Biotech portfolio updates – Esperion, Trevena, Exelixis and ArQule

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.

Despite the relatively modest LDL effect, I believe there is a significant market for a drug like bempedoic acid. Its profile (25% LDL reduction, oral, no muscle-related side effects) can address a major clinical need in patients who cannot achieve desirable LDL levels (due to dose-limiting side effects or lack of efficacy) with approved oral agents. For many of these patients, a cheap oral agent with a milder LDL effect is more suitable than monthly injections of PCSK9 inhibitors, which will probably be preferred in more severe patients (very high LDL levels, high risk for cardiovascular events etc.).

Market opportunity for 2nd/3rd line oral therapy is illustrated by Merck’s  (MRK) Zetia and Vytorin (Zetia + statin), which generated peak sales of over $4B combined. Bempedoic acid appears more efficacious than Zetia and in contrast to Zetia, has a statin-like effect on CRP levels. In a market with no branded oral agents, Esperion could easily gain market share by formulating bempedoic acid with a statin, Zetia or both to reach 50-70% LDL reductions.

My primary concern with owning Esperion in 2017 is the lack of meaningful positive catalysts for the remainder of the year. With P3 data expected only in mid-2018, meaningful data updates for Esperion can only be negative/neutral: PCSK9 actual CVOT results which may not live up to expectations and new safety signals with bempedoic acid that may force Esperion to terminate the program. An acquisition remains the only meaningful upside catalyst.

Even if Esperion gets bought during 2017, timing and price are hard to predict, but for me this is a good enough reason to own the stock given the scarcity value and sales potential of bempedoic acid ($1B under conservative assumptions). Even a sales multiple of 3 results in a x5 upside over current market cap of $564M.

Trevena – P3 readout next month

The next big catalyst in my portfolio is Trevena’s (TRVN) P3 data next month. The company will report results from two post-surgical pain studies and hopes to demonstrate that its drug (oliceridine) can alleviate post-surgical pain as effectively as opioids but with fewer side effects and complications.

Opioid-related side effects are a major issue in hospitalized patients, especially in certain risk populations. Although life-threatening events are uncommon, opioids have tolerability issues that can be dose-limiting and may lead to increased hospitalization stay and cost. In order to take market share dominated by established generic opioids, Trevena has to address those issues to an extent that will justify oliceridine’s relatively high cost.

I am cautiously optimistic about the P3 readout based on previous data which demonstrated similar efficacy with better tolerability or superior efficacy with similar tolerability depending on oliceridine’s dose. However, it is important to note that the drug’s efficacy/safety profile was not always a homerun across all metrics and doses. Assuming the drug is as efficacious as opioids, investors will focus on its safety profile, especially on opioids’ hallmark side effects (nausea, vomiting, constipation) and the more dangerous respiratory failure, which is potentially life-threatening.

On paper Trevena is targeting a huge market with more than 10 million relevant operations in the US annually but given the complexity and variability (different procedures, different hospitals, different guidelines etc.) and the lack of a benchmark, market penetration is hard to estimate. In the post-surgical pain setting, efficacy is a pre-requisite but it does not guarantee broad use of oliceridine in hospitals, where additional factors (cost, personnel, risk of complications and bureaucracy) are equally important. Therefore, Trevena’s study is unlikely to have a black or white outcome (unless the trial fails completely).

I am still struggling with assessing oliceridine ‘s market opportunity. The closest comparator I could find is Pacira’s (PCRX) Exparel, which is also used to treat (in this case, prevent) post-surgical pain. Exparel is an analgesic which is administered locally to the site of surgery and is currently approved for various types of surgeries. Although Exparel is not a direct competitor to opioids, one of its strongest selling points is the opportunity to reduce systemic opioid use by local pain control. In that sense, Exparel is used to minimize utilization of systemic painkillers like oliceridine.

Exparel generated US sales of $276M in 2016, which may provide a benchmark for the market opportunity in post-surgical pain. It is important to note that Exparel’s penetration is still quite limited, partly due to its less than stellar efficacy. Using it as a benchmark, oliceridine has a realistic market potential of $500-600M assuming a differentiated clinical profile and a modest market share.

Exelixis – Questionable risk/reward for 2017

“What are the arguments of not selling EXEL now?” was a question asked by one of my readers. Following the 100% jump in just over three months, that question is getting tougher and tougher to answer. The recent deal with Takeda for Japan rights implies an acquisition is not on the table, so focus now shifts to Exelixis’ ability to generate sales that could justify a market cap of $6.6B.

Exelixis has three growth drivers:

1 – Renal cancer (RCC) opportunity – Cabometyx is the most effective agent in RCC and could generate $600M in the US alone without any label expansions. Exelixis has a shot at getting 1st line approval based on a P2 study (CABOSUN) which demonstrated superiority over Sutent (current standard of care). Approval in 1st line could push US sales to ~$1B even when assuming PD-1 regimens become the dominant treatment option.

2 – Opportunity beyond RCC – Cabometyx is being evaluated in multiple clinical trials including a P3 in liver cancer (data in 2017) and combination studies with PD-1 inhibitors in GU cancers.

3 – Cotellic (partnered with Roche) – Exelixis has co-promotion rights in the US to the drug, which is expected to be in three pivotal trials this year based on preliminary intriguing efficacy signals.

While these drivers have the potential to drive shares higher in the long run, my sense is that the risk/reward in 2017 is becoming unfavorable. Exelixis is entering 2017 with very high sales expectations in RCC which might make it challenging to generate positive surprises. 1st line approval may come towards the end of 2017 but data need to be analyzed and verified by an independent review before the package is submitted to the FDA, which is another risk.

