Frequency Therapeutics — Hearing Loss Regeneration

[Zugzug]

I take my previous comment back. This post is officially the best post on Tinnitus Talk of all time.

Shut the thread down. See you all in the clinic in 2 years.

I hope it was worth it. My tinnitus and hyperacusis are spiking. The nice thing (and confirmation that I used the formula right) is that if we pull up the published figure, we can literally see the direct visual comparison between the p-values and the amount of clearance over the top dotted line.

Patient 918: Z=-1.8972, p=2*P(Z<-1.8972)= 0.0578,
which is not less than alpha (but close) so not statistically significant.

Patient 932: Z=-0.9795, p=2*P(Z<-0.9795)= 0.3273,
which is not less than alpha and not close.

Patient 919: Z=-2.1268, p=2*P(Z<-2.1268)= 0.0334,
which is less than alpha so statistically significant.

Patient 916: Z=-4.0547, p=2*P(Z<-4.0547)= 0.00005,
which is way less than alpha so very statistically significant.

Patient 936: Z=-3.9133, p=2*P(Z<-3.9133)= 0.00009,
which is way less than alpha so very statistically significant.

Patient 937: Z=-5.0387, p=2*P(Z<-5.0387)= 0.00000047,
which is way less than alpha so very statistically significant.

 

[Greg Sacramento]

We had 5 notable transactions from professional funds today - 2 buys and 3 sells.
Market makers towards end of regular hours let a 500,000 share transaction fill entirely on ASK price - a sell.

Then market makers dropped price by two dollars, but price recovered as buys limit orders were in placed. These buy limit orders should have been filled on drop and drop would had been softer.

I have no doubt that market markers for FREQ cater to funds way more than the normal.

This is the company's wish which throws a trust concern as far as I'm concerned.

 

[just1morething]

Market makers towards end of regular hours let a 500,000 share transaction fill entirely on ASK price - a sell.

Does that mean a long person got out or someone sold short? That's a huge trade. Could that be an insider? Probably illegal if it was.

 

[Chetan]

We had 5 notable transactions from professional funds today - 2 buys and 3 sells.
Market makers towards end of regular hours let a 500,000 share transaction fill entirely on ASK price - a sell.

Then market makers dropped price by two dollars, but price recovered as buys limit orders were in placed. These buy limit orders should have been filled on drop and drop would had been softer.

I have no doubt that market markers for FREQ cater to funds way more than the normal.

This is the company's wish which throws a trust concern as far as I'm concerned.

I'm not sure you know what you are talking about. If an order fills on the ask price, that is de facto a buy, not a sell...

There was no 500,000 share transaction in regular hours. There was a lot of volume the last 15 minutes which totaled around 530,000 volume, through thousands of shares being bought up. The reason for today's drop is because when ETFs rebalance, they do this not by buying on open market. They use market makers, third parties who act as middle men that provide liquidity to brokerages as well as ETFs and funds. When you want to buy 1-2% of shares outstanding, how do you buy this in a day? You can't is the short answer, not without spiking the price massively. Instead they basically use the market maker who shorts the stock on the open market.

A short sell is when you take a negative shares position and sell the share to someone. Usually you are borrowing someone else's share to have the right to short (i.e. you are being lent someone else's share and owe them an obligation). When you sell that short share, the market maker is filling the buy order for an ETF or institute. Since this is open market, it reflects downward sell pressure even though the intention is to buy shares.

This results in increased short interest until the market maker closes their short position. In return for filling these orders, market makers are given liquidity coupons, a bonus for providing the order liquidity. On top of that they can make money on the margin between their short sell and closing that short position later.

Read this to learn more. Usually this happens in dark pools but on ETF balancing day it's in open market.

For folks thinking news leaked. No, news did not leak. And in fact at end of day market on close was about 633,000 as a buy order indicating clearly they were buying all day long. Same exact thing happens every 3 months third week of the third month of the quarter. 3/18, 6/18, 9/18, 12/18. You can look on a chart, same thing happened in December with huge volume and massive drop even though ETFs like XBI were actually buying 1% of FREQ shares outstanding (1/3 the December volume)

I can confirm this as factual Monday when XBI updates holdings as of end of Friday.

If you look at broader market across biotechs you see the same thing. Either they were allowed to fly high so ETFs can dump them at a higher price, or to have short pressure so ETFs can load them at a lower price.

That's it. No news leak. If they wanted to bury bad news, Friday is the day after hours to do so.

