Last week’s approval of Alnylam’s (ALNY) Onpattro, the first FDA-approved siRNA drug, serves as a reminder for the bumpy road new technologies go through on their way to the market. From an investor perspective, siRNA has gone in and out of fashion over the years with dramatic shifts in market sentiment. It started with unrealistically high expectations, deteriorated to deep pessimism due to clinical setbacks, followed by gradual sentiment improvement in recent years (with some hiccups along the way). Continue reading
To me, the main challenge in today’s biotech market is finding good quality assets with attractive valuations. There are definitely a lot of promising programs out there but valuations are often hard to justify as they reflect limited development risk and unrealistic commercial potential. From a risk/reward standpoint, it is hard to get excited about valuations of >$0.5B for companies before clinical proof of concept and $2-5B for clinically validated programs.
From that perspective, Xenon (XENE) is a market anomaly, with two promising clinical stage programs, a robust discovery platform and a market cap of just under $100M. Its two epilepsy programs, XEN1101 (Kv7 opener) and XEN901 (Nav1.6 inhibitor), are still in P1 but at the current levels the upside potential is too significant to ignore. Continue reading
It is hard to overestimate the impact of the Novartis (NVS) /Avexis (AVXS) deal. So far, big biopharmas have had limited exposure to gene therapy and those that did get into the field focused on early-stage collaborations: Pfizer/Bamboo, Biogen/AGTC, Roche/ 4DMT, Abbvie/Voyager etc. This is understandable given the unique product profile gene therapies represent: One time irreversible treatment, lack of long term follow up and creative reimbursement models.
The $8.7B acquisition of Avexis, just three months after the deal with Spark (ONCE), makes Novartis the first pharma to embrace gene therapy as a commercial opportunity. The deals also make Novartis the undisputed gene therapy leader with (hopefully) two products on the market next year. Continue reading
After being the industry’s graveyard for over 20 years, there is finally room for optimism in CNS (central nervous system) disorders. The void created in the field is now being filled by small companies which are using novel therapeutic (gene therapy, antisense, antibodies) and development (genetic validation in humans, biomarkers for patient selection) approaches. While clinical results are early and sparse they may represent the beginning of a new innovation cycle in CNS. Continue reading
It has been a hectic 5 months here at Pontifax (10 new investments, some yet to be announced) so unfortunately I didn’t have a lot of time to publish new posts. Going forward, I will try to make posts more concise so I’ll be able to publish stuff also during busy periods.Today, I will focus on what I consider to be the three winners in the portfolio in 2017 so far, not only from a stock performance but also from a strategic development perspective. All three will have important readouts in the coming 6 months.
Esperion – Flawless execution, pivotal readouts in Q2/18
Despite its strong stock performance (+275% YTD), I still feel that Esperion (ESPR) and its management team don’t get the credit they deserve for their flawless execution in 2017. After starting 2017 with poor investor sentiment and great uncertainty about its clinical/regulatory strategy, Esperion is ideally positioned for pivotal readouts next year (Q2 2018). Although risk is still significant I am more excited than ever about Esperion for the following reasons: Continue reading
Last month Spark Therapeutics (ONCE) reported initial results for SPK-8011, its hemophilia A gene therapy program. Despite their preliminary nature, the data are very positive and put Spark in a strong position vs. Biomarin (BMRN) and its Hemophilia A gene therapy, BMN270. Providing the signal is corroborated with additional patients, results may have broad implications on the liver-targeted gene therapy. Continue reading
Readers of this blog know I have high hopes for gene therapy, a field with a checkered history but disruptive potential that may finally be ready for primetime. After two years of dramatic progress 2017 is shaping up to be a year of incremental progress, focusing more on establishing and validating results seen to date. Continue reading
This year’s ASCO marks a second year in a row of relatively uneventful meetings, with very few groundbreaking or practice-changing data. Just like last year’s meeting, there were too many “me too” drugs targeting the same validated targets while results for truly novel MOAs were mostly underwhelming or immature. This stagnation is particularly troubling in light of the huge budgets the industry is pouring into oncology drug development, which used to be a highly capital-efficient sector.
Looking at the different vertical segments, stagnation is apparent across the board with some exception with few kinase inhibitors and BCMA CARs. Continue reading
Esperion – Positive read-through from Repatha
Shares of Esperion (ESPR) doubled within two weeks after Amgen (AMGN) announced positive CVOT (cardiovascular outcomes trial) outcome for Repatha, Amgen’s PCSK9 antibody. Although this news will make the lipid-lowering field more competitive for Esperion, it also validates the LDL hypothesis and removes some regulatory risk around Esperion’s LDL-lowering pill, bempedoic acid (ETC-1002).
Until now, investors assumed Esperion will need to have CVOT data in order to file for approval but now the likelihood of FDA approval based on positive LDL readout in 2019 is much higher. Beyond regulatory uncertainties, investors’ primary concern revolves around whether an oral drug with a 25% LDL reduction has room in a market dominated by generic oral drugs (statins, Zetia) on the one hand, and branded highly effective (50%-60% LDL reduction) PCSK9 antibodies on the other. Continue reading
Exelixis – Decreasing exposure on valuation
Exelixis (EXEL) continues to look very strong after hitting a 15-year high on Friday, which is never a bad point in time to realize some gains. While I still view Cabometyx as the most effective agent ever approved in renal cancer (even better than Opdivo), a valuation of $5.1B seems to fully capture the current label. Continue reading