On the label expansion front, the liver cancer data is the most impactful catalyst but risk is high as it was based on a single arm P2 and the P3 was not stopped for efficacy at an interim analysis despite its large size. The PD-1 combination studies continue to generate intriguing data, especially in bladder cancer but results are hard to interpret and will not translate into revenues anytime soon. Lastly, Cotellic may become an important drug for Exelixis eventually but P3 results are 2-3 years away.

ArQule – Internal pipeline making progress in niche indications  

On Friday, ArQule (ARQL) reported the failure of tivantinib in liver cancer. The stock was down only 18%, as expectations had already been very low. The company now plans to focus its resources on three proprietary programs (ARQ087, ARQ092, ARQ531), which in my opinion don’t get enough recognition from the market, evidenced by a market cap of $85M.

ARQ087 (FGFR inhibitor) and ARQ092 (Akt inhibitor) target well validated pathways which have already been explored with limited success. I like these programs despite the high risk because they employ a creative development strategy and potentially clinically differentiated molecules (based on cross trial comparisons). The initial markets ArQule is pursuing with each compound are small ($50M-$200M each) but the timelines may be quick and the impact on ArQule’s valuation could be significant.

ARQ087 – With ARQ087, ArQule is going after intrahepatic cholangiocarcinoma (iCCA) with FGFR2 mutations, an underserved niche indication representing ~1500 cases in developed countries (>2nd line metastatic patients). According to a recent update, ARQ087 led to a response rate of 24% (6/25) in FGFR2+ iCCA. The majority of patients experienced some tumor shrinkage and 3 of the 6 responders stayed on treatment for 40+ weeks (3 responses still ongoing). PFS appears to be ~6 months, which compares favorably with previous reports in the literature.

Based on regulatory feedback, ArQule plans to start a pivotal single-arm P2 in 2017. Depending on recruitment rate, the trial may report data within 18 months of initiation and serve as a basis for accelerated approval.

ARQ087 is clearly active in FGFR2+ iCCA but efficacy does not appear spectacular, especially compared to other rare fusion mutations (ALK, ROS, Trk). In addition, although response rate and PFS appear better than historical data in iCCA , there is limited knowledge on the natural history of patients with FGFR2 mutations which may confer better prognosis. Still, if the pivotal study corroborates a ~20% confirmed response rate and a response durability of 5-6 months, ARQ087 has a reasonable chance of approval given the unmet need and rarity of the tumor.

ARQ087’s biggest competitive threat is from Incyte’s FGFR inhibitor INCB54828, which is in a 100-patient P2 trial in cholangiocarcinoma including FGFR2+ tumors. The trial started recruiting in October 2016 and may have data (as well as a decision to advance to pivotal trials) during 2017.

ARQ092 – ARQ092 started as an oncology program but is now shifting to rare diseases characterized by activation of the PI3K/Akt pathway. The first of these is Proteus Syndrome, an ultra-rare indication characterized by outgrowth of skin, bone and other tissues (best known as the elephant man syndrome). Proteus Syndrome is caused by an activating mutation in Akt1, making it an ideal indication for an Akt inhibitor.

To date, ArQule treated 5 adult patients in collaboration with the NIH with plans to increase the dose and recruit younger patients in 2017. While efficacy is challenging to assess (ARQ 092 is the first disease modifying treatment for the disease), biopsies demonstrated a 50% reduction in Akt signaling in 4 patients.

ArQule is expanding ARQ092 to additional rare indications characterized by PI3K/Akt over- activation (PROS) and expects to treat patients in 2017. The addressable patient population is hard to assess given the different indications and mutations (not all may be relevant for ARQ 092) but it can range from several hundreds to several thousands in developed countries. Assuming an annual cost of $200k-$300k per patient, the commercial opportunity in Proteus and PROS is $100M-$200M.

Portfolio updates

I am adding a second position in Trevena as I expect a positive P3 readout  which will hopefully be well received by investors. I am also adding another position in ArQule based on the potential of its two lead programs to generate data and market recognition. I am selling Exelixis at a 410% profit ahead of its quarterly earnings next week for the reasons discussed above.

Portfolio holdings – Feb 20th, 2017

Portfolio - Feb 20 2017 - after changes biotech etfs - Feb 20 2017

143 thoughts on “Biotech portfolio updates – Esperion, Trevena, Exelixis and ArQule

  1. Hi
    Thanks for portfolio update. You answered my question on how Positive you were with TRVN. Thanks again.

    Any reasons why you still hold BIS? Do you still see biotech not do good in coming days?


  2. Hi Ohad
    It’s an honor to be mentioned in your blog.. : )

    EXEL – can’t an acquisition occur even with the Takeda deal? or is it very unlikely


  3. Hi Ohad,

    ARQL seems like an intriguing opportunity at this price. Any thoughts about ARQL’s finances? They have about $40mm in cash right now and judging by prior years’ reports, are going to be burning about $20mm a year. It doesn’t seem likely that they’ll be able to afford a PIII, so I’m assuming they’ll either need excellent results for their PII’s to be registrational or a partner to run a bigger PIII.

  4. Precisely, TRVN is holding conference call 8 am EST tomorrow to announce oliceridine ph3 results. so I guess the stock is halted from now. You picked it last minute. Good luck!

  5. Hi Ohad

    Many thanks for the update (seems I felt it was coming 😉 )
    I understand that you generally see potential in AGIO, CTMX and MGNX but that you consider them too expensive at this stage.
    AGIO market cap: USD 2.27bn, CTMX: USD 430m, MGNX: USD 745m
    Around which levels of valuation would you consider those to be attractive?

