2
  3. 3. Life Sciences May 11, 2012 Figure 1. AAN Summary of Tweets Source: Pharm3rRODMAN & RENSHAW EQUITY RESEARCH 3
  4. 4. Life Sciences May 11, 2012 Figure 2. Scatter plot of tweets from AAN-2012 Source: Pharm3rRODMAN & RENSHAW EQUITY RESEARCH 4
  5. 5. Life Sciences May 11, 2012 Figure 3. Sentiment across MS agents Source: Pharm3r Figure 4. Amyotrophic Lateral Sclerosis (ALS)-agent related tweets over time Source: Pharm3rRODMAN & RENSHAW EQUITY RESEARCH 5
  6. 6. Life Sciences May 11, 2012 Figure 5. Sentiment for agents targeting Amyotrophic Lateral Sclerosis (ALS) Source: Pharm3rRODMAN & RENSHAW EQUITY RESEARCH 6
  7. 7. Life Sciences May 11, 2012 RODMAN & RENSHAW RATING SYSTEM: Rodman & Renshaw employs a three tier rating system for evaluating both the potential return and risk associated with owning common equity shares of rated firms. The expected return of any given equity is measured on a RELATIVE basis of other companies in the same sector, as defined by First Call. The price objective is calculated to estimate the potential movement in price a given equity could achieve given certain targets are met over a defined time horizon. Price objectives are subject to exogenous factors including industry events and market volatility. The risk assessment evaluates the company specific risk and accounts for the following factors, maturity of market, maturity of technology, maturity of firm, cash utilization, and valuation considerations. Potential factors contributing to risk: relatively undefined market, new technologies, immature firm, high cash burn rates, intrinsic value weighted toward future earnings or events. RETURN ASSESSMENT q Market Outperform (Buy): The common stock of the company is expected to outperform a passive index comprised of all the common stock of companies within the same sector, as defined by First Call. q Market Perform (Hold): The common stock of the company is expected to mimic the performance of a passive index comprised of all the common stock of companies within the same sector, as defined by First Call. q Market Underperform (Sell): The common stock of the company is expected to underperform a passive index comprised of all the common stock of companies within the same sector, as defined by First Call. RISK ASSESSMENT q Speculative - The common stock risk level is significantly greater than market risk. The stock price of these equities is exceptionally volatile. q Aggressive - The common stock risk level is materially higher than market level risk. The stock price is typically more volatile than the general market. q Moderate - The common stock is moderately risky, or equivalent to stock market risk. The stock price volatility is typically in-line with movements in the general market. Rated Companies mentioned in this report Company Ticker R&R Rating Price Mkt Cap 12 Month ($ MM) Price Target Cytokinetics Inc. CYTK Market Outperform $0.86 $66.66 $4.00 RATING SUMMARY Distribution of Ratings Table IB Serv./Past 12 Mos Rating Count Percent Count Percent Market Outperform(MO) 74 64.35% 10 13.51% Market Perform(MP) 28 24.35% 3 10.71% Market Underperform(MU) 6 5.22% 0 0.00% Under Review(UR) 7 6.09% 2 28.57% Total 115 100% 15 100% Investment Banking Services include, but are not limited to, acting as a manager/co-manager in the underwriting or placement of securities, acting as financial advisor, and/or providing corporate finance or capital markets-related services to a company or one of its affiliates or subsidiaries within the past 12 months. ADDITIONAL DISCLOSURES Rodman & Renshaw, LLC. (the "Firm") is a member of FINRA and SIPC and a registered U.S. Broker-Dealer. ANALYST CERTIFICATION I, Michael G. King, Jr., hereby certify that the views expressed in this research report accurately reflect my personal views about the subject company(ies) and its (their) securities. None of the research analysts or the research analysts household has a financial interest in the securities of Cytokinetics Inc. (including, without limitation, any option, right, warrant, future, long or short position). As of Mar 31 2012 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Cytokinetics Inc.. Neither the research analyst nor the Firm has any material conflict of interest with Cytokinetics Inc., of which the research analystRODMAN & RENSHAW EQUITY RESEARCH 7
  8. 8. Life Sciences May 11, 2012 knows or has reason to know at the time of publication of this research report. The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services. The Firm or its affiliates did not receive compensation from Cytokinetics Inc. for any investment banking services within twelve months before, but intends to seek compensation from the companies mentioned in this report for investment banking services within three months, following publication of the research report. Neither the research analyst nor any member of the research analysts household nor the Firm serves as an officer, director or advisory board member of Cytokinetics Inc.. The Firm does make a market in Cytokinetics Inc. securities as of the date of this research report. Any opinions expressed herein are statements of our judgment as of the date of publication and are subject to change without notice. Reproduction without written permission is prohibited. The closing prices of securities mentioned in this report are as of May 16 2012. Additional information is available to clients upon written request. For complete research report on mentioned companies we cover, please call (212) 356-0500. Readers are advised that this analysis report is issued solely for informational purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy. The information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of the available data. Past performance is no guarantee of future results.RODMAN & RENSHAW EQUITY RESEARCH 8