Agenus Call Luck, Alexion analysis

I had a bit of luck with my Agenus positive call earlier this week, but first a link to my article Seeking Alpha published yesterday:

Alexion's Rare Disease Model Analyzed

My article on Agenus might seem prescient:

Agenus: Herpes Competition And Cancer Checkpoint Prospects

You might even think my articles can move a small-cap stock. As I write Agenus is at $4.04 per share. I was near $3.12 when my article came out on the 11th around noon.

In fact Agenus and GlaxoSmithKline (GSK's) announced good data on GSK's shingles vaccine, on the 18th. Agenus contributed an adjuvant to the vaccine (which makes it work better), and is entitled to a milestone payment (amount not stated) and royalties when the vaccine is commercialized. Keep in mind that there is not yet regulatory approval and royalties for an adjuvant are not in the same magnitude as if GSK had licensed the entire vaccine from Agenus.

Still, this is Agenus's second time to have approvable results in a partnership with its QS-21 Stimulon. The other is also with GSK, for malaria.

Some of the vaccines using IP licensed from Agenus have failed. As can be expected, the price of Agenus stock goes down when a failure is announced, and up when good trial results come in. Given that today's vaccines are for diseases that are typically hard to vaccinate for (else they would have had working vaccines by the 1960's), any company working on a variety of vaccines is going to have some failures. Any success is a breakthrough.

The fact that Agenus now has 2 working vaccines provides proof of concept. Read my article to see just how broad Agenus's platform is.

I own shares of Agenus but not of GSK, though I think GSK is a good buy right now and reserve the right to buy it at any time.

On the downside Cyclacel (CYCC) announced its AML (acute myeloid leukemia) trial is unlikely to achieve statistically significant results. Nevertheless the trial will continue as there is little hope for these patients, Cyclacel's oral therapy is easy to administer and tolerate, and there is a small chance that while Sapacitabine may be no better than Dacogen in efficacy, patients may prefer it because it can be taken at home. I lost money on CYCC, but am holding onto my shares because Cyclacel also has a shot at the easier-to-treat disease myelodysplastic syndrome.

GlaxoSmithKline (GSK) and Gilead (GILD)

I remain optimistic about the stocks I invest in. I don't think the stock market is in a bubble, though a few select stocks are, but there are always a few stocks that are highly overvalued at any given time.

My article in Seeking Alpha, published today, is positive about both stocks:

Could GlaxoSmithKline Be A Better Investment than Gilead?

It does feel peculiar that Gilead Sciences has become such a large company in the past decade. But I can only think of one reason that Gilead is not already at $120 or even $140 per share: the vast amount of cash that would need to be invested to get it there. Rather than being in a bubble, in fact investors are rather restrained when it comes to the stock market. Despite federal bonds returning less than the rate of inflation, that is where the stupid money is. Stupid pension money, stupid 401k money. The foreign money in bonds may not be so stupid, given that some national bonds, for instance Germany's, return even lower rates.

Of course, if for some reason the U.S. economy should turn south later this year (perhaps a meteor will strike New York or Washington), markets will fall, and the doomsday specialists will say "I told you so."

I do believe the Federal debt is an overhang that will become an avalanche someday if taxes are not raised, and the earth's environment is in trouble, but those are long-term, not near-term problems for investors.

I currently own Gilead, but not GSK. Gilead is already over 10% of my portfolio, so I may sell some at any time, but my hope is to wait until it is at least $120 per share, and then sell as little as needed to bring it back in line with my portfolio guidelines.