Biotech portfolio updates – Endocyte and AVROBIO

Endocyte – Surprise acquisition driven by scarcity value

Last week’s acquisition of Endocyte (ECYT) by Novartis (NVS) came as a surprise as Lu-PSMA-617 just started P3 and results are not expected until 2020. This is Novartis’ second radiopharmaceutical acquisition within a year, following the AAA acquisition, making Novartis the undisputed leader in targeted radiotherapy.

The decision to buy Endocyte was likely driven by the commercial performance of Lutahtera (originally developed by AAA), which generated Q3 sales of $56M compared to $24M in Q2. This trajectory in the first year of launch (approved January 2018) proves that radiopharmaceuticals can become meaningful products despite the logistic hurdles.

The resemblance between Lutathera and Lu-PSMA-617 are clear. Both agents target solid tumors and demonstrated a significant anti-tumor effect. Importantly, both are based on small targeting moieties (peptides) and 177Lu as a payload, which translate to a favorable safety profile in contrast to antibody-based products which suffer from a narrow therapeutic window.

Lutathera and  Lu-PSMA-617 could mark the beginning of a new innovation cycle in targeted radiotherapy but from an investment perspective, there are very few publicly traded companies that develop radiopharmaceuticals, let alone companies with the desirable, clinically validated profile (small targeting moiety, beta emitters, solid tumors). Looks like the experience with this class of drugs has been so disastrous that investors will have to wait until more targeted radiotherapy companies emerge. This scarcity value probably played an important role in Novartis’ decision to buy Endocyte so early.

AVROBIO – Another gene therapy cautionary tale

So far, 2018 has been mixed for gene therapy. The only clear positive news came from Sarepta’s (SRPT) DMD program which demonstrated impressive biomarker data in 4 patients but clinical improvement and durability are  still an open question. Most other companies, many of which I hold, published mixed to encouraging data (Spark, Audentes, Nightstar, Ultragenyx). Some, like Krystal (KRYS) presented positive data but sample size is too small to rely on.

The most disappointing readout was from AVROBIO’s (AVRO) Fabry program. As followers of this blog know, I was initially very excited about AVRO’s platform based on the premise of treating rare genetic metabolic diseases with a single ex vivo treatment. AVRO utilizes lentiviruses which integrate into the genome so the vector is not diluted over time as cells divide (as opposed to AAV-based therapies). Blood progenitor cells are collected from the patient, genetically modified to express the missing protein and then re-injected and populate the bone marrow. The concept is similar to that of Bluebird Bio (BLUE) but AVRO’s claim to fame is its mild conditioning regimen which is safer and results in less complications, making it relevant for broader patient populations.

AVRO went public with data from two Fabry patients (see below), demonstrating clinically meaningful levels of AGA, the missing enzyme in Fabry disease, after 12 and 3 months respectively. This data set was enough to support an IPO at a valuation of $450M, which climbed to $1.2B last month.

AVRO - #1Earlier this month, the company provided an update which included additional follow up on the two initial patients as well as preliminary results from a third patient (the first to enroll in a company-sponsored study). As can be inferred from the figure below, both patients experienced significant drops in AGA levels with a troubling trajectory.

AVRO - #2

The trend was also seen with vector copy number (VCN) which is a way to quantify the number of transduced cells in the blood.  As can be seen in the figure below, VCN number tend to fluctuate but are directionally correlated to the AGA levels. The company did not report AGA levels for patient 3 but his VCN value 1 month following treatment was very low. In retrospect, a declining VCN trend had already been seen at the time of the IPO with patient #1 but this was overlooked by investors (myself included).


While the trend is very troubling there is still a theoretical possibility that AGA levels for the first two patients will stabilize and stay within the clinically relevant range (above 1). Personally, I view it as unlikely based on experience with Bluebird’s Lentiglobin. Lentiglobin has had its share of setbacks but a quick look at some of the early data in beta thalassemia provides a clear example of how a good engraftment looks like. Expression reaches a plateau after 6-9 months and stays relatively stable (especially in non β0/ β0).

BLUE - HbA- T87Q

Source : Bluebird Bio , Dec 2015

This is definitely not the end of the road for AVRO, which is already working on improving its core technology. Nevertheless unless the curves for patients 1 and 2 miraculously stabilize, it’s back to the drawing board with a long waiting period. AVRO can still be a good investment long-term but even after the drop it has a market cap of $717M, which I find unrealistic for a company that doesn’t have a viable product. This is another testament for the dysfunctional nature of today’s public biotech market, where valuations are so out of touch with reality. When I look at companies like AVRO and some of its peers like Rubius (RUBY) (Market cap of $1.35B without treating a single patient) the problem is not with the companies but the unsustainable valuations the market ascribes to them.

Biotech portfolio updates

I am adding another portion of the ProShares UltraShort Nasdaq Biotech (BIS) as I think that the last volatile weeks are a beginning of a broad correction. I intend to keep a significant cash position which I hope to deploy next year.

Portfolio holdings – Oct 28, 2018

biotech portfolio - Oct 28 2018- after changesBiotech etfs - Oct 28 2018 - after changes

192 thoughts on “Biotech portfolio updates – Endocyte and AVROBIO

  1. Hi Ohad
    what are the reasons you think this time the correction will be broader?
    every now and then a healthy correction occur.. what’s different now?


  2. I acknowledge these things are very hard to predict so I could be wrong…
    Don’t think there is an objective metric here, it’s mainly the fact we have been in a huge bull cycle for 10 years combined with valuations that don’t make sense to me. Add that to pricing pressure and low r&d productivity and you get a setup for a real correction next year. Lastly, there are a lot of alarming signs in the biotech VC industry that corroborate my sense that things have gone out of control.


  3. Hi ohad, there are still a few questions in the other Thread. Maybe you have time to read and answer. Thank you.

  4. Hey Ohad,
    thanks for the update and the heads up!
    Any chance you looked at ESPR data? they just released!
    thanks a lot!

  5. Ohad
    After this bearish blog it doesn’t look it make sense to ask you about individual stocks.
    So I will just have a question about cancer stocks in general.
    It looks the fields is dominated by the big players. The ESMO was a bloodbath for small / mid size bios. Is there any technology which is still worth holding /following, or we just sell all cancer stocks and forget about the field. I still have a few cancer stocks which are holding, for some odd reasons, reasonably well (XLRN, XNCR, ZYME, AUTL).

  6. Hey Andre,

    Good question!
    Strange thing for me is that I have several stocks that are at 52 week lows, with micro market caps, and I am wondering how they could go even lower? MGEN, MBIO, TRIL, APHB ($7M market cap I believe), CAPR, SNSS, APTO. But its always surprising how low a stock can go…

    Then there are those that had rose (quite greatly) during the last year and have taken a good haircut in October….but are still relatively high.

    Only exception seems to be AUPH and STML, which have been trading in a very narrow range for a while now.


  7. Visionary –

    ONCE – I plan on holding it as a core GTx position but it didn’t go low enough to justify adding more imo.

    SGEN – I think it is fairly priced, the ADC field is a clear disappointment so far but hopefully things will change with new technologies and programs. I like the Nectin4 program in bladder cancer which should gain visibility next year.

    CTMX – I find the data hard to interpret, their technology is still not clinically validated imo. Still quite expensive.

    ZYME – Mixed feelings about this one. I don’t think their lead program is efficacious enough as monotherapy (short durability) but still a very nice poc for their approach demonstrating clear efficacy with a bsAb. I really like their platforms and the bsADC programs, very elegant and differentiated imo.

    Dan (ESPR) – Just saw the pr but didn’t delve deeply into the data. I still think the drug works and it will have a CVOT effect but near term the market will probably be negative on the mortality imbalance (0.8% vs 0.3%) which is probably a statistical fluke but this has to be proven with data.

    andre – I don’t think so as I don’t think investment strategy is a binary thing. One can be more cautious on the market but still be exposed to sticks selectively. Plus, I have no guarantee that my prediction will materialize. I don’t plan to sell all my stocks but instead adjust the proportion of stocks/cash/short ETFs. Of the four you mentioned I like ZYME and AUTL but waiting for a better entry point to add more or buy respectively.


  8. Hello Ohad

    thanks for all your thought-sharing – really inspiring!

    Ohad, Innate Pharma had a pretty strong deal with AZ last week. Sitting on a lot of cash now, not much Enterprise Value.

    What’s your opinion on them?


  9. Hi Ohad,
    Could you write a few words on why you use BIS for hedging? I’ve been trying to hedge my biotech portfolio too lately (even before the drop) and I find BIS a strange choice. It’s a leveraged short ETF, meaning you’re getting more or less double the protection vs. the amount invested but you’re also getting double the loss when your core asset goes up in value. So you’re basically nullifying the effect of the IBB on about 25% of your portfolio (without cash). Why is this preferable to put options that provide downside protection without a lot of loss potential?

  10. NITE, MeiraGTx and AGTC and Biogen pushing XLRP through the clinic.

    Do u still like the NITE platform moving forward…their lead asset seems promising?

    I added a small starter on the dip $nite

  11. Ohad, if you could explain why you choose BIS over LABD, that would be appreciated. It looks that LABD has a higher daily volume, and its holdings look to be more transparent than BIS’s.

  12. Ohad
    AMRN has a mkt cap of 7B, ESPR has a mkt cap of 1B. Does that make sense to you? Would you be a buyer of ESPR after the latest release of data.

