Q1 update – GTx, ADC and NASH

Gene therapy – M&A picking up, imminent crucial update from Biomarin

In Q1, the gene therapy space saw one big acquisition (Roche/ Spark (ONCE)) and several smaller deals including Biogen/Nightstar (NITE), Pfizer/Vivet and J&J/MeiraGTx (MGTX). These deals demonstrate the industry’s appetite for gene therapies with an emphasis on liver and ophthalmology as validated domains. CNS (primarily AAV9) and muscle (primarily AAVrh74) are the two other popular domains

What I find interesting in these deals is the fact they weren’t done from a position of strength (as opposed to the Novartis/Avexis deal, for example). Spark was struggling with its HemA program and did not have near term catalysts with other programs. Nightstar was trading around its IPO price with initial XLRP data that were hard to interpret at higher doses. MeiraGTx’s stock also hasn’t performed well and the company was facing an imminent fundraising.

The next 12 months will be crucial for GTx with tens of clinical readout that should justify or disprove the current sentiment. The single most important readout will be  a 3-year follow up for Biomarin’s (BMRN) HemA program (ValRox), expected mid-2019. This program is probably the most prominent gene therapy in development (rivaled only by Sarepta’s (SRPT) DMD program). It is in pivotal trials, it clearly works and market potential is huge (peak sales >$3B).

Biomarin’s 3-year update will potentially have dramatic implications for the entire liver-targeting gene therapy space because it will start to answer the durability question. AAV-based products are hailed as single lifetime treatments but actual durability is an open question. Investors are rightfully nervous about ValRox and other liver-targeted programs because in contrast to other tissues (brain and retina), cell divisions clearly occur in adult livers, potentially leading to transgene dilution.

Results to date with ValRox show a peak in FVIII levels at 6 months followed by a gradual decline up to 2 years (last data point). Will the trend continue or can levels reach a plateau that can be maintained for years?  If the 3-year update demonstrates a significant decline towards the clinically meaningful threshold (12%), this will cast a shadow over ValRox’s value proposition. Stabilization in FVIII levels will reinforce the notion of a long term treatment although actual persistence will have to be demonstrated.  The market would like to see 5 years at minimum but ideally 10+ years of durability.

ValRox - 2 year F8

Biomarin’s update should have limited read-across to CNS and ophthalmology (retinal) programs given the limited cell turnover in these tissues but one area that should be affected is muscle diseases where vector dilution due to cell division is potentially the biggest issue. In diseases like DMD and XLMTM, relevant patients are children or infants who add muscle mass as they grow. So far, initial biomarker data from Sarepta’s DMD and LGMD2 programs are impressive but functional data are limited. Audentes (BOLD) presented encouraging results with longer follow up in XLMTM but more follow is needed to understand durability.

Antibody drug conjugates – DS-8201 gets center stage

As far as investors are concerned, ADCs are still in the penalty box given the limited success seen to date with the class. Out of >100 programs, only a handful of ADCs made it to the finish line, predominantly due to a narrow therapeutic window. As most large biopharma companies like Pfizer and Roche de-prioritized ADCs as a class, next-gen ADCs are being developed by smaller, specialized companies like Zymeworks (ZYME) who are trying to design safer ADCs.

While it is too soon to assess the next wave of ADCs, Q1/2019 had news regarding four late stage ADC programs (2 positives and 2 negatives). Daiichi Sankyo announced a massive deal with Astrazeneca for its HER2 ADC and Astellas/Seattle Genetics’ (SGEN) Nectin4 program reported positive results in a pivotal P2, whereas Immunomedics (IMMU) encountered a major regulatory setback with its Trop2 ADC and Immunogen (IMGN) reported the failure of its P3 FRa study.

The economics of the Daiichi/Astra are definitely unusual ($1.35B upfront and $5.55B in future milestones for a 50/50 profit share ex-Japan). DS-8201’s efficacy appears best-in-class and since the targeting antibody is trastuzumab, the differentiated profile can be attributed only to the linker and payload. In HER2+ breast cancer, this ADC generated a 59.5% response rate and a 20.7 month durability of response in heavily pretreated (8th line!) patients. These figures are almost double what Kadcyla reported in a less heavily-pre-treated population.

DS-8201 also generated positive data in populations for which Kadcyla is not approved for such as HER2+ gastric and lung cancer patients. This extended market potential was likely the reason behind the rich deal terms.

Daiichi’s ADC technology is unique as it utilizes a topo-1 inhibitor (most programs utilize tubulin inhibitors [DM1, MMAE] or DNA binders [PBD, IGN]) and a high DAR (drug/antibody ratio) ratio of 7-8 (vs. 3-4 in most ADC programs). Immunomedics’ ADC technology is also similar in terms of payload and DAR, so this may represent a new ADC class.

While Daiichi’s ADC platform clearly delivers on the efficacy front, safety profile is challenging. Activity comes at a heavy price of side effects including a high rate of nausea/vomiting and lung toxicity (which was fatal in some cases). Going forward, Daiichi hopes to mitigate lung toxicity with active monitoring and dose reductions in ongoing P3 trials.

Daiichi is one of the few pharmas with an active ADC pipeline (figure below). At its R&D days, the company shared data with a second ADC program targeting HER3 with encouraging P1 data to date (42.9% response rate, 8.3 months PFS). Safety profile is too early to assess but lung toxicity was also reported, making this a potentially class effect.

Daiichi - ADC

Seattle Genetics’ positive P2 results in bladder cancer got muted reaction from the market despite of a 44% response rate and a ~7-month durability of response in PD-1 failures. To put this number in perspective, PD-1 inhibitors were approved based on a 20-23% response rate in a similar setting. Safety profile isn’t benign but the overall clinical profile still looks strong.

Immunogen’s data for mirvetuximab in ovarian cancer was clearly negative but it is hard to ignore the signal in the FRa-high subset with a strong overall survival  benefit (HR=0.62, p=0.033). The study was designed with PFS as an endpoint so the company would not be able to use it for approval but in contrast to most retrospective subset analyses, the signal in the FRa-high subset looks real. It implies that FRa-medium patients in the study had a slightly shorter survival with mirvetuximab vs. chemo, which isn’t unusual as mirv was tested as monotherapy. To me, this is one of these rare cases where a second, relatively small (250 patients) study is warranted. Mirvetuximab’s is in multiple ongoing P2 combination trials which may be amended to include only FRa-high patients.

NASH – P3 disappointments, activity continues

NASH is as popular as ever on Wall Street, evidenced by NGM (NGM) Bio’s recent IPO and $1B valuation. I am more cautious on NASH as I view it as a high risk indication: It isn’t commercially validated (no approved drugs yet), disease is asymptomatic in most patients and the bar for safety is very high.

So far, P3 readouts have been disappointing with a mixed data set for Intercept’s (ICPT) Ocaliva and a complete failure for Gilead’s (GILD) Ask1 program. Ocaliva met the primary endpoint of the study and demonstrated a clear anti-fibrotic effect but the benefit was marginal which, coupled with a problematic side effect profile, may prevent wide adoption of the drug. Ocaliva’s data serves as a proof of concept for more selective next-generation non-bile acid FXR inhibitors which should hopefully be safer and more efficacious.

I still plan to keep my NASH exposure limited to Madrigal (MDGL) and Viking (VKTX) with their THRb programs despite the lack of near-term catalysts. What I like most about the two is the mutual validation each drug provides, validating the strong efficacy data. Biggest risk is still long term safety but so far both MGL-3196 and VK2809 appear to be safe (especially in light of the recent 5mg data for VK2809).

Portfolio holdings – Apr 28, 2019

biotech portfolio - 28-4-2019

biotech etfs - 28-4-2019

186 thoughts on “Q1 update – GTx, ADC and NASH

  1. Hi Ohad,

    It’s interesting if you look AMT-060 long term follow up is showing stable to increasing FIX activity in contrast to ValRox. Despite the difference of Hemophilia A vs B I would think that liver cell division would cause transgene dilution in both but QURE 2018 ASH presentation showed 2.5 year follow up with stable expression in low dose cohort and the high dose cohort actually had increased expression going from 7.1% at year 1 to 8.3% at year 2 and 8.9% mean in N=5 at last follow up. At their R&D day QURE showed some mouse data suggesting FVIII expression in the liver induces hepatocyte stress/apoptosis leading to loss of expression over time, do you think it may just be that ValRox and SPK-8011 are inherently flawed approaches?

