Nabriva's 34% Rally

Dr. Frederick Frankenstein: Whose brain is this?

Igor: Err... Abby something...

Dr. Frederick Frankenstein: Abby who?

Igor: Abby... Normal. Yes that's it, Abby Normal!

- Mel Brookes (from Young Frankenstein)

​​The Portfolio

The portfolio is UP +16.76% YTD.

Our benchmark index, the S&P 500 is down -5.75% YTD.

Nabriva Rallies on Good News

Anytime one of my most 'unloved' stocks rallies nearly 34% in one day, I probably owe a comment. This market isn't normal, in fact the abnormal has become so common it's normal.

Nabriva Therapeutics plc (NBRV) announced today that the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) has adopted a positive opinion recommending approval of XENLETA (lefamulin) for the treatment of community-acquired pneumonia (CAP) in adults when it is considered inappropriate to use antibacterial agents that are commonly recommended for the initial treatment of CAP or when these have failed. The CHMP opinion will be reviewed by the European Commission (EC), which has the authority to approve medicines for all 28 countries of the European Union, Norway, Iceland, and Liechtenstein. A regulatory decision is anticipated during the second half of 2020.

Today’s announcement brings us one step closer to the first approval of a new class of antibiotics for patients with community-acquired pneumonia in Europe in almost 20 years,” said Jennifer Schranz, MD, Chief Medical Officer of Nabriva.

XENLETA has a novel mechanism of action and provides an urgently needed short course, empiric monotherapy treatment alternative for adult patients with CAP. We look forward to the European Commission’s decision and the opportunity to bring this important medicine to patients.”

This step forward has the potential to open a very large market for Nabriva, and provide a much needed drug for patients with CAP. To be clear, I've always been fan of the science at Nabriva, my complaint is with management's inability to execute and repeated missteps. If the science is great but the commercialization is poor, then it's just a science experiment and not an investable company. That's on me, I picked the company.

Because my issue is with management, I'm still not adding to the portfolio's position. Under better circumstances I would see the news as 'de-risking' the position and averaging down would make sense. I'll take the Missouri position, "SHOW ME"!

"Markets don't go to zero, Portfolio's do.

Buy quality, be patient...and look twice for motorcycles."

- Clay Baker

Stay Invested,

Clay Baker

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Keep Me Honest 2020

  1. Today is a good time to carefully leg into stocks again (3-20-2020).

  2. Worst Case: S&P 500 decline further to around 2,100 - 2,150 (3-28-2020).

  3. Middle Case: S&P 500 level out around 2,650 - 2,700 (3-28-2020).

  4. Best Case: YE S&P 500 eventually rise to around 3,000 - 3,200 (3-28-2020).

  5. Market bottomed March 23, 2020 at S&P 500 2,237.40 (4-17-2020).

Clay's Rules

Rule #1: Don't lose money

Rule #2: See Rule #1

Rule #3: Portfolios go to zero, markets don't, Stay Invested

Rule #4: When a good stock you own drops 10% below your cost basis, add shares

Rule #5: Bull markets aren't sustained without the Transports

Rule #6: When Forward P/E is lower than TTM P/E, expect earnings to increase

Rule #7: When an investment bank sells below book value, buy it

Rule #8: Tips are for waiters. Do your own homework.

Rule #9: Don't sell a stock because you're bored with it. Do your own homework.

Disclosure: I am personally invested long in some or all of these stocks or funds that appear in the Stay Invested portfolio and may purchase or sell shares within the next 72 hours. I am also invested in other stocks and funds that do not appear in the Stay Invested portfolio but may be mentioned or related to this article. It is not my intention to advise or encourage the purchase or sale of any security. I am invested long in these securities mentioned in this post:

ENPH, FOXF, WMT, AMZN

I am invested short in these securities mentioned in this post: GSX

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. This article is not intended to offer investing advice, guarantee 100% accurate predictions, or to be interpreted as providing a personal recommendation.

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This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice.
This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities.

© 2016 by Clay Baker all rights reserved