Portfolio updates – Biotech M&A valuations and ADCs

It was nice to see M&A picking up in the 2nd half of 2019, with multiple high profile acquisitions. Two sectors of interest were kinase inhibitors for oncology (Array Biopharma, Loxo, ArQule) and Gene therapy for rare diseases (Spark, Audentes). siRNA came back to the limelight with Novartis’ $9.7B bid for MDCO for its twice-yearly PCSK9 treatment, marking a radical change in sentiment towards siRNA.

This uptick is great news for investors in small/mid-cap biotechs for which acquisitions are the primary exit route. Looking at some of the deals, I am having a hard time justifying valuations or seeing the acquirers making a decent ROI in the long run. What bothers me is not the fact that many acquired assets eventually fail but the amount some biopharmas are willing to spend for high risk assets, sometimes even preclinical ones.

To me, Dec 9 provided a good example with two acquisitions (ArQule and Synthorx) similar in size but very different in risk profile. I realize there might be some personal bias here as Pontifax is one of the largest shareholders in ArQule, but the fact that both companies were acquired with similar valuations is a real head-scratcher to me.

I try not to discuss ArQule (ARQL) for obvious reasons but suffice it to say that their lead drug has solid efficacy in humans with a clear route to market. Opportunity size is always debatable, ranging from hunderds of millions to several billions, but the drug has a high likelihood of reaching the market and generate revenues based on a straightforward clinical program. In other words, Merck is likely to see more than $2.5B in sales from this acquisition.

Synthorx’s (THOR) is on the other end of the spectrum as its lead agent (THOR707) just entered P1 with very limited visibility towards the market. THOR707 is an engineered IL2 designed to retain the cytokine’s beneficial effect on T cell activation while sparing side effects and undesirable activity (Treg activation and vascular leak syndrome). The drug’s potential is significant, of course, as with any IO (immuno-oncology) agent that is heralded as the “next PD1” but given the lack of clinical validation, the poor translation from animals to humans in IO and recent experience with other IO agents (Nektar’s next-gen IL2 in particular) one has to admit technical risk is high.

I like the drug and Synthorx’s platform and completely understand why it is an attractive acquisition target. Nevertheless, I am struggling to understand how someone can pay $2.5B for an asset that just started P1, knowing that most drugs fail and that success rate in IO is one of the worst in the industry. I realize Sanofi’s management was under a lot of pressure to unveil something new at its R&D event but if I were a Sanofi shareholder I would expect the company to treat shareholders’ money with a little more respect.

In general, I never understood lucrative preclinical deals where a pharma pays hundreds of millions upfront for something that hasn’t been proven in humans. These deals typically don’t age well, especially in areas of low technical success like IO.

A recent example can be seen with Novartis’ decision to terminate its STING program it had licensed from Aduro at the preclinical stage for an upfront of $225M (and they didn’t even get full commercialization rights). Just like engineered cytokines today, STING was a super-hot space in 2015, but that doesn’t necessarily change drug development statistics. Another notorious preclinical IO deal was the BMS/Flexus acquisition,  in which BMS paid 800M upfront for a preclinical IDO inhibitor.

The trend seems to continue as earlier this year, Novartis acquired another company with no clinical data (lead program just started P1 in healthy volunteers) and paid $310M upfront. Novartis will probably write off these $310M, which still looks like an excessive amount for an asset with no clinical data but at least they didn’t pay $2.5B…

2019 as a turnaround year for ADCs

After years of stagnation, antibody-drug conjugates are finally gaining momentum.

Seattle Gentics (SGEN) and its partners won FDA approvals for Polivy (Anti CD79b for lymphoma) and Padcev (Anti-nectin4 for bladder cancer). Despite relying on legacy ADC technology used for Adcetris, both agents demonstrated unequivocal efficacy with a reasonable safety profile, and are likely to become commercially successful products.

On the next-gen ADC front, Daiichi presented updated results for its two lead programs (Enhertu targeting HER2 and DS1062 targeting TROP2). Despite demonstrating unprecedented efficacy in breast and lung cancer, respectively, safety profile remains challenging (especially lung toxicity). Enhertu just received FDA approval in last line HER2 breast cancer, implying the risk/benfit is still attractive (the waterfall chart below from SABCS 2019 is truly impressive).