 

[Chetan]

Okay, here is my final deep dive post. I end up computing the 2-sided p-values for all 6 eligible FX-322 participants on the WR test-retest. Recall that 4/6 are statistically significant (and clinically) by the Thornton and Raffin 95% confidence intervals. Hence, we will have 4 individual p-values less than .05 and 2 greater than .05. Note that everyone saw improvement, even if it wasn't statistically significant. One non-significant person was right on the cusp of significant.

Background: I was thinking about the bear/bull divide and it occurred to me where it is. Roughly speaking, since the data was imbalanced by chance, the placebos started off closer to a ceiling effect. Hence, even though all group level differences were statistically significant, except PTA, the bears would argue that the placebos had a harder fight, with higher starting baselines -- probably some validity to this, even though it's percentage based.

But here's where the divide really is. Frequency Therapeutics have said (in the Tinnitus Talk Podcast) that there shouldn't really be a placebo effect with hearing words. Looking at the placebo patients, this is what we would expect. They all land in the 95% confidence intervals and scattered above and below.

The bulls think even with the data imbalance, let's focus on the responders. Placebo control is a little less important to us because we think the placebo effect is less for hearing. We see the 4 WR responders with massive gains and think that even though it's only 4, there's no way that's by chance or just retesting a little better. I think so much of the bull/bear position is what you think of a placebo effect. However, I do want to reiterate that the FX-322 group did outperform the placebo group in every test except one so it's not just zooming in on 4 ears.

Okay, here's my work and calculations from Thornton and Raffin. I am writing it out for completeness, but it's perfectly fine to skip right to the p-values. From the patent submission,

View attachment 44095

By Central Limit Theorem (justified), we apply angular transformations to baseline and day 90 scores. Then using the Freeman and Tukey uniform variance formula that was adjusted by Mosteller and Youtz (1961), we have the formula

Z=(arcsin(sqrt(x/(n+1)))+arcsin(sqrt((x+1)/(n+1)))-(arcsin(sqrt(y/(n+1)))+arcsin(sqrt((y+1)/(n+1))))/sqrt(2/(n+1/2)).

Here,

• x=# correct out of 50 at baseline,
• y = # correct out of 50 at day 90,
• n=50

This leads to the following Z-scores and corresponding 2-sided p-values. Note that alpha=0.05.

Patient 918: Z=-1.8972, p=2*P(Z<-1.8972)= 0.0578,
which is not less than alpha (but close) so not statistically significant.

Patient 932: Z=-0.9795, p=2*P(Z<-0.9795)= 0.3273,
which is not less than alpha and not close.

Patient 919: Z=-2.1268, p=2*P(Z<-2.1268)= 0.0334,
which is less than alpha so statistically significant.

Patient 916: Z=-4.0547, p=2*P(Z<-4.0547)= 0.00005,
which is way less than alpha so very statistically significant.

Patient 936: Z=-3.9133, p=2*P(Z<-3.9133)= 0.00009,
which is way less than alpha so very statistically significant.

Patient 937: Z=-5.0387, p=2*P(Z<-5.0387)= 0.00000047,
which is way less than alpha so very statistically significant.

So I will conclude with some commentary on these p-values. The last three (patients 916, 936, and 937) have very small p-values. It's even crazier because this is two-sided, which produces bigger p-values. The probability of that occurring by chance is practically impossible to believe.

Let's just say that I'm a bull and there are 3 patients in the Phase 1b study riding me hard.

Yeah I mention this on the Twitter thread, that this is the crux of bull vs bear. Phase 1 trial was murky as not powered or intended for efficacy, it was a lucky side effect for a safety trial.

Bulls see the data and believe this is true indication that drug works, hence Phase 2a if designed for efficacy and powered and designed right, will demonstrate unambiguously it's a real regenerative therapy.

Bears see the data and think no stat sig result, why would it be different in Phase 2a and believe that placebo response will ensure its either not stat sig or the drug just doesn't work. As someone mentioned, biotwitter is always skeptical of unproven companies especially if any subgroup analysis or statistical insignificance is demonstrated

Hence I wouldn't ignore them but understand they won't be persuaded til there is data, since their belief is based on skepticism by default vs trying to verify if treatment works and is therefore real.

 

[Tezcatlipoca]

I'm not sure you know what you are talking about. If an order fills on the ask price, that is de facto a buy, not a sell...