  13. Hey Ohad,

    Would love to hear your thoughts on Marker Therapeutics (MKRK) after their merger w/ tapimmune. They have some pretty interesting data where they show > duration of complete responses in lymphoma vs CD19 CARs

  14. Apologies, RE Marker the ticker is MRKR — Also would love to hear if you have any thoughts about Zosano (ZSAN) in Ph3 for migraines and Intec (NTEC) which has a Ph3 delivery system to improve Carbidopa/Levodopa in Parkinson’s patients.

  15. Hi Ohad, Fellow Bloggers,

    Have you had a chance to look at SELB data? The stock has cratered over the past week following the results.

  16. Ohad

    XENE has a net cash position of 120M and a mkt cap of 220M and a compound that has a 300M commercial opportunity. Do you still view them as being undervalued in what you predict may be a couple rough months ahead for biotech’s. And with your success in calling several takeovers in 2018 would they be high on your list of companies you see as a potential buyout in 2019?

  17. Christian (IPH) – Agree, looks like a good deal for that stage of development, my main reservation has to do with their targets and the focus on innate immune cells, which is still not clinically validated imo.

    Ted Strail (BIS) – I chose BIS because it’s an easy and straightforward tool, not involving options. I like the fact it is inversely correlated to large biotechs which are more linked to the overall market. I still plan on holding smal mid cap biotechs selectively, hoping to get one or two winners although this group will surely go down in case of a market correction.

    Kay Lee (DRNA/ARWR/ALNY) – Indeed , very impressive recovery although still not much happening beyond liver diseases. I like DRNA’s PH program which could be differentiated than that of ALNY but waiting for a better entry point.

    Robert goulet (NITE/MGTX/AGTC) – I like XLRP as an indication but still unclear whether one of these programs is superior. I still like NITE and thinking about adding if stock goes down because it provides good optionality for the next XLRP readout. Not so confident about the choroiderremia program because P3 is based on a small data set.

    Hiroshi (LABD) – The reference ETF for LABD is XBI so these are smaller biotechs. Don’t have a strong position against it as a hedge, just a different exposure profile.

    dave (AMRN/ESPR) – AMRN should be worth significantly more than ESPR because it has great CVOT data while ESPR has only biomarker data (which are approvable but still less important than outcome). I still believe in ESPR and think the drug is effective and safe, might add more next year.

    Alex (GNCA) – Yes, I like the technology, surprised other neoAg companies don’t have it, but I was more interested in cell therapy rather than vaccines so at the moment too early for me.

    Rob Preasant (MRKR) – Not familiar wit them but sounds like an intriguing approach that doesn’t involve T cell engineering.

    Sorry, don’t know ZSAN and NTEC well.

    Les (SELB) – Didn’t have a chance to look at the data but doesn’t look great at first glance.

    Dave (XENE) – Yes, I still like them at these levels because they have two de-risked programs validated by human genetics and a potentially quick route to the market in orphan indications.


  18. Ohad, $PIRS is only valued right now with about 80 mio. for the fully-owned clinical/preclinical programs, the co-development rights with AZ, Servier and SGEN, the approx. 5 billion biobucks, the potential milestones, the anticalin technology…..

    This valuation seems very prudent despite still missing clinical PoC for the two lead programs – what do you think?

  19. Hi Ohad,

    Have you had a chance to look at AVEO’s results? 52% ORR look OK to you? Their Ph3 update is expected mid 4Q. Insiders have bought a huge number of shares at current levels ($2-2.50) so they seem to be very positive about the outlook.

    Anyone else holding AVEO with more inputs/insight?

  20. Interview with CEO of ESPR on CNBC. He said the recent results released (trial with 4000 patients) alleviated the earlier safety concerns :-). Pricing of $3500 per year compared to more expensive PCSK9 drugs of $4500-8000 and Lipitor (?) of $108 per year. Said the company would consider global or regional partners for selling and is looking at strategic options as well. Indicated that his wife is a candidate for this drug and is looking forward to its approval :-). Shares are up nicely today with the rest of the market :-).

  21. I know Ohad cannot comment on ARQL – anyone else who is still holding it in their portfolios have any idea why it is dropping so heavily after such sizable insider activity and no major negative news on the Earnings Report? Will appreciate any input.

  22. ARQL – INSIDER TRADES – 700K at $3.20-3.50 and 181K at $5.50 (their recent public issue pricing) in June/July. Stop Limit triggered decline of $.62 this morning was a buying oppty. ASH in December will likely have some results.

  23. Hi Ohad,

    Have you any opinion on NDRA? Looks like their testing gear will be useful to all the NASH players.

  24. Hello Ohad,

    it seems that ADVM’s vector for rare diseases (though in preclinical models seemed effective) has flunked ph1- this puts the entire rare disease development into question (same vector). Wich is too bad.


  25. Hey Ohad,

    Are you going to review the ASH abstracts? It seems TRIL and FTSV have some positive ones that may point to a use for their anti-CD47 drugs.
    Thanks for your insight, as always!

  26. Hey Ohad,

    is NewLink, $NLNK, back from the dead? Late breaker at SITC and looks like very robust ASH abstract for AML.
    Trading well below cash as well.


  27. Hello Ohad,
    Are you familiar with Karyopharm Therapeutics (KPTI)?
    I read an article yesterday (Avisol Capital Partners) and initiated a position this morning and then read that they will be presenting with at least 10 oral/posters at ASH 2018.
    Their home page “Targeting Disease at the Nuclear Pore” also piqued my interest. They are also a USA/Germany/Israel company. Any comments? Thanks.

  28. Hi Ohad,
    SAGE with the strictest black box warning for the loss of consciousness issue. What is that going to be
    doing to the valuation?

  29. AFMD

    Do you like the ASCO abstracts? Amphivenas drug looks nice too.

    Do you like the bispecifics?


    Where do you See the stock Price in a few years with positive cvot?

  30. Hello Ohad,
    In the spirit of ECYT any opinion on PGNX. They have a radiopharmaceutical that targets PSMA, that just went into Phase 2 trials.

    Thank You!!!


  31. SAGE halted all day last Friday with scheduled meeting
    with the FDA panel, result very favorable and up $10 after hours.

    AVXS, FMI, ECYT all great endings!

    Thanks, Ohad.

  32. Ohad, what are your thoughts on the driver behind Parkinson’s disease? Asking as it relates to PRTA and DNLI. PRTA seems to be in the lead targeting alpha-synuclein in a good partnership with Roche. However, DNLI in their latest presentation seems to suggest alpha-synuclein not a driver behind PD (correlation, not causation?) and that LRRK2 is a better target for PD (more upstream). Curious on any thoughts you have here as it pertains to both DNLI and PRTA.

  33. Ohad
    FOLD has a busy GT program for 2019.
    Revenue is growing nicely, a lot of cash to support the advancement of several GT programs. EV is <2B.
    What would be a good entry point?

  34. Ohad

    can you comment on ONCE and SAGE. Both released earnings and a business update this morning and market is responding negatively. Do you think this selloff presents a opportunity for either?

    And specifically with SAGE, do you think the likely black box warning regarding brexanolone dampers your enthusiasm for that drug and and possibly for SAGE-217 as well

  35. Ho Ohad & fellow bloggers,

    Any comments on AVEO? 44% increase in PFS & 26% reduction of risk in progression are significant enough? Stock is down. OS showed no change but people argue that it being a 3rd line treatment that should not matter much.

    XENE – Fingers crossed on results and update :-).
    SAGE – $117/118 seems to be the short term support.

  36. Dave–I hope you don’t mind if I mention a few things regarding Sage until Ohad has time to comment. The conference call is very informative. I would especially recommend the questions by an analyst “Jeff” at 22:30 in the call.
    The loss of consciousness events are predictable, and the patients could self report a change in how they felt. That will be important in the sense that they are not monitored 24/7 for 60h in a hospital room. There is no associated apnea or decreased oxygen levels with these events.
    –One big issue I see is that they will need to treat in the hospital and the drug will cost about 30K. If that is true, hospitals will lose money on a DRG charge and will need to carve out a deal with insurers. That can be a major impediment.
    Sage 217
    Different pharmacology given the oral drug….lower peak concentrations and no LOC events so far. I suspect they will dose the drug at night which will make it even less of an issue. A phase I study looked at an oral suspension, rather than a capsule–which is somewhat between IV and oral. Nonetheless, dosing was limited by sedation rather than LOC.

    I am very interested in Ohad’s opinion, but I think that Zulresso will be challenging both from acceptance and reimbursement perspectives, but I remain optimistic regarding 217.

  37. Hi Ohad, do you have any opinion on Calithera (CALA). Seem to have promising early pipeline relative to market cap. Thanks.

  38. Ohad FGEN’s market cap now somewhat lower at 3.67 billion $. they have obviously 2 real drugs. do you still think it is to expensive?

  39. Hi Ohad,

    VKTX – Any reason for the huge dip? Did you see anything alarming in the ER and updates?

    Anyone else have an opinion? Buy opportunity for a near term trade?

  40. Ohad, I think you commented before on ALPN and were cautiously optimistic on their approach to IO with their lead oncology drug (PD-L1/CTLA-4 antagonist and CD28 agonist) set to enter clinic 4Q19.

