Biotech portfolio updates – Exelixis, Spark, buying more gene therapy stocks

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

Biotech portfolio updates – ESMO 2016, Exelixis, Abeona, Esperion and Seattle Genetics

After a two-month break here is a recap of key highlights from the September/October time frame. On the menu today: PD-1 controversies at ESMO 2016, Exelixis’ (EXEL) launch in renal cancer,  gene therapy data from Abeona (ABEO), long awaited update from Esperion (ESPR) and a positive surprise from Seattle Genetics (SGEN).

ESMO 2016 – Merck wins by a landslide (for now…)

While ESMO is typically secondary in importance to ASCO, this year’s meeting overshadowed its US counterpart (which was relatively quiet to begin with…), generating big headlines in the PD-1 arena. Continue reading

Biotech portfolio update – Jumping into gene therapy

After a long summer break it is time to review recent events and update the portfolio. As far as clinical readouts go, my portfolio had a brutal summer with one complete P3 failure from Array Biopharma (ARRY), a mixed data set from Aurinia (AUPH) and a win from SAGE (SAGE) that resulted in limited share appreciation. This was offset by strong performance from Exelixis (EXEL), my biggest holding which is up 48% quarter to date.

For the remainder of 2016 I plan to gradually increase exposure to gene therapy, which I hope will become one of the industry’s primary growth drivers in the coming years. In parallel, as I am still pessimistic about the biotech field in general (R&D productivity, pricing, biosimilars…), I intend to keep my short ETFs and a significant cash position. Continue reading

Could gene therapy become biotech’s growth driver in 2017?

Despite bouncing off a 2-year low, biotech is still an unpopular sector and investors are rightfully concerned about its near-term prospects. Recent drug failures, growing pricing pressure and the potential impact of biosimilars all contribute to the negative sentiment, but the main problem is the lack of growth drivers for the remainder of 2016 (and potentially 2017). Continue reading

Notes from ASCO 2016

Although this year’s ASCO contained a limited amount of groundbreaking data, it provided some interesting take-aways and signaled important trends in oncology drug development.  Below is my take on a quiet but important meeting.

Immuno-oncology – PD-1 combinations at their infancy

As in previous years, the meeting was dominated by PD-1/PD-L1 antibodies. Now that PD-1 blockers have been tested on every tumor known to mankind (see below a great figure from Merck), focus is shifting to combination regimens with PD-1 as a backbone. Combination partners range from other immune checkpoints to chemotherapy, targeted therapy and radiation. Continue reading

Biotech catalysts for 2016

After last week’s pessimistic post, this week I am focusing on potential catalysts in 2016 that could improve sentiment towards biotech as a sector.

As if to remind us late stage trials don’t always fail, last week saw positive news from three different programs, all of which are antibodies in non-oncology indications. Regeneron (REGN) and its partner Sanofi (SNY) announced excellent data in atopic dermatitis, Alder (ALDR) reported positive results in a P2b in migraine and Pfizer (PFE) had positive P3 data for its PCSK9 program.

Below are four additional clinical data readouts that (if positive) may serve as important catalysts. Continue reading

Q1 2016 scorecard – Arrested Development

As if sentiment around Smid-cap biotechs wasn’t bad enough, Q1 provided a painful reminder of the high failure rate in biotech. The slew of disappointing results at ASH in December 2015 (which I discussed here) was followed by numerous clinical failures and regulatory setbacks. Most notable blowups came from Celldex (CLDX), Incyte (INCY), Alkermes (ALKS), Oncomed (OMED), Chimerix (CMRX), Atara (ATRA), PTC (PTCT) and Portola (PTLA). Continue reading

Buying more Exelixis following positive renal cancer data

The past six months have been quite frustrating for Exelixis (EXEL) investors (myself included). The company had a string of positive announcements for cabozantinib (cabo) and Roche-partnered cobimetinib (Cotellic) including positive overall survival readouts for both drugs. Since the July announcement on the METEOR study in renal cancer, the stock is up only 16% despite having a wholly owned drug with a blockbuster potential, imminent approval and significant label expansion potential. Continue reading

Biotech selloff leaves Wall Street disillusioned

After 5 years of a raging bull market, more than 140 IPOs and tens of billions in proceeds, there is a debate on whether the violent selloff in biotech stocks is a hiccup or the beginning of a real correction. I have no idea where the sector is heading in the coming weeks but it seems like the overall sobering experience coupled with this month’s selloff changed Wall Street’s perception around biotech. Investors are finally realizing drug development is fraught with uncertainty and that biotech is an attractive but not infallible segment, which is why I expect the correction to continue in 2016. Continue reading

Post-ASH bloodbath is a bad omen for the biotech sector

Although hematology represents a small portion of human diseases, its weight in the biotech equity markets is disproportionally high. Bluebird (BLUE), Agios (AGIO), Juno (JUNO), Kite (KITE), Cellectis (CLLS), Pharmacyclics (PCYC), Incyte (INCY), Genmab (GEN.CO), Seattle Genetics (SGEN) and Acceleron (XLRN) all derive the majority of their valuations from hematology drugs. This is also the case for larger companies such as Amgen (AMGN), Celgene (CELG) and Alexion (ALXN). Continue reading