Enhertu - waterfall

Enhertu was the subject of a huge deal between Daiichi and AstraZeneca, which paid $1.35B upfront (out of a total of $6.9B) for co-promotion rights. It is too early to assess this deal but given the strong clinical data, the multibillion opportunity in HER2 breast cancer and the potential to expand to other HER2+ tumors (gastric cancer), this deal looks like a calculated risk from Astra’s point of view. This is in contrast to their 2015 decision to buy 55% of Acerta for $4B. Enhertu’s clinical profile and mechanism are radically different from approved HER2 agents, as can be seen in the cross-trial comparison below from Daiichi’s recent R&D event.


The same could not be said about Acerta’s Btk inhibitor (Calquence), which was another covalent inhibitor like Imbruvica with slightly better selectivity and overlapping resistance mechanisms. Reversible Btk inhibitors like ARQ531 and LOXO305 are mechanistically different from Imbruvica, which is why they (in contrast to Calquence) actually work in Imbruvica failures.

The Astrazeneca/Daiichi deal also compares favorably to the Abbvie/Stemcentrx acquisition, where Abbvie bought an ADC with dubious efficacy (22% response rate, median PFS of 3.8 months) and a problematic safety profile for $5.8B.

Beyond Enhertu, I am still excited about Daiichi’s TROP2 program, DS-1062. Despite seeing significant lung toxicity, it still looks like a viable product with potential utility in multiple solid tumors. A recent update from the company continues to show clear efficacy. Although the spider plot chart at the 8 mg/kg cohort is not as clean and striking as the initial one from WCLC2019, most patients experience tumor shrinkage already at the first scan so a 50% response rate is still realistic.


Other ADC programs to watch are Zymeworks’ (ZYME) bispecific HER2 ADC and Sutro’s (STRO) FRa ADC, both expect to have readouts in 2020. I like both programs as they utilize new technologies that might solve issues with current ADC technologies.

Zymeworks’ ZW49 binds two different sites on HER2 which may make it more potent to target cells, potentially expanding the therapeutic window. Sutro is using site specific conjugation to generate a more homogeneous ADC product (so far, approved ADCs are a mixture of several entities with different drug-antibody ratios). The company’s CD74 program (STRO-001) appears to have a narrow therapeutic window, which may be related to the payload it employs. The FRa ADC (STRO-002) utilizes a different payload and appears much better tolerated but efficacy is still too early to assess.

Portfolio holdings – Dec 22, 2019

portfolio - 22-12-2019biotech etfs - 22-12-2019

72 thoughts on “Portfolio updates – Biotech M&A valuations and ADCs

  1. Ohad

    thanks for your new blog post, always s pleasure to read.

    Ohad, do you think ARQL is a done deal? As you mentioned pharma are partly paying huge sums for some not so proven assets, and I don’t find the takeover price for ARQL that impressive (eg given there is also miransertib…).

    other companies did not see the ASH data yet, so do you think it is possible we’ll see a competitive bid?

    why do you think price is 1 to 2 % above offer price (usually it is different), is this shorts covering, or…?


  2. Ohad,
    In ADC space, I think a future “game changer” could be Mersana therapeutics. Several reaouts are expected in 2020 for NSCLC, ovarian cancer… Data presented last ASCO was interesting. Escalating dose is ongoing. Mersana lead asset target NaPi2b. Recent studies have demonstrated that high level of NaPi2b expression was seen with adenocarcinoma subtypes and tumors harboring EGFR and KRAS mutations.
    Do you have any opinion on their lead asset and ADC platforms ?

  3. Any companies you are following or recommend me look into making advancements in Schizophrenia/Alzheimer’s/Diabetes?

    Alzheimers getting late Q4 momo with SAVA CRTX any thoughts on those?

  4. Ohad…… It looks like there are a number of posts that you have not responded to. Will you go back and include them in the comments for the latest Portfolio Update ? Will you be adding Sutro ?