There was no 500,000 share transaction in regular hours. There was a lot of volume the last 15 minutes which totaled around 530,000 volume, through thousands of shares being bought up. The reason for today's drop is because when ETFs rebalance, they do this not by buying on open market. They use market makers, third parties who act as middle men that provide liquidity to brokerages as well as ETFs and funds. When you want to buy 1-2% of shares outstanding, how do you buy this in a day? You can't is the short answer, not without spiking the price massively. Instead they basically use the market maker who shorts the stock on the open market.

A short sell is when you take a negative shares position and sell the share to someone. Usually you are borrowing someone else's share to have the right to short (i.e. you are being lent someone else's share and owe them an obligation). When you sell that short share, the market maker is filling the buy order for an ETF or institute. Since this is open market, it reflects downward sell pressure even though the intention is to buy shares.

This results in increased short interest until the market maker closes their short position. In return for filling these orders, market makers are given liquidity coupons, a bonus for providing the order liquidity. On top of that they can make money on the margin between their short sell and closing that short position later.

Read this to learn more. Usually this happens in dark pools but on ETF balancing day it's in open market.

For folks thinking news leaked. No, news did not leak. And in fact at end of day market on close was about 633,000 as a buy order indicating clearly they were buying all day long. Same exact thing happens every 3 months third week of the third month of the quarter. 3/18, 6/18, 9/18, 12/18. You can look on a chart, same thing happened in December with huge volume and massive drop even though ETFs like XBI were actually buying 1% of FREQ shares outstanding (1/3 the December volume)

I can confirm this as factual Monday when XBI updates holdings as of end of Friday.

If you look at broader market across biotechs you see the same thing. Either they were allowed to fly high so ETFs can dump them at a higher price, or to have short pressure so ETFs can load them at a lower price.

That's it. No news leak. If they wanted to bury bad news, Friday is the day after hours to do so.

Finally we have a guy that knows what he's talking about. Thank you.

 

[Diesel]

Yeah I mention this on the Twitter thread, that this is the crux of bull vs bear. Phase 1 trial was murky as not powered or intended for efficacy, it was a lucky side effect for a safety trial.

Bulls see the data and believe this is true indication that drug works, hence Phase 2a if designed for efficacy and powered and designed right, will demonstrate unambiguously it's a real regenerative therapy.

Bears see the data and think no stat sig result, why would it be different in Phase 2a and believe that placebo response will ensure its either not stat sig or the drug just doesn't work. As someone mentioned, biotwitter is always skeptical of unproven companies especially if any subgroup analysis or statistical insignificance is demonstrated

Hence I wouldn't ignore them but understand they won't be persuaded til there is data, since their belief is based on skepticism by default vs trying to verify if treatment works and is therefore real.

A new player has joined the game.

 

[just1morething]

If an order fills on the ask price, that is de facto a buy, not a sell...

Yeah, makes sense as why would a short seller get an advantage on what could be a market order. I guess not necessarily a market order but one they wanted to get filled right away. Option expiration could cause a lot of offsets like Chetan said in another post.

 

[Gb3]

Hey @Toby1972, what's the inside position on air fryers?

 

[Paulmanlike]

A new player has joined the game.

He/she is good!

 

[Aaron91]

A new player has joined the game.

Indeed. I may or may not have been bigging-up the due diligence abilities of this forum in the stock Twitter/biotech sphere.

 

[Zugzug]

I wasn't talking about Phase 2a... am I missing something? I was just trying to clarify that it wasn't exactly clear from Zugzug's post how many patients had tinnitus in the first place because he said only 3 tinnitus improvers came from the 15 treated ears. I'm assuming that was just an assumption of his model.

Yeah, it's definitely conservative (which was intentional). I have some work in front of me in learning about TFI statistics.

 

[Greg Sacramento]

There was no 500,000 share transaction in regular hours.

16:00:03 $ 34.25 477,629 *
16:00:03 $ 34.25 220
16:00:03 $ 34.25 1,273
16:00:03 $ 34.25 428
16:00:03 $ 34.25 256
16:00:03 $ 34.25 32
16:00:03 $ 34.25 88
16:00:03 $ 34.25 3
16:00:03 $ 34.25 1,107
16:00:03 $ 34.25 551
16:00:03 $ 34.25 310
16:00:03 $ 34.25 469
16:00:03 $ 34.25 3,437
16:00:03 $ 34.25 27
16:00:03 $ 34.25 193
16:00:03 $ 34.25 15,824

94 pages in last half hour.

