This year’s ASCO marks a second year in a row of relatively uneventful meetings, with very few groundbreaking or practice-changing data. Just like last year’s meeting, there were too many “me too” drugs targeting the same validated targets while results for truly novel MOAs were mostly underwhelming or immature. This stagnation is particularly troubling in light of the huge budgets the industry is pouring into oncology drug development, which used to be a highly capital-efficient sector.
Looking at the different vertical segments, stagnation is apparent across the board with some exception with few kinase inhibitors and BCMA CARs. Continue reading →
After a long summer break it is time to review recent events and update the portfolio. As far as clinical readouts go, my portfolio had a brutal summer with one complete P3 failure from Array Biopharma (ARRY), a mixed data set from Aurinia (AUPH) and a win from SAGE (SAGE) that resulted in limited share appreciation. This was offset by strong performance from Exelixis (EXEL), my biggest holding which is up 48% quarter to date.
For the remainder of 2016 I plan to gradually increase exposure to gene therapy, which I hope will become one of the industry’s primary growth drivers in the coming years. In parallel, as I am still pessimistic about the biotech field in general (R&D productivity, pricing, biosimilars…), I intend to keep my short ETFs and a significant cash position. Continue reading →
Despite bouncing off a 2-year low, biotech is still an unpopular sector and investors are rightfully concerned about its near-term prospects. Recent drug failures, growing pricing pressure and the potential impact of biosimilars all contribute to the negative sentiment, but the main problem is the lack of growth drivers for the remainder of 2016 (and potentially 2017). Continue reading →
Clovis (CLVS) lost 75% of its market cap last week after disclosing a disappointingly low response rate for rociletinib in T790M+ NSCLC patients. Updated response rates were 28%-34%, dramatically lower than the 54-60% response rate reported at ASCO 2015. According to the company, the dramatic difference stems from analyzing the same data set based on more stringent criteria (confirmed response rate). Continue reading →
The ECC/ESMO meeting, the European equivalent of ASCO, will take place next weekend. Historically, this event has received limited investor attention (since most of the important late stage stuff is reserved for ASCO) but in recent years its importance is growing as more practice-changing data are presented. As a proof of this trend, this year’s meeting will include the two most important breakthroughs in renal cancer in almost a decade. Continue reading →
The biotech sector is having a brutal summer, with major indices (IBB, FBT, XBI) down 15-20% from their July highs. Even after this decline, valuations for most biotech stocks are still rich and need to come down by an additional ~25% in order to become reasonably priced. As my working hypothesis includes a correction (with significant fluctuations) going into 2016, I still plan to have a significant cash position and complement it with leveraged short bio ETFs. Continue reading →
ArQule (ARQL) has doubled in less than two months, following two years of weakness. While tivantinib’s phase III liver cancer is the company’s most visible asset, investors are starting to notice ArQule’s early stage pipeline and its potential to generate meaningful data in the coming year. Both ARQ 092 (Akt inhibitor) and ARQ 087 (FGFR inhibitor) are being tested in biomarker-enriched trials with the potential to have clear efficacy signals during 2015. Continue reading →
Below is my traditional end of the year summary and a recap of catalysts for 2015. As always, I did my best to cover the most important events, let me know if I missed anything… I would like to use this opportunity and wish the readers of this blog a happy and prosperous new year.
After months of uncertainty regarding the fate of binimetinib, Array (ARRY) announced it regained full rights for the drug from Novartis (NVS). Binimetinib (MEK162) was originally partnered with Novartis in 2010 (discussed here) and has been aggressively pursued since. Novartis had to return binimetinib back following the acquisition of GSK’s (GSK) oncology portfolio which included Mekinist, a MEK inhibitor approved for melanoma. Although binimetnib has a high likelihood of returning to Array, the decision is still subject to final approvals for the GSK-Novartis deal. Continue reading →
With most of its market cap covered by cash, ArQule (ARQL) and its pipeline are receiving very limited appreciation. The negative sentiment stems from skepticism regarding tivantinib, currently in phase III for liver cancer (partnered globally and in Japan with Daiichi Sankyo and Kyowa Hakko Kirin, respectively). The skepticism is based on the drug’s 2012 failure in lung cancer as well as uncertainty about its mechanism of action. Continue reading →