  5. Sorry you appear to have dropped IMGN at this time. Recent news has moved it from lows to approaching highs for the year. The new Phase 3 Trial should give IMGN853 a path to approval that’s a year shorter than previously anticipated, and that trial was added after discussions with the FDA, so I believe it has a strong probability of being successful. Meanwhile IMGN532 is reporting strong data and may have a path to approval out of Phase 2. It should be noted that this conjugate has essentially the same target as a drug developed by SGEN which created unacceptable side effects before dose levels were sufficient to be effective. I still believe in many cases IMGN’s technology is superior to SGEN’s in spite of the difference in their price.

    It’s ironic that one of SGEN’s latest successes works because of it’s synergy with Kadcyla (IMGN’s technology), but one which IMGN fully monetized and is no longer benefiting from sales. Clearly SGEN has marketed itself better, but I cannot say it’s better technology.

    Personally I bet on the IMGN January $4 calls when they were very cheap, if the price continues above $5, I will add substantially to my holdings. I hope you’ll be back into IMGN in the future.


  6. tedy (MRSN) – They definitely have a unique approach but so far their ADCs seem to have safety issues probably because of high DAR.

    Kay Lee – these are areas I am not familiar with. In schizophrenia I own NERV but it’s a high risk binary event.

    bouschka (STRO) – I prefer to wait for more data as so far they were able to dose escalate to the “right range” but efficacy signals are preliminary. I am trying to reply to as many questions as possible but hard to cover all of them.

    Dan G. (APTO) – Not following the story closely but I prefer selective kinase inhibitors.

    Gary Mohilner (IMGN) – I also think mirv is effective and will eventually get approved for FRa-high ovarian cancer. The new P2 study for accelerated approval is a positive development but should also take 18-24 months to read out. I still believe in their technology but for some reason their technology could not generate successful ADCs. It’s a matter of target selection but also an issue of target/payload combination.


  7. Ohad I know you haven’t followed cycn as they’re a recent ironwood spin-off but if it’s not too much trouble your insight would be deeply appreciated. I believe it could merit a position in your portfolio. The CEO and CSO both transferred over $10m worth of stock options from ironwood to cycn which seems a deep conviction move. What are the odds here in vascular dementia and sickle cell. Thanks for all you do bro.

  8. Ohad I know you haven’t followed cycn as they’re a recent ironwood spin-off but if it’s not too much trouble your insight would be deeply appreciated. I know you’re quite busy and completely understand if you’re not able.The CEO and CSO both transferred over $10m worth of stock options from ironwood to cycn which seems a deep conviction move. What are the odds here in vascular dementia and sickle cell. Thanks for all you do bro.

  9. Ohad…. Could please comment on Arcus { rcus }.Their venture backing, leadership,and recent Genentech collaboration are all impressive !

  10. Hi Ohad
    You probably didn’t see this post. Here it is again, just in case you or someone else has an opinion on BTAI.

    Novel MoA, selective alpha-2a receptor agonist, Market cap is fairly modest – 150M valuation for Ph 3 company with data readout (mid-2020); NDA submission (2H 2020), and product launch mid 2021. ACAD is a good proxy about the potential revenue and market cap.

    Ph2 data with BXCL501 met all primary and secondary endpoints with p< 0.0001
    Looks like a low risk CNS investment for 2020-21 or … I am missing something?

    Thanks and happy holidays

  11. With the developments @ZIOP over the last 6-9 months or so, do you have
    a new or revised view ? Thanks

  12. Paul (CYCN) – Will try to take a look. At first glance, the rationale across indications converges on nitric oxide as a harmful element. Biology sounds a little soft but didn’t delve deep.

    bouschka (RCUS) – Agree team and investors are impressive but so far data have been underwhelming as monoTX and combianiton studies are hard to interpret, especially in IO. So far the adenosine pathway hasn’t been validated in humans, like many other immuno-metabolic approaches in IO. I always prefer a bet like NXTC where you have some activity as monotherapy.

    andre (BTAI) – As with other IO agents without monotherapy activity, I preer to wait for more data. Cannot comment on the agitation program, not my space.

    Rodolfo (ZIOP) – I have always liked sleeping beauty as a non-viral alternative in CAR/TCR and the idea of using it in the context of neoepitopes makes a lot of sense. Definitely something to track. I am less excited about the IL12 program in GBM, hard to interpret those single arm survival data.