  2. Jason (QURE) – Durability and what happens into gene therapy with time is still a black box with a lot of potential variables including transgene itself. Very hard to answer these questions now, QURE also uses AAV5 so profile should be similar but who knows…

    Ohad

  3. Hello Ohad,

    Thanks for your update!
    Any opinions on THERF? thetratechnologies – they just completed a ph2 gir their approved drug EGRIFTA (indication: reduction of excessive abdominal fat and adipose tissue) in HIV patients with NAFLD that shows a 37% liver fat reduction compared to placebo – results look good to me and the drug is already marketed for abdominal fat reduction. I would be very interested in you opinion. They claim secondary endpoints also show effects on liver fibrosis. The company is listed on Toronto stock market – market cap $500M. They also have a second drug approved in North America.

    Dan

    Thanks,

  4. Ohad,

    Your portfolio has a lot of gains in it, and in your previous post you were still expecting a biotech (and general) downturn. The BIS holding is a relatively small counterweight to the other positions. Did you give any consideration to selling more positions and raising cash? Or are you more positive on 2019 than back in January?

    Thanks,
    Mark

  5. Andrew (LPTX) – Sorry, not following them.

    Richard Baker –
    MRKR – Not a big fan of their approach.
    MRUS – The technology clearly works but still no “killer app”, prefer to wait for clinical poc.

    Dan (THERF) – Sorry, don’t know them.

    Biotek (DTIL) – I am still reading their initiation reports, didn’t know their allo-CAR program was so advanced, definitely worth monitoring but data will take time to emerge.

    Mark (BIS) – I am still pessimistic about the market overall after a decade long run and lofty valuations. Balancing this with picking companies in which I believe in is tricky. I am considering adding more BIS or just stay with a large cash reserve that just got bigger following the ONCE and NITE acquisition.

    Ohad

  6. Hi Ohad
    ONCE – ” The company faces shareholder lawsuits that call the deal price too low—a “bargain,” one suit claims—and question Spark’s accounting methods and deal disclosures.”

    same with NITE

    Claims have been filed, do you think it can affect the sales? Can the transactions be canceled or can the price rise? What do you think?

    regarding Mark’s question
    what about selling say half of each positions to raise more cash?
    Thanks

  7. Hammer time…any thoughts on $eigr?

    Or Bicycle therapeutics $bcyc which just IPO’d?

  8. Hey Ohad,

    with the press releases today, AXSM seems to indicate they are effectively in pivotal trials for MDD and may have results before the end of the year. Have you had a chance to look at their data/pipeline. Stock appreciated greatly but market cap is still around $630M which is a steep discount over SAGE ($8B). Moreover the company has a broad pipeline in CNS targeting various indications including, among others, TRD, migraine, smoking cessation, narcolepsy, which are all very large indications/markets.

    Thanks

    Dan

  9. Thanks to Dan or whoever else it was that highlighted AXSM in the 6-8 $ range. Trial results have been great and nice price action followed.

    Dan – Ohad has commented on the stock saying he liked it and it could do ok in the market but wondering how long that would last considering it’s product is a combination of meds which others could formulate as well. Wonder if they could get patents on this.

  10. Hi Ohad,

    Greetings! Sorry for bringing up ARVN again–
    In their April corporate presentation, ARVN stated that Ph. 1 was initiated 1Q19 for their androgen receptor degrader for prostate cancer as well as presented favorable pre-clinical data for their estrogen receptor PROTAC degrader for breast cancer (achieving tumor shrinkage in combo with palbociclib in all 10 mice subjects). ARVN has partnerships with Genentech (2017) and Pfizer (2018). Do you think now is the time to become enthusiastic about PROTAC? Do you think that PROTAC opportunity may be bigger than that of CRISPR? Do you have a favorite in the PROTAC field? Thanks.

    Link to corporate presentation: http://ir.arvinas.com/static-files/a81094d3-1daf-4859-b87c-314b9f878652

  11. Hi
    Ohad

    Do you see any catalysts for NERV to do any better this year ?
    The stock is performing bad as well, any reasons why you hold this ?

    Thanks

  12. HI Ohad I saw your tweet on Nash players. thoughts on NGM ‘s valuation with FGF19 and other candidates in their pipeline?

  13. Hi Ohad — What do you think about Invitae (NVTA) in genetic sequencing and any interest in engineered bacteriophage companies?

  14. Alex (ONCE/NITE) – I don’t think it matters, not aware of cases where these lawsuits were able to torpedo a deal.

    Robert goulet
    EIGR – Sorry, not concrete opinion there.
    BCYC – They are still private from what I see. Interesting targets, ADC-like approach but I prefer to wait to see how these molecules behave in humans.

    Dan (AXSM) – Agree about indications but personally I prefer more innovative products. Stock has made a very nice move, though…

    Jeff B (TBIO/MRNA) – I like mRNA as a field but at its current stage it belongs more on the private side until clinical proof of concept is achieved. MRNA’s market cap is impossible to justify, TBIO is cheaper but high risk especially after the regulatory setback.

    Anna (ARVN) – I am still an avid follower of the PROTAC space, acknowledging these compounds are “ugly” from a med chem perspective but hope it will somehow workout. No favorite player for now, prefer to be of the sidelines until someone shows clinical data.

    Robert goulet –
    ATRA – Not following them closely.
    RGNX – I still plan to hold as a GTx ETF. AMD data look slightly more convincing but still early and hard to interpret.

    Ruhu (NERV) – Yes, I plan on holding into P3 data later this year. Valuation makes risk/reward attractive imo.

    Jaime Allen (NGM) – I have mixed feelingsa here as data look encouraging and provocative but sample size is small and frequent administration is a major issue for a disease like NASH. I don’t think valuation is justified.

    Steve (ALNY) – I have been following them for a couple of years and getting more and more comfortable. TTR launch looking good (not too concerned about Tafamidis) and GalNac programs seem to work. Safety profile is still an open question and valuation isn’t cheap even after recent months.

    Reggie (NVTA) – Sorry, don’t know them well.

    Ohad

  15. NERV – bad news..,and the manner the Company
    presented the date.. what your take?

  16. once – “I don’t think it matters, not aware of cases where these lawsuits were able to torpedo a deal.”
    so far it manage to postpone the deal –
    “Roche has once again extended its tender offer for the outstanding shares of Philadelphia gene therapy company Spark Therapeutics in order to give federal regulators more time to review the proposed deal.
    The new deadline for Spark (NASDAQ: ONCE) shareholders to accept the Swiss Pharmaceutical company’s $114.50 per share tender offer is June 3. The previous deadline, which was extended earlier this month, was May 2.” ..

  17. KRYS

    Ohad, Why is the Chart so strong? Any reasons? Unusual for a biotech without significant news these days…

  18. Hi Ohad,

    Ref. your comment on AXSM – it’s meds not being innovative. Here is what their CEO said on recent ER conf call. “ As a reminder, AXS-05 is Axsome’s novel, oral, investigational NMDA receptor antagonist with multimodal activity. AXS-05 was internally developed at Axsome and was covered by more than 30 issued U.S. patents, with coverage extending to 2030.” Pretty strong statement about the value of their drug. What do you think?

    AXSM has been ripping up recently. Thanks again to Dan or whoever it was that posted AXSM on this blog. It was at $8 then, now $22. Picked up a few shares for some decent gains. At $600M market cap this has room to grow if everything goes right.

  19. Ohad…any thoughts on RYTM and setmelanotide for genetic obesity disorders of the MC4R pathway? Topline pivotal phase 3 readouts for POMC and LEPR deficiency due in 3Q19 and phase 3 readouts for BBS and Alstrom in 2020.

  20. Hey Had,

    What do you think of the quizartinib negative vote in ADCOM? Surprised me.
    Dan

  21. Dan, after positive P3 results i was very confident about approval but after the briefing docs came out i was already expecting a negative Adcom. We can be happy that AMBI got bought. Not sure if this will influence the frontline P3.

  22. Hey Ohad,
    Any opinions on AUPH VOS for dry eye? seems like a proven MOA and well-defined clinical pathway – and yet it does not seem like investors are giving any value to this program. RESTASIS is also about to go off patent and Novartis is about to spin out its ophthalmology division… so VOS seems like a valuable asset – also patent has a long life for AUPH.

