Reviewing data for cabo and Opdivo in renal cancer

Yesterday at the ECC meeting, BMS (BMY) and Exelixis (EXEL) presented data for their respective drugs ,Opdivo (nivolumab or nivo) and cabozantinib (cabo) in renal cancer (RCC). Before delving into the inevitable comparison, it is important to note that cross-trial comparisons are tricky and it’s impossible to definitively say which drug is better without a direct comparison in the same study.  Nevertheless, the studies were very similar in terms of patient population, control arm and prior treatment lines so as far as cross-trial comparison goes, this is as good as it gets.

Overall survival – Opdivo improves overall survival and cabo is very likely to do so as the data mature. The magnitude of benefit appears similar with a numerical advantage for cabo (needs to be validated)

Opdivo demonstrated a 5.4-month survival benefit (25 vs. 19.6 months) over Afinitor with a hazard ratio of 0.73 that was statistically significant (p=0.002). Cabozantinib’s data set was immature so median survival values are not available but there was a strong trend favoring cabo with a hazard ratio of 0.67 on the verge of statistical significance (p=0.002). This is also clear from the survival curves which already start to separate after 4 months (see below). Given the strong signal, cabozantinib has a high likelihood of demonstrating a statistically significant survival benefit at the next analysis (expected in 2016).

METEOR - survival

Source: Choueiri TK, NEJM 2015

Progression-free survival – Cabo wins but what matters is overall survival

Cabo improved PFS whereas Opdivo did not but given the strong survival benefit for both drugs, the relevance of PFS is unclear. As I previously discussed, PFS has been regarded as the basis for approving most RCC drugs to date as it was viewed as a surrogate endpoint for overall survival. In Opdivo’s case, this hypothesis proved incorrect.

Safety profile – Opdivo is clearly a safer drug but dose reductions should allow physicians to keep patients on cabo until progression

Safety and tolerability is going to be a major topic going forward, as the two agents have very distinguished profiles. The way the studies reported adverse events makes it challenging to compare the two agents but it is clear that cabo has more tolerability issues. Compared to Afinitor, cabo had led to a higher incidence of most toxicities (GI, appetite, Palmar-Plantar, hypertension etc.). In contrast, Opdivo had a lower incidence of adverse events almost across the board compared to Afinitor.

Surprisingly, treatment-related discontinuation appears only slightly more common with cabo than with Opdivo. This is explained by physicians’ ability to reduce or interrupt dosing while keeping patients on the drug. Although dose reductions occurred in 60% of patients who got cabo, only 9% discontinued, demonstrating that with a daily oral pill it is possible to find an optimal dose without stopping treatment.

Market positioning – Opdivo will dominate 2nd line RCC but virtually all patients will require 3rd line options, where cabo is ideally positioned

From a clinical perspective, both drugs should be viewed as major breakthroughs. Opdivo is the first drug to demonstrate a survival benefit in the general RCC population. Hopefully, cabozantinib will be the second agent to have a survival benefit in its label with more follow up. Consequently, both agents are likely to be used sequentially in the 2nd/3rd line setting after Sutent /Votrient. Going forward both agents may be used in combination although previous experience with Opdivo and other kinase inhibitors revealed a problematic safety profile.

As can be seen in the summary table below, the two drugs are quite similar in terms of most clinical endpoints (survival, response rate, treatment discontinuation). At the end of the day, Opdivo is better positioned because it has a confirmed survival benefit (based on a more mature data set) whereas cabozantinib has a strong survival trend with a better hazard ratio that requires validation. Opdivo has a superior safety profile even though cabozantinib-related toxicities can be managed with dose reductions that minimize discontinuations. Lastly, Opdivo has the advantage of being branded as “immunotherapy” whereas cabozantinib belongs to an old class of drugs (kinase inhibitors) with many approved drugs.

cabo vs. nivo

Portfolio holdings – September 27, 2015

Portfolio - 27-9-2015biotech etfs - 27-9-2015 

82 thoughts on “Reviewing data for cabo and Opdivo in renal cancer

  1. If this is the case BMS should take out exel so they can control both 2nd and 3rd line rcc…sort of a one stop shop and then they can position them accordingly with a linear message to where it will be clear opdivo is 2nd and cabo is 3rd. They would maximize the value of both this way…I guess they should have never returned cabo!!…thanx Ohad

  2. Ohad what is the current 3rd line treatment? and what kind of dollars(conservatively) are we talking about here $400k-600k???