  13. $cycn Thanks in advance Ohad. I know you didn’t dive deep but the premise is actually the opposite. The lack of Nitric oxide is the problem they’re trying to solve with their SGC stimulator. Adempas(Bayer-SGC stimulator) is already approved for PAH and the CHF indication they sold to Merck for $1b passed their phase 3 study in preserved ejection fraction.
    CYCN CEO recently stated at conference their version of SGC is the only one known able to cross the blood brain barrier and indicated they would present IW-6463 data in january.

  14. Hi Ohad,

    What are your thoughts on MEIP and their lead PI3k delta inhibitor ME-401? The phase 1b data is quite impressive and seems to put ME-401 as the best in class PI3k inhibitor in the hematologic malignancy space. In my opinion, the ongoing TIDAL study that is being conducted with registrational intent has a high rate of success given the low ORR threshold that ME-401 has to pass in order to claim technical success in a non-comparator study and thus the route to FDA approval seems fairly straightforward. Certainly there is concern about the overall utility of the PI3k delta class in hematologic malignancies given the poor performance of idelalisib but presumably this is attributed to mediocre efficacy and significant toxicity concerns with idela which preclude its widespread use. The efficacy with ME-401 appears much more pronounced and safety with intermittent dosing appears doable. Many thanks in advance for your thoughts.

  15. Ohad and all
    I found it interesting to share with the blog:
    “Cell penetrating peptides (CPP) for intracellular delivery of bioactive cargo”
    Instead of virus – fusion protein to deliver e.g. frataxin, missing in FA
    ZFGN is merging with private company – Chondrial Therapeutics.
    Ph1 in FA, top line data in late 2020. Early but I guess would be interesting to follow, since the preclinical data show ability to deliver missing protein to almost any tissue – heart, muscles, brain, spinal cord, ….
    Like dystrophin, frataxin is too big for virus delivery, so if it works, the technology could cover some other rare diseases.


  16. hello Ohad,
    what do think about DERM, more specific Lebrikizumab after successful phase 2 results? is it differentiated enough compared to Dupilumab (Dupixent)?
    thanks Paul

  17. Alex (MEIP) – I am still skeptical about isoform-selective PI3K inhibitors after the experience with GILD and INFI. I had expected them to become much more successful but I guess clinical profile and unmet need are not that exciting to physicians. Activity is clearly there but can’t argue with market figures…
    Not sure 401 is best in class based on cross-trial comparisons.

    andre (ZFGN) – Agree, very interesting technology and concept. Challenge is huge as you need to shuttle enough frataxin to the mitochondria, not just into cells. I am a little bit hesitant because TAT based penetrating peptides have been around for years, not sure what the problem was but I presume they didn’t deliver eventually. There is also immunogenicity concerns, as with every novel protein. Agree about the broad utility, especially for mitochondrial and large proteins, definitely worth tracking.

    Les (ITCI) – Sorry, not following them.

    paul (DERM) – No, I don’t think it is differentiated enough from dupi.


  18. Thanks Ohad
    Very accurate framing of the problems – therapeutic window and immunogenicity. The ph 1 data in h2 2020 should answer both.
    2 years ago RCKT was in the same situation – reverse merger w/ unproven technology. Worked well in this case – 10x return in 2 years. Let’s see if ZFGN can repeat that.

    Any thoughts about WVE failure?
    Is the entire stereopure ASO thesis busted or it is limited to DMD?
    The other target is Huntington- do they have any advantage compared to GT?

  19. Dear Ohad

    Any opinions on Exosomes for delivery of gene therapy? this is the route that CAPR seems to be going with their exosomes program. Are you watching this field and what could this be a technology that will be maturing and could become a better “tool” for delivering genes? Any names that you are watching?

  20. Natural Killer Cells had some publicity recently.
    What is your take on it conceptually and more specific
    on NK (Nantkwest) ?

  21. Hi Ohad, have you looked at Aprea (APRE)? Its had a big run up after its IPO… now has a market cap of $752 million.

    Motley Fool description – This biotech works on novel cancer therapies. Its drugs reactivate a mutant tumor suppressor protein (p53), also known as the “guardian of the genome.” Aprea has a drug, APR-246, it’s testing in multiple indications. There’s an ongoing phase 3 trial for myelodysplastic syndromes (MDS), a rare disease of bone marrow failure. The company also has a phase 2 trial for a type of cancer called acute myeloid leukemia (AML), and a phase 2 trial for MDS/AML post-transplant maintenance.