    Do you think the initial disappointing clinical data from JNCE targeting ICOS in combo with a PD-1 casts doubt on what ALPN is trying to do? Or will the fact that I believe CD28 is upstream from ICOS make a difference? Or reason to believe that a dual PD-L1/CTLA-4 antagonist will make a difference here? Thanks!

  41. Christian ׂׂ(PIRSׁ) – Agree it is becoming interesting but I still prefer to wait as their interesting programs are still early and the 41BB/HER2 program is high risk with data expected only next year.

    Les (AVEO) – Saw their topline data but didn’t delve deeper. The PFS difference wasn’t dramatic but this time it was in last line patients, the negative OS trend still coming back to haunt them…

    Les (NDRA) – Not familiar with them.

    Dan (ADVM) – Agree, very bad news which means they have to acquire programs to stay relevant, luckily for them they havea a lot of cash.

    Dan (TRIL/FTSV) – Don’t have time this year for a detailed review of the ASH abstracts. Personally I am not optimistic about CD47 given results to date and CELG’s termination. FTSV’s data are the only ones with me signs of efficacy but they are hard to interpret, especially the combo study with Rituxan.

    John (NLNK) – I think it will be hard to get excited around IDO without a comprehensive data package, likelihood of success are slim imo. They should look for external assets .

    Lawrence (KPTI) – Yes, I have been following them for a while, still on the sidelines as selinexor has activity in myeloma but is not a stellar drug and there have been lingering tolerability issues with the drug. For me , eltanexor is the more interesting program given the limited CNS exposure, looking forward to seeing P1 data.

    Les (SAGE) – For severe post partum depression with IV administration I think the drug will still be used as it will be given in the clinic and this profile is manageable.

    Christian (ADVM) – For now yes although I am not a big fan of their intravitreal approach (a super long shot…).

    Hubbel (AFMD) – Looks like NK is becoming a hot area, I still cautious but the deal with Genentech was impressive. The ASH abstracts look ok, hard to interpret the PD1 combo data but the 50% response rate in CD30+ CTCL looks nice.

    XNCR – Bispecifics emerged as a very challenging space so I don’t ascribe a lot of value to these programs. To me, ZYME has a very interesting platform and could have something clinically meaningful for ADCs by targeting 2 differernt epitopes on the same target. If bispecifics make a comeback than XNCR definitely has a lot of capabilities but so do others.

    ESPR- I think the stock has the potential to reach 150 if CVOT is positive (10-15% reduction) but that’s highly speculative and will take time.


  42. scott (PGNX) – On paper should have been a very interesting program but from what I see clinical data aren’t as compelling, not sure why…

    RM (SAGE) – Thanks, let’s hope SAGE ends in a similar way, need to wait for MDD P3 data next year.

    mcbio316 (PRTA/DNLI) – Personally I think LRRK2 represents a more robust therapeutic approach because patients have activating mutations so this probably isn’t just correlation. Can’y say te same thing about synuclein, which may end up like Abeta, just a hallmark of the disease. So I would go with DNLI over PRTA if we ignore valuations but I don’t think a 1.5B valuation is reasonable for a P1 program.

    Alex (CNAT) – Haven’t looked at it for a while. Biology makes a lot of sense but clinical data were underwhelming last time I checked.

    andre (FOLD) – I like their GTx pipeline but hard to justify valuation right now given sales of Galafold, debt position and stage of programs. I prefer to wait.

    dave –

    ONCE – More delays/ potential issues with the HemA program not a good sign. May pan out long term but I don’t see the urgency to add right now. The Pompe program looks really interesting but need to wait for clinical data, BOLD’s setbacks work in their favor.

    SAGE – Need to wait for next year’s launch in post partum depression and most importantly, P3 data in MDD towards year-end. I am not that concerned about teh black box warning but this indication is so unprecedented that it’s hard to predict the effect on market uptake. Obviously, this mustn’t happen with 217 which is an oral agent for a much broader population.

    Les –
    AVEO – There is also the IP issue (still should get exclusivity though)
    XENE – Sounds like P1s for 901 and 1101 did not encounter serious issues, data expected early Dec.

    Gary (SAGE) – Thanks for sharing this, very interesting. Agree reimbursement may be more challenging but the unmet need is so severe that I expect payors to pay for it eventually.

    Alex (BOLD) – Delay in Pompe program.

    Subb (ABEO/ONCE) – No plans to add for now, waiting for more data or lower stock prices.

    Dan S (CALA) – Still waiting to see clinical proof of concept, so far limited efficacy.

    Christian (FGEN) – Yes, I like the CTGF program but prefer to wait.

    Les (VKTX) – No, waiting to see data soon.

    mcbio316 (ALPN) – Experience with new IO agents has been such a terrible one… Hard to conclde from one target to another but so far none actually work. Hope we’ll get the breakthrough we need soon…

    Ruhu (ESPR) – Topline data already announced so no major surprises, aligned with the profile we are aware of.


  43. hi again Ohad!

    “Christian ׂׂ(PIRSׁ) – Agree it is becoming interesting but I still prefer to wait as their interesting programs are still early and the 41BB/HER2 program is high risk with data expected only next year.”

    well after Q3 call it is clearer to me why stock price had been sinking for some months. 080 basically failed (but I have not had high hopes for this one anyway and they had been downplaying it for long time). 343 delayed and it seems they could not see much efficacy in the first cohorts, so now they are starting dosing in quantities equivalent to clinically used Trastuzumab doses… sounds not too good I would say.
    Also 060 data delayed a little. This program alone would make PIRS easily a multi-bagger from here IF it works.

    market clearly thinks Anticalins don’t work (MC 192 million and cash 30/9 137 million…)

  44. Ohad

    You had mentioned AUTL in a positive light on several occasions, and this week the stock was up over 50%. Is this a reaction to data they will release at ASH, and do you feel it’s 1.5 billion mkt cap is justified.

  45. Hi Ohad, comments on VKTX latest release? XENE drop an add oppty? Which of your other holdings are getting into strong buy territory or this is a biotech meltdown you saw coming with your BIS add?

  46. Hey Ohad,
    Yes, any opinions on the additional data by MDGL and VKTX? how do these two programs compare to another NASH therapies in development?

    Thanks a lot. A lot of stocks are down big (ABEO, NITE) and I wonder if you have any opinions or may be tempted to add.
    Thanks as always for sharing your perspective!

  47. Interesting about VKTX results is that the benefits are so dramatic and sustained in the longer-term (post 12 week treatment) that the drug may just need to be prescribed for a short-term (12 week) treatment course.

  48. Hi Dan,

    VKTX, would be bad news if only short term treatment is required. Like GILD,s drug which heals in a few weeks. They used to price it high but competitors and government pressures results in price drops. New patient populations can of course compensate, which may be true for VKTX. Generally for LDL-C and other fat related issues maintenance doses of statins are common practice even when the levels drop to safe values.

    Looking for a big jump in VKTX SP today and in the next 3 months. The volatility has been scary. Short sellers need to scurry away 😊.

  49. Hi Ohad,

    Very disturbing downgrade of SAGE to Underperform by Leerink with negative comments by Marc Goodman who is apparently the new analyst at Leerink covering SAGE. He has said prospects are not good for both Zulressa and SAGE-217 and cut the Price Target to $80 from $120. Will appreciate your comments.

  50. Hey Les,
    Re VKTX – Yes, in terms of profit and revenues, sure. But in this case I think some people were very worried about long-term treatment and possible AEs, and so the remarkable effectiveness on a 12 week treatment offers another reason why maybe safety risks are not as pronounced as what most critics have been expecting. So I am only saying that this might also be a positive (given drug has also been tested in small population and no ph3 yet).

  51. Thanks Dan. Disappointed at the VKTX performance this morning. Just faded out.

    Ohad, Dan – have you or other fellow bloggers heard of LPCN’s NASH drug? LPCN-1144. They made a presentation on Monday and some say their drug’s performance was also good. Their stock price is $1.65 (dropped from 18 to 10 to current price over the last 5 years).

  52. MDGL dropping like a rock today. ICPT is up but does not seem the money is flowing into VKTX. Not sure whether big pharma is beating down VKTX so they can acquire it for a smaller premium like they did with ECYT.

  53. Hi Ohad,

    The NASH players data is getting confusing. It will be great if you can publish a brief comparison. Do MDGL, VKTX, ICPT, LPCN have drugs targeting the same conditions? The huge drop in MDGL supposedly triggered by VKTX data will not make sense if they are treating different conditions. The differentiation seems key to holding or getting out of one or the other names – or is it too early to call? (MDGL seems to have lost a great opportunity to get acquired when they pegged their price too high – now they are narrowing the gap with VKTX).

    Will really appreciate your thoughts. (And inputs from fellow bloggers). Here is the article on MDGL selling off. (Another bad day for SAGE as well :-(.

  54. Hi All,

    Do not see any comments on MDGL, VKTX and SAGE. All dropping furiously. Can understand MDGL dropping on VKTX superiority and SAGE on Zulressa but why is VKTX selling off?