    Thanks
    Dan

  23. IMGN

    New pivotal study necessary. Much Money will be burned, market hates the Stock Right now. You Said before that Youre thinking about opening a position. Stock is cheap. Whats your strategy here ohad?

  24. Hello Had,

    Regarding the question of innovation/innovative products: isn’t efficacy more important – considering AXSM especially – MDD with few approved options for patients and the efficacy they showed in ph2 seems on par or better than SAGE (sure hard to compare different trials / but again AXSM was against active drug, not placebo). Moreover, if their product was not innovative, why didn’t anybody else think of combining the two drugs they are using for AXS-05? I suppose it wasn’t that obvious, and they were able to patent the formulation / use of the drug for indications, etc. In my opinion what they are doing is actually more than a company like CHMA, which is only changing delivery method of an existing drug (making the drug more convenient (better quality of life and compliance) but it is ultimately also a less effective.) Just sharing these thoughts… I think the question of innovation is an interesting one.

    Thanks for you perspective!

    Dan

  25. in addition…. drug combinations are a big trend in many diseases (oncology, NASH, heart, mental health). ESPR is doing the same with their combo pill.

  26. After reading a glowing article on Nektar Therapeutics (NKTR) a couple of days ago- I opened a position, immediately covered it… but it immediately resumed its decline.
    How do you feel about the science behind its lead drug NKTR-214 (bempeg)? I see that it does have other drugs, ie for autoimmune disease and pain- both awaiting decisions this month and this year, but the real prize would be for NKTR-214.
    As usual, your insight is much appreciated.
    Lawrence

  27. Ohad
    Inclisiran data (MDCO/ALNY) look quite impressive – twice annual dosing with >50% LDLc reduction (n=382), no material safety issue.

    In January you wrote that “at $9B Alnylam is not a steal yet”
    OK, what about $7B today? Does it look more reasonably priced?
    First ever 2 approved siRNA drugs, plus 5 late stage drugs and $1.2B cash.
    Thanks

  28. FYI…$bcyc goes public next week…keep it on watch brother…these small molecule scafold platform’s always seem to attract attention.

  29. Dan,

    Ref. AXSM – was reading their annual report and they cite an innovative technology component that helps making the combination more effective. So it seems more than just a simple formulation.

  30. Hi Ohad, any comments on EXEL’s moves to collaborate with companies like Iconic?

  31. Hey Ohad,

    You mentioned in the past that you were interested in the MGEN’s therapeutic programs in fibrosis. They are now disclosing a second fibrosis targeting program (mircoRNA-29)– this one pre-clinical and targeting Pulmonary Fibrosis, and the data looks encouraging. Valuation of the company is still below $100M, and the second half of the year should be interesting, with data from their ph1 and ph2 programs.
    Are you still considering investing in the company? what do you need to see to become an investor? Thanks, as always, for your insight!
    Dan

  32. Ohad

    TOCA. You had been bearish for a couple months and stock is down 50% during that time. You have mentioned for some time that your somewhat bearish for the biotech and overall market. Can you share other companies you feel are greatly overvalued at this time.

    Anything you can add regarding RGNX and NERV as both have underperformed recently. Can they present a opportunity at these levels.

  33. MTEM….Ohad, considering your interest in ADC, do you have an opinion of MTEM’s ETB approach?

  34. Hi Ohad,

    I’m another reader who would like your opinion on NERV. I talked to a KOL in the field and he said that Seltorexant was always going to have difficulty showing efficacy in patients refractory to other anti-depressants. However, he believed that Seltorexant would be solid in insomnia. Another doctor that I talked to said that the market would be tough now that Ambien was generic. What was your view of the Seltorexant results? Is there space in the market for another insomnia drug? Would you be a buyer at these prices?

  35. Hello Ohad,

    at what level would you consider IMGN and ALNY attractive? Thank you very much for your opinion and your blog, you’re the best!

  36. Ohad,
    Do you have an opinion about IOVA TILs?
    You said you are not fan of NKTR. Is it bc of TILs in general or it is NKTR specific or IL2 related.
    Thanks

  37. Hi Ohad,

    Thanks for answering my questions. Do you think Synthorx’s unnatural base pairs-derived therapies can evade immunosurveillance and hold promise as efficacious add-on therapies for checkpoint inhibitors (and autoimmune disorders)? The CEO is an I/O veteran from BMY. The protein science is based on Floyd Romeserg’s invention which was featured in a Nature article entitled ” A semi-synthetic organism that stores and retrieves increased genetic information (2017) Nature, 551:644–647.”

    Do you think a market cap of $499 M is justified?

    Thanks.

  38. Hammer time

    Nice win for $RGNX…does this now legitimize their vectors?….I can’t see how this doesn’t lead to more steady upside in the near future.

  39. Hey Had,

    Just wondering what you will keep an eye on at ASCO?
    Seems bi-specifics / engineered antibodies are are getting a lot of attentions, and this should bode well for ZYME.
    Regarding GTx – (Novartis Jost priced AVXS drug at $2M) will the pricing be sustainable? it seems that eventually the industry is going to crash into a wall, there ar ego many GTx in development…

    Thanks as always for sharing your perspective!
    Dan

  40. FCSC has an cooperation with Castle Creek to develop and commercialize its gene therapy candidate, FCX-007, for the rare skin disease of recessive dystrophic epidermolysis bullosa (RDEB) and has now received FDA Regenerative Medicine Advanced Therapy Designation for FCX-007. I’m cautiously optimistic now – what do you think of this development, Ohad?

  41. Ohad, you still alive? what’s your take on the BMRN data? any readthrough for other GT stocks in your portfolio?

    any reasons why ABEO is down so much?

    Thanks :-)

  42. Alex (NERV) – Agree data are inconclusive but this is not their 1ry asset and they have an opportunity to prospectively corroborate the signal in the next study. Most important catalyst is roluperidone’s P3 data in Q4.

    Alex (ONCE) – We’ll see… surprising response from shareholders given ONCE’s situation.

    Alain K (STML) – So far so good, 5M in less than a quarter seems pretty good to me. Still early days so need to see performance in the next quarters.

    Carlos (KRYS) – Hard to say…

    Les (AXSM) – I am sure they are doing their best but composition of matter patents are the strongest form of IP protection, other types of patents (use, formulation etc.) are considered weaker may not be upheld in court.

    biocqr (RYTM) – I like the story but stock is too expensive IMO, prefer to wait for P3 data.

    Dan (quizrtinib) – Yes, the briefing docs were quite harsh to begin with so not completely unexpected.

    Dan (AUPH) – Haven’t been following the story lately so don’t have a strong opinion there.

    Josef (IMGN) – I am glad they are doing another P3 because I think the drug works in FRa-high pts. Typically this is the time to get in but as I don’t see other important value creating events there is no urgency (unless someone decides to buy them, which is always a wild card).

    Dan (AXSM) – I don’t have a good objective answer here , I guess it’s a matter of perspective although at the end of the day what matters is financial return and here I was dead wrong. I always prefer innovative molecules because these are more likely to become important drugs. CHMA’s case is unique because they use a propritary technology that is patent protected and not so easy to copy to turn an injectable to an oral drug. This is not the case with AXSM where barriers for competitors aren’t that high IMO.

    Agree about drug combinations but what companies typically do is adding an innovative agent on top of a generic standard of care.

    Lawrence (NKTR) – Hope I am wrong but I feel this whole next gen IL2 space will end up like IDO.

    Robert goulet (AXGT) – Don’t have a strong opinion there, prefer to wait for clinical readouts from recently initiated trial in GM1 and PD despite teh low valuation.

    Lucky (TRIL) – Looks like they have a lot of challenges, not optimistic about FTSV’s program either…

    andre (ALNY) – Yes, quite impressive reductions. I still like the story but prefer to wait for a better entry point given uncertainty around the GalNAc platform and the TTR launch. btw, what is the second approved siRNA drug besides Onpattro?

    Robert goulet (BCYC) – Looks like SMDC, which hasn’t been a successful approach to date but always good to track, thanks.

    Les (EXEL) – I like their branching out to other areas, program is somewhat early
    but I am a big believer in ZYME’s technology.

    Dan (MGEN) – Yes still following them although not sure the lung fibrosis results are that compelling at first blush.

    Dave (TOCA) – With TOCA it was more about the approach rather than valuation. As for other overvalued companies, there is so much to choose from … 😉

    RGNX/NERV – I still plan to hold both, RGNX as a broad spectrum GTx play and NERV ahead of the P3 readout.

