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Daily Blog - Tiger Software

               September 14, 2007
Revisited 1/27/2012 after 4x increase

Clinical Data (CLDA) 
   A Perfect TigerSoft Biotech Play.
   Look at All The Insider Buying.

    How An Investor Might Better
    Evaluate Such A Biotech Company


William Schmidt, - Tiger Software's Creator
      (C) 2007 William Schmidt, Ph. D.  - All Rights Reserved. 

      No reproductions of this blog or quoting from it
      without explicit written consent by its author is permitted.

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            Clinical Data (CLDA),  A Perfect TigerSoft Biotech Play
          Look at All The Insider Buying.
  It took some time, however.

            But it took riding out the 2007-2009 bear market or coming back into
            stock when a new high is made confirming the wisdom of the earlier insider buying.

CLDA.GIF (28569 bytes)

                                                    2007-2009 Bear Market Interrupted Things:
                                                           CLDA is now in 2012 over $100
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          How An Investor Might Better Evaluate Such A Biotech Company.

             It Looks Like A Buy Now under $35... We'll follow it here regularly and see how it plays out.

First, see how CLDA's stock was marked up for its July 2007 Public Offering of
             3,450,000 Shares, yielding $71.5 million for the company.  Next, Clinical Data, Inc. announced
             after its public offering closed on July 23, 2007, that that the underwriters, Bear Stearns and Lazard
             Capital Markets, had exercised an over allotment option to purchase an additional 450,000 shares
             of common stock from the Company.   Not surprisingly, it is Bear Stearns that hosted its 20th Annual
             Health Care a week ago which featured Clinical Data.  And to promote the stock some more,
             it has announced a 3:2 stock split. It would be surprising to see this stock not at least
             double from the $22 offering price, given that it seems tightly held (high and steady blue
             Accumulation readings are seen in its Tiger chart below) and the company is certainly being
             actively promoted to investors.  Its story, as you will see, does looks good.

                          CLDA's  New Drug: Vilazodone

As a dual serotonergic antidepressant in pivotal Phase III clinical trials.   Clinical Data is also
            developing a companion bio-marker which will act as a genetic-based, predictive screening tool
            to guide its use as a antidepressant.  This last point is important because it is believed that some
            people are genetically predisposed to depression.  Identifying these genetic bio-markers might
            help predict their response to specific anti-depressants.


                                        How To Evaluate A Biotech with A Dug In Trials    
           Usually when a trial's end-points are met, as was just announced, there is a very good chance
           for FDA approval.  That would seem to be true here.  But when?  The next questions are, is the
           study to be trusted,   when will the FDA approve it, how big a market will it serve, how much of the
           revenue might this small company get, how much competition is out there?   These are some of the
           standard questions that can be applied to any drug in trials.
But is the drug really effective?    The extent to which the benefits of this drug in trial is due to the
is still unknown. This is because a strong   ‘placebo’ effect in clinical trials for depression
           is often very significant.   A 2002 meta-analysis of 47 clinical studies comparing antidepressants against
           placebo showed that a significant proportion of patients on antidepressant therapies are benefiting not
           from the drug but from a placebo effect. To guard against this, the just finished study had 410 adult
           patients with major depressive disorders were enrolled in a randomized,, double-blind, placebo-controlled,
           ten-site trial. 

          1.    How ethical is the company's management?  Everyone remembers how Imclone lost 90% of
                  its value because of the insider selling by Sam Waksal-the-Weasel, its then CEO.  There is
                  good news here with CLDA.  Its CEO and major share holder, Randal Kirk, is already is a
                 billionaire and made his fortune in biotechs.  And he recently paid  $22 a share for a $45 million
                  dollar stake in the company. The stock is 50% higher now.

     wpeC.jpg (4259 bytes)   
     Randal Kirk - CEO of CLDA.  64 yrs. old. 
     A lawyer who has been in the health care business 20 years.  Background.

2. Does the company have the cash to continue operations long enough to see if the FDA
           will approve the drug?
  Evan Ballantyne, Senior Vice President and CFO of Clinical Data,
           remarked, "The completion of our public offering in July (2007) which raised $71.5 million
          in net proceeds for Clinical Data, provides us with the necessary capital to fund our operations
          for at least the next 12 to 24 months and pursue acquisition opportunities.

. Is the drug safe?  The Clinical Trials said it was as safe as currently used anti-depressants.
         This is not saying a lot.  The side effects of these drugs is the main reason people stop taking
         these drugs. There is also "an established direct link between suicide and violent behavior and
         the use of the alternative SSRI anti-depressants."
4. Will the FDA approve it? The company intends to proceed with a second Phase III Trial,
         despite the statically significant success in the just completed trial.  This would delay FDA
         approval by at least a year.  The company seems to understand quite well that the FDA
         regularly shoots down the first application, just to prove their power and justify their
         existence, I suppose, though they would say it is to be sure that all the relevant facets of the
         drug's safety and efficacy emerge.    So, FDA approval is a year away...

5. How big a market is there? Currently first-line treatment options for depression are
           hampered by an overall poor response, less than 50%.  So, it is important that  "
           has a novel mechanism of action." 
The Surgeon General’s Office estimates that 5.3% of American
           adults, approximately 17 million people, suffer from depressive illness.

         6. How much revenue might this small company get? Clinical Data acquired the   worldwide
         rights to develop and commercialize Vilazodone from Merck KGaA of Darmstadt, Germany in September  2004.

         The treatment of this illness generated sales of more than $9.75billion in antidepressants in 2004.
7. How big and close is the competition?  No information.

   ( See: http://www.clda.com/uploads/CLDA%20Vilazodone%20Press%20Release%2003_26_07.pdf )


                                                          Looking Back A Year

                    A year ago the stock was languishing at 15, just at its flat 50-day ma.  But it did
             show rising signs of  insider Buying, defined by us as an Accumulation Index current
             value above .45 with a rising set of  moving averages.  Note how in December 2006,
             that TigerSoft index jumped above the second dotted line above the base line.  That
             dotted line represents .50.  

CLDA 2006.  Note rising Accumulation Index/

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