  55. Les,
    Ohad had been mentioning over valuation for the bio sector.
    It’s no different than the high tech which had a big run up including
    a lot of new IPOs since last year.
    At my advisory service, we had 3 stern warnings that the correction would occur in March so I sold almost all my holdings the most of which are in high tech. I started buying little by little when they reach my cheap price.
    As the correction in March did not fully adjust the values and continued higher, we again discussed the identified next leg of it in September to October. It didn’t happen in September but right on time in October and it may go at a slow end in January to April before it clears out.
    Of course, I’m not waiting for the end to start buying as I’ve deployed half or more of my holdings with a strategy to catch the next high tech event in IoT and AI, the same way I don’t want to be out on Gene Therapy and Editing.
    Luckily, I didn’t miss out on AVXS, FMI, ECYT having bought and sold them before for a nice gain. The same with about 2 dozen or more high tech names that really paid off well.
    It’s not going to be as easy as the correction of January 2016 when we knew what stocks were very undervalued and bought them all the way down.
    The market from here is treacherous. Good luck to all!

  56. Thanks for your comments/advice RM. Number of articles about the MDGL/VKTX data elsewhere (nice summaries at Seeking Alpha and Motley Fool). Long and the short of it is that the data applies to 2 different sets of patients and VKTX may (unless FDA okays a direct path to Phase 3 Pivotal) have to go through a Phase 2 to get to where MDGL is (efficacy data on NASH patients). Longer time to market and risk. Conclusions are that VKTX is a better bet given its larger pipeline and lower valuation and a good possibility of its efficacy on NAFLD carrying on to NASH.

    Looking forward to Ohad’s verdict and comments on the market’s confused reaction to both MDGL and VKTX.

    LGND owns stakes in both VKTX and SAGE (besides a huge pipeline and existing revenues) and given its recent drop from 278 to 150 seems it may be a good additional low risk way to invest.

  57. Once Abeo Bold

    The three stocks sold off a lot. Which ohne would you add? Once looks a bit tattered, no good news there, Maybe still to expensive?

    Greetings habu

  58. Christian (PIRS) – Yep, agree sentiment is very negative right now, still worth tracking next year imo.

    Dave (AUTL) – I still like AUTL but prefer to wait until actual data at ASH given valuation. We should focus more on duration of CRs, as the hypothesis behind targeting CD22 and CD19 is addressing CD19 downregulation which is a documented mechanism of resistance.

    Les –
    VKTX – Data look good, agree they are behind MDGL but efficacy is strong and safety concerns removed to some extent.
    XENE – I plan on holding but not to add given the high exposure in the portfolio.

    Dan (MDGL/VKTX) – I honestly believe there is not enough data to compare the two so I prefer to own both. The drugs, both target TRbeta, look efficacious and safe.

    ABEO – Yes, I think it is becoming attractive based on its deep CNS pipeline, more concerned about the DEB program which could be an overhang.
    NITE – Waiting for more data from the RPGR program to make sure steroids can lead to efficacy at higher doses.

    Dan (VKTX) – I still assume chronic treatment is needed to maintainteh effect.

    Les (SAGE) – Stock isn’t cheap but I still plan on holding. SAGE-217’s potential is so explosive I prefer to stay in despite the high valuation.

    Les (MDGL, VKTX, ICPT, LPCN) – NASH is indeed getting very crowded. Not an expert so will probably focus on other stocks on my next write-up.

    Habu (Once Abeo Bold) – Of the three ABEO is the most attractive IMO based on its MPS programs based on AAV9 and the early stage CLN pipeline.
    ONCE – I prefer to wait given the series of negative updates on Hem A, Pompe looks really interesting but still early.
    BOLD – Pompe delay is disappointing but the XLMTM program still looks good imo. Prefer to wait before adding more.


  59. Thanks Lawrence
    GT general question – how does the virus with the “good” gene Replacing a mutated gene ?

  60. Hi Ohad,
    why are you not into gene editing such as crsp, sgmo, edit, ntla or clls? there’s a slew of good twitter news on sgmo that it’s really revolutionary medicine.

  61. Hi Ohad,

    Can you comment on Jerome Verony ‘s article on Seeking Alpha (VKTX hype) and his conclusion that it should be valued at $366M? Any flaws in his thesis? Weird seeing articles like this when VKTX raised capital recently at $18.50 per share.

    Would also appreciate comments from fellow bloggers still holding VKTX.

  62. Hey Ohad,

    Would love to know if you had any thoughts RE: NVUS Ottis media program (companies valuation seems cheap), GMDA (cord blood transplants), SRRK (TGFb targets), NTEC (Phase 3 Parkinson’s program). Also James Wilson

  63. Meant to say that I recently overheard James Wilson give alcholades to RGNX for there AMD program and wanted to know if you think the data is positive so far. He also said that a gene therapy company that can implement a on/off switch would be the next innovation in the space and I believe MGTX has a tech of that sorts.

  64. Dear Ohad,

    Any thoughts on BPMCs new data for KIT GIST. How do you think it compares to DCPH program?

    Secondly, Any thoughts on ATRA’s Multiple Sclerosis data from last week. Looked rather encouraging. They also are leveraging there virus T cell platform to construct Allo CARTs w/ partnerships with Michael Sadelain and also the Mofott Cancer Center. Seems interesting

  65. Alex (NITE) – I wouldn’t give it too much weight. These fluctuations occur frequently.

    XENE – I never really saw the value in that program, prefer their Kv7 opener which should have superior clinical profile.

    RM (Gene editing) – I think gene editing is very exciting but from an investor perspective I would be surprised if they see clinical success so early. Typically it takes years, even decades for groundbreaking techs to mature into products (gene therapy, CARs etc.). For me we are in the midst of the hype cycle and the right to time to get into CRISPR stocks will be down the road when they encounter setbacks which they will eventually overcome, I hope. Hope I am wrong and they get right on the first attempt, it’s just that it has never happened.
    SGMO – I prefer to skip, not a big fan of zinc finger technology but let’s wait for the updated data from the IDS program.

    Les (VKTX) – Haven’t seen it, but like any other early stage biotech, valuing a drug’s potential is very tricky and results can be variable.

    Tony K – Of the list I am familiar with SRRK as I am very interested in the TGFb superfamily. I like their technology and focus on selective TGFb1, preclin package is compelling but I have an issue with valuation and risk profile at this stage. This is true esp in IO programs where there was almost no translation in humans with PD1 combos.
    RGNX – I was encouraged by the protein levels they see but clinical outcome is underwhelming in terms of rescue treatments, with the constant levels they have I expected to see patients becoming Lucentis/Eyelea independent, like in hemophilia GTx studies.

    Jason C (BPMC/SCPH) – Hard to say based on cross trial comparisons…
    ATRA – Again hard to interpret the data, I don’t think they have a clear signal yet.
    Not sure how much value should be assigned to their Allo CAR efforts, there is so much going on right now in this area….


  66. After following you for awhile, it seems like one of your investment strategies is to never buy the hype nor hope nor partnerships nor speculation. It seems like you want to always always wait for some type of data to prove the concept/theory/class/etc with, for example, good safety profiles/ORR before you invest. Thoughts?

  67. Bispecifics

    You dont Hold Any bispecific stocks like xncr, mgnx, afmd… Any reason for that?

    Do you agree in the thesis that the Potential of the technology (masking antibodies, adcs…) is enormous if they See activity with their Cytomx-2009 program? Or How do you Assets the Potential?

    Do you still think there is potential in this program? Market disagrees.

    Do you plan on Adding at current Prices? You mentioned that you like the menin – mLL program a lot. Do you See much upside here? A Long way to Go.

    Still confident about approval? How much risk do you See here?

    Gene Therapy stocks
    ABEO , ONCE , BOLD, RGNX all Came down a lot. Maybe a good Chance to add now with the Future readouts?

    Thanks for your work and efforts. You are awesome my Friend:)

  68. Josef, Ohad is holding $ZYME – which is in my opinion a good idea.

    Since this week they are having 8 partners that have licensed their Azymetric and/or Efect technology. One problem for the partnered pipeline is that the earlier deals were concluded at rather lousy deal terms, but since the emergence of first clinical data for ZW25, deal terms are strongly up. Sure, these new programs will take long time until they enter the clinic, anyway the considerable upfront payments are very useful for ZYME, and future value is being created on top of their fully owned pipeline.

    Regarding proprietary programs, there was some news this week:
    – partnership with Beigene for ZW25 + ZW49 for Asia ex Japan with pretty strong deal terms (e.g. 40 million upfront and 390 million development and commercial milestones plus tiered royalties; imo not bad for a geographical deal also given that Beigene finances the Asia-studies, and they have data-sharing agreement)
    – IND for ZW49 was filed. I am very excited to see first data on this program.

    They are having two valuable platform technolgies (Azymetric and Efect) by now, and if their next-gen ADC-tech also works, this would unlock nice additional value imo

    cash level about 200 mio. USD right now which will be much needed for ZW25/ZW49.., market cap 439 mio. not bad but some patience will be necessary.

  69. Hey Ohad,

    Ambit’s FLT3 inhibitor just approved for Astellas… any idea / memory about how the CRV will be payed out to old shareholders of Astellas

  70. Hi Ohad,

    ABEO: 1) Wondering what your thoughts are on the MOX short report earlier this year on ABEO. Didn’t agree with the report’s championing of 2 neurocog tests as all neurocog tests are not fully validated for MPSIII clinical outcomes. However, wondering what you think about the dose dependency / efficacy with Cohort 2 in the Leiter / Vineland scores.

    2) Thoughts on CEO removal? And any thoughts to record of proper CEO selection (given Mark Ahn RE promotion)?