    Many thanks

  6. Jh: I would never speak for Ohad, but since results for TRVN are out tomorrow I thought I would try to answer your question or at least my understanding. TRVN invited Adam Feuerstein to an 8:00 am conference call to discuss results. No official pr as of now. My hope, nothing more is that the results are outstanding and that is why they invited Adam. I respect the man because he calls B.S. On nonsense trials results and results packed with fluff. So…..why would you invite a man that has a reputation of being hard on B.S. ? Only reason I can think of is that results are outstanding and they want him to bring attention to the great results. Only my hope, not stating as fact or theory. To the Ohad community, if I have misspoke or have stated something not correct, please correct. Thanks

  7. Very unimpressive results. Higher doses similar efficacy/response rates to morphine no meaningful difference in safety/adverse events. Lower dose safer but not as effective. They made a mistake in trial design to many doses. Not seeing this successful in market.

  8. Hey Ohad
    Re: TRVN
    Disappointing results but I am a buyer here. I believe it will be approved and the challenge will be pricing and selling to hospitals. However, valuation being just over $200M, I see this as a long-term play with fewer risks than upside. They may run one more ph3, during or after FDA review to show that weaker more at risk patients benefit from fewer side effects. What do you think?

  9. Hi Ohad,

    Do you have aany comments on VSAR & SRPT (following their GILD association).

    Sad to see TRVN dip despite their positive comments on the results, apparently because of pricing and performance v/s morphine. Added to my very small position :-). Thanks for your analysis of EXEL (decided to part with some of my holdings as well ahead of the results).

  10. Jaime

    Hello Ohad. Want to thank you for your responses here. You answer all people and that’s admirable.

    Question: Just heard ADVM uses RGNX AAVrh10 vector for their A1-AT indication. In lieu of he safety profile with DMTX and their Hemophilia in use of this vector any concerns?

  11. Ruhu (BIS) – I still feel the biotech sector is headed for challenging times in 2017 due lack of growth drivers and pricing pressure.

    Alex (EXEL) – I don’t think we can rule it out completely but I don’t see it happening in the near future.

    Wildbiftek (ARQL) – Agree about their need to raise funds in order to date late stage studies. It all depends on how strong their data will be.

    lgonber (TRVN) – Too bad I was on the wrong side ….

    Kevin (AGIO/CTMX/MGNX) – Yes, I like the companies but not their stock prices. I would be a buyer if they drop 30-40% from current levels.

    Britta (TRVN) – Based on teh data they provided I think market reaction was justified. The drug may be relevant for certain niche populations but overall none of the doses demonstrated an ideal profile. The comment about anti-emetic drugs masking the difference in GI side effects was intriguing but I would like to see actual numbers.

    jh (TRVN) – Not sure it’s a matter of trial design, perhaps the drug isn’t that differentiated as we thought.

    Dan (TRVN) – Agree abot the need to focus on special subsets for whom morphine is contra-indicated, not sure what the commercial opportunity is.

    Les (VSAR/SRPT) – Sorry, don’t have a strong opinion there. I don’t think SRPT’s drug works but now that it’s approved hard to predict market performance.

    Jaime (ADVM) – They are going after a different target organ and from what I recall may inject the virus directly to the lungs so not sure there is an issue here.

    Alex (ABEO) – So far so good, data continue to demonstrate an effect including functional improvement in the 2 patients with 180-day follow up. Some mixed data on some the endpoints but there is a lot of variability and sample size is small.

    Bes (NLNK) – It’s an IDO story, a lot depends on the MRK/INCY data this year.


  12. TRVN is a sell at this point..( unless it’s already priced well below its cash value).
    There’s no way that this drug..even if approved……gets past hospital pharmacy boards and ends up on formulary unless it is priced well below what the market would want to see it generate in sales.
    1. Morphine is way less expensive
    2. Many alternatives to Morphine already like Dilaudid etc
    3. Move in the industry to multimodal to reduce narcotics
    4. Increased safety profile would have needed to be significant to justify cost in the current healthcare environment.

    I would think CARA …with its non-mu option receptor approach ( Kappa receptor) is the next great hope.

    Ohad…..the A/E of CARA’s drug ….elevated Na++ levels…could be a deal breaker ( short FDA halt) yet the stock has recovered and gone way beyond that since. Could you review the current data for CARA in detail and give your opinion. Same potential as TRVN which looks like a fail.


  13. Hey Frank

    I disagree with you on TRVN. Market is is greatly diminished but there is still a need for painkiller with less AEs and side effects than morphine. I think the low 0.1mg dose, with a very good profile in therms side effects will find use in hospitals.

    Also, your points 1. that mopehine is way less expensive, and 2 that there are other alternatives in the market are contradictory. If alternatives exist it is precisely because morphine does not work for all patients and better alternatives are needed.

    Ohad, what is the size of the post-operative morphine market?


  14. Dan and Ohad,
    I agree that the post op narcotic market is a market that is large and in need of safer options….that’s why CARA has potential…despite its A/E.
    My main point in considering TRVN a sell ..up to its cash position…..and a trade around that market cap… that TRVN drug is purely a hospital based drug. No prescriptions written or utility outside the hospital environs. That means it must…after approval…get past Hospital Pharmacy review boards …which look very closely at cost/value/safety. Without marked safety improvements to get it past these boards, allowing for the increased cost compared to existing alternatives, it will not likely supplant and of the existing options in the eyes of these Pharmacy Boards.
    I’ve sat on one at times…attempted to get IV Tylenol on the hospital pharmacy for exactly the reasons discussed: Post Operative Pain. Rejected for two plus years. Reasons…no increased efficacy over oral or rectal…way more expensive….numerous studies had to be performed years past its FDA approval before finally considered and allowed on my hospitals formulary.

  15. Hi Ohad,

    EXELs latest tie ups show range of possible applications justifying higher valuation.

    Any comments on CLDX? It had great results with its trial but was rejected due to the very small size of patients enlisted. Potential for being another EXEL.

