Lioness Associates, Inc.

Economic & Corporate Risk/Yield Reports

November 18, 2012  -- Pharmacyclics Update to Risk/Yield for 2012

Refer to Reading Graphs for information on interpretation of the graphs.


June 25, 2012  -- Pharmacyclics Risk/Yield for 2012

Early in June an analyst predicted (see article) that one of the drugs in the Pharmacyclics pipeline could eventually bring in as much as 2.7 billion by 2024 and as a result of this -- set a target price of $80.00 a share for this stock.

Since that time, Pharmacyclics stock price has been moving steadily towards that target, so much so that there are reminders of the move that Apple made after one analyst set a target of $1000 for it's stock (see article).  As Apple stock has demonstrated since April of 2012, sometimes there are pauses along the way to the target price and maybe, the target doesn't get reached and then again, maybe it does.

In this case, we have graphs from both the IPO and the Incorporation of this company.  The IPO charts reflect the "public" company while the Incorporation chart reflects the "private company". 

The PCYC IPO Delta Core/Transient 2012 graph shows a significant transient (green line) momentum into risk during the June period which coincided with a slight dip of the stock price  - note, this was before the analyst call of a price target of $80. The core (black line) has been in the risk area since March of 2012 and remains there until late in the 2012 year.  The PCYC IPO Risk/Yield 2012 graph also has a heavy presence in Risk during the 2012 year. 

With the IPO information appearing contrary to what was happening with the market view of the company, the Incorporation graphs for this company are also being shown.  In this case, the period starting in June has momentum into yield until July and at that time momentum decreases and hits equilibrium but, does not appear to have momentum into the risk area.  There is also a nice transient peak into yield around the November 2012 period.  The PCYC Incorporation Risk/Yield 2012 graph has a better view of the peak at the July 2012 period and while there are some risk factors, they appear to be negligible.

This drug is still in trials and the differing results from the graphs indicates that the "story" is indeed different from inside the company as a stakeholder versus outside the company as an investor.  As an outside investor there is a lack of transparency with the drug trial process and this may cause variations in the market perceived price if fear (or lack of news - good or bad) takes over while insiders may have a better measure of the true worth and are able to stay the course. 

The Incorporation graphs also indicate another possible core momentum into yield late in the 2012 year but, if there is a peak, it would be in 2013.

We'll come back and update in the September 2012 timeframe.

   PCYC IPO Delta Core/Transient 2012 graph

                 PCYC IPO Risk/Yield 2012 graph

             PCYC Incorporation Delta Core/Transient 2012 graph

        PCYC Incorporation Risk/Yield 2012 graph

Disclosure as of 6/25/2012 - Pharmacyclics (PCYC) is not part of our portfolio at this time.