    Thank you as always – Xo

  71. Dan
    AMBI was bought by Daiichi Sankyo not Astellas. So this is a different compound.

    But speaking of AMBI there were some news recently. DS got BTD in august and already filed in the US some days ago (r/r AML) . Under priority review the approval should come before end of may 2019. (They also filed in europe and japan but this is meaningless for the CVR)
    Regarding the first CVR: it will be paid upon first commercial sales in the us. So should be in summer 2019 if approved. Quick reminder: For each CVR you would get 2,25$

    The second CVR (also 2,25$) will be paid upon first sale as first line treatment. P3 is Quantum-first study which has a completion date in late 2020 on clinicaltrials…

  72. Ohad, you are also holding NERV.

    it has corrected a bit from its recent highs, now at MC 304 million $. cash as of 30/9 is 97,7 mio. $ (I think quite a bit under your projection for year-end – they are guiding mid 2020 for cash reach).

    why do you like the stock – and do you think it is an attractive entry point here?

    Thanks as always for your feedback!

  73. Ohad
    do you have an opinion about ACIU?
    They are focused on CNS – AD, Parkinson, Down syndrome.
    A lot of solid partners – Genentech, Biogen, Jansen.
    Enough cash – 200M – to last at least to 2021.
    The most advanced program is an anti-Abeta antibody for AD in Ph 3.
    And another one in Ph 2 with anti-Tau antibody also for AD
    A lot of programs failed in AD, so curious to see your opinion if their programs is differentiated enough to avoid the anti amyloid disasters

  74. Hi Ohad, first of all I like to thank you for the great job and precious&accurate analyses.
    Do you think there is potential in AFMD programmes?
    Data shown at ASH18 looks very interesting.
    Like to know your opinion.

  75. Ohad, it seems to me the bispecifics field is getting hotter. some very promising data at ASH as I understand.

    I think the field might get hot for investors in the coming years, and same goes fir ADCs.

    What do you think?

  76. Ohad
    IMGN data look fairly safe – nicely surprised about that. Any comment on their new IGN payload?
    Can that bring back some hope to the ADC field?

  77. Any take on the KURA ash results?

    Do you still hold STML due to nice imgn cd123 data ?


  78. Hi Ohad and fellow bloggers. FDA issues guidelines for NASH drugs. While they say (in the intro of the document) that development of drugs for NAFLD and NASH will meet unmet needs, they later say ‘Splitting NAFLD into three successive stages (NAFL, noncirrhotic NASH, and NASH with cirrhosis) can provide sponsors a convenient conceptual framework to identify areas of potential future drug development. At this time, because patients’ NAFL can exist for many years andmay not progress to NASH, it may be challenging to demonstrate a favorable benefit-risk profile of pharmacological treatment(s) in NAFL patients. Therefore, NAFL treatment may be better addressed by interventions such as diet and exercise.’. Does this put a damper on VKTX valuation?.

  79. Hi Ohad,

    What do think of the phase 1 data from CD20xCD3 bispecific Abs from Roche and Regeneron?

    Will these data make a comeback for bispecific antibodies?


  80. Hello Ohad,

    Any insight or things that struck you about ASH18? It seems,a s some of us here have pointe out, that the Bispecific mAbs are attracting attention (on the coattails of the Regeneron bispecific.) Does this change something in the ZYME story?

    Also IMGN seems like a positive surprise. Hard to understand SNSS, it seems that APTO and LOXO might soon catch up with SNSS… APTO is supposed to start 1Q 19 with IND / dosing. Have you looked at their poster and preclinical data? I know its just preclinical, but their molecule seems quite unique, and so far (little toxicity) and it has been well tolerated in animals.

    How is it that AGNX is so successful in going after effective targets? why didn’t anybody else go after the CD70 target? Does it really take a company from Belgium to figure this out? I am having trouble making sense of this, considering plethora of biotech companies….

    Have you looked at FATE recently? Are you still skeptical about their NK technology? Valuation is well below other companies.

    Finally regarding cos in your portfolio:
    – what is your take on XENE results?
    – STML and KURA – what are the expectations for ’19

    As alway, thanks for sharing your knowledge and insight!


  81. Hi ohad. Looking forward to read your ASH article :) with some comments…

    The valuations of your stocks came down a lot in the last time – which do you like best at current prices to add more?


  82. Ohad

    Are you at all familiar with NTEC? They have a oral drug delivery system designed to improve the safety and efficacy of existing drugs. It’s called the Accorfdian Pill. It’s in late stage trials for Parkinson’s and earlier for CBD cannabis. Sub 200Mmkt cap.

  83. Ohad

    Can you do a write up where you show liquid tumors. AML. CLl. CML etc. show where CAR T, TCR, TIL BCMA show promise and how much area is still unresponsive with liquid tumors. It’s all very confusing.

  84. Ohad

    XENE. I’ve been puzzled by the stock action over the last several weeks. With over 100M in cash the mkt is only assigning 80M value for their epilepsy programs. Update at AES appeared to show no red flags. Any reason market isn’t seeing the potential in XEN1101 and XEN901.

  85. Ohad
    ABEO – a nice surprise: ABO- 401 GT for ALL CF mutations.
    Sounds great but my understanding was that the GT can fix only single gene mutations. Any thoughts about that?

  86. I too thought the CF program and AIM vector discussion most interesting. I wish they would have given a lot more details. It wasn’t clear to me if they’ve overcome all of the delivery issues with prior CF Gene Therapies or just some. Also would be nice to know exactly how far away from the clinic the program is. It seems like Ferret or Pig models are more meaningful for Cystic Fibrosis would be nice to know if they have data in those models.

  87. Hi Ohad,

    can you write a bit about the actual development of gene therapy stocks. It seems gene therapy stocks get destroyed at the market right now, esp. ONCE/ABEO/BOLD/RGNX

  88. Hello Ohad….. What are you going to do with your position in AGTC now that Biogen has terminated their collaboration ?!

  89. Hey Ohad
    What do you think of CONATUS, the results did not reach endpoints, but there was a positive trend. Two more trials will have results this year, and chances seem better for those. Market cap is quite low now.

  90. Hey Ohad,

    Additional data for APTO CG-806, expected to start ph1 very early ’19: AML patient cells with the IDH-1 mutation were unexpectedly sensitive to CG-806, which broadens CG-806’s potential use (in addition to BTX and FLT3).
    Any thoughts on this? Stock gained 10-15% after investors’ conference this week. Market cap $90M. Completed animal tox studies that showed no SAE.
    Thanks for your opinion!

  91. Exited AGTC 3 weeks ago – so thankful I did. Best strategy seems to be to sell at least half the position on significant rises. New PO’s and trial updates always seem to affect the price.

  92. Gene Therapy

    Seems that there are only bad news in the last time. Sector ist gets punished and revalued by market :(

  93. As far as Xene, I spoke to Mr Hogan in investor relations and they assured me there is no negative news the market is pricing in to explain the decline. They think it’s just profit taking.

    If anything everything is progressing quite well and they’re confident they possess one of the best pipeline’s in the CNS space.

  94. Hi Ohad,

    Any comments on the recent downgrade of RGNX? It has dropped considerably after that. Given that its NAV AAV platform is being licensed by ABEO, SRPT, RCKT and others why is there such a gloomy outlook? Will appreciate your views as always.

  95. Hi everybody, sorry for the slow turnaround, busy times with a lot of traveling. Will try to answer all questions over the weekend.

    Kay Lee – Yes, I try to make data driven decisions and prefer to avoid companies without clinical poc (with some exceptions). It’s hard for me to assess preclinical companies let alone with valuations of >500M like the CRISPR companies.

    Josef (xncr, mgnx, afmd) – I was initially really excited about bsAbs but clinical data t odate have been disappointing IMO and the two predominant approaches, CD3 engagers and dual targeting of “complementary” targets (e.g HER2/HER3, VEGF/Ang2), didn’t pan out so far. One bsAb stock I like is ZYME as i feel their approach of targeting two epitopes on the same target could have dramatic consequences on ADCs. Still early days but their data are compelling.

    CTMX – Yes agree there is potential but not sure their approach will increase ADC’s therapeutic window as we now know most toxciity is not target related and their masking technology applies to the target binding regions. Could be more reelvant in IO. iam follwoing them but stock is too expensive IMO.

    Snss – Agree with the market, problematic safety profile.

    KURA – No plans to add for now, the H&N data were disappointing and MLL program is still early (but biologically fascinating)

    Stml -Yes I think they will get approved, especially in today’s regulatory climate.

    ABEO , ONCE , BOLD, RGNX – Yes, some of the correction is justified as there have been a lot of setbacks. Plan to add during 2019.

    Christian (ZYME) – Agree they are becoming interesting at these levels, I also have high hopes for ZW49, beautiful preclinical package with a real fighting chance to overcome limitations with older ADCs.

    Dan – Yes, that’s a different FLT3 program. This is why Astellas terminated their collaboration with AMBI. AMBI’s CRV is triggered only after initial sales in 2nd and 1st line AML, respectively, from what I recall.


  96. Hi Ohad,
    Would be really interesting to hear your opinion on AGTC following the bad news.
    Also, are you keeping your SNSS position?