  22. Les
    Check APRE S-1A from their recent IPO
    APR-246 is prodrug without strong IP protection apart form Method of use, dosing and such. Moreover, APR-246 is used as a combo w/ chemo, which undermines in my opinion the concept of repairing mutant p53. There must be some logic though, otherwise they wouldn’t be $1B company.

    NXTC in their Dec presentation have a scatter plot PD-L1 vs S15 for NSCLC.
    It looks that the S15+ domain is > PD-L1+. Is it going to translate to larger market opportunity?

  23. AXSM keeps delivering…. what an incredible run and execution they’ve had – AXS-07 delivers on all endpoints and secondary endpoints in ph3 migraine trial. Seems a lot of other biotech and managers could learn something from AXSM in terms of execution of clinical trials. Moreover they have done this with very limited resources. Hats off.

  24. Andre (WVE) – Quite disappointing, of course, science and rationale were really compelling. Based on the recent HD update, issues don’t look indication specific.
    GTx vs. ASO is an open question, the only positive data was from Roche/IONS with impressive knockdown in CSF. The main question is level of knock down in different regions of the brain, which is still unclear and used by both camps as an advantage.

    BJ (MRSN) – I am not optimistic about their platform, looks like too high DAR for the payload they are using which translates to a narrow therapeutic window.

    Dan (CAPR) – So you see a lot of exosomes projects especially in private companies and academia, so far the field is still too early for me. I doubt exosomes can compete with viral vectors but let’s see…

    rodolfo (NK) – Yes a lot of activity around NK, mostly as CARs. They have an interesting value proposition for allo and results from MD Anderson with an auto CD19 CAR were very positive. I think there are better technologies out there than NK but all are private.

    Les (APRE) – I don’t think valuation is justified, response data are high but hard to interpret like any other MDS/AML combination single arm trial, durability doesn’t look great and a lot of patients either progress or switch to transplant.

    andre (NXTC) – Hard to assess market opportunity at this stage, on paper if they show correlation to Siglec15 expression and response then yes but they first need to show efficacy signal is real.

    Dan (AXSM) – Agree. Well done!

    Richard Baker (ADRO) – They are traded way below cash but their assets are still to early without any human poc.


  25. Ohad,
    Have you looked at Bicycle Therapeutics recently? Do they fit into your ADC thesis.
    On that note (ADCs) could you graph out the current valuation: future potential of the current ADC leaders. With that in mind, why not reduce your SGEN position? Do you expect them to be bought out at a significant premium to the current ~ 20B or is their future pipeline that significant?

  26. Ohad – why do you expect the enhanced binding of the ZYME ADC to HER2 to drive an enhanced clinical effect, given HER2 just provides a “navigational” marker for the construct to deliver its payload to the target?

  27. Any reason for the recent sell-off in CHMA? Hard to fathom with filing of NDA coming soon. Would you be a buyer at these prices?

  28. (CHMA) It’s nothing if not annoying that they guided in November they were on track to file the NDA by end of year, and still nothing. Is this innocuous, or a potential sign of management that is not as scrupulous as they should be?

  29. Do you have an opinion on IDYA? Very low-float and great institutional investors.

  30. Hi Ohad,
    same q as Richard Baker: MGTA? too early?
    same again: Any plan to run bio fund? I really like to be the first to join.

  31. Any thoughts on Tarveda? They recently announced they are merging with ONVO (Organovo). They are working on “miniature drug conjugates”, in particular, PEN-866, which was licensed from the former Synta Therapeutics, and targets HSP90 while linked to a topoisomerase 1 inhibitor (SN-38). In September 2019, they presented data from the phase I portion of their current 1/2a trial. Tarveda is privately held, but the merger is bringing them public and giving them access to ONVO’s cash.

  32. TRVN has solved the QT issue that had been one of the biggest question mark in the Oliceridine AC in October 2018. What do you think are the chances of Oli being approved now?

  33. Re trvn
    Any opinions on their migraine program? Trv 250? They are moving to ph2 – safety looked okay in ph1

  34. Hi Ohad,
    what do you think about CTMX and their ADCs? The have closed some deals wirh big pharma but still own a lot programs. Unfortunatley their cash burn seems pretty high for Phase 1/2 trials and I am not sure if their technology works. What is your opinion?