  3. Dr. Choueiri, the principal investigator of the METEOR trial, pointed towards the very low percentrage of primary refractory patients in METEOR (14%) as compared to CHECKMATE 025 (35%). He suggested that doctors and their patients may prefer cabo as it seems to control disease in 86% of patients (as measured after three months of therapy). Assuming that nivo and cabo have similar overall survival numbers do you think this is a valid argument? Or is the better side effect profile of nivo more relevant? Thanks, Eric

  4. From the cc, Choueri specifically said that they reported all events regardless of whether it was treatment related and that the nivolumab trial reported only treatment related AE’s. I was bothered by the high number of grade 5 events in METEOR until I heard this and they had a slide which reported just one g5 AE that may be cabo treatment related.

  5. robert (EXEL) – Thanks. I think every company with an oncology franchise should be interested in cabo. In the context of PD-1, renal cancer is not considered a huge opportunity but it’s still significant (~$1B for a successful drug).
    I don’t think there is a consensus regarding 3rd line treatment as patients go through a mix of VEGFR and mTOR inhibitors. In terms of commercial opportunity, my estimate is $600M using conservative assumptions.

    Eric (EXEL) – I don’t know how to factor-in the superior clinical benefit rate (CR+PR+SD) cabo has. I agree it may play a psychological role but does it trump safety issues? what matters most is survival and whether cabo will maintain a good hazard ratio.

    Wildbiftek (EXEL) – Correct but if you normalize AEs to the respective Afinitor arms it is clear Opdivo is better tolerated at least initially.


  6. Ohad

    Are you considering adding to your position in ESPR or with the relentless selling in the biotech sector do yo think it can be revisited at a lower entry level.absent a partnership/buyout is there any impending catalyst that can reverse the decline in the PPS.

  7. Ohad,

    Thanks for sharing your thoughts.

    Expounding on Eric’s thoughts, it seems to me that with Opdivo having such a high % of PR patients it means those 35% that have no response will immediately get moved over to Cobi. That plus it’s higher HR I read as if Opdivo works for a patient it will work very well and if not the benefit is not that pronounced.

    The mature Cobi OS data will be very interesting. Will Cabo’s lower HR translate into an equal or hopefully even slightly better OS. Next summer will be interesting indeed.

    I also liked how excited Toni was about how well the sub set of patients did who had only had Sunitineb as their prior therapy. They achieved a PFS of 9.1 which is as good as Sunitineb when used as first line therapy. You mention how Cabo will end up as 2/3 line. I think it will end up being used as a first line eventually. Sunitined has a worse SE profile and may end up having no better PFS or OS.

    I also liked the dig Toni gave out when on slide 33. This is when he mentions that the ORR was independently verified with the Meteor trial and only by the investigator in the Checkmate trial.

  8. Dave (ESPR) – I plan on keeping my position but I don’t want to increase exposure at the moment. An acquisition is the only meaningful catalyst in the foreseeable future (initiation of P3 is another catalyst but not a big value creation event).

    Bill13 (EXEL) – I agree there will be a significant group of patients who will show progression rather quickly on Opdivo and will look for the next treatment option. Note that sense there is a seperation between PFS and OS, Opdivo may still be benefcial even in non-responders.
    The PFS in Sutent failures is encouraging but it’s a subset analysis that I am not sure about its validity. My assumption is that PD-1 (with or without Yervoy or a TKI) will become 1st line and that cabo will be an important 2nd/3rd line option. It will take time and a lot of data to bring cabo to P1 (including a dosing regimen to minimize side effects imo).