How Wall Street Front-Runs Leveraged ETF Rebalancing - Market Insider

I agree with all your education - for newer investors. Had discussed much of that myself.

https://www.macroaxis.com/invest/advice/FREQ

 

[just1morething]

16:00:03 $ 34.25 477,629 *
16:00:03 $ 34.25 220
16:00:03 $ 34.25 1,273
16:00:03 $ 34.25 428
16:00:03 $ 34.25 256
16:00:03 $ 34.25 32
16:00:03 $ 34.25 88
16:00:03 $ 34.25 3
16:00:03 $ 34.25 1,107
16:00:03 $ 34.25 551
16:00:03 $ 34.25 310
16:00:03 $ 34.25 469
16:00:03 $ 34.25 3,437
16:00:03 $ 34.25 27
16:00:03 $ 34.25 193
16:00:03 $ 34.25 15,824

94 pages in last half hour.

How Wall Street Front-Runs Leveraged ETF Rebalancing - Market Insider

I agree with all your education - for newer investors. Had discussed much of that myself.

Could some of those trades be related to options offset? The third Friday of the month option expiration.

 

[tommyd87]

Analysis, Part I

So I ran a Fisher's Exact Test for myself on this test and computed the p-value. I was lazy so I just used Graphpad to do the calculations for me.

Assumptions:

• Two categorical variables: Variable 1 is Treatment (FX-322 or Placebo) and Variable 2 is Responder (Yes or No, where Yes means >5 dB at 6 and 8 kHz on day 90). This creates a 2x2 grid where the n=23 total sample size will satisfy that each patient lands in exactly 1 of the 4 cells.
• One-tailed test. In other words, the p-value looks for the "improvement" from FX-322 being at least as extreme. This means that I am looking for the probability that with 15 treated ears, 8 placebo ears, what is the probability that at least 2/15 ears will be a responder? Obviously, the p-value should be large, which is considered less evidence. A small p-value means that the probability of improvement at that level of extremeness if the null hypothesis (no improvement) was true, is small. Therefore, the closer p is to 0, the better and the closer p is to 1 (100%), the worse. Small p-values mean that the null hypothesis is harder to believe, essentially. Opposite for large p-values.

Notes:

• They performed this same test on the 6/15 responders to look for statistical significance. Therefore, it's a very reasonable test. They also performed a one-tailed test.

Results:
After a bunch of math, p=0.415. For some interpretation, we need p < .05 to be considered statistically significant. Also, note that p=.05 for the same test, but with "Responder" only requiring >5 dB improvement at 8 kHz. As we can see, big difference in the p-value.

This small sample sized, crude test tells me something pretty big. That is, 8 kHz is right around the boundary where drug action reaches. It is nice that 2/15 saw improvement at 6 kHz, but I think our expectations should be low. Moreover, to @Aaron91's point about the impact of dosing volume being similar because of Pick's law, that makes me think that the best we'll see from multiple dosing cohorts is added improvement at 8 kHz. I expect that 6/15 ratio to improve, but the 2/15 ratio at 6 kHz to barely improve in the Phase 2a study.

tl;dr: they need a new formulation or a fundamentally different drug delivery technique to reach lower. Still encouraging.

Analysis, Part II

I ran the same test as above, but with "Responder" changing to "tinnitus improvement" (Yes or No). My conservative assumption is that of the n=23 people in the study, there were only 3 tinnitus improvers in total. The only 3 tinnitus improvers came from the 15 treated ears.

The same one-tailed test procedure reveals a p-value of p=0.2569. For the two-tailed test (more conservative p-value, which considers the possibility that the drug worsened tinnitus), we have p=0.5257.

Caveats: This assumes that tinnitus was perfectly assessed and that only 3 people in the whole study improved. I have no idea is is true or not. Either way, it seems like if the 3 tinnitus responders came from the 6 responders, that's not bad for one dose.

While this is quite plausible and could end up being accurate, at this stage it is impossible to rule in or rule out whether someone will get a bigger benefit from the Phase 2a trial processes if they fell in that group who gained a benefit at 6 kHz.

The fact of the matter is that while mathematical and statistical analysis does have some relevance on predicting and determining outcomes, it still doesn't definitively answer what the benefit and/or outcomes are in multi dosing recipients. Really only the trial results will demonstrate the benefits of multi dosing and the extent to which the treatment then provides benefit.

 

[Chetan]

Could some of those trades be related to options offset? The third Friday of the month option expiration.