    VSAR is rising further – analysts say it has blockbuster potential for a 10x rise.

  16. Hi Ohad,

    Any thoughts on ADAP (adaptiummune), who has a collaboration effort with BLCM in place?

  17. Ohad
    AUPH 48w data look better – still lower dose outperforms in CRs. But, 3 deaths in control vs 0 in active, another nice development

    If I remember correctly you sold out bc of unbalanced deaths
    I wondered if it is good idea to jump back since the main risk is removed.
    The market is enormous – ~ 200K pts x $50k -> potential $10B/ year peak sales

  18. I cannot understand what went wrong with ARQL’s Tiva HCC Ph3 trial. The Ph2 data were good but ARQL/Daiichi used different formulations for Ph2 and Ph3 trials. Why?
    I am waiting the results of Asian HCC trial results where the primary endpoint is PFS but there are only 166 pts requiring outstanding results to succeed.
    The same has happened in NSCLC Ph3 trial. Their Ph2 trial had excellent PFS results but no OS data. However, the Ph3 primary endpoint was OS. Why? Is stupidity or incompetence or both?

    Ohad, what do you think about PARP inhibitors? Will appreciate your comments.

  19. hello Ohad!

    AUPH: seriously think that with those strong results, they can attract a very good partnership. BTD (although will not bring them much at this stage) not unlikely. Possibly buyout on the table.

    Am I to optimistic here?

    regarding TRVN, will you sell or hold?


  20. Hey Ohad
    What if the Amgen CVOT results are not as impressive? Implications for ESPR? As stated before, the Amgen trial is is combo with statins (known for reducing inflammation) so it is possible the reduce risks are holly a factor of Tatum therapy.

    Have you looked at GEMP? I opened a position in last two weeks. I think it could become a serious contender- completely different MOA. Results of small ph2 due in summer.

    What to do about TRVN?

    Have you looked at MTNB – just uplisted to NYSE. Big valuation for company that used to trade on pinksheets days ago. But it has huge market potential and many catalysts coming. Any opinion? Would really appreciate you view on company. I have small position.




  21. Wholly result of statin therapy. Sorry about typos. Spellcheckers have a singular mind.

  22. Hello Ohad,

    can you take a look at OSE Immunotherapeutics? They have a low valutation and agreements with Janssen and Servier.


  23. $ESPR What is your price target after the oral abstract presentation and the ACC presentation ?

  24. $ESPR When do u think a partnership/buyout can occur i.e. what would be the ideal quarter for the company ? It has to occur to plan for the roll out according to their conference call. Do u think a $ 3 billion dollar buyout price is achievable ?

  25. CLDX

    Do you have an opinion towards the risk/ reward profile of celldex? Looks like a compelling buy at these levels due to many interesting programs


  26. BLCM

    Why not buy BLCM at current levels? You said you like the company and their approach.

  27. Hi Ohad
    Do you have an oppinion on VSTM?
    does Epacadostat can compete with Binimetinib or cabozantinib ?


  28. hello everybody

    does somebody have a good overview on usual sales multiples for biotechs with products on the market?


  29. ESPR

    What kind of impact will good data of amgen cvot trial have on espr? Whats your take?


  30. $GEMP is a company founded by old Esperion guys and advancing a drug for LDL lowering and for NASH. could move big like $ESPR.

  31. Any thoughts on:
    1) JNCE – JOUNCE THERAPEUTICS and their immunotherapy treatments. Market cap too high for a starter?
    2 ) VYGR – VOYAGER THERAPEUTICS and their gene therapy programs after their bust on their lead Parkinson’s drug. Good time to buy now that at lows?
    3) ADAP – ADAPTIMMUNE THERAPEUTICS. NY-ESO and TCR program viable? At record lows and starting to rally finally…


  32. $ESPR I thinki Sanofi will be the likely buyer of Esperion especially since Amgen will work to block Praulient for patent violation and once they succeed, guess what you got to buy something that has no patent issues. $3 billion price tag is reasonable. What do you think ?

  33. ESPR – I find the crowd mentality to group ESPR in the sell-off with AMGN today interesting. Overall the FOURIER trial showed positive results, but not quite as much as the Street was looking for. Part of this is likely related to trial design in AMGN’s attempt to get data as quickly as possible.

    I think this is an opportunity to buy into ESPR because the value proposition of ESPR’s drug is potentially better than that of the aPSCK9 drugs and therefore the read through from the FOURIER trial seems positive to me for ESPR. I understand the Street reaction to AMGN because of the high prices of aPCSK9 drugs, but less so for ESPR. What am I missing?

  34. $ESPR LDL lowering did not hit the 20-25% target and did not reduce death rate. So i think it now depends on the clinical trial results from the P3 of ESPR and the alternative mechanism of action might have to be proven to be better instead of saying that since we are LDL lowering we are the cheaper alternative for some patients and have a great impact on the survival. CVOT data of ESPR if it shows better than AMGN would make it a hit, they might even get approval without it but i think the case of LDL management as a means to improve survival is not as convincing. Also, it will take a while to get the data. That is my take despite all the bulls posting on twitter that is see. The buyout case might be pushed to 2018, i think they will settle for a partnership.

  35. In general i think it is better sometimes to take the losses than to hold on to something, that is why you see a lot of selling

  36. ESPR

    Ohad You Still alive?

    what do you think about current entry point 23-24 $ a share? Good Buying opportunity still after la la CVOT results?

  37. ESPR
    If PCSK9 inhibition shows such mediocre benefits, do you see any chance ESPR drug to show ANY cardiovascular benefit at all?
    Is it still possible the drug to be approved w/o CVOT data?

  38. Hi Ohad,
    Hope you are well, have not heard from you in almost a month now.
    Was wondering whether you’ve had a chance to read about Cellectar biosciences (CLRB) and if you have any thoughts on the company..