    Always better to have an independently reviewed response rates but in this case it’s a secondary issue. What matters is final OS data next year.



  9. A further normalization to consider is the OS KM curve for both Checkmate 025 and METEOR of the everolimus arm. It looks like the METEOR patients are sicker in general.

    There’s also the opinion that a trial vs. Everolimus is just a foot in the door and that the real comparison will be versus the other VEGFR TKIs which are already approved in this indication (sunitinib, sorafenib, axitinib, pazopanib) or coming up (lenvatinib). All of these will likely slot after a Nivolumab + Ipilimumab combo and might either be given in combination with or followed by everolimus.

    CABOSUN will give some clarity on this issue, and things look promising for Cabo as even post sunitinib it gives a 9.1 month PFS which are comparable firstline numbers. Any thoughts on this? Do you still stick to your $600mm US revenues annually for Cabo?

  10. Ohad,
    what do you think of of the new Clinical Data Presented On Binimetinib And Encorafenib In Melanoma of Array at ECC?
    Thanks Toby

  11. carinna – BPMC is the only one I know relatively well and I like the company and their approach very much but decided to wait for price to come down.

    Wildbiftek (EXEL) – We need to be very careful when comparing the two Afinitor curves from METEOR and Checkmate-25, especially given the excessive censoring in METEOR. Optimally I find them quite similar (at least up to 9 months where there is less censoring) but we’ll have to wait.
    I don’t thinkoncologists need to see a head to head comparison with VEGFR inhibitor after such a strong performance vs. Afinitor (which is considered comparable to Inlyta and superior to Nexavar). If cabo’s survival benefit is maintained at the next analysis it’s a done deal imo.
    Positive CABOSUN data could be a positive but I don’t view it as a pre-requisite for widespread 3rd line adoption. I think cabo could bring $600M globally, not in the US .
    Toby (ARRY) – Results are encouraging but not phenomenal imo. The NRAS melanoma and BRAF CRC combo data have activity and may be differentiated but the true benefit is still unclear (a lot of unconfirmed responses).

    Luis (ARQL) – The drug is active and looks better than other Akt inhibitors but it is still unclear whether the drug has a path forward as monotherapy. I really liked the responses in tumors with AKT1 mutation but the expansion cohort included only 2 such patients (both responded).


  12. Thanks Ohad. Exelixis was discussing monetizing ex-US rights, do you see a 50-50 split in the revenues for US vs ex-US? Any thoughts on what the economics of such a deal would be as well?

  13. Hi Ohad,

    Both EPZM and RXDX fell really hard today after presenting positive data. Any thoughts on either? Thanks.


  14. Ohad

    With the IBB trading to 285 today and your perspective that you wouldn’t expand your biotech exposure for 6-12 months is your feeling that we continue lower or have the moves been so large that you think we can capitulate and level out over next few days.obviously as you had originally called for a 25% correction which we have almost reached.
    I know your not a day trader but respect you opinion in these turbulent times.

  15. I also have same questions for you as Chris and Dave. Regarding ESPR and Bio sector. Thank you for your thoughts as always.

  16. Hi Ohad,

    ESPR is getting hit badly. Do you think this sell off is justified or are you still optimistic?

  17. Hi Ohad,

    ESPR now about 2x cash. Market seems to be pricing in a 5 yr CVOT requirement prior to approval – which is still likely not the case. Sentiment is obviously bad right now but for the intermediate term sounds like a very good value. Thoughts?

    thanks for all your insights.

  18. Wildbiftek (EXEL) – Yes I assume a 50-50 split in US/ ex-US sales. If a licensing deal occurs, my guess is upfront payment of ~150M, milestones in the $700M-$1B range and 10-15% royalties on ex-US sales.

    Rick (RXDX, EPZM) – I would wait in both cases. Both drugs have activity but carry significant risks.