16:00:03 $ 34.25 477,629 *
16:00:03 $ 34.25 220
16:00:03 $ 34.25 1,273
16:00:03 $ 34.25 428
16:00:03 $ 34.25 256
16:00:03 $ 34.25 32
16:00:03 $ 34.25 88
16:00:03 $ 34.25 3
16:00:03 $ 34.25 1,107
16:00:03 $ 34.25 551
16:00:03 $ 34.25 310
16:00:03 $ 34.25 469
16:00:03 $ 34.25 3,437
16:00:03 $ 34.25 27
16:00:03 $ 34.25 193
16:00:03 $ 34.25 15,824

94 pages in last half hour.

How Wall Street Front-Runs Leveraged ETF Rebalancing - Market Insider

I agree with all your education - for newer investors. Had discussed much of that myself.

https://www.macroaxis.com/invest/advice/FREQ

Thanks. I appreciate the extra info and references to articles. I've been wondering how I could front run this myself as a retail investor if I wanted to (not based on insider information but predicting it in advance or watching tickers live).

I certainly know my FREQ shares would feel lighter if I waited to buy for this Friday vs at the $40 price... (I even thought it may happen but didn't believe it was a real effect even though I saw same trend December when XBI first initiated a position in FREQ and tanked it 25% in a day on rebalancing day).

For @just1morething, this was a market on close order. The blocks you see were all one transaction and totaled around 630k shares bought implying there was net buying imbalance, i.e. many people wanted to buy a bunch of shares guaranteed by close.

This can be for a variety of reasons. it could be the shares that were short sold by market maker to fill large orders from ETFs, it could also just be a block transfer from one entity to another, it's hard to really confirm this stuff. What we will be able to confirm Monday is how many shares were added by XBI ETF (it is one of the main growth based bio ETFs and has 1% of FREQ shares outstanding already, and I think may have doubled today to another 1% or .5%). That's about 345k shares per percent.

XBI updates holdings daily and discloses it while most ETFs only do this once a quarter so harder to track.

It's definitely not related to options being exercised (not the Market On Close)

You can see here the number of options open today that would be able to exercise is a tiny fraction. Additionally MOC usually doesn't have to do with options since options automatically exercise over the weekend usually (I forget the exact details).

There's about 2k put options that are "in the money" meaning have value because the share price is below the strike and can actually be used to sell shares at that strike to the seller of the option contract.

Note I don't count the 569 50P because you can see those have same volume indicating they were sold and closed vs allowing it to exercise.
200k shares (100 shares per contract). The call contracts are tiny and fractional. Far from the 630k Market On Close.

Generally this is a very bullish sign, especially seeing a market on close buy worth 2% of the entire shares outstanding.

 

[Chetan]

16:00:03 $ 34.25 477,629 *
16:00:03 $ 34.25 220
16:00:03 $ 34.25 1,273
16:00:03 $ 34.25 428
16:00:03 $ 34.25 256
16:00:03 $ 34.25 32
16:00:03 $ 34.25 88
16:00:03 $ 34.25 3
16:00:03 $ 34.25 1,107
16:00:03 $ 34.25 551
16:00:03 $ 34.25 310
16:00:03 $ 34.25 469
16:00:03 $ 34.25 3,437
16:00:03 $ 34.25 27
16:00:03 $ 34.25 193
16:00:03 $ 34.25 15,824

94 pages in last half hour.

How Wall Street Front-Runs Leveraged ETF Rebalancing - Market Insider

I agree with all your education - for newer investors. Had discussed much of that myself.

https://www.macroaxis.com/invest/advice/FREQ

To be clear, sorry I misread what you were saying and want to correct the record again.

I consider Market On Close as "after hours" volume because it technically only fills after the trading day has ended and acts as the final trades and executes technically after 4 PM market close.

Market-on-Close (MOC) Order

That is one gigantic order of every person's markets on close totaling around 630k if you aggregate all the market on close orders at 4:00:03. I'm not sure I understand what you mean by MM allowed this 470k portion of the 633k market on close to fill at the ask. It's not a limit order. It's literally a market order. It by definition fills at the ask if market buy. In this case it was clearly a market buy since it filled at the ask. I don't think a MM can control that like they can in normal transactions during normal hours with limit sells/limit short sells.

The 530k volume I was referring to was the volume in the last 15 minutes where you can see the volume as the volatility spiked and ETFs/funds really went nuts to meet their end of day weighting quotas.