  35. And do you have any thoughts on XNCR? They have a validated platform with Ultomiris and probably MOR208. Beside that they have plenty of own and some partnered programs in Phase 1 trials.

  36. Hello Ohad,
    I believe that you may not be keen about zinc finger technology…
    However, does Sangamo (SGMO) deserve attention, esp in light of their late stage collaboration with Pfizer in hemophilia A, and with Sanofi (mid stage) in sickle cell disease and beta-thalassemia?

  37. Like Sam said MOR208 will probably be approved by mid 2020. What is your opinon on MOR in general?

  38. AXSM published strong data in November and December. Following the data the stock rose to a market cap of $3.5 billion. Is the market cap too high at that level or is there more to come? Will AXSM get acquired by a big player?

  39. Hi Ohad, happy new year! Could you take a look at Germany’s BioNTech (BNTX). They went public in October 19 and had a nice run up. Not a good entry point I guess but technology looks very interesting.

  40. Hi Ohad,

    As always, thanks for your work on this blog. It’s an awesome resource.

    With regards to chiasma’s phase 3 topline data. The trial enrolled patients that are currently controlled on injectable SSAs with an average IGF-1 ≤1.0 × ULN during the eight-week screening period. Patients are then dosed with mycapssa (40, 60, 80mg or individually titrated).

    topline data showed that 58% of patients maintained an IGF 1 response. Since these patients were already controlled on an injectable, wouldn’t we expect for a higher % of patients to be controlled on the same drug just in an oral formulation? If not, what explains the drop off in response? perhaps this was caused by non-compliance? It’s great to see that 90% of patients continued to stay on drug in the extension study and clearly oral is better than receiving a horse needle shot, but is the fact that of the responders to injectables only 58% responded to Mycapssa a concern?


  41. Ohad
    great data by APLS vs Soliris in PNH!
    They have in addition a trail for Control of Host Attack of AAVs for GT.
    Many GT programs may profit from that, if it works.
    Any thoughts about APLS, if you follow it.

  42. Hey Ohad,

    do you have an explanation for the weakness of ABEO?
    Thank you in advance!

    Kind regards

  43. hi Ohad,

    MIRM is an interesting company, and it resembles a bit AUPH for some reasons:
    – large n safety datatbase (maralixibat was tested in > 1500 persons whereof > 100 children)
    – high unmet need for the pediatric indications they are targeting, e.g. in ALGS, Maralixibat would be the first approved drug. It is an orphan pediatric indication with small population size, but premium pricing should be possible, and a pediatric disease voucher is in place. Maralixibat has breakthrough designation for puritus in ALGS. Breakthrough designation also for PFIC2.
    We talk about serious illnesses, because the only alternative is often a liver transplant, or external biliary diversion surgery (PEBD).
    – they don’t have to make a lengthy phase 3 for ALGS indication and will start rolling submission in Q3 2020
    – also the phase 3 trial readout in PFIC2 is not too far away

    Market cap some 500 mio. after the recent run which seems not very cheap but also not expensive imo.

    What do you think about the company?

  44. AGTC positive results for P2 efficacy and durability.
    It’s moving up now keeping up with ZYME,XENE,NERV,TGTX, AUPH
    small bets.

    Thanks again Ohad.

  45. Ohad
    it looks that the AGTC data are better than NITE’s. They reported improvement of visual activity, not observed before. +5 letters looks significant!
    Once you said that you wanted to see the XLRP data before adding to AGTC.
    Is the data good enough to add to the position?
    Or you would wait for the ACHM trials to fail. The data are due also in January.
    I guess they will raise cash soon, definitively before the ACHM data.

  46. Ohad or anyone have an opinion on BPMC?

    $AGTC Reports Positive Six-Month Data from its Ongoing Phase 1/2 Clinical Trial in X-Linked Retinitis Pigmentosa

    a got a small position at $5=/share.