    Frank (MTEM) – I am still cautious based on immunogenicity risks and lack of clinical poc.

    Alex (ADMA) – Sorry, don’t know them well.

    Richard Baker (NERV) – I think in psychiatry there is a lot of appetite for new drugs and MOAs providing the offer true benefit. I am more interested in roluperidone based on its P2 data but it’s still a high risk program.

    Milos –
    IMGN – I prefer to wait until they get closer to P3 readout, which is at least 2 years away so no urgency there IMO (unless they show positive data with one of their earlier stage ADCs)
    ALNY – Prefer to wait here too, valuation is more attractive but still quite high.

    andre –
    IOVA’s ASCO abstract was very intriguing, waiting to see data at ASCO this weekend. I am not a fan of next gen IL2 programs so far, have no problem with TILs as they clearly work but logistics and success rates are challenging.

    Anna (THOR) – I like the science but valuation is too high in the absence of clinical data.

    Robert goulet (RGNX) – This whole AAV patent battle will probably persist, so much is at stake and there are so many programs and stakeholders. Also, don’t forget some of the old patents will expire soon so a lot depends on their internal programs and novel vectors.

    Dan –
    ASCO – AMG 510 is obviously the most interesting program but it will be hard to meet expectations. Other than that couldn’t find anything earth shattering in the abstracts. There should be an update on BCMA bispecifics, I found JNJ’s EGFR/MET bsAb intriguing but efficacy wasn’t stellar. Looking forward to seeing SGEN’s Nectin4 data in bladder cancer as well.

    GTx pricing – I think it is optically challenging but when payors do the math these prices are defendable compared to a lot of the chronic drugs in orphan indications.

    Ruedi –
    FCSC – It doesn’t change much IMO.

    karlos (BMRN) – Barely… the BMRN data are mixed not a complete disaster but not spectacular either so durability concerns are still there. It depends on how you choose to interpret the 3 year data (slope stabilizing or decrease continuing)

    Ohad

  43. Hello Ohad ! I am intrigued by the recently announced partnership between Amicus { FOLD } and the University of Penn.I am very interested in any comments you may have !!!

  44. Hello Ohad,
    I too await your comments on Amicus (FOLD).
    After they were awarded the 2018 UK Prix Galen Medal (for innovative product) late 2018- I initiated a position (The Prix Galen is “considered by many to be the industry’s equivalent of a Nobel Prize”).
    This morning, I added more- after the stock took a hit because of raising more capital. I found it strange because they ended Q1 2019 with about $440 million. They are now seeking to raise at least an additional $150 or more. They are also projecting revenue to double on galafold sales, to $160-180 million this year.
    They clearly have a very ambitious plan to become one of the preeminent pioneers in metabolic diseases.
    I like what I see. Your insight is very much appreciated,
    Lawrence

  45. Ohad
    About ALNY second drug – I misspoke, Givosiran is still not approved.

    AUTL has many readouts in Q3-Q4.
    Which one you think is the most important for their success?
    “AUTO3 – antigen driven relapse by dual targeting”
    “AUTO2 – low antigen expression & antigen escape”
    “AUTO1 – CD19 CAR-T”
    “AUTO4 / 5 – T cell lymphoma”

  46. Ohad do you plan to publishing an article about ASCO 2019? Would be nice to see your comments/opinion

  47. Thanks for all you do Ohad. Had a chance to load up on IMGN trading at cash. 2 yr timeframe but I have the patience

  48. Hey Ohad!
    Hope you are well!
    What is your read of MGNX Sophia results?

    Thanks
    Dan

  49. Ohad
    Based on the market reaction it looks that the biggest winners of ASCO are:
    IOVA with TIL cervical (80% gain so far)
    MRTX with KRAS (50% gain so far)
    What do you think of the technology – is the market reaction justified?

  50. Hi Ohad, re: IOVA, LN-145 responses look good but do you think IL-2 toxicity is a concern? Thanks.

  51. Hi Ohad, I wonder whether you paid attention to ORTX. Its stock price has dropped recently to IPO price due to stock offering. It has multiple gene therapy programs, 3 on registration trial, 3 on positive proof of concept study. It has 1.2 billion cap. Are you interested in adding this to your portfolio? Thanks a lot.

  52. Hello Ohad
    any opinion on RGLS ? and microRNAs in general
    EXEL – There are rumors of M&A by the end of 2019. Do you think it makes sense?

  53. Hi Ohad,

    ARQL stock increased over 30% to $8.28 due to the newly released data on ARQ531. ORR of 66% (4 responses in 6 evaluable patients) was observed in heavily pretreated R/R CLL patients, all with the BTK-C481S mutation, from cohort 7.

    Do you think it’s still a good price to buy?

    Thanks a lot!

    Jinyu

  54. Now that KURA has shown definitive POC with Tipifarnib, do you think adding more here is a good idea? The stock is still considerably below its 52-week high.

  55. Hey Junju
    I do not think that Ohad discusses ARQL. I think he states that on numerous occasions (potential conflict of interest).
    Dan

  56. Ohad
    Could you comment about KURA data?
    They said that the data support multiple registrations. Does it sounds right? What would be the market potential in that case

  57. PFE is buying ARRY for $48/share in $11B deal.
    Ohad, what is your read- through for other potential deals in oncology?

  58. ARRY

    Ohad why did you sell ARRY from your portfolio so early? Looks like a winner!

  59. Karl, you can’t will all battles.
    With the ARRY money he bough AVXS, ONCE, RGNX, KURA
    Two are already bought out, the other two probably will follow sooner or latter.

  60. Hi ohad, what stocks are on your watchlist right now? When you are going to publish your next thesis? Cannot wait any longer. Thanks a lot.

    Jinyu

  61. bouschka/Lawrence (FOLD) – I also like their recent transformation into a CNS oriented AAV company but valuation is hard to hustify given stage of development. Definitely one to watch.

    andre (AUTL) – I think most value depends on the CD19/CD22 program given the strong rationale. Still need more follow up to show lower antigen escape.

    Jonas – ABEO yes, CTMX no as I prefer to wait for clinical poc.

    Carlos – Actually there wasn’t a lot of important news beyond AMNG’s KRAS which was already discussed extensively everywhere. I will try to post something next month, need to finish an ongoing transaction first…

    Alex (GNCA) – Hard to interpret,don’t believe in cancer vaccines in general.

    Kenny (GHSI) – Sorry don’t know it well.

    Paul (IMGN) – I plan to wait but definitely would like to add next year, ADCs could be making a comeback but mirv’s P3 is still 2 years away and their IGN based programs are too toxic imo. I would like to see them buying a private ADC company, there is a lot of interesting stuff out there…

    Dan (MGNX) – So far they are underwhelming imo. Next OS analysis could surprise but I am not optimistic.

    andre –
    IOVA – Haven’t looked at it seriously, hard to get IP on TILs but who knows…
    MRTX – Expectations are very high for a compound without clinical data and a formidable competitor.

    cg (IOVA) – Yes that has always been the case with TIL therapy, in melanoma efficacy has always been strong but only a fraction of patients are eligible. Same issues should exist in other indications.

    ORTX (Jinyu) – I am following them but valuation is too high and cannot be justified by the niche programs and the MPS programs are too early.

    Ohad

  62. ABEO

    Tempting at 4,x ? Do you upsize your Position or wait for offering ?

    Greetings

  63. ABEO – it looks the offering is coming. Hopefully soon, or the stock may go to zero.
    So far it looks that projected offering price will be 4.50-4.70. So far the shorts are winning this round.

  64. Ohad, Andre – any ABEO near term catalysts you are aware of? That may push the price up and justify a higher offering price?

  65. Ohad

    ZYME. With 180m in the bank as of end of Q1, doesn’t it surprise you that they would look to raising an additional 150m. Do they think the stock is overpriced and are taking advantage of these higher prices. Seems like a red flag, and market seemed to agree as down over 15% over last 2 days. What are your thoughts?

    I also notice that Eli Lilly Co. a large owner of the stock has been a seller over the last year. 750 mkt cap seems rich with only ZW25 in Phase 2 and remaining pipeline Phase 1 and pre clinical. With a 100% gain on the stock would you think of selling and wait for a better entry point.

