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

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

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

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

Notes from ASCO 2016

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

Immuno-oncology – PD-1 combinations at their infancy

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

Q1 2016 scorecard – Arrested Development

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

Buying more Exelixis following positive renal cancer data

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

Biotech selloff leaves Wall Street disillusioned

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

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

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

Biotech portfolio update – Clovis, Array, ImmunoGen

Clovis Oncology

Clovis (CLVS) lost 75% of its market cap last week after disclosing a disappointingly low response rate for rociletinib in T790M+ NSCLC patients. Updated response rates were 28%-34%, dramatically lower than the 54-60% response rate reported at ASCO 2015. According to the company, the dramatic difference stems from analyzing the same data set based on more stringent criteria (confirmed response rate). Continue reading

Esperion – Seeing the glass half full

Esperion (ESPR) has been the target of a lot of criticism lately, demonstrated by the collapse from $115 to $24 in just 5 months. Investors became skeptical about Esperion’s ability to get FDA approval without cardiovascular outcomes data, which may push approval by 2-3 years and decrease probability of success. Even if the drug obtains FDA approval, many are worried about a narrow label that will limit initial commercial opportunity. Continue reading

ECC 2015 – Renal cancer showdown between BMS and Exelixis

The ECC/ESMO meeting, the European equivalent of ASCO, will take place next weekend. Historically, this event has received limited investor attention (since most of the important late stage stuff is reserved for ASCO) but in recent years its importance is growing as more practice-changing data are presented.  As a proof of this trend, this year’s meeting will include the two most important breakthroughs in renal cancer in almost a decade. Continue reading

Biotech portfolio updates – Thoughts on ongoing correction and upcoming catalysts

The biotech sector is having a brutal summer, with major indices (IBB, FBT, XBI) down 15-20% from their July highs. Even after this decline, valuations for most biotech stocks are still rich and need to come down by an additional ~25% in order to become reasonably priced. As my working hypothesis includes a correction (with significant fluctuations) going into 2016, I still plan to have a significant cash position and complement it with leveraged short bio ETFs. Continue reading