  47. Sorry for the AGTC mix up.

    $BPMC Avapritinib Approved PDGFRA mutant GIST – Label Dispels Bear thesis FDA approved avapritinib (Ayvakit) for treatment of adults with unresectable or metastatic GIST harboring a PDGFRA exon 18 mutation (including D842V). approval comes ahead of the Feb 14, 2020, PDUFA date

  48. the NDA for MYCAPSSA has been accepted by the FDA and the PDUFA target action date has been set to June 26, 2020; CHMA share price should increase – whats your opinion Ohad?

  49. Hi Ohad,

    ADAP has a big move today, up 250%. What’s your take for their future?



  50. Ohad

    ZYME. The stock has appreciated over 300% since your purchase in your model portfolio. Can you speak about the potential for ZW49 as it gets advanced thru its multiple clinical trials and the data they released today?

    Also, in looking at the CEO-CFO ownership of stock, I was surprised to see such small holdings as only 70,000 shares combined. On the surface doesn’t appear to show a lot of confidence. What are your thoughts on this?

  51. STML – Stemline Therapeutics Announces Preliminary 2019 Net Revenues for ELZONRIS
    $43.2 million in estimated ELZONRIS net revenues for the year-ended December 31, 2019
    $11.8 million in estimated ELZONRIS net revenues for the fourth quarter of 2019

    The stock fell more than 20 percent after hours
    would you add at this point if its less then 8$?

  52. Hey all re: STML
    Stock falling like a rock all the way to low $6s
    market cap at just over $300M
    I have added, but too early. :(
    commercial execution is key, but hopefully they can expand indications by next year and grow sales? European approval could happen this year, but that will require investing in sales operations, unless they outlicense ti someone? so that may be a non-event.

    Ohad, what is our take on STML? Thanks as always for your insight!


  53. Alex, Dan & Ohad,
    Stemline’s Sept “19 cash was at about 180 million. I’m not sure if ELZONRIS net out, after marketing and Manufacturing to a +.
    Still, with that one marketed product, the company is selling for about 8x earnings (40 million x 8 = 320 million; 50 million outstanding shares).
    So it may represent a buying opportunity, especially if the rest of STML products/platform has any value here (Ohad…your thoughts here).
    The other thing it highlights is the markets desire to see M & A . Biotech down significantly yesterday after JPM ‘20 opened without any M&A news.
    Stemline might have been viewed as a takeout candidate if sales were more robust.
    Again, Ohad…..time to take profits in general in the space, add to BIS and wait for a pullback?

  54. Frank, at al.
    STML problem is the sequential Q/Q growth. In fact there is a decline from 13.3M to 11.8M. I would be cautious until the revenue changes the trend

    BDTX files for IPO. According to the S-1 the technology looks pretty cool- personalized precision small molecule. They think they can “out-smart” the cancer mutations and solve the durability problems of many targeted therapies. Unfortunately only pre-clinic.
    Is it worth watching or the approach is hopeless?

  55. hi Ohad, AZ out of the race with Epanova (Strength trial failure), ACST also gone as potential future competitor. AMRN really the only one with CVOT!

    I know, $7b market cap is quite something, and patent cases still ongoing, but this will be a huge drug! CEO preparing suppliers for $5b peak sales.

    I think there is some room to go, no?

  56. Andre,
    Re: STML.
    Thanks. True the Q/Q sequential revenue numbers are not inspiring. It’s still pretty early in its evolution as a marketed drug and they all undergo Vetting and price adjustments through Insurers, PBM, CMS etc and often show seasonal Q/Q Adjustments.
    The Q: for Ohad remains whether the current valuation at 8x current sales of ELZONRIS has significant upside based on the drugs current indications and STML’s ongoing attempts to expand its reach + gain Europe / Asia exposure.
    The value of the rest remainder of their programs or their platform as a whole ( as an M&A) is an unknown that Ohad can shed some light on.

  57. Hi Ohad, friends,

    Any comments on SNGX? Two P3’s with results due 1Q and 2Q. Rising steadily.

  58. Hello Ohad,

    BioNTech bought Neon Therapeutics. They like their neoantigen T Cell therapy.

    Genocea has also a neoantigen T cell therapy.

    Is this a new interesting field?


  59. Frank –
    BCYC – Valuation is low but for ADCs I prefer large targeting moieties which seem to confer a better product profile as opposed to radioTx where small moieties are superior.
    SGEN – It’s a fair question… I don’t see them getting bought for 20B without another wholly owned success story but plan to keep it for now as part of my exposure to ADCs.