  66. Ohad, Affimed came out with some additional data on AFM13. I know it’s still early, on the other hand it looks like nice signals that the combo is working?
    The Roche-collab makes me think they could be onto something with their NK-tech, and market cap is low…

    Regarding NERV, do you have any clues why insiders are selling and the share price is tanking?

    thanks as always for your insights!

  67. regarding NERV, today’s data look good to me, what do you think? EV very low…..

    the big value driver is in Q4…. but the stock might end its downtrend today I hope

  68. Ohad
    I found this one in KRYS call intriguing
    “no antibody response was noted for COL7”
    Do you think is capsid or target specific? Or delivery related?
    Any read through to other targets, like Parkinson’s :)

  69. Hello Ohad,

    NERV, in spite of the positive ph2 results, has a lower market cap now than when you initiated. I’m thinking of adding to my position. What is your take on the value or NPV of the Insomnia indication given they’re holding rights for EU and have royalties for rest of the world?

    Any opinions on the AGN deal and what this might mean for the industry in general?
    Do you think that BOTOX sales will never fall off a cliff, but plateau? ABBVIE mgmt is arguing that the strong brand and the fact that the molecule (special receipt -similar to Coca-cola!) has been kept under warps means that competitors will never be able to develop anything similar… Interesting. First time I hear such an argument in pharmaceuticals–that a trademark and trade secret are better than a patent, it seems. Also strange that AGN management failed too see this? (seems like they failed to ‘accurately’ forecast NPV of Botox). Or am I missing something? Do you think that this approach is possible for other the biotech technologies or molecules being developed? But I guess for esthetics indications it’s a wholly different ballgame than for cures that save lives or treat difficult conditions.

    Thanks as always for your perspective!

    Dan

  70. Hey Ohad — Any thoughts on Seelos’s (SEEL) licensing of a gene therapy program targeting the regulation of the SNCA gene, which encodes alpha-synuclein expression from Duke? Thx!

  71. Hi Ohad,
    You commented on AVRO and their Fabry GT programs on Nov. 2018. SInce then, they have 2 more INDs accepted and the data for Gaucher disease will be available on H2 of 2019 according to their report. Meanwhile, their market value has dropped to around 300M. Has your view changed on AVRO and is this a good time to enter? how do you see the success rate of their Gaucher and cystinosis programs?

    Thanks a lot for your input as always.

    Jinyu

  72. Alex –
    RGLS – Haven’t been following them for a while, I like their focus on kidney disorders which is a plausible target organ for oligos, not sure about Alport as a lead indication as they don’t address the underlying cause of the disease.
    EXEL – An obvious takeout candidate following ARRY and LOXO but many potential bidders are busy in large M&A transactions (LLY, PFE, BMY, ABBV). In contrast to others , they are generating cash but are struggling to grow cabo’s sales in RCC without label expansion.

    Jinyu (ARQL) – Sorry cannot comment on ARQL, it is a Pontifax portfolio company.

    Richard Baker (KURA) – Agree, there is a clear signal of activity in PTCL/AITL but data are early and opportunity isn’t huge. Most of te value still lies in H&N where data have been weaker than expected so no plans to add for now.

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

    andre (KURA) – See above, yes I believe they do have a path to registration and some patients appear to derive a lot of benefit including CRs and bridge to HSCT but opportunity is probably modest.

    andre (PFE/ARRY) – Focus is back to small molecules in oncology, preferably with a biomarker. Funny how IO is completely out of fashion…

    Jinyu – I have CARA, MDGL,VKTX, ALNY, HRTX on my watchlist. Hope to post something next month, still swamped with work…

    Jonas (OVID) – Valuation is very low, close to cash but too risky imo.

    Qereb (ABEO) – Agree valuation is attractive, plan to add this year. Not aware of any meaningful near term catalysts.

    Dave (ZYME) – Hard to blame a company for raising money especially given their growing pipeline. I plan to hold as I am cautiously optimistic about ZW49 and their ADC platform in general.

    Bouschka (PRVL) – Sorry , it’s also a Pontifax portfolio company.

    Christian (AFMD) – I am still on the sidelines as the NK hypothesis has yet to generate convincing poc imo.

    NERV – No idea, insomnia data were good but landscape is tricky to navigate.

    Christian (NERV) – Agree, clear clinical efficacy but a long road ahead.

    andre (KRYS) – The are referring to the transgene, not the capsid from what I understand. It’s positive, of course because the risk of immunogenicity is always there.

    Dan (NERV) – I don’t plan to add before their P3 readout next Q, it is a high risk binary even but valuation is low enough.

    AGN – I think it’s a great deal to AGN but a big mistake for ABBV, not sure how the Botox brand will cope with competition over time.

    Jim (SEEL) – Interesting approach but program is early and field is crowded.

    Jinyu (AVRO) – I prefer to wait for more data that show improved persistence with an optimized protocol or a plateau in transgene expression as so far the Fabry data look great during the first months but expression decline rapidly.

    Ohad

  73. Ohad

    You mentioned CARA and HRTX as two companies on your watch list. Both are developing non-opioid pain medications. Heron seems to be somewhat ahead of Cara in terms of having 2 approved drugs on the market, but also twice the mkt cap. Can you discuss your investment thesis and what would you look to before taking a position in either. Looking forward to your next write up.

  74. Ohad,
    Interesting watchlist – no cancer, CNS or GT?! Is there any common denominator?

    Does RTRX fits in it? Just got another drug approved on Friday- 4th plus 3 in Ph 3. 800M cap w/ 400M cash doesn’t look quite overvalued yet.

  75. Correction about RTRX – it is not a new drug but reformulation.
    The big one for them is Ph3 data in Q3 in PKAN

  76. Ohad

    What’s your feeling about the ESPR deal with Oberland and any thoughts to add more. Is it your belief this can be a takeout candidate over the next 12 months?

  77. Dan–I invested in CARA a few months ago, so like you I am interested in Ohad’s opinion. They have opioid drugs (presumably with less addictive potential since they act on the kappa rather than mu receptor) but I think the real promise is their use in pruritis rather than pain. There are no good drugs for this problem and their compelling results in CKD may be applicable to other diseases (just started a phase II in liver disease). Hopefully, the international study which will report later this year will be as compelling as the US study.
    Unlike SAGE and their IV formulation (which I personally dont think will ever be viable commercially), the IV CR845 can be used in dialysis pts and will be reimbursed in the US at ASP as an add-on. It will be helpful to have for pts with poor prescription drug coverage. They can then use their po drug (results in 2H2019) for pts with less severe CKD or other outpatient diseases.
    I hope Ohad decides to give his opinion in his next review…

  78. Hi Ohad,

    Hope you have a happy July 4th holiday with your friends and family.

    Jinyu

  79. Ohad
    What do you think about Karuna approach – xanomeline-trospium. Agonist – antagonist combo, both with confirmed MOA. Troposoium is even approved.
    The hope is that the combo may work in schizophrenia, psychosis, dementia, AD,, and neuropathic pain, w/o the side effects of xanomeline alone.
    Sounds intriguing but does it make sense?

  80. Hello Ohad ….. I am VERY impressed with the management team at NGM.There has also been recent accumulation by insiders and an extended collaboration from partner Merck.I read your comments a couple of months ago. Hoping you would provide an update ?!?

  81. Alex….insiders bought arql at $9.75 which is much lower than now when its already trading near $12. I would probably wait for a pullback.

  82. ARQL did an offering at 9,75 $ so i would assume that the insider participated at the offering.

  83. exactly – and the insider is Pontifax :)

    It is a pity that Ohad cannot comment because of this, but for those invested certainly a nice signal that Pontifax added at the 9.75

    ARQL isn’t cheap anymore but still has a lot of potential

  84. IF Ohad could write about Arqule, then writing an article could be “Arqule, the next Exelixis?” On a serious note, large run and smart people are going to lock in some profits and it will likely trade in the $10’s again…just look at the negative trading action on Friday and that was not a real bad day in the market. Haven’t bought a stock in his portfolio for a very long time but enjoy his long articles about a tiny or small company that can change the future of the treatment of an unmet disease with no hype. I have been following ohad for years and when he writes a long article about a company then it is definitely worth following even if you do not invest in it. Live long (and healthy) and prosper!