  97. Ohad,
    I appreciate all you do to provide this free service…its incredibly nice and charitable. Have you looked at REPL? So far only 3 MoA have succeeded in I/O combo Ph3 trials:
    – Chemo combo in NSCLC/SCLC/TNBC
    – TKI or VEGF combo in RCC
    – CTLA4 combo in melanoma and RCC
    Do you think T-Vec that is with REPL will be a 4th? Thanks!


  98. OHAD……. Do you have a current opinion on Corvas { CRVS }??? VERY impressive LEADERSHIP team ! With the current downturn in biotechnology,they are now selling near an all time low.

  99. Xo (ABEO) – Still didn’t have a chance to listen to the R&D webcast so may not be up to date but I am cautiously optimistic about the MPSIIIA program given the strong effect on CSF HS levels. Clinical picture isn’t as stellar but the emphasis on age/stage of disease makes sense, this was also teh case with AVXS’s SMA program. The CEO news clearly doesn’t help, don’t have a lot of insights there.

    Christian (NERV) – I still like the stock although it is a more traditional CNS story (no biomarkers, targets aren’t novel) because I think they have strong data sets for their with clinically meaningful benefits and a potentially differentiated profile (eg effect on negative symptoms in schizophrenia with a mild safety profile for roluperidone).

    andre (ACIU) – Personally i am quite skeptic about their programs, anti-Abeta for sure but also tau which is still not validated. Agree that they have very goodpartenrships but that’s not enough imo.

    Manny (AFMD) – i still don’t see a lot of potential for their NK programs, I know NK engagers have become popular and Roche obviously view the approach favorably but I prefer to wait for more clinical data. In T cell engagers, I don’t see their advantage and NK engagers don’t look that effective to me. NK CARs on the other hand are gaining steam.

    Christian – Yes a lot of noise around bispecifics but I couldn’t get myself excited with the overall clinical profile, activity is there (only for liquid tumors…) and safety profile is not trivial. AMGN’s BCMA program had the best data but very few patients, the CD20 programs are less exciting in my opinion and the number of clinical holds or reported safety events with CD3 engagers is going up constantly…(see MGNX’s update on 009).

    I am more optimistic about ADCs after seeing new technologies that address the major limitation seen to date (general tox in non-target cells), new conjugation techniques that control drug/antibody ratios, novel linkers and enhanced internalization etc. I really like ZYME’s capabilities in the field. ADC is definitely a class to watch for 2019-20.

    andre (IMGN) – I actually was disappointed with their CD33 data, safety profile still not validated (as we have seen with SGN33A) while efficacy still isn’t good enough imo. The CD123 program looks better but still they couldn’t see higher activity at higher doses in AML, safety profile looks ok for now but data set still immature. Anecdotal results in 3 BPDCN patients are encouraging but early. Durability of responses is unclear.

    Jones (KURA) – They clearly have efficacy but not sure the value of this indication is as big as SCCH&N.

    STML – Yes because I think they will get approval and IMGN is 2 years beind with encouraging but very early data.

    Alex (XENE) – Overall moving in the right direction, nothing earth shattering, the imaging data with the Nav1.6 program is encouraging but hard to put it in context (in contrast to the Kv7 data that can be compared with historical ezogabine data).

    drrjk (SNSS) – Agree with the market…

    Les (VKTX) – I don’t think this came as a surprise to anybody as it is clear that NAFLD is still very far down the line in terms of development and most companies focus on NASH and fibrosis.

    Liang (CD3XCD20) – I am less excited than the market, there is clear activity but field is crowded and results are early and aren’t spectacular, safety issues clearly there like one would expect with CD3 engagers. As discussed above, I think it’s too early to announce a revival in bsAbs.


  100. Ohad,
    I’m also very curious about your thinking about AGTC
    You were always pessimistic about the XLRS program and intravitreal administration ( which bodes poorly for ADVM wAMD program).

    You liked their XLXP program but now with Biogen pulling out, throws the whole program into question. For their dose escalation phase (3 COHORTS, 15 PTS), first pt dose mid 4/2018, last pt dosed last week. If we were to extrapolate from NITE’s PII study where no effect seen in the first 2 cohorts and in the third cohort benefit seen in all pts as early as 1 month, I’m thinking Biogen saw at most early data on the first 2 cohorts and made their decision based on this. So maybe still some hope in seeing an effect for XLRP in the third cohort like NITE study?

    Do you think their issue is really intravitreal administration or vector issue?

  101. Ohad
    You wrote that NK CARs are “gaining steam”. Any public traded company doing that?

    APTX recently published data about their NMDA modulator for fibromyalgia.. Met the primary and secondary endpoints. Does that validates their platphorm to address chronic pain in unconventional way? Soon they will have data for DPN with the same compaund
    They have also some spectacular preclinical data about cognitive impairment in Parkinson’s disease.
    They are not cheap but with 4 programs potentially addressing multi-billion dollars each I wonder if they fit into a CNS portfolio

  102. Hi Ohad

    Have you looked at Arvinas (PROTACS) and whats your view in general on targeted protein degradation?

    Regarding ADCs /BsAbs which other biotech platforms besides Zymeworks (Azymetric/ZymeLink) could you highligt – or perhaps just other candidates besides ZW49?


  103. Hi Ohad,

    You mention safety concerns for SNSS, which ones are of concern? Their presentation shows only 1-drug related case grade 3 anemia, the others appears to be non-drug related.


  104. Christian (CLDX) – Couldn’t find anything interesting in their clinical pipeline.

    Pietrocco (EXEL/ARRY) – I sold both a while ago. With EXEL it was based on valuation but if the stock goes below 15 it might be an opportunity. I sold ARRY just before runup… don’t think valuation of 3.3B is attractive without a clear pipeline value driver.

    Dan (ASH/ZYME) – Personally, I am more reserved on the bispecific data from ASH, efficacy is definitely there but data are early and safety still an overhang. I don’t think it changes anything regarding ZYME because I view them more as a classic antibody/ADC player and not as an IO play (CD3 engagers).
    ARGX – The deal with JNJ was phenomenal IMO, data package is quite limited and hard to interpret given the antibody was tested in combination with an active agent (although numerically the CR rate was very high) . Generally, they have done a great job going after targets and they clearly have the technical capabilities to generate high quality antibodies.

    FATE – Don’t know them well, NKs are definitely gaining steam.

    See above regarding STML,XENE, KURA. I plan to hold all 3.

    Jupiter – In general I prefer to wait until 2H/19 for increasing exposure to biotech.

    Dave (NTEC) – Not very familiar with them.

    Bio Trader – Well that would be a very long a write up…. CML is one area where treatment options looks very effective so unmet need is limited, next after is myeloma that is fairly well served with novel agents although they aren’t curative so even with BCMA CARs most patients relapse within a year. Unmet need in AML is still very high IMO, some progress in certain subsets (IDH, Flt3) but nothing stellar.

    Dave (XENE) – Agree, not familiar with new issues, seems like everything is going well.

    andre (ABEO) – Still need to learn more about their CF program. CF is a great indication for GTx and a single program can cover all mutations but historically there have been a lot of technical challenges like cell turnover in lung epithelium and delivery.

    Qualio (ONCE/ABEO/BOLD/RGNX) – The negative sentiment is justified IMO, at least to some extent as most GTx programs haven’t generated stellar data. I still optimistic long.

    Bouschka (AGTC) – I plan to keep my position for now. They have multiple programs and the XLRS program has always been a long shot as it was administered intra-vitreally. Cautiously optimistic about RPGR given NITE’s data but need to see more results.

    Dan (CNAT) – Didn’t see their latest data but from what I recall their clinical data were underwhelming.

    Dan (APTO) – Not familiar with this program, prefer to wait until they have clinical data.

    Sop (Gene therapy) – Yep, and now the burden of proof is on the sector, hope there will be positive updates in 2019 as there are tens of active programs.

    Les (RGNX) – I think it has a lot to do with valuation. They have an impressive partnered pipeline but still no wholly owned program with a clear route to market.

    Aviv (AGTC) – Obviously the new are disappointing but I still think the other programs (especially RPGR) have potential and valuation is very low. I plan to hold into 2019 and potentially add later in the year.
    SNSS – No, I plan to see it.

    Stanley Smith (REPL) – Sorry don’t know them well. Looks like a next gen oncolytic virus, personally not a big fan of this field as data have been disappointing to date…

    Bouschka (CRVS) – Agree about leadership team but so far data are underwhelming IMO, like all other IO programs in combination wit PD1s…


  105. Ohad

    I know you don’t usually speak of larger biotech companies, but as you are positive on ADC’s in 2019 can you at all comment on Seattle Genetics. Like most, the stock has retreated over last several months. The Baker Brothers are large holders of the stock. Would this be a company that can garner M&A interest this upcoming year

  106. Thanks ohad. Surprised with AML as high need. What good are CAR-T then? More hype? Do they relapse fast also?

  107. Guys just need to calm down on xexe. Company just negotiated a prepayment of their future loyalties owed for one of their drugs (I doubt they would bother if there was any issues) and are chock-full of cash. Yes stock has shot straight down but all looks like market conditions

  108. CD47/FTSV – Ohad, just want to follow up on your skepticism of CD47 and the FTSV data to date, including combo data with Rituxan. I certainly agree that have to be cautious on combo data with Rituxan as this was uncontrolled and even though patients were Rituxan-refractory I think, you can still have subsequent responses again on Rituxan alone in these patients I believe. But, don’t you think the the single agent activity for 5F9 in ovarian cancer, including multiple PRs, makes it more likely that FTSV has an active drug?