    Elementsofz (ZYME) – I have high hopes for bispecific ADCs. In a nutshell, they increase potency due to enhanced on target internalization without affecting off target tox.

    Richard Baker/ Alex (CHMA) – Don’t know, people are waiting for FDA decision and launch. They re-submitted their NDA on Dec 26.

    IDYA – Biology looks excellent but still early stage, definitely one to watch.
    MGTA – I like them and following them, new conditioning regimens are definitely needed.

    Gene H (MGTA) – Yes, prefer to see more data but love the approach.
    Still no plans to start a fund but thanks for the kind words !

    Neil M (ONVO) – Sorry, not following them closely.

    Rüdi (TRVN) – I haven’t been following the story for a while but I recall this program looked attractive at the time. Seizures overhang is still there t some extent despite moving to P2.

    Sam (CTMX) – I think their technology is more pertinent to bsAbs as masking hte binding arm might not impact off target tox with ADCs, but that’s just a hypothesis.

    Sam (XNCR) – Yes, clearly a set of validated technologies (less confident about 208 in the absence of randomized data). Not sure whether this justifies market cap but definitely a productive engine.

    Lawrence (SGMO) – Agree, they are no longer a ZFN pure play. Hem A program is already partnered and field is very competitive so prefer to watch from outside for now.

    Daniel (MOR) – I am not as excited as others about 208 given the lack of randomized data. DLBCL is becoming very competitive and two-drug combo without randomized data is too risky for me. Beyond that they have a broad partnered pipeline but need to re-visit and check if they have any wholly owned advanced assets with clinical poc.


  60. James (AXSM) – Sorry, hard for me to judge.

    Marc (BNTX) – Agree about strength of technology and platform but for a company with no clinical validation, valuation looks outrageous to me. Similar to MRNA…

    Richard Baker (PRVB) – Sorry, don’t know them well.

    John (CHMA) – Since the active drug is the same or similar to the injectable patients were on, absorption with the oral drug could explain the fact “only” 58% responded. I still think that for these patients, Mycapssa will become the preferred option in order to avoid painful injections.

    andre (APLS) – I also thought so initially but looks like there are still open questions the market would like to resolve. Not too familiar with their programs, a lot of activity with anti-complement drugs…

    Martin (ABEO) – Nope…

    Christian (MIRM) – Need to take a look, not sure how robust their biology is.

    andre (AGTC/NITE) – I still didn’t have a chance to review the data thoroughly, it was a little challenging to understand what the effect is based on the deck but the fact two different programs have a signal in the same disease is encouraging by itself.

    RAM (BPMC) – Tempting to own following LOXO, ARRY, RXDX but at the end of the day market caps for BPMC and DCPH are quite generous and factor in strong GIST and SM launches

    Rüdi (CHMA) – I plan to keep my shares but it’s a binary high risk event.

    Jinyu (ADAP) – That was a very pleasant surprise but I prefer to wait for more data, these studies are notorious for generating initial efficact signals with “index patients” that are not corroborated further on.

    Dave (ZYME) – I admit I was surprised by the strength of the stock, I personally have high hopes for ’49 but it’s hard to predict. Based on the update at JPM it looks like there are no show stoppers but efficacy is still an open question.

    Alex (STML) – No plans to add for now, numbers were indeed disappointing and we need to see if this is part of a trend or not.

    Frank (BIS) – I thought the sector and broad markets are expensive 2 years ago and still think a correction is likely but so far the markets proved me wrong. I plan to keep a significant cash reserve + BIS position.

    andre (BDTX) – Agree technology looks cool with teh potential to overcome resistance to existing drugs and mutations not amenable to standard inhibitors. Prefer to wait for clinical data.

    Christian (AMRN) – Agree. Prefer to wait for more clarity on the IP.

    Les (SNGX) – Not familiar with them, sorry.

    Richard Baker (KURA) – Yes, I think they are approaching attractive valuations.

    Duane (NK) – Didn’t havea chance to see their data, inherently skeptic about this company but hard to ignore two CRs. I prefer to wait for full data resentation as I am nervous about these out of context reports.

    Toby (BNTX/GNCA) – Yes, the field is interesting but IMO not via vaccines.


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