  85. Sam, Christian, Ike
    Similar to ARQL, an insider was buying recently a lot of ELOX shares at $9 -9.50
    Go figure why …

  86. It will be interesting to find out why. Though the difference between elox and arql was that insider buys for arql were at 52 week multi year highs while elox buys are at 52 week lows. I will try to find out the “story” behind it. It is frustrating to watch the picks that I was so interested in but was too gun shy to buy… go significantly up. I remember ohad report about Exelixis very positive results that others did not understand until later…that I guess is kinda of a pick that I am looking for. However, ohad has much less time now than before to write such an article. Like your insights andre…are there any significant misunderstood biotechs that are a “safe” bet?

  87. Sam
    You may look into ALNA and NTEC. Not sure if ‘safe’ bets, but definitely not overpriced at ~100m cap with ph 3s ongoing and clinically confirmed POC.

  88. Hi Ohad,

    You mentioned NGM as overvalued with problematic dosing schedule.
    Have you looked at recent IPO Akero? $AKRO
    Half the valuation, much easier dosing schedule, and liekly better data.

    Thanks!

  89. Ohad

    ABEO is trading at 4 down from 15 a year ago. You had been somewhat optimistic and included it in a basket of gene therapy stocks. Would you consider adding to your position at these lower levels, and what do you see as the next possible catalyst?

  90. Hi Ohad,

    Any updated thoughts on SGMO with their latest data? Also, have you ever looked at MTEM? Thanks

    Steve

  91. Hello Ohad,
    What do you think of Sangamo (SGMO)? Did you once comment (negatively) on their “zinc finger platform” technology ?
    Also hoping for ABEO to reverse course!
    Regarding NGM 282 (lead drug)- if NGM stopped work in 2015 on the drug in type 2 diabetes but chose to pursue NASH instead, does this mean that the “red flags for liver cancer” have been mitigated or otherwise do not apply to NASH ?
    Thanks again for this forum,
    Lawrence

  92. Hi Ohad,

    ADVM keeps rising everyday, congratulations to your bold pick. How big a market is this?how high can it go if the data is indeed promising? Also when would you update your portfolio?

    Thanks a lot!

    Jinyu

  93. hi Ohad- any thoughts on the recent ipos ADPT and BBIO other that the high valuations?

  94. Dave (CARA and HRTX) – I like both companies because they are relatively de-risked with P3 data and reasonable valuations. CARA is more of an itch story to me, which is a field I like a lot given the unmet need and lack of effective treatments. Will try to elaborate on my next post.

    andre – Yes, it’s more of a white space opportunistic watch list. Obviuosly, I already own most GTx stocks I am interested in.
    Sorry, don’t know RTRX well.

    Dave (ESPR) – I am still optimistic about ESPR and BA’s likelihood of approval and commercial traction. Hard to speculate on M&A but my guess is that a potential acquirer will wait to see at least several quarters of sales.

    Jinyu – Thanks!

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

    Alex (CALA) – So far clinical data don’t look great IMO, waiting for readout in biomarker-defined tumors.

    bouschka (NGM) – My main problem is valuation given the limited clinical data the have and the open question about frequency of administration.

    John (AKRO) – Yes. FGF21 is another promising class of agents with a potentially broad scope of indications. I like the mechanism but we placed our bets on a competitor:

    https://www.prnewswire.com/news-releases/89bio-launches-into-liver-and-metabolic-disorders-with-60-million-series-a-financing-300737539.html

    Dave (ABEO) – Yes I still like it despite the challenges and disappointing data. Definitely on my watch list for this year.

    Steve –
    SGMO – Data look good, in line or better than what ONCE/BMRN saw but follow up is still limited and we know that the bad news start to emerge with longer follow up, still, AAV6 is emerging as a valid option for liver.

    MTEM – Don’t know them well.

    Lawrence –

    SGMO – See above my reply to Steve. This is canonical AAV so it has nothing to do with their gen editing platform.
    NGM – From what I remember they were able to clear those concerns to a degree that will allow them to pursue chronic not life threatening indications like NASH.

    Jinyu (ADVM) – Stock is on fire but I don’t know why, next important readout is in September for their intravitreal AMD program. AMD is obviously a huge market but the program is still early.

    Rob Russo (ADPT/ BBIO) – Need to learn more about them, BBIO is more relevant to me and valuation looks quite high…

    Ohad

  95. Hey Ohad,

    Any reactions to the small ph2 by Capricorn (CAPR) and implications for their platform technology and exosomes?
    Dan

  96. Hi Ohad,
    ABEO is now below $4. How low can it go? What’s the next catalyst for ABEO?

    Thanks!

    Jinyu

  97. Hi Ohad.
    Regarding CHMA, what do you think about the argument in the article below by Adam Feuerstein from 4/14/16 where he writes about an investor who argues that the response rate from the last trial was really 30-40%, not 65%, when the IGF-1 response rate is set to 1x instead of 1.3x?
    https://www.thestreet.com/story/13530139/1/chiasma-s-acromegaly-drug-headed-for-fda-rejection-investor-says.html
    Thanks in advance. Your blog is a great resource. I really enjoy it.

  98. jliiu
    If I may —-the next catalysts for ABEO:
    1. Start Ph3 for EB-101 in RDEB (not sure if a real one)
    2. Raise money.
    They have cash for only 3-4 months.So they have to do it in the next 1-2 months or declare bankruptcy.
    The short interest is very high on purpose. The shorts will not cover until the company capitulates and raise cash.. Unfortunately the conditions are not going to be pretty, …unless they find a partner, like VYGR did at the very end of Jan 2019

  99. Ohad CHMA mentioned in their last conference call doing a faster dose escalation this time as they’ve now learned it doesn’t increase adverse effects and brings disease under control quicker. They’ve also been very strict with patient selection and training to ensure no dropouts (last time drop-outs counted as treatment failures) . What effect if any will this have on the response rate and historically, what’s a realistic response rate for ocreotide capsules?
    Also what response rate do you think the FDA would like to see?

  100. Hello Ohad, what is the stock price you would consider adding ABEO? Thanks as always.

  101. Hey Ohad,

    Any opinions on NTEC – ph3 results due before end of August – this might be a similar story to AXSM or CHMA with tech to increase therapeutic window and improve pk and drug assimilation – it is trading at 52 week low and has just announced deals with big pharma to evaluate and eventually apply their platform technology (accordion pill)…
    Thanks! Hope you will have time for a nice vacation this summer! Close the deal! :)
    Dan

  102. Ohad
    You had CLVS in the past.
    I am surprised to see it at $10. Do you still follow it? Approved drag with revenue growing nicely , plus a rich pipeline. Is it worth considering it again, or it is losing proposition?

  103. NTEC – on Jul 15 the fail was already known – 4.4k contracts of Aug 2.5 put were executed

  104. Well, Andre,
    Yes…. makes sense.
    Should always keep an we on put activity… good indication most of the time
    😉

  105. Ohad, In studies plasma octreotide levels increased proportionally with the oral dose in terms of Cmax and AUC. The oral encapsulated formulation resulted in peak plasma octreotide 2 h later in comparison with approximately 0.6 h for the injectable drug; nevertheless, in the clinical context of the sustained endocrine suppression, such delay is not expected to have clinical significance. Five hours after a single dosing of oral or injectable octreotide peaked, plasma octreotide levels remained within therapeutic concentrations (>0.5 ng/ml). In addition, plasma octreotide half-life was comparable between treatments, with an average of 2.5 h measured in both groups.

    My question Ohad is…why then did the oral treatment group in CHMA study show a lower response than injections. Was it possibly due to poor trial execution? Scientifically speaking, shouldn’t the responses between oral and injectables be quite similar?

  106. Ohad strikes again.. CHMA positive Ph3 topline just announced. Thank you Ohad and keep up the good work.

  107. Hey Ohad,

    And endpoints article that just came out says the CHMA results leave the door wide open for CRNX? Any opinions? Thanks a lot!
    Dan

  108. Paul – The oral arm of octreotide CHMA study probably showed a lower response due to the chemical nature of the peptide. Octreotide has plenty of amide bonds within it which are prime locations for cleavage via HCl in the stomach, along with (carboxy)peptidases and other proteases in the GI tract. Short of super-enteric coated capsules this is largely impossible area to surpass without some metabolism occuring. Then you have the liver -first pass- metabolism to contend with. Which is why the IV route produced a better response.

  109. Ohad, what value do you see in the chiasma asset? What Revenue could it generate? Is a buyout by Novartis likely?

    Thanks

  110. Hi Ohad
    congrats on CHMA !! what is next for them?
    INCY – results for Ruxolitinib are nearing, would you consider buying?
    Thanks

  111. CHMA
    Novartis reported sales for Sandostatin on July 21st
    for 2q2019: US $218m / ROW $185m
    for 1st half 2019: $795 (2018: $799m)
    Do you find reasons why the oral octreotiode shouldnt overtake a big part of this cake? I didnt find it yet. But Ill try further.