    Chris (ESPR) – The initial thought is OUCHHH… I still didn’t havea chance to listen to the call but from what I read it is hard to justify the collapse in stock price. I plan to add more because I don’t think anything has changed fundamentally.

    Will answer the rest of the questions later today.


  19. Dave – I still intend to limit my exposure to biotech and selectively invest in stocks with significant near-term catalysts. The past couple of months have been brutal but I doubt the segment can recuperate quickly.

    lgonber – See answer above.

    Alex (MRNS) – I agree it is cheap, the only question what level of exposure makes sense here as the stock is very high risk. I wouldn’t allocate more than 4-5% of the entire portfolio.

    Steve (ESPR) – I completely agree. Nothing changed fundamentally, the advantages and risks are the same as they were 2 months ago.


  20. Hi ohad,

    any nearterm catalysts for XENE in sight ?

    Stock under pressure since you recommended it. Valuation really low now.

    Greetings n0cturnr

  21. Hi Ohad,

    1.Can you share your opinion about BLCM. Do you still think valuation is still rich?
    2. what do you think would be a reasonable price to start a position in BPMC?

    Thanks as always,

  22. One more question ohad:

    What do you think about VSTM (much more cash than valuation right now) and QURE at current valuation? Thank you

  23. N0cturne (XENE) – The only thing I can think of is P1 data and decision from Genentech regarding the oral NaV1.7 program.

    Chris (BLCM) – I like their technology very much and believe they have a truly differentiated technology. They are starting to get interesting at these levels (2X cash).
    Re BPMC – It’s a great company but I don’t intend to buy in the next 6 months unless stock goes to $15.

    N0cturne (VSTM) – I still don’t think they are attractive even at this low valuation. Their clinical data are uninspiring imo.
    QURE – I really liked the Sanfilippo B data but price is too high given development stage.


  24. Hi Ohad,

    What’s your opinion on Acceleron Pharma (xlrn)? It seems cheap at this level.



  25. FOLD took an ESPR-like hit on filing delay. Seems like FDA and drug execs aren’t hearing the same things at meetings lately. Any interest in FOLD?

  26. Hi, Ohad:
    What do you think of PTLA, it has two drugs in phase 3, one is receive BTD and orphan drug. What about the current valuation? Is it worth to buy, thanks.

  27. Ohad

    Regarding GNCA you had stated you were new to the field and was still doing your homework. the stock has fallen along with the weak bio market.i understand you may not be adding to your position as its a high risk bet.but have you anything to add regarding their data readout to be announced this qtr,and chances of success.If I remember correctly,you thought it may be a free shot of sorts.

  28. Looks like everyone is waiting for the European partnership to be announced by ARRY…do you see this has major catalyst ?

  29. Hi Ohad,
    I am probably the first of many who would like to hear your thoughts on EXEL’s P-III cobimetinib melanoma overall survival news this morning.

  30. Hi Ohad,

    1.Do you think an acquisition is still likely for ESPR following recent developments?
    2. Re Genocea, the stock has been beaten hard recently. Down more than 60% since you added to your portfolio. Are you still optimistic?
    Thanks as always,

  31. bj (XLRN) – I still think valuation is too rich, although I still like the MDS opportunity as well as the recent ACE-2494 preclinical data in the WMS.

    cg (FOLD) – I think the recent pullback creates an interesting opportunity. I intend to explore it next year as things cool down.

    Ken (PTLA) – Sorry, don’t know them well.

    Dave (GNCA) – I still haven’t delved into the story.

    ruhu (ARRY) – Yes I see an Ex-US deal as a major catalyst especially in light of the low valuation which could result in an acquisition.

    Jeff W (EXEL) – The survival benefit is a positive but expected update (based on GSK’s data). I don’t think it changes EXEL’s value proposition as cabo is much more important.

    Shane – I follow MDVN but don’t have a strong opinion there. Don’t know MSTX well.

    Chris –
    ESPR – Yes I stillthink it is a likely acquisition target (although the market disagrees…).
    GNCA – Still learning there.