Again, there was no block transaction of 500k shares in regular hours.

The 630k volume is distinct and occurs as link above mentions, literally as market closes or a second or two after. The reason I group this is it's effectively a summed order when you look at MOC for imbalances (and you generally want to see an imbalance indicating more buying than selling for all the MOC orders). That's also how Think or Swim displays it when looking at the transaction in the charts and ticker tape tab.

I am definitely curious what are the 5 major orders you are referencing that occurred today during regular hours.

Feel free to correct me on the record for any of the above, if I'm wrong I'd like to update my understanding. Thanks!

I tried to read the Seeking Alpha article but I hit my free limit and gotta figure out how I can view the article. Sorry if it is explained in there.

 

[Chetan]

For others that want to see what I believe are actual examples of major bets by institutions/potentially insider leak based activity, read the below. The tl;dr is there's people betting millions on FREQ to have not just positive result, but results that warrant price rising into the $70-90 range at minimum if not possibly higher. Some of these people even forewent millions in profit in February already.

There are a couple major sets of options that I've been tracking the last few weeks. In the span of tracking those I found someone who had noted the other major set of options UOA (Unusual Options Activity, i.e. major outlier indicating a very high conviction high risk/reward bet that usually is based off people with either inside information or extremely high confidence).

I noted two weeks ago that there was a variety of 1000 contract put block transactions which caught my eye.

Let's first look at open interest on options.

In March we can see that there was 1k+ of 50 and 60 calls and also 25 strike puts.

In my opinion the March 25 strike puts have been used to constantly sell options as a way to make free money (since 25P would expire worthless as it ended up doing today), especially since you may not expect data to come by March options expiration in the first place.

I also can confirm this because I've seen numerous blocks go through last few weeks where the action was clearly selling the options near the bid. You can see confirmation here as they take advantage by selling puts while either premium is high or risk of data coming out and being bad is low.

https://www.barchart.com/stocks/quotes/FREQ|20210319|25.00P/interactive-chart

The 50/60 was actually something I saw yesterday. Someone had made an extreme lotto gamble that basically was a call debit spread (basically they make 0->1000$ per contract depending where in 50-60$ it closes).

https://www.barchart.com/stocks/quotes/FREQ|20210319|50.00C/interactive-chart

You can see that this was an extreme gamble imo given they spent about $60-70k from what I recall on the possible chance this hit (if data came out and this hit, they would've made around $1M dollars, about a 15x return so I can get why they took this gamble).

Let's now look at April since there is nothing interesting remaining about March.

OK, we have 40C, 60C with 1k+ and then 20, 25, 35, and 45P with 1k+ with 25P being particularly popular similar to March

The 40C calls is interesting to review first. Someone on Twitter caught this, it's from January 13th apparently and was a 1k block that cost the buyer $570k.

This was when the SP was like $33, and on top of that this person ended up leaving this open. That's right, this person didn't want to close these calls even when the share price went to $57, about 73% increase. At $57 these were worth around $2.7M in profit (almost 500% profit). It's nuts this person didn't bother to take any profit at all and just held them to today where these are now barely at 60-80% profit from the entry price. And the next 3-4 weeks it will only keep bleeding.

So this person is clearly expecting data readout to offer a return much higher than $2.7M profit (meaning $72-73 is the minimum share price they expect after data by April 16th expiration).

This is clearly uber bullish or this person's using the 40C to cover a short position (unclear to me why you would hedge a short position with 40C so far out vs closer term January or February calls) vs just buying calls in February to hedge a short position.

I lean towards this is bullish person.

Then let's look at this 60C. It leads into another interesting option trade, this one is a bit more complicated, a three way transaction.

They did a trade with 1000 July 55 calls, 1000 April 60 calls, and 1000 April 25 puts.

I agree with the person here, you can judge if it's a buy or sell based on whether it's closer to bid or ask (bid means sell, ask means buy).

It looks like they sold July 55C, used the premium to buy April 60C (for $10), and sold April puts for additional premium.

I don't think they sold naked July calls but had actually owned shares, possibly at $40 or a lower price. Assuming they bought 100k shares at $40 that they sold the July calls against, it means the cost of the shares is effectively $27. This means their sold July 55C is guaranteeing they make 100% profit by July on that position as long as data is positive.