  112. RGNX – very futuristic approach – delivering antibodies decoded from “the genetic information of immune cells obtained from healthy aged people” via AAV
    Could be a new trend to cure all CNS in 20 years :)

  113. ABEO – now is official – the RDEB will not start mid 2019 but rather Q4. Still clarifying some aspects of the study, CMC, transport, …
    Ohad, do you see it happening at all? You were skeptical about this program in the past, saying that you do not ascribe a lot of value to it.

  114. Ohad

    XENE. Its the largest holding in your portfolio. Stock has been quiet for the last several months. You had previously said that 2019 would be a quiet news flow year for them. When can we expect to see additional information regarding there various programs and are you as bullish as your holding indicates

  115. Alex (SNSS) – I prefer to wait until they show an efficacy signal in CLL.

    Dan (CAPR) – Sorry, don’t know them well.

    jlliu20012001@yahoo.com/karlos (AVRO) – I was actually positively surprised and really liked them, still risky but they are in the right direction with more clinical aspects demonstrated. These include substrate reduction in kidneys in naive patients and stabilization of slope in ERT-experienced patients (but not sure these levels are enough). Seeing some patients off ERT with no effect on Gb3 is also quite encouraging.

    jlliu20012001@yahoo.com (ABEO) – I am surprised by its weakness, thought the Sanfilippo A results were very encouraging, in line with early treatment paradigm.

    Eric (CHMA) – Still didn’t have an opportunity to delve into the data but while the drug appears less potent than standard somatostatin analogs, it appears to maintain a significant portion of patients in check so I think it will have a place in the market.

    andre (ABEO) – Thanks.

    Paul (CHMA) – Good questions. I think the 58% vs. 19% is definitely enough for approval albeit not best-case scenario. Treatment appears safe so I think both FDA and physicians will be supportive.

    Milos (ABEO) – Hard to say but valuation looks very low to me right now, especially after the new data in MPS3A.

    Dan (NTEC) – Sorry not following them closely, but saw P3 was a failure…
    Thanks, the deal was closed last week 😉 but now there are more so no summer vacation for me this time…

    andre (CLVS) – I think the market realizes PARP is more competitive and smaller than what people originally thought (or what companies like CLVS had claimed…) and a potential introduction of a generic olaparib is a major overhang. I don’t think they have anything interesting in their pipeline beyond rucaparib. They are getting close to their cash position which is always interesting but I am still on the fence.

    Carlos – Thanks, will try to post something, hard to find the time…

    Hubertus (AMRN) – I am definitely following it as I thinkj their clinical data were very strong. Not sure about entry price yet.

    Paul (CHMA) – We can speculate about the cause of this discrepancy but at the end of the day the data are the data. When you change exposure and PK profile of a drug, seeing a clinical change is common depending on PK/PD ratio (i.e what drives the effect.

    Dan (CHMA/CRNX) – I think concerns about competition from CRNX are legitimate but burden of proof is on CRNX, especially with long term safety profile which is crucial for a chronic indication.

    Jonas (CHMA) – I still think it can generate a ~200M easily based on the response they see in more than half of patients. Hard to say about buyout, I would bet on a smaller specialty pharma company rather than NVS.

    Alex
    CHMA – Thanks, although market reception has been lukewarm… Up next is NDA filing.
    INCY – Not for now, I think rux is fully proced in already.

    Ruedi (CHMA) – I agree , I think many patients will at least try to switch and the responders will probably stay on Mycapssa.

    andre (RGNX) – Futuristic indeed, let’s start with wet AMD and MPS3 …;)

    andre (ABEO) – I am still more interested in their AAV9 programs, I think they will make it eventually.

    dave (XENE) – I still like them a lot, 2020 will be a make or break year.

    Ohad

  116. Hi Dan
    If you keep an eye on option activity, this one may mean something, who knows
    2600 Aug $75 call contracts before Fri close. ~$20M commitment does not come quite often.

  117. Hello Ohad
    what do you think about adding ESPR before the phase-II for type 2 diabetics?
    Thanks

  118. Ohad,
    Do have an opinion on Ligand ..LGND? Currently selling for near their cash value. They’re associated with at least two of your current picks Sage & Viking.

  119. Ohad, former ECYT CEO joined CMRX and just licensed CX-01 from Cantex, a phase 3 ready frontline treatment for AML. Would like to hear your take on this drug.

  120. Hi Ohad et al, Very damning SeekingAlpha article on ABEO today. Price dropped big time as a consequence. It points to people involved in ABEO as being responsible for driving many biotechs into the ground. Sad… will be a bag holder having chosen to average down but stopped doing that at $4. Will wait and see and hopefully things improve. Any comments?

  121. problem with $abeo is no cash so no one will touch it…best if they pulled an axgt and do a reverse split…this bio shit the bed by not doing a raise while they had a chance…I highly doubt this new mgmt can pull of a partnership within the small window

    Ohad any opinion on $rckt or $autl?

  122. hi Ohad
    would you feel comfortable with buying more ABEO at this moment?
    keep up the great work
    Paul

  123. Hi Ohad,
    It would be really helpful if you could add the price/average you bought the stock:-)
    Thanks for your efforts!

    Chris

  124. Ohad & Folks, the gains on CHMA were short lived. With the market downturn It’s now trading well below its offering level of 5.50 and way below recent high of 8.34. Should have banked some profits but ‘long term’ greed always gets in the way :). Any hopes that ER on Aug8 will do something positive?

  125. Hello Ohad, do you think $ABEO EB program has any value? They try to differentiate themselves by treating chronic large wounds as opposed to $KRYS (so far only wounds <20cm2). Thanks as always.

  126. Hi Ohad,

    Do you still have Still attention to AVEO, you used to be interested. The OS data will come out in August. What do you see the chance of success? Thanks so much!

    Jinyu

  127. Ohad
    STML vs INSM
    Two Q2 results which look fairly similar (solid launch with ~40% revenue increase), however the market reaction was quite different
    Can you comment on that.

  128. What did you think of MRKR results in pancreatic? Good institutional ownership.

    Do you have an opinion on GNCA?

    Are you buying more ABEO yet?

  129. Jinyu, it reported earnings and I guess missed revenue estimates.
    Chris, You can get average $ for stock very easy, just add/sub p/l & divide with number of stocks… excel can help

  130. ARQL
    Hard to know but my guess is that investors were hoping for an update on the 531 trial. Expectations were high since ARQL had given updates in the past. But nothing really new on the CC. Seems like we have to wait till ASH for an update…

  131. Hi Ohad,

    Any thoughts on how GLYC’s AML program might fare after the flop of their sickle cell anemia treatment based on similar technology?

  132. Hi Ohad,

    Concerning ESPR: The FDA finally scheduled an AdComm for AMRN. Do you expect the same for ESPR the closer the pdufa-date gets?

    Thanks as always

  133. Ohad, you have a good sense for the market. do you increase your short hedge during 2019?? what are your plans?

    and how do you see latest price actions in chma, stml, abeo, espr? good entry points?

    Best Regards

  134. Hey Ohad,

    As others have pointed out, several gene tx companies are way down in valuation– ABEO, AGTC, RGNX — plus the same is true also for CHMA, ESPR – which you had already singled out as value plays.
    What is your take on these tickers, and especially for CHMA which had a successful ph3 and some of the risk has been removed. Do you think that the current low price (they just raised I believe at $5.50) is an opportunity to add? What about for the other companies?

    Have you followed APTO?
    – they announced at last cc that MYC inhibitor has completed/cleared second dose with no AE and clear signs of inhibition of MYC
    – they also completed fist cycle (I believe 150mg) for BKT drug (patient was given drug twice daily) and no AE or toxicities so far… they are now moving to 300mg dose twice daily.
    – several institutional investors have started a position (now 21% of float)

    Thanks a lot!
    Dan

  135. Rudiger – Mr. Hammer is in all likelihood just fine. I believe ‘swamped with work’ would probably be an understatement. GL .