  32. Hello Ohad, I would like to have your opinion in NVAX. The stock went to $15 this year and has come off to $6s on no negative news. I would appreciate your thoughts. Thank you in advance

  33. Hi Ohad,

    What do you think about the recent data of AZD9291 in the combination trial,
    and what impact this may have on rociletinib ?

    Thank you

  34. Lgonber, Kenny – Sorry, don’t know them well.

    gerwei – Yes it’s definitely a positive as it may make rociletinib the preferred inhibitor for combination regimens with PD-1 antibodies (Tarceva also leads to ILD).
    Now that both drugs demonstrate a similar PFS, safety profile will become an important differentiator and it looks like AZD9291’s WT EGFR inhibition is an overhang whereas roci’s hyperglycemia is easily manageable.

    Bottom line, this could make roxi the dominant 3rd generation EGFR inhibitor pushing sales to ~$1B


  35. Ohad
    MTRX reported recently good data in NSCLC patient with AXL gene amplification with a single agent. Two combos with Tarceva are also planned. They had secondary at 45, now they are at 32. Baker Bros have 18% of the company and bought additional shares on the secondary.
    What do you think about their programs? Is it a good entry point (about 600M cap with 140M cash)?

  36. Hi Ohad,

    Is there any data so far for the Atezolizumab Rociletinib combo? It seemed like AZD9291 was well tolerated in monotherapy but only ran into issues when used in combination with a checkpoint inhibitor; do you believe that things would be markedly better for the Roche/Clovis combo?

  37. ohad

    with the new of LLY failure with there CETP inhibitor, the reaction for ESPR at the end of the day was not positive.Do you think the FDA will require them to do a clinical outcomes trial before possible approval or allow them like regn/amgen to do the trial after approval.

  38. andre (MRTX) – The confirmed response in the AXL+ patients was a positive but I am still concerned about the drug’s broad spectrum activity and the ability to compete with more selective drugs,especially MET inhibitors. There are no selective AXL inhibitors in clinical development (but there may be soon) so this could be a more attractive opportunity but market opportunity is unclear. Bottom line, still too expensive imo if the risks are factored in. I prefer LOXO’s and BPMC’s approach.

    Wildbiftek (CLVS) – I am not aware of any data from that combination study. It is hard to predict but on paper rociletinib may lead to a lower incidence of ILD, which may be related to EGFR WT inhibition (seen also with Tarceva).

    dave (ESPR) – I view the announcement as a clear positive as CETP inhibitors were the only competing class to ETC-1002. Now ESPR has the only P3 oral drug with a novel MOA and a statin-like profile. Concerns about outcome studies are overblown in my opinion, even if the FDA will require outcome studies for approval (required anyway) ESPR is a very attractive acquisition candidate.


  39. Hi Ohad,

    You own 470 shares of ESPR At an average price of 37.60. Do you plan adding now that CETP inhibitors are of the table and ESPR makes an attractive buyout candidate?
    Thanks as always

  40. Chris (ESPR) – Yes I plan to add more at the next portfolio update (hopefully this or next sunday). I think that if AMGN bought Dezima for $300M knowing it would have to do outcome studies before approval, a first in class P3 agent should be worth 2-3 times at minimum.

    Shane (RLYP) – Sorry, don’t have a strong opinion on them.


  41. ohad

    you state that ESPR with a first in class P3 agent should be worth at minimum 2-3x the price that amgen paid for Dezima.So if that was to occur you are putting a pricetag on ESPR of about 26-40 per share.

    Am I missing something as you had purchased the stock at a avg of 37 per share.Doesnt seem like much of a premium if a buyout was to occur.

  42. Dave – the AMGN purchse of Dezima was for $300 MM PLUS up to $1.2 Billion plus royalties, so I think your calculation is off.