55C is a short change, but given they either guarantee 100% profit by reducing cost basis, or give themselves free 60C options which give them incredible return upside potential if data readout happens and blows the SP up to $80-90 or above, then every $10 that the SP goes above $60 before April expiration, they will end up earning $1M dollars. Add in the $2.7M they make off the shares with July expiration covered calls, they are set to make a lot of money. Add in that they additionally reduce cost by selling 600-700k of April puts that they likely expect to expire worthless, then this makes them really bullish as this person's clearly thought a lot about the anticipated initial reaction vs where it settles by summer time.

OK, now we segue naturally into the puts. In my general opinion, the April 25P is being used primarily by people to sell puts for option premium for when Implied Volatility (a method of pricing possible change in price of an option and hence the increased value of that option based on its greater potential for profit) will crash after the data readout happens reducing implication of additional future volatility off a catalyst near term.

https://www.barchart.com/stocks/quotes/FREQ|20210416|25.00P/interactive-chart

I saw a few 1000 contract blocks myself where 750k of premium was sold, typically near bid or midpoint of the two.

The 45P I have no larger context for and its unclear if it was a giant series of blocks or just large volume

https://www.barchart.com/stocks/quotes/FREQ|20210416|45.00P/interactive-chart

Looks like series of days where people sold it or blocks. Mostly in February when price ran up a lot. Possible this was even a long hedge, hard to judge.

35P equally murky.

https://www.barchart.com/stocks/quotes/FREQ|20210416|35.00P/interactive-chart

First big block in January, mostly small volume after that.

I think the 20P is mostly a hedge used in combination with some of the 25P to do spreads (unclear if debit or credit, debit bearish, credit bullish).

https://www.barchart.com/stocks/quotes/FREQ|20210416|20.00P/interactive-chart

Anyways I hope this was useful for folks. I didn't monitor beyond April because I didn't spot anything too interesting barring that July call block we discussed (there's 1k July 22.5P but they were done in December and don't imply much interesting things imo, odd move imo to do puts into July when SP was so low and to not close it out despite the sharp rise over the following months). Could just be a hedge.

https://www.barchart.com/stocks/quotes/FREQ|20210716|22.50P/interactive-chart

 

[Bill Arsenault]

Could some of those trades be related to options offset? The third Friday of the month option expiration.

How do I keep ending up on Stock Talk?

It went from slightly annoying to oddly comforting.

I just cannot comprehend how some can deal with more stress.

But I hope you all make a million. Some of you even deserve it.

 

[Chetan]

How do I keep ending up on Stock Talk?

It went from slightly annoying to oddly comforting.

I just cannot comprehend how some can deal with more stress.

But I hope you all make a million. Some of you even deserve it.

Making money would be nice, but I'm here as much for being part of a history defining moment of real clinical stat sig evidence that regenerative medicine is here and possible (with hearing loss benefitting). My dad has a hearing aid and tinnitus and as I've understood the area more I've grown more and more concerned about him especially when I start to recognize some of the issues I see mentioned with hearing loss over time and the cognitive load/potential development of deeper cognitive issues after years of damage.

I'll just be happy to be a part of a company that will do so much good for the world.

I also wanted to say hats off to folks in this thread. Only joined recently and been reading since page 506, but the quality of diligence, scientific literature based discussion, and fundamental rationality here is really impressive. I've learned a ton from folks here and it's been really illuminating.

I invest in bios because I enjoy the science and R&D aspect and validation of hypothesis as I make sense of the data and its impact on humans inevitably. I've really enjoyed learning about hearing loss and regenerative therapies through this whole process.

 

[Greg Sacramento]

Again, there was no block transaction of 500k shares in regular hours.

I was referring to the 477,629. I was referring to the ASK as a sell - someone selling. I was watching FREQ trade on the official NASDAQ beginning with near to the second hour of regular session.

Not sure how many page recordings of trades for the day, but may be 500 or more. I saw 4 other trades near or over $1 million.

I placed an order for 75 shares Thursday night at $34 and it was filled when I got up. I sold not long after getting up from bed at $36 to avoid the frenzy that would be coming.

I have a degree in Economics/Finance, besides bio sciences - 1976. I started buying stocks as a kid - well over 50 years ago. My dad was a commercial trader. First Bio bought was AMGEN in 83. I started Options later. Warrants on Intel Class A and B daily after IPO. I taught 3 college investment classes for two years and managed private portfolios for about 2 years quite awhile ago. Because of severe health problem and tinnitus, I now mostly just day trade whenever. I rather come to this site to help others or help my wife with sick children and/or with tinnitus.