    Thanks as always and looking forward to seeing you back here!
    Best Chris

  39. Hi, Ohad

    Hope everything is ok with you. What’s your strategy now for ESPR? Thanks! Jinyu

  40. Ohad, hope you are doing well
    do you folllow CytomX Probody drug conjugate technology?

  41. Sorry for the lack of responsiveness, I have been traveling. Will try to address most of the questions.

    andre (AUPH) – I am still concerned about their data and death imbalances.

    bob (ARQL) – unfortunately in drug development it is quite common to have good P2 data that are not corroborated in P3…
    Regarding PARP inhibitors , they are a promising class but valuations for all relevant companies are too high imo.

    Christian – Re AUPH I am still not convinced. Still haven’t decided about TRVN.

    Alex (ESPR) – It is a very long study indeed.

    Christian (TGTX) – I think it will be hard for them to compete with existing CD20 agents especially when biosimilars reach the market.

    Druz (KURA) – Encouraging but not stellar so far. Need to wait and see….

    Kurdus (FMI) – Not that I am aware of.

    Toby (OSE) – Sorry don’t know them.

    Robertgoulet (LPTX) – Sorry, cannot comment.

    Sven (CLDX) – I think the risk is quite high and readout is not imminent.

    Huhu (BLCM) – I still like the technology. Not sure about market potential for the GVHD product.

    Alex (VSTM) – Been a while since I looked at them. I don’t think the drugs you mentioned are direct competitors because they have different MOAs.

  42. Alex (INFI) – Their preclinical data look solid and the concept is scientifically intriguing, no doubt, but I am not sure about translating the effect in humans as with many other IO agents.

    Bouschka – Thanks, hope to be more active going forward.

    Christian – Typically valuations are 5x-10x of expected peak sales.

    Rob (GEMP) – Don’t know the drug well but agree that every LDL-lowering drug looks more compelling today investment-wise.

    JNCE – Yes, I think valuation is too rich.
    VYGR – I prefer gene therapy treatments which go after monogenic diseases where the driver is clear.

    curiousgeorge (ESPR) – Impossible to speculate here but I don’t think a 3B price tag is realistic.

    Adam (ESPR) – Agree to some extent, on the hand hand the fact they were able to show an efficacy signal in such challenging settings is impressive but the effect is lower than hoped.

    Josef (AVXS) – Data continue to look good but agree valuation is becoming expensive…

    Chris (CLRB) – Sorry don’t know them well.

    Jinyu (ESPR) – Now that they have the FDA’s blessing, they have become a more attractive M&A target although timing is impossible to predict.

    andre (CTMX) – Yes and I like the technology but valuation keeps me on the sidelines as there is no clinical proof of concept.


  43. Hi

    Happy that you are doing well and back again.

    Is espr still a buy art his levels?


  44. XENE

    acne study failed in p2… stock is now at 5.5 – do you recommend the stock at these levels? seems the pain programs are still good (TEVA, Genentech) and a worth a current 40m EV , which seems quite low?

    Whats your take?

  45. Hi Ohad,

    Have you looked into Ignyta (RXDX)? Pan-TRK inhibitor with blood brain barrier passage and ability to target more fusion genes than LOXO, but LOXO valued at 2.5x over Ignyta.

  46. Shark (AVEO) – Don’t think there is a lot of value there given te RCC landscape.

    Gene Mc – Thanks!

    Alex (ARRY) – I am not optimistic about the launch in BRAF+ melanoma, tough and crowded market and I am not sure ARRY has a differentiated regimen.

    Garry Xo – Thanks!

    Ruhu (ESPR) – I plan to keep my existing position, valuation is still not very high given their stage of development. I am more cautious after the lower than expected CVOT benefit but still believe that there is a need for an oral drug to complement statins without added muscle toxicity.

    Gors (FPRX) – The CSF1R program is very risky imo. I liked preliminary data with the FGFR2b program, hope they hold up. Too pricey at $1B imo.

    Wizz (STML) – Mixed feelings about this one. Not sure…

    josef (XENE) – I am planning to keep my position despite the failure. Valuation is low and the NaV1.7 programs may still have value.

    Dan (ARQL) – Agree but still high risk so exposure should be limited.

    Garry (LOXO/RXDX) – I think the valuation gap is justified as LOXO has a more effective compound in TRK+ tumors. RXDX’s only edge may be brain penetration.


  47. >> still believe that there is a need for an oral drug to complement statins without added muscle toxicity.

    There is one already, generic Zetia.

  48. hello Ohad

    what do you think about ADAP Adaptimmune?

    Quite depressed share price compared to IPO; just did a financing at these low levels… nevertheless sounds interesting?

    Thanks as always for your thoughts!

  49. Hello again

    I was also wondering whether you know Isreal-based Protalix (PLX) and whether you have any opinion on them.

    They showed that they can produce real drugs with their plant-based protein platform, though the first one is a dud on the market. But they have more in the pipe and might partner… market cap not very high

    thanks for any feedback you have on them


  50. Ohad
    CARA is showing good results with their Kappa receptor
    They claim that it does not penetrate the brain barrier and may not couse addiction

    TRVN disapointed to some extend with their Mu receptor, may not be as potent as originally expected :(
    Is it a good idea to hedge TRVN position with CARA or switch change completely from TRVN to CARA


  51. BLCM

    Hi Ohad,

    no good buy given their valuation and stage of development?

    Thank you

  52. XENE

    Valuation quite low – soon down on cash position

    Maybe a good buy opportunity given the nav 1.7 chance? What do you think about the pain program with TEVA and the coming p2 results in Mid 2017? What chance of success do you think it will have?

    Maybe too high risk stock ?