  43. Hi Ohad,
    Wondering if you can provide your current thoughts on CLDX. Last time I can find you mentioning them is he ASCO preview:
    “Celldex will report updated survival data for its EGFRvIII vaccine (rindopepimut) in GBM (#2009). If the survival benefit reported in November is corroborated, the trial may be sufficient for accelerated approval.”
    Since then a major sell off after the June 29 announcement of no early P-III termination grant by regulators, followed by the general sell off. From a range around $25 this spring/ summer to a low of $10 before a recent bounce to $13 does the risk/ reward seem favorable from the data so far? Interim data release anticipated sometime Nov. to Jan. from what I can tell.
    Thanks as always

  44. Ohad
    thanks for the frank MRTX answer. You said that you prefer LOXO.
    LOXO will present additional Phase I data on LOXO-101, (potentially best in class TRK inhibitor ??), at next month’s AACR-NCI-EORTC – November 5-9, 2015.
    Is it a good idea to buy some shares before the meeting? The company is 330M with 100M in cash.

  45. EXEL What can we interpret from the sale of expiring options by Dr. Lamb, preplanned sale due to the expiry date date of October 17, and nothing else. Do you think the increased short interest is a sign of manipulation to put more pressure on management to do a partnership or just correlated to increase short interest in the IBB index.

  46. Hi Ohad,

    you have a opinion to Genfit ($GNFT), french NASH player. They a good drug in pipeline which soon goes in p3 and maybe “better” than Intercepts ($ICPT) OCA with significant safety issues.

    Greetings, n0cturne

  47. ARQL When do you think is the next catalyst, and when are Tivantinib resutls expected ? I would assume it is better to sell after the next catalyst and before Tivantinib resutls come out.

  48. EXEL When do you anticipate the combo study with PDL1 to read out, and do you think they will wait until the results of this are out before doing a JV ?

  49. dave (ESPR) – Dezima was acquired for $300M plus $1B in milestones so I use 2-3 fold premium as a minimum valuation and add ESPR’s cash, which brings us to almost $1B . This is the very conservative takeout price, I believe actual price could be much higher.

    James – This is a good idea in principle but there are very few pure play immuno-oncology stocks. This approach may work better with gene therapy where there are many relevant stocks.

    Jeff (CLDX) – Despite the drop I don’t plan to get back in as this is a high risk program especially after the interim analyses did not result in a stat sig result.

    andre (LOXO) – If i had to choose I would go with LOXO but I still think it’s expensive. The drug is still in P1 and market potential is unclear.

    curiousgeorge (EXEL) – Don’t think this means everything.

    n0cturne (GNFT) – I don’t think it’s a better drug than ICPT’s drug.

    curiousgeorge (ARQL) – The next catalysts are updated data for 087 (FGFR) and 092 (Akt) in their respective studies. It will be important to validate initial signals the company observed in order to increase visibility. Tivantinib should have a first interim analysis next year (should announce completion of enrollment before).

    EXEL – The trial started recently so I don’t think they will have meaningful data. I don’t think they will wait for these data to partner the compound /sell the company. btw, I am concerned about the safety profile of this combination and am not sure the two agents can be combined.


  50. Ohad, thanks for the LOXO response.
    In the past you commented about ADRO as too risky in pancreatic cancer.
    But recently there are some interesting development.
    They just started Phase 2 with INCY – LADD+IDO1 vs LADD vs IDO1 in Platinum-resistant Ovarian Cancer. Plus collaboration with Novartis and Janssen may validate the technology.
    What do you think about their science – LADD – looks very intriguing.

  51. $GNFT

    Thanks for your answer, Ohad. Do you think, when the drugs are comparable, the valuation for Genfit ($884m) is reasonable?