 

[ThomasRobert]

This is me right now...

 

[Diesel]

I think we've reached peak over-analysis for $FREQ and Phase 1/2 data.

...

Looking forward to starting fresh with next week's data.

 

[ThomasRobert]

I think we've reached peak over-analysis for $FREQ and Phase 1/2 data.

...

Looking forward to starting fresh with next week's data.

Ok then, in simple English, what is the chance, in percentage, of FX-322 failing to do what it's meant to do?

 

[Zugzug]

Ok then, in simple English, what is the chance, in percentage, of FX-322 failing to do what it's meant to do?

Largely depends on your definition of "meant to do." If your definition is consistent with the company's advertising, which is improved EHF, speech recognitions, and an adjunctive therapy with the hearing aid market, then the probability of it failing is very, very low, in my opinion.

If "meant to do" means curing hearing loss, the probability of it failing is very high.

With these two extremes, we can make guesses about tinnitus and hyperacusis based on correlations between high-pitched tinnitus and EHF loss.

From my studying, it's a total wildcard for hyperacusis. I have a little more faith that it could help loudness hyperacusis caused by hair cell loss, but I have no idea with noxacusis. Maybe people who understand all of the science behind outer hair cell ribbons, etc. have good theories.

 

[Ed209]

Ok then, in simple English, what is the chance, in percentage, of FX-322 failing to do what it's meant to do?

It's in the region of 70 - 80%.

Most drugs fail to get past the trial stages. Looking at FX-322 as an isolated case, it's not possible to give a percentage, but it's still more likely to fail than succeed, unfortunately.

Let's hope it doesn't.

 

[FGG]

It's in the region of 70 - 80%.

Most drugs fail to get past the trial stages. Looking at FX-322 as an isolated case, it's not possible to give a percentage, but it's still more likely to fail than succeed, unfortunately.

Let's hope it doesn't.

That's *such* a misleading metric and I get triggered when people quote it, lol.

That's across all biotech and includes drug indications that have less than a handful of approvals in 10 years (e.g., Alzheimer's drugs). While other classes of drugs are much more successful.

There is literally no value in using an industry drug average to assign a probability on a brand new platform with no prior data.

 

[Diesel]

Ok then, in simple English, what is the chance, in percentage, of FX-322 failing to do what it's meant to do?

Simply put: FX-322 is a "success" if Frequency Therapeutics can prove the drug can cause inner ear hair cells to regrow that can send signals to the brain.

If the Phase 2A data show that hearing improved from FX-322, then it successfully did what it is supposed to do.

ELI5:

FX-322 is supposed to make hearing better. If it does this with regular doctor tests, it is a success.

% chance of failure after Phase 2A positive outcome:

25%

Why: Rare Side Effects unknown

 

[Ed209]

Largely depends on your definition of "meant to do." If your definition is consistent with the company's advertising, which is improved EHF, speech recognitions, and an adjunctive therapy with the hearing aid market, then the probability of it failing is very, very low, in my opinion.

If "meant to do" means curing hearing loss, the probability of it failing is very high.

With these two extremes, we can make guesses about tinnitus and hyperacusis based on correlations between high-pitched tinnitus and EHF loss.

From my studying, it's a total wildcard for hyperacusis. I have a little more faith that it could help loudness hyperacusis caused by hair cell loss, but I have no idea with noxacusis. Maybe people who understand all of the science behind outer hair cell ribbons, etc. have good theories.

I haven't had the time to analyse the available data as I once would have done, but it's interesting to see a (sort of) optimistic outlook on here. I've only read a few of the posts, but it seems most are more positive than not.

My take on it is that it has to offer a beneficial therapeutic outcome. It could objectively work, but to what degree? How much will it change people's lives? A small increase in hearing that is either not noticeable, or that is negligible to the patient, would be disappointing. But, it could be the starting point of something bigger if there are ways to refine it. A complete failure to work on any level would be a disaster.

It will be interesting to see how it affects those tinnitus.

 

[Diesel]

That's *such* a misleading metric and I get triggered when people quote it, lol.

That's across all biotech and includes drug indications that have less than a handful of approvals in 10 years (e.g., Alzheimer's drugs). While other classes of drugs are much more successful.

There is literally no value in using an industry drug average to assign a probability on a brand new platform with no prior data.

Agree. Doesn't account for the bar being so embarrassingly, stupidly low in the hearing loss treatment space; and the massive population that it can potentially treat.