  109. IMGN

    You Said ADCs are still a Good class. Maybe imgn is a intruiging buying opp at These Levels again?

  110. Hey Ohad,

    what do you think about Idorsia at current valuation?

    Thanks for sharing your thoughts.

  111. hi Ohad, regarding ADCs, have you ever looked at STRO Sutro?

    talking antibodies, any opinion on Ymabs?

    merry Christmas to everybody!


  112. Hi Ohad,

    Really enjoyed your posts. As regards market correction, how do you think current correction level? Do you think correction will continue in Q1 2019?


  113. Les (FCSC) – Eventually didn’t meet them, don’t have a clear opinion on them.

    Dave (SGEN) – I am still following SGEN and have them as part of the portfolio (probably the only one left from inception). So far the story haven’t evolved much beyond Adcetris, although they are doing a good job expanding the franchise. The stock still isn’t cheap IMO and they need additional value drivers. My top program is the Nectin-4 ADC for bladder cancer which could represent a >500M opportunity for SGEN (co developed with Astellas). Don’t see anyone buying them at a 10B valuation before that data…

    Biotrader – From what I know CARs don’t work in AML, some signs in a study form Australia from what I recall but nothing more.

    Alex (STML/XENE) – I like both names, attractive valuations and I plan on adding next year. For STML, it will be all about the launch and XENE will have to wait a while before P2 data.

    Alex (ARQL) – Yes.

    mcbio316 (FTSV) – Agree with what you wrote, I liked the signal in ovarian cancer, just need to wait and see if it’s real.

    Steve (XENE) – Yes but later in 2019, the general correction is just starting IMO but their cash level is a strong buffer.

    Jonas (IMGN) – Maybe, the FRa agent is clearly active but not to the degree I hoped for. Other than that, I couldn’t find anything meaningful including the IGN programs.

    Martin – Sorry don’t know them well.

    Richard Baker (VYGR) – I am more interested in their preclinical pipeline, so far PD data is mixed.

    Karlos – No I am waiting until spring/summer for things to cool down.

    Richard Baker (EPZM) – Need to re-visit them. Same for ARDX.

    Christian (STRO) – At first blush looks too early. They have a couple of interesting early-stage programs but prefer to wait.
    Ymabs – don’t know them well.

    Jay – Yes I think this is just the beginning after a 10-year bull market.


  114. hi Ohad,
    The 10 year bull market was in general.
    Biotech as i recall plunged in 2016 and only
    recovered at the end of 2017 driving it to
    lofty valuations and now causing the sector
    a severe adjustment down.

    So picking the right ones at a good price is
    why I’m here. I do this with the high tech sector
    which is where I still invest the most where the technology
    is more predictable and biotech being my wild cards.

    Thank you for all that you share with us.

  115. Ohad

    At the end of may you said “if the safety data for XE1101 and XEN901 continue to look clean(long term data expected by YE18), it is hard for me to envision Xenon staying independent at these levels”. Has anything changed in your mind other than market conditions?
    Thanks for all you do for the small investor.


    the “Big” players are sold off. Good levels to add? Or do you wait for them to further come down

  117. Hi Ohad,

    Thanks for sharing your insight. I have a couple of questions:
    (1) GILD recently partnered with Scholar Rock (SRRK) for their TGFβ inhibitor. What do you think of Scholar Rock’s (a) anti-fibrotic NASH program and (b) valuation vis-a-vis that of Viking’s?
    (2) In the head and neck cancer space, Rakuten Aspyrian’s photoimmuno therapy antibody conjugates has demonstrated efficacy and specificity (resulting in acute tumor necrosis at tumor site without damaging normal organs). ASP-1929 targets EGFR antigens in squamous cancer cells of the head and neck, skin, and other cancers. Do you think the therapy changes anything for KURA?

    Thanks and best regards,

  118. Ohad
    You wrote that NK CARs are “gaining steam”. Any public company doing that?

    What do you think of APTX
    They recently published data about their NMDA modulator for fibromyalgia.. Met the primary and secondary endpoints. Does that validates their platphorm to address chronic pain in unconventional way?


  119. Ohad, so many thks for your great PRO BONO job!
    I wish you and all your loved ones a peaceful anf healthy 2019.
    Same for all of your followers.

  120. Ohad, happy New Year. Thanks for your generosity in sharing your knowledge with us.

    Are you still positive on ADVM? Do you consider a “buy” here”

  121. Ohad,

    given that you own ESPR, are you thinking about adding AMRN? not cheap with about 4,4 billion $ market cap (and approx. same EV). though could be an attractive M&A target in 2019? Vascepa could easily get a blockbuster I think….?


  122. PS: would you think that a potential acquirer would definitely want to wait with buyout-offer until the sNDA decision for Vascepa was made, i.e. approx. end of 2019 approval?

  123. hi again Ohad

    and another question: ARNA has now several P3 programs, and after the UTHR-deal with 800 million upfront, they have now cash around 1,2 billion $ with market cap 1,9 billion $.

    have you ever looked at them?

  124. Ohad

    If CAR-T hardly works. Why so Much hype. It’s so expensive and I don’t see how will
    They make any money.

    What is your favorite targeted therapy that is in pre clinical stage. I remember you did great write ups on TAT Conference. Anything excited you as a modality that has promise? Also any hope for MYC Or KRAS targeting?

  125. How do you feel about the “offering curse”? There have been dozens and dozens and dozens of secondary offerings done in the past 2 years. After offering, the price has never ever recovered (yes I know there are exceptions, but few). It seems like an offering is a double negative to stock price: 1. Offering happens, PR news out, stock drops and 2. The tutes that got in during offering sell out their position, stock drops again. It’s a lose lose. Is this not borderline a scam? We are not talking about thousands (like me and you), but tens and even hundreds of millions basically a guaranteed loss

    To name a few out of many many…
    MDGL – $300M raised at 305, now under 100
    VKTX – $175M raised at 18.50, now under 8
    BOLD – $150M raised at 29, now under 21
    PIRS – $44M raised at 8, now under 3
    APLS – 140M raised at 25.50, now under 13
    GLYC – 119M raised at 17, now under 9
    I could go on and on and on…

  126. Kay Lee,

    my 2 cents on your topic: the harsh correction is mostly not related to the capital raise of these companies. In contrast, these companies can be lucky that they have raised at the high prices, before the current correction. Some of these companies would probably be considerably lower in case of low cash level given burn rates and worsening financing possiblities.

    PIRS specifically had also fundamental setbacks which justify a correction (although it is now approx. at EV = 0 which is not justified imo).

  127. RAM – Agree that there was a biotech correction in 2H:15 but I think valuations of smidcap biotechs need to go down significantly.

    dave (XENE) – No, I don’t think anything has changed. Today the company have more data which are directionally positive, next step is efficacy data in late 2019 or 2020.

    samuk (ABEO/RGNX/ONCE) – I am still waiting for a better entry point before adding, it can be a lower price or more clinical data.

    Anna (SRRK) – There is a lot of activity around TGFb and SRRK seem to havea valid approach going selectively after TGFb1. My main issue here is the high vluation in the absence of clinical poc. VKTX has strong clinical data, approach is different, going after the metabolic features of NASH which eventually translate to fibrosis. TGFb is more of a pure fibrosis angle that needs to be validated.

    KURA – Not familiar with these programs but I don’t view them as a direct threat as they target different mechanisms and populations. My issue with KURA is the decrease in response rate….

    andre – Most of the companies I know are private. FATE has a couple of preclinical programs.
    APTX – Don’t kno them well but the fibromyalgia dat aset looks quite small and preliminary.

    Richard Baker (ADVM) – Their cash position is a big advantage but recent setbacks took away most of the upside potential imo. Not optimistic about their AMD program.

    Christian (AMRN) – Agree about Vascepa’s potential, the effect looks real. The open question is what portion of pts are relevant for the drug (high TG, LDL well controlled).

    Christian (ARNA) – Not following the story closely, will take a look.

    BioTrader – They don’t work outside of B cell malignancies, still waiting for the breakthrough in solid tumors.
    Yeah, I used to go to TAT when I had more free time, good meetings…
    Cannot think about a preclinical oncology asset in particular, I am cautiously optimistic about ZYME’s new ADC vintage, will write about it on my next update. RAS and MYC have been out there with a lot of failed attempts, looking forward to seeing data from AMGN and MRTX.

    Kay Lee – Overall I think it’s understandable that biotech companies raise money when markets are good and stock enjoys a positive sentiment after data readout or a deal. These offerings took place when valuations in general are quite high and following the recent drops prices of many biotechs fell sharply. Let’s see what happens in the long run.

    Richard Baker (MGEN) – Yes,wasn’t aware they are now at 3, they have clear efficacy in CTCL which isn’t a huge market but still, low EV and the fibrosis program looks very interesting…

    Thanks everybody for the kind wishes, wishing you a happy and prosperous new year!

  128. I feel like when someone asks you for your thoughts on a stock, a very common reply is that you are “waiting for data” “waiting for more data” “waiting for clinical proof” etc etc.