  53. XENE
    Interesting video “Shutting Down Pain – YouTube” about Nav1.7 MOA.
    Nice job by Genentech.

    If it works as presented, the curent price looks like a good entry point. Only 10M marker cap and more over it will be covered by the Genentech payment when Ph 2 is initiated sometime this year

  54. Hello Ohad, thanks for your job. I follow a few months.

    One comment – I agree, but BIS isnt good instrument for longtherm hedging.
    ,,Ruhu (BIS) – I still feel the biotech sector is headed for challenging times in 2017 due lack of growth drivers and pricing pressure.”

  55. Ohad,
    have you seen the results of INCB54828 at AACR?
    2 PRs in 6 patients with cholangiocarcinoma. Very early but seems durable (all ongoing) and comparable to ARQ087?
    Thanks Ike

  56. ESPR

    Huge insider selling in march at – 45 $

    Any opinions?

    Maybe wait until end 2017 for p2 results to enter the stock? Why do you hold now?


  57. NLNK

    Any comment to the results (52% orr and low tox profile) and the current selloff?


  58. Ohad,
    Have been reading your blog for two years, sharing your knowledge is greatly appreciated by me and I’m sure by all other readers. I miss the ~weekly~ replies, but as the kids’ would say “it’s all good” : )

    thanks again, cb

  59. $GERN What do you think of the recent press release ?

    $ESPR Insider selling is good for ESPR, it has insider buying too, i think the stock will go up.

  60. Alex (TRVN) – I think focus will be more on oliceridine, didn’t think they are putting resources behind TRV734. If anything, the migraine program may be interesting in the long run but still very early.

    JQ (ESPR) – Right but Zetia has no CRP effect and in many patients more LDL lowering is needed.

    Christian (ADAP) – Sorry cannot comment on CAR/TCR stocks. Don’t know the PLX pipeline well…

    Jinyu – Not sure yet… A combination of circumstances make it a very challenging time to allocate time to this web site. Hope things improve later in the year.

    andre (CARA) – I agree, CARA’s molecule looks good but there my focus would be on itch rather than pain. Need to see OA data later this year wit the oral formulation.

    svereb (BLCM) – Prefer not to comment on CAR-related stocks.

    XENE – In contrast to the previous trial which employed topical formulation for osteoarthritis of the knee, in PHN there is less penetration issues so likelihood is higher on paper but still a long shot.

    PetrS (BIS) – Definitely, BIS has its flaws as volatility takes a toll on returns but I still prefer to hold some given my overall outlook on the biotech field.

    Jonath (CNAT) – I thought the data were too messy

    ike (INCY/ARQL) – Yes, looks active. Still hard to picka winner there but definitely validates cholangicarcinoma with FGFR fusions. Disappointing to see the lack of efficacy in other histologies…

    Sven (ESPR) – Agree risk is high, the only reason to hold right now is M&A imo.

    Sellor (NLNK) – I know the market disagrees with me but I am far from convinced IDO is an effective target, very hard to interpret uncontrolled studies in melanoma.

    conrad – Sorry I couldn’t be more communicative, as I said hope this improves during the year….

    curiousgeorge (GERN) – Not much can be said…

    SAMi (TOCA) – Don’t know them well.

    Sallin (DMTX) – In the short run I think investors will continue to punish them, long term the new programs utilize different technologies that may prove clinically superior.


  61. Confused? In the past u couldn’t comment on car-t, then u could, now u can’t…please explain

    Now I can’t ask u about $SRNE!!! LOL

  62. Hello Ohad ! I have greatly appreciated your commentary over the past years and am disappointed to hear of the conflicts you are facing. Can you recommend an alternative website or blog to enable your readers to have current and relevant information? ANY suggestions would be VERY HELPFUL in our shared pursuit of scientific insight into current and future Biotechnology developments..

  63. Hi everybody

    I didn’t retire from the blog but had to take a break. Hope to be back later in the year…

    Thanks everybody for your support and patience.


  64. Good Luck Ohad! Hope all goes well with you. Totally appreciative of you and your manner.

  65. Hey Ohad

    putting some life back into this blog! nobody posted for too long!

    I was just looking at the RDHL slides about their IBS-D ph3 compound BEKINDA… and found a number that is very interesting for TRVN, here it is:

    2013 hospital abulatory care visits for use of Morphine: 7.8M.
    Morphine is the top 6 prescribed drug in the USA.
    I am not sure what the cost of morphine is, but certainly it might only be a fraction of the cost of each ambuatory/emergency care visit.

    what if TRVN is able to capture 5% or 10% of the market?

    Thanks, hope you are well and that you will have more time for the blog soon!


  66. EXEL Great results. They are paying off their debt so bottom line will keep improving as will their top line.

    GEMP Same folks who sold ESPR to Pfizer – with portfolio similar to ESPR. Is this spinning off of pipelines PFEs way of getting better valuations?

    IMGN Inching up – Ohad had indicated that he was tempted to buy at $2.xx. Doubled since then. Any comments?

  67. Georges – Thank you!

    Peter – Thank you!

    Dan (TRVN) – I think everybody agrees on morphine-related burden (clinical and economic), the question has more to do with having a differentiated product and while TRVN has some selling points, the profile is not as strong as I hoped for.


    EXEL – Agree, they are having a great launch but this is already baked in (hence the muted stock reaction yesterday)

    IMGN Inching up – They should have incremental updates at ASCO but I don’t expect to be dramatic. With their broad partnered pipeline there can always be a wild card from NVS or LLY. I am still on the sidelines.