  52. Hey Ohad
    hope all is good.
    I wonder if you could comment on CYAD, and especially their p3 cardio study is due in 2016… the company valuation seems low compared to peers. How do you rate their chances of success?
    Also, you added 3000 shares of ARQL recently, what is the potential here? how high could the valuation rise if the next events prove positive?
    Regarding BIS and the biotech sector, are we going to keep swinging back and forth? Do you still see BIS reaching 50 sometime in the next 6 months? It seems that nobody knows exactly in which directions things are going… tug war between bulls and bears, a lot of day-traders in this market…

  53. EXEL What do u think is the timeframe in number of months that the firm does a JV or sells out

  54. EXEL When do you think Roche will post Cobi results for MEK combinations with their drug in other diseases. If Cobi works in other indications it can increase the revenue significantly potentially giving EXEL an added valuation. What is best case scenario for added valuation if Cobi works in all clinical trials for additional indications.

  55. n0cturne (GNFT) – Yes, I just don’t think the drugs are comparable. If I had to choose I would with ICPT despite the high valuation.

    Dan –
    CYAD – Sorry don’t know them well.
    ARQL – The stock is still flying under the radar and is ignored by most investors so the upside here is very significant imo (and so is risk…). Positive catalysts, which include validation of efficacy signals for 092 and 087 in their respective populations, may lead to two registration trials for niche indications. My investment hypothesis relies on this transition which should result in a major re-pricing (2 wholly owned programs for biomarker defined tumors). Proteus syndrome is a smaller opportunity (<80M) but given the low market cap and the unmet need even a PD signal in patients may be an important catalyst.
    BIS - I plan to hold it in the coming months as I don't believe the correction is over. I do plan to get into stocks with clear catalysts that I view as undervalued in parallel.

    curiousgeorge (EXEL) - I expect a deal to be announced in the coming months as they will probably like to have someone handling the international filing. Given their low market cap I think an acquisition makes more sense here.
    Regarding cobi, on paper the potential is huge as there are many tumors with RAF/RAS dysregulations but I wouldn't count those indications in unless there is compelling data.


  56. EXEL Do you think Cobimetinib is sure approval ? Also, most likely they will want to see Cobimetinib data for other indications before selling out so a partnership would make more sense for the company given the low market cap. If they do a JV this year, do you still expect a buyout next year or that will then be most likely pushed out further ? What would be the incentive of let us say Roche looking to buyout EXEL for example Roche who already owns half of Cobi to partner with Exelixis now and then buy them out for a higher price. From that perspective Exelixis might get a different JV partner other than Roche because their interests will be aligned solely based on Cabozantinib’s potential.

  57. EXEL Do you plan on holding until the buyout or possibly take some profits on a JV announcement ?

  58. curiousgeorge (EXEL) – Yes I think cobi has a very high likelihood to get approval in melanoma given the recent OS update and the experience with Mekinist.
    With respect to a deal, I don’t think it will revolve around cobi since cabo is seen as the primary value driver (EXEL owns global rights there).
    Although it makes sense for Roche to acquire the full cobi rights, I am not sure they view cabo (a multi-kinase inhibitor) as a good fit (although their are clearly active in uro-oncology).

    I plan on holding until the deal is announced as they way I see it there is very limited downside risk with practically no major negative announcements could come in the coming months.


  59. Good durability data for GNCA on herpes; bad news on pneumonia. Assume it’s still a hold for you? Looking forward to your blog article on GNCA Thx.

  60. Hi Ohad,

    (IMGN) Any thoughts on the GATSBY failure? They were looking for OS vs a taxane control in gastric cancer and it didn’t meet this endpoint.

    (EXEL) Do you think Cabozantinib has any hope of capturing any market share in differentiated thyroid cancer now that Lenvatinib has passed its P3 for second line treatment?


  61. Ohad

    You have been right on target with your bio correction that you had predicted a couple months ago, and you just recently stated that even with this 20+ percent correction that there could be more pain ahead. what signs will you be looking for to change the negative sentiment that has overtaken the sector and start to see a leveling off of stock prices.

  62. EXEL Assume Cabo gets a JV this year, and Cobi comes positive in phase 1 by this year as well what valuation would you put on EXEL

  63. cg (GNCA) – Still haven’t decided…

    Wildbiftek –

    IMGN – Very disappointing although the commercial implications on IMGN are limited. Market cap is predominantly based on IMGN853.