    1. What are the exceptions to the rule? Are there any? Or do you always wait for some type of validation?
    2. Do you not fear that by the time good data comes out, you missed your entry/missed the big pop? I mean, biotech for the most part, is a data gamble, so getting in before data is key, no?
    3. Do you purposely tend to shy away from early companies for reasons above? like early P1?

  129. What do you think about best in class drugs developed by ARNA:
    1.) Ralinepag outlicensed to UTHR for 800m$ upfront payment and potential of further 400m$ and low double-digit tiered royalties on annual net sales
    2.) Etrasimod as the most specific S1P receptor modulator (subtypes 1,4 and 5) with much better PK properties than Ozanimod (bought by CELG for 7.2b$) or Fingolimod (NVS brand Gilenya) to treat different immune and inflammatory-mediated diseases (eg Ulcerative C., Crohn, PBC, atopic dermatitis, MS etc.)
    3.) Olorinab with positive 2a results in patients with abdominal pain (Crohn Disease)
    4.) APD418 in development for treatment of DHF (Decompensated Heart Failure)
    and 1.3b$ cash!

  130. Hi Ohad,

    Would love to hear your thoughts on BLRX and specifically their CXCR4 antagonist BL-8040. Despite their extremely slim pipeline this particular compound seems to have a lot of utility across indications. Target is validated and it’s clearly superior to Mozobil for stem cell mobilization. Price seems attractive. Still too early?

  131. The purchase of celg by bmy may be a tailwind for highly profitable midcaps like Exelixis and/or have a positive impact on IBB. You believe that BIS is a hedge but today’s megadeal could hurt BIS. You focus mostly on micro to smallcap but do like any midcaps?

  132. RGNX

    Whats your take on this stock? Do you like the update and Data up to date? Big pipeline and IP.

    Where do you See the Stock in 5 years?

    Thank you.

  133. Hello Ohad!

    Happy new year to you and everybody on this blog!

    I am curious to know your take on the ESPR deal–it seems the market did not like it because it favored a M&A – however the CEO had long pointed to a deal for EU rights. This to me seems like a sensible deal, and if all the milestones are hit the $900M is close to 80% of the current market cap. Of course people might be nervous about execution and the costs/cash flows of marketing and sales… what is your reading?

    MGEN all of a sudden it spiked, but it is still very low market cap. I was able to pick up 2000 shares at around $3.40 and I am hopeful that the company will execute and even attract commercial partners. It seems that mRNAs are becoming a hot area.

    Regarding NASH, it seems that the race is heating up. Merck just secured its partnership with NGM (they invested close to $500M in NGM over the past 5 years). Maybe this can be an indicator for NASH M&As in ’19 – any sense of what might happen to VKTX/MDGL? Do you have a blue sky scenario? It seems that both are going it alone and expecting high multiples. I have initiated a MDGL position on the expectation that they have a ph3 ready compound with solid data. I am also tempted to add VKTX at these levels but I am already heavily invested in that ticker.

    Finally, AUPH is getting close to results for DYS and rare indication, and LN results will roll in soon. It;s one of those stocks that has not taken a beating of late but remained steady at $500M valuation. Any expectations? Any hope DYS might be perform better than Restasis, AGNs cash cow?

    Thanks for your insight and help with biotech investing!


  134. Ohad
    do you follow MRKR?
    Early but interesting results with their multi-antigen targeted T cells – high CRs and durability in Lymphoma, Multiple Myeloma and ALL.
    What do you think about their LAPP & MAPP technology – looks cheaper and easier to produce compared to CAR-T. Also the safety profile looks fairly clean so far.

  135. ZYME 2019 goals:
    Initiating multiple ZW25 Ph2s
    ZW25 combo data (chemo & others)
    ZW49 Ph1 data
    Add collaborations on new platfotms

    Ohad, is it enough to justify the current valuation?

  136. Hey Ohad,

    Loxo goes to LLY for $8B!
    What a story. Any idea who will be next – I know this may sound a little euphoric – KURA? BPMC? QURE?

  137. Hey Ohad,

    Any opinions on ph2 Lysin Exebacase results for CFRX?
    What catches my eye is the 74.1% (exebacase) response rate compared to 31.3% (antibiotic alone) response rate in MRSA.

  138. And one more!
    Have you looked at the NMDA antagonist results for AXSM – shot up 130% but market cal still $200M a very small fraction of SAGE.

  139. What’s up with SNSS? It went up significantly in the last few days. Couldn’t find any specific reason for this.

  140. hey Ohad,

    AXSM, currently with $250M market cap, has just released comparable results to SAGE 217 in PPD, perhaps with a better safety profile. This seems to be a very compelling story. They are also going after various indications, already in Ph3. SAGE valuation $6B – almost 30 times larger.

    What’s your take?

    I am looking at VTGN and RLMD too which will release MDD ph2 study results in the next 3-6months and have valuations under $50M.


  141. Dan the AXSM data look really interesting, and I also bought today in the low 8s. they have other important readouts still in this Q – let’s wait and see…

  142. Ohad, just building on your prior ECYT post, have you looked at Nordic Nanovector in the radiopharmaceutical space? Their lead drug is Betalutin, which consists of an antibody targeting CD37 on NHL cells conjugated to the beta-emitting isotope lutetium-177 via the chemical linker p-SCN-Bn-DOTA. Not sure if worth a deeper look as haven’t delved into the existing clinical NHL data yet but just curious if you have. Thanks!

  143. Hey Christian, Ohad,

    I started a position in AXsM, too, given results, upcoming catalyst, low market cap considering huge addressable market they are pursuing.
    Also, given $6B SAGE market cap I have started a small position in MRNS. Any thoughts on MRNA, Ohad?!


  144. Ruhu – Thanks, Happy New Year!

    Kay Lee – As biotech is very “data driven” I try to base my decisions on clinical data that ideally generate a conclusive signal, that is the basis for everything IMO. This is why I try to avoid preclinical companies, no matter how hot they are and how beautiful the science is. I guess every rule has an exception, perhaps in cases where the target is validated by someone else etc. Because most readouts are negative (or mixed), I prefer to wait until the data are out and pay a higher price for a company with a high likeihood of technical success.

    Rüdi (ARNA) – I don’t know them well but on the face of it, they look interesting with this amount of cash and clinical programs. The S1P program may be differentiated and it makes sense to go after IBD with Gilenya and Tecfidera going off patent soon.

    Attell (BLRX) – Don’t havea strong opinion there.

    Sam (BIS) – Yes, you are right about BIS being very dependent on large cap biotechs. There is also LABD which focuses on smaller biotech but not on small caps.

    karlos (ESPR) – Mixed feelings. On teh one hand they need someone who can sell the drug in Europe quickly but economics aren’t that great imo.

    Banusa (RGNX) – I view it as a core long term holding given its broad AAV exposure but I would still like to see a wholly owned program with a clear efficacy signal (which they still don’t have).

    Dan (ESPR) – As written above, I have mixed feelings about the deal, was hoping for a richer deal or a simple acquisition with a nice premium.

    MGEN – Yes mRNA are becoming hot but still without clinical poc. Note that MGEN are developing miRNA, which are related but a different class.

    VKTX/MDGL – So far I plan to keep both as their MOA is the most validated and potent one in NASH in my opinion. Hard to factor all the other drugs but I don’t think NASH is a winner takes all market, like diabetes and other metabolic disease, there will probably be combination regimes tailored per patient.

    AUPH – Haven’t been following them recently. I guess the fact the LN study wasn’t stopped due to mortality imbalance is a good sign.

    andre (MRKR) – Sorry, don’t know them well.

    ZYME – I really like their ADC, preclinical package is phenomenal, but I agree that ZW25 can’t justify current valuation. The partnered pipeline is quite impressive as well.

    Dan (LOXO) – An amazing deal for LOXO bearing in mind Bayer has most the Trk upside. Don’t know if LLY are going to see those 8B back if they rely on LOXO’s RET program….

    Josch (SAGE) – Thanks, nice data indeed, important readacross to MDD, hard to assess opportunity in PPD due to lack of precedence.

    Dan (CFRX) – From what I see their ITT analysis did not demonstrate a stat sig benefit.
    AXSM – It also caught my eye, don’t know the compounds they are using, I asume they don’t have COM patent protection but data looked very positive.

    Aviv (SNSS) – Not aware of anything specific.

    Dan (AXSM) – Their data is in MDD, agree it’s intriguing. Yes, a lot of MDD activity, hope one of them works….

    mcbio316 (Nordic Nanovector) – I am skeptic about Betalutin, it is based on a murine IgG so cannot be dosed repeatedly, they target NHL which might work with IgG but historically Bexxar and Zevalin did not perform well in this market given other Tx alternatives.

    Dan (MRNS) – Haven’t been following them but I prefer to wait until more data.


  145. Hi Ohad

    I think you missed an earlier question from me regarding Arvinas and targeted protein degradation in general – Its only preclinical so probably not that interesting to you?


  146. Jens Bjørn Jensen (ARVN) – It’s extremely interesting to me, very cool science but as you said still no data in humans so I prefer to stay on the sidelines.

    Hazardeur – Next Sunday!


  147. “Richard Baker (ADVM) – Their cash position is a big advantage but recent setbacks took away most of the upside potential imo. Not optimistic about their AMD program. ”

    Ohad, why are not optimistic about the AMD program? What’s left, if not the AMD program? Will the stock remain in your model portfolio?

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