  68. Hi Ohad
    good to hear from you again.
    Any thoughts about XLRN and EPZM? Diversified portfolios and strong partner – CELG. If you have to pick one of them, which one has stronger and more promising platform.
    Thanks and take care

  69. Versartis has somavaratan , an extended release of human growth hormone that had promising results so far but has the phase 3 velocity trial results in September 2017. Its a high risk/reward catalyst in a $3 billion market but wonder why they have not partnered yet…large bio/pharma skepticism? Do you have any opinion?

  70. Hi Ohad, I hope you are doing well.

    Do you have an opinion on FLXN?

  71. Hey Ohad

    have you listened to the CC of ARQL?
    they are about to start ph1 of their reversible BTK molecule… they are attaching high expectations to it… calling it a potential $1B drug.

    Have you heard of CAPR? they had good, solid results in DMD ph2. Their valuation is lower now than before those results… I think they took some heat on Twitter when Feuerstein called them a small company who is trying to pump their stock with an iffy trial. But DMD is notoriously hard to treat, and according to other sources I follow the ph2 seems legit and the results positive, though not a slam dunk.

    Finally there is an i/o company out of canada with market cap under $100M that seems intriguing. They are about to start p3 and their drug in ph2 double overall survival (in combination with chemo). It seems that many big pharma with checkpoint inhibitors are combining them with chemo, so this might be an interesting play. They have multiple ph2 for various indications and just got fast track designation.
    here is a link:


  72. Hey Ohad

    please delete the first message…. I thought I had lost my post for some reason….
    did not mean to repost ska things

  73. load up DMTX of jump overboard?

    any thoughts on RARE? 3-phase3’s another on tap….plus rare drugs have higher success p3 (73% success p3) especially if they use biomarkers.

    thanx sir, hope your back soon

  74. Alex (ARRY) – I guess that as the launch approaches, people turn to focus on challenging market dynamics in BRAF+ melanoma. It won’t be easy to compete with Roche and NVS…

    andre (XLRN/EPZM) – I would definitely go for XLRN as I like their approach (designed TGF beta traps) over that of EPZM’s (HMT inhibitors) although it is still too expensive IMO and investiors are rightfully nervous about toxicity.

    Sam (VSAR) – Sorry don’t know them well.

    Richard Baker (FLXN) – It’s been a while since I last looked at them.

    robertgoulet –
    DMTX – I plan on keeping a small position (perhaps even add) as newer products may overcome limitations wit the HemB program.
    RARE – I still find the 2.5B market cap very hard to justify. Citi recently published a very insighful report on the true market opportunity in XLH, which may be much smaller than originally conveyed.


  75. $ESPR With 7 months to go in the year, when do u anticipate a partnership or a BO. Do you suspect a partnership will pan out or a BO ? Institutions seem to have loaded up on the shares of the company up to 87% now on NASDAQ. What price do u think it will achieve before Partnership or BO ? Who are the most likely partners or purchasers ?

    $EXEL Any update on Exelixis
    $GERN JNJ looking to file for approval in myelofibrosis. Any thoughts ?

  76. Ohad, I am wondering if you will have the time to do a pre-ASCO analysis? THANKS for your response !

  77. $RXDX What do you think now that they got a BTD status as compared to LOXO ?

  78. IMGN made a big move, investors seem to expect some good reports at ASCO but reports are around phase 1/2 only.

    ESPR lost a lot of ground today – market jitters?

  79. J Allen DMTX Intriguing at these prices Inherited metabolic disease (IMD) program utilizes AAV-8 Could be a game changer. dmtx-301 initial data later this year. I would not bet against James Wilson this time around with OTC

  80. curiousgeorge –

    ESPR – very hard to predict a transaction and there is no certainty it will occur. A potential catalyst may be MRK’s CETP data later this year. Regarding price tag, if I had to guess I would go for ~1.5B, which implies a 100% upside but my guess is as good as anybody’s…
    EXEL – Launch in the US is going great but stock price has that baked in already. Liver data is coming soon, if positive could have a huge impact but I am not optimistic.
    GERN – Need to check recent data

    Bouschka – I will try to post something pre or post ASCO, the problem is that I don’t a lot to write about this year…

    curiousgeorge (RXDX) – I still think LOXO has a better molecule.
    ARQL – Overall they didn’t have any material updates, starting a pivotal trial in ihcc soon and could have data in Proteus later this year.

    Les –
    IMGN – I don’t there will be a lot of new stuff at ASCO after last week’s conference call. Glad to see responses hold up in larger sample sizes, still not sure if activity as monotherapy is good enough.
    ESPR – No idea…

    J Allen (DMTX) – It’s a high risk bet but given the low valuation I think it’s a risk worth taking.


  81. $ESPR Do u think positive CETP data is good or negative CETP data is good ?

    $GLYC What do you think of GLYC ?

  82. ARQL:
    Did you see the ASCO abstract?
    77% DCR and 20% PR (32-47% tumor reduction, all FGFR2 fusion positive).
    Do you think these data varant a pivotal trial in iCCA?

    What is wrong with their IDO? Only 9% PR and 33% DCR.
    It looks weak compared to INCY IDO – 35% PR and 88% DCR (different target though – NSCLC)

  83. Hi Ohad
    what do you think of this EXEL evaluation?
    “After appropriate discounting, we estimated the peak net annual earnings of $6M, $90M, and $300M for Cometriq, Cabometyx, and cabozantinib’s 20 other indications, respectively. Taking the sum of the three figures ($396M) multiplied by 33 P/E average (of large cap biopharma), we arrived at $13B enterprise value. This figure is 130% higher than the current market valuation of $5.6B.”



  84. uriousgeorge-
    ESPR – Negative CETP data is good for ESPR because it removes a potential oral competitor.
    GLYC – I find their data hard ot interpret, never understood why they got BTD to begin with….

    andre (ARQL) – I still think results are decent and there is a chance to get accelerated approval with a pivotal P2. AGIO’s data put these data in perspective.