  136. Ohad, Once again you nailed it mentioning ‘significant correction’ in Jan. While not broad based the bios have certainly lived up to that call. The current valuations appear to show wall street is moving towards bio revenue as opposed to bio potential. (?) Bought Chma after data and Abeo recently. Couldn’t stay away from that $2+ price. Thank you for your input. Invaluable.

  137. Ohad
    What about AUTL below 10?
    Is the woodford the main reason?
    If so, as VC man can you tell why it matters
    Autl has 220M cash, enough to complete the pivotal trail in CD19/22, for which, as you said, the rationale is strong.
    Just curious – do you follow BTAI. Recent results were great – meet all primary and secondary endpoints. Will start ‘soon’ a pivotal ph 3, which will be fairly quick- just a few months. It does not seams to have AE typical for antidepressant, so may compete well with ACAD.

  138. Alex (ESPR) – I am happy with my current exposure, don’t think P2 could change anything as investors are focused on approval and launch.

    Frank (LGND) – TBH I never considered them as they were more of royalty/EPS story and less of a classic drug development play. Their royalty pipeline is quite impressive but looks out of scope for me at least.

    Paul (CMRX) – At first glance I don’t think the story is compelling there, in general not a big fan of chemo formulations for AML. On the other hand, I completely missed CPXX at the time and their P3 data looked really good.

    Les (ABEO) – I think things could stabilize after an imminent fundraising, I thought the MPS3A update was positive and make perfect sense, will have to wait to the next update and see if trajectory is maintained (which will be hard to explain by natural history of the disease).

    Robert –
    RCKT – Haven’t looked at them in a while, at teh time they were too early and valuation wasn’t attractive enough.
    AUTL – I was surprised by recent correction but it looks justified given the setbacks and CD19 data don’t look like a home run. I am still a big believer in their dual CD19/CD22 approach to avoid antigen escape. Following them closely.

    paul (ABEO) – I would wait until fundraising.

    Chris on August 1, 2019 at 3:05 pm said: Edit
    Hi Ohad,
    It would be really helpful if you could add the price/average you bought the stock:-)
    Thanks for your efforts!

    Chris – Are you referring to a specific stock or is this a general comment?

    Les (CHMA) – I thought data were good and that clinical profile will make Mycapssa a viable commercial product. Will publish a post on them on Sunday.

    Milos (ABEO) – I ascribemore value to their LSD programs, I prefer KRYS’s approach in DEB.

    Jinyu (AVEO) – Sorry, haven’t been following them in a while.

    andre (STML/INSM) – Both drugs are doing better than expected IMO. Of the two, INSM looks tempting despite concerns around quarterly sales growth slowing down. Price is close to pre-P3 data levels.

    Robert (ALLO) – Not following the story closely. They are definitely leading with CLLS the Allo CAR space.

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

    GNCA – Interesting platform but not a big fan of cancer vaccines. ACT program is more interesting but early.
    ABEO – I would wait until they raise more money.

    Richard Baker (APTO) – Their pipeline is still too early and risky imo.

    Randall (GLYC) – I think AML combo data are impossible to interpret without a control arm.

    Alex (AVRO) – I am much more positive, will post more on Sunday.

    Marc (AMRN) – I hope not, it would be a huge surprise as FDA explicitly communicated to the company that an advisory committee is not needed.

    chma, stml, abeo, espr – I plan to keep all of them. Plan to add CHMA and ABEO in the future.

    Toby (RGNX) – I am still holding as a gene therapy AAV, they need a proprietary program with a clear route to market.

    Cube (AGTC /ABEO /CHMA) – Agree. I think CHMA is the more puzzling case.

    Rüdiger – Yes and yes 😉 Summer was much busier than usual plus taking some time off. Will post a portfolio update on Sunday.

    Dan – I think CHMA’s recent weakness creates a long term opportunity but prefer to wait a bit before adding in order to avoid surprises.

    APTO – If they can inhibit MYC this is a huge breakthrough but I prefer to wait for data given history of the target.

    Conrad (CHMA/ABEO) – I still think a correction makes sense after 10+ years of a bull market. I like both CHMA and ABEO as long term investments but prefer to wait before adding more.

    andre (AUTL) – Definitely one on my watchlist but price reaction is justified given setbacks and clinical data are not a home run (but clinical potential could still be differentiated eventually. I still like the dual targeting approach.

    Sorry, not following BTAI.

    Ohad

  139. Hi-

    Great column as usual.

    Any thoughts on NBRV (antibiotics) or AGEX (aging), both small market caps and interesting …

    Also, RAPT (oncology / inflammatory).

    Thanks

    paul

  140. Ohad
    speaking about CPXX, what do you think about ATNX (oral chemotherapy)?
    A sort of CHMA story – successful oral vs IV.
    They completed recently pivotal Ph3 with a response rate higher and less neuropathy incidents compared to IV paclitaxel. No need for immuno-suppression is nice plus. Looks a good maintenance therapy for metastatic breast cancer. Plus several trails in angiosarcoma and solid tumors

  141. Ohad if you could be a little more specific if not too much trouble re: CMRX. ( I might learn something for the future)

    CX-01 added to 7+3 chemo had 89% CR vs 58% for chemo alone and this little co has paid $30m upfront plus 10 m shares, so a huge bet. Maybe I got carried away with Mike Sherman here after ECYT buyout.

  142. Paul
    Need Help……CX-01 is from Cantex …..CMRX is Chimerix.
    CX-01 looks interstellar but it’s Private I think (?).
    Ohad,
    Would MGEN be another potential CPXX?

  143. Ohad

    ZYME.Stock has done well in a sub par performing biotech market. You had stated your a big fan of their technology. What do you see as their next catalyst and would you recommend buying more as a long term investment.

    Also, do you expect a change at the FDA, now that Gottlieb is no longer at the helm. Do you think that is a reason for the flat performance of the sector.

  144. What is your take on BPMC? The DCPH’s drug phase 3 results seemed to send BPMC stock much lower. Is this price action justified? The response rate of DCPH’s drug is much lower than Avapritinib (9% vs 22%) in the same setting.

  145. Ohad
    Do you follow TRVI.
    Pivotal Ph3 w/ read out in h1 2020.
    Ph2 data were not stellar but they had nice dose response, plus no SAE.
    Is that enough to consider Ph3 derisked?
    If so, why the cap is about the cash position
    Am I missing something, like high discontinuation rate in the open label expansion, or lack of composition of matter patent, or the use of post-hoc analysis to get stat sig in Ph2, or CARA will eat their lunch, sort of…
    The volume is so low, it reminds me CHMA when you originally purchased your 5k shares.

  146. Ohad, you proved a good sense for the market. how do you see the biotech market in 2019/2020 in general? Where do you see the XBI ?

    Do you plan to increase your short hedges or cash? Or even initiate more long positions?

    Looking forward to read your Update today.

    Carlo

  147. Paul – Thanks. Sorry but I am not closely familiar with these names.

    andre (ATNX) – Don’t know the product well but in general in oncology moving from IV to oral is not as important as other chronic indications.

    Paul (CMRX) – I will have to dig deeper, looked at CMRX’s deck and despite the CR difference I am still cautious here as the trial was small (25 pts per arm) and teh OS curves don’t look that great.

    Frank (MGEN) – I am following them but prefer to wait for more data. Valuation is definitely cheap with a negative EV.

    Dave (ZYME) – For the me the most important readout is for the HER2 ADC program next year. I am not very optimistic about ZW25 but happy to be proven wrong here.

    Not sure how Gottlieb’s departure will affect the FDA at this point.

    Liang (BPMC) – I thought DCPH’s data were very strong, setting a high bar for BPMC. BMPC’s KIT program should also work but it may have to share the market and valuation is too high imo.

    andre (TRVI) – I think you already listed all the reasons 😉
    I would consider the drug derisked from a mechanistic perspective following CARA’s P3 but not sure about their claim about the need to have mu inhibition to improve efficacy.

    Carlo – I still think that in general valuation are too high but hard to predict anything concrete. I don’t plan to add more BIS but will selectively add stocks like today (AVRO, VKTX, MDGL).

    Ohad

  148. Hi Ohad,any opinion on ELOX?
    The preclinical data of ELX-02 seems promising and dirisking, but all the data works well at concentration level of 50~100 µg/mL;
    While the clinical PK data at high dose 2.5mg/kg indicating a plasma Cmax = ~8 µg/mL and T1/2= ~3 h, which is substantial lower…
    Not know whether there is a enrichment effect in lung tissue or HBE .
    Many Thanks

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