    EXEL – I don’t expect any revenues in thyroid cancer beyond MTC.

    Dave – Thanks. It’s always hard to predict market behavior. My hypothesis relies on the assumption that after several years of record breaking performance and valuations which are hard to justify with commercial metrics, a serious correction is needed. imo we are still in the midst of it and I would wait until we see a really negative sentiment (especially within generalists), re-pricing of biotech stocks and significant slowdown in IPOs. To me, that would be the right time to get back in full force.

    curiousgeorge (EXEL) – If EXEL decides to do licensing deal for ex-US rights than it should be traded around $2.5B (assuming reasonably positive sentiment around cobi and an OS benefit for cabo in RCC).


  64. Hello Ohad,

    isn’t XENE at present relative cheap after Genentech has advanced a second Nav1.7 inhibitor into clinical development?


  65. TRVN – Listened to the investor presentation. Thought it was very strong, particularly with the slides, which provided a lot of color and will hopefully be available for download shortly.

  66. AUPH
    Voclosporin – Starting to get data on the trial and expecting 8 week data collection around second week of January 2016 followed by a 24 week data collection then with a 24 week data release expected in summer of 2016.

    data encouraging!! Would have loved to see more patient level data though. Videos from Rome conference will be online in a few days.

    Ohad, do you still see a B/O possibility – maybe by GILD? I love this stock, but missed the entrance several times

  67. Hi Ohad, I’m a long time follower and really appreciate you taking the time to provide such valuable information. I have only asked 1 question and it was in regards to VSTM. I want to thank you and your opinion was absolutely correct.

    Anyway, you have stated several times you cannot comment on CAR T companies like JUNO ETAL…because of your relationship with KITE.
    Instead of asking about a specific company, are there any good blogs/resources you can point me to regarding this field. I’m also interested in gene therapy companies. Are you able to give your opinion on compaies like BLUE?

  68. Hi Ohad,

    Seems MRNS delayed the data readout of P3 from Q1 to mid 2016. But does that justify the big drop? Do you plan to add more in the near future?


  69. (mrns) I have seen sage’s drug in action and there is a clear need for drugs to stop status. I think pre-clinical data is stronger for MRNS, but sage is ahead in clinical development.

  70. Christian (MRNS) – The PCDH19 data are positive but very preliminary and hard to assess without longer followup. I wouldn’t ascribe value to this indication for the time being.

    Toby (XENE) – Yes I think they’re cheap although it is not clear whether the more advanced programs has any issues.

    Paul B (TRVN) – Thanks, I still didn’t have a chance to listen to the webcast but looks like they are on track across all fronts.


  71. n0cturne-

    AUPH – Very important catalyst which is predominantly ignored by the market. I think they have good chances of a positive outcome.
    MRNS – Agree data are encouraging but I would have waited for more folowup and patients.
    CLVS – Yes I still think it’s an attractive M&A target, especially if lucitanib demonstrates good activity at SABCS next month. Gilead sounds like the perfect acquirer. I wouldn’t rule out others like Roche.

    Chris (ONTY) – I am still waiting for more data on ARR380, so far results are inconclusive imo.

    jh (MRNS) – This is very surprising to me, they are making a lot of progress and valuation gap with SAGE is still very significant. I am looking forward to see the preclinical package for IV ganaxolone, don’t know if you can say it’s superior to SAGE-547 as each company emphasizes its alleged superiority . Surprised they are not pursuing PPD with the oral formulation. Agree about SAGE being ahead but it looks like ganaxolone is at least comparable and can beat SAGE to markets where oral administration is preferable.

    Jun (BLUE) – Thanks. Yes I can discuss gene therapy companies like BLUE, which I really like and currently considering as a new investment. Too bad there is not a gene therapy ETF.

    Cloud (MRNS) – Delays are always negative but I still think the stock is cheap given the early stage programs for both oral and IV ganaxolone. Will ad more if stock drops to 5.


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