    NLNK – Not sure there is anything wrong with it, as their patient population was tougher. Cantor issued a note where they reverse engineered INCY’s data and showed that results are not that different in 3rd line patients and beyond (very small numbers, different indications etc.)

    curiousgeorge (IMMU) – I think it’s good for SGEN

    Richard Baker (IMDZ) – Sorry, don’t know them well.
    Alittle too late for me to do a pre-ASCO report but I hope I will get back to writing next month.

    Alex (EXEL) – I think it is very generous… I don’t think the stock can go there without a totally new indication like HCC.


  85. Regarding GLYC, based on their presentation from january in R/R AML the CR rate seems to be slightly better than historical trials. The best CR was from Classic 1 which utilized Clofarabine plus cytarabine and was about 35%. At the recommended dose 1271+chemo was ~42. The 30 day mortality is much better for 1271+chemo as is median OS right now. Still may be hard to compare without a randomized trial so like AGIO and CEL, GLYC can use e-selectin as a biomarker.

    In frontline 1271+chemo seems clearly better than historical trials. CPX-351 had about ~38% CR in their P3 trial. 60day mortality is much lower than CPX-351. Celator was of course purchased by JAXX for ~1.5B. But I agree more has to be seen to push marketcap above ~375M where it is at currently.

    GLYC seems to have a differentiated pipeline though. CXCR4 is targetted by big pharma and perhaps PFE can file Rivipansel for SCD early like Novartis

  86. Rick (GLYC) – Thanks. Not familiar with the rest of their pipeline but as far as their AML data goes, I see very little reason for optimism (see MEIP’s single arm data that also looked promising).

    tom (ABEO) – I plan on adding more, so far data are pretty good for an early P1.


  87. Thanks Ohad. Thats a good point. What kind of early data do you think for be approvable in AML? AGIO, CELG have filed in IDH2 R/R AML with a CR of about 19%. Do you think this will be approved and if so biomarkers would be the way to go even if the CR rate is low?

  88. CTMX

    becomes cheaper and cheaper. you’re going to open a position?


  89. CLDX

    EV is currently about 130m.

    Whats your opinion about the poster presentation at ASCO 2017 from Varlilumab and Opdivo in combination trial and the results to date?

    Are you still on the sidelines?


  90. ARQL

    I like the stock and valuation because of the potential of ARQ 087 in FGFR+.

    Cash is currently about 35m, so ARQL needs to raise funds in the near term. Data was already published, so there will be no catalyst which could push the stock higher in order to conduct a reasonable offering.

    Maybe wait until the offering comes and reenter the stock ? Do you hold?

  91. Exel—- It looks to me that MSS colon cancer Cotellic/Atezo will read out later half of 2017 or first quarter 2018. We don’t have to wait 2-3 years. Enrollment for study completed first quarter 2017 and patient median OS in Regorafenib is expected to be 6 months

  92. Rick (AGIO) – Yes I think AG-221 will get approved despite the somewhat underwhelming efficacy.

    Alex (EXEL) – A lot of drugs are found to have immunologic effects in prelinical models, but translatability to humans is unclear. At the end of the day what matters is clinical endpoints and I don’t see how this changes things. cabo+PD-1 studies are still ongoing.

    seppbroo (CTMX) – Not cheap enough IMO.

    hallama (CLDX) – Yep, still on the sidelines. Data at ASCO were early and not that impressive IMO.

    ISHIA (ARQL) – Always hard to predict timing of events, especially with such a low valuation. I plan to hold going into data in the 2nd half of the year for Akt.

    Chris (EXEL) – The trial started just a year, where did it say enrollment is completed?


  93. NLNK – do you think the punishment for the loss of Roche partenership is justified?
    They still have 4 Ph 2 programs and a lot of chash.

    MRUS – any idea why they were one of the biggest losser after ASCO

    No positions in both, just looking for a resonable entry point,

  94. CLVS – Clovis to settle class action lawsuit for $142M in cash and stock
    Medina vs. Clovis Oncology, Inc., et. al., No. 1:15-cv-02546, that accused the company and certain executives of violating securities laws by making allegedly false and misleading statements regarding its progress and market potential of rociletinib, given a thumbs down by an FDA advisory committee last year.

    Hello Ohad
    Does this affect the shareholders at that time?


  95. Hi

    If EXEL gets 1st line approval, do you stock going up or price is already baked in ?

  96. Hi,

    So Tivo has been approved by CHMP for RCC in first line. In addition a recent P1 study found that Tivo could be tolerated at full dose in combination with Opdivo (whereas Cabo required a dose reduction); now expanding to P2. AVEO valuation is still below the post-2013 FDA decision, even allowing for a factor 2 dilution of the stock. Your thoughts appreciated on whether the upcoming P3 third-line data (assuming successful) should be enough for first-line authorization in N/A. Also on how big the market niche would be for TIVO if it turns out to be the most effective anti-VEGF drug in combination with PD-1s. It always seemed to me that its potential lay mainly in combination therapy.

  97. andre –
    NLNK – Personally I am not excited with their pipeline. The Roche breakup is a serious blow but sentiment could reverse dramatically if INCY makes it.
    MRUS – Efficacy simply wasn’t strong enough although population was a tough one.

    Alex (CLVS) – Not sure.

    Ruhu (EXEL) – I think it will have an impact on the stock but the liver cancer data could be more dramatic.

    Chris (EXEL) – Thanks, indeed quite interesting!

    Chris (AVEO) – Good for them! The landscape is much complicated today and 1st line RCC will hopefully be transformed with PD-1 and cabo. One interesting angle is tivo’s good combinability as a relatively selective and safe molecule which bodes well for their PD-1 combo study.


Leave a Reply

Your email address will not be published. Required fields are marked *