Portfolio updates –ADC data readouts, AVROBIO, Chiasma

Crucial ADC readouts at WCLC 2019

The coming months will be very important for the ADC industry which has been struggling to bring forward effective treatments, especially for solid tumors. While there have been some positive news (mostly utilizing Seattle Genetics’ technology like the recent  update on GSK’s BCMA program in multiple myeloma), existing platforms are still limited by side effects. In order to address this need, the industry has to find new technologies that would minimize off -target toxicities.

To me, the most intriguing ADC platform today is that of Daiichi Sankyo, which has been quietly developing its next generation ADC platform at a time when most of its peers de-prioritized their ADC programs. Continue reading

Investment ideas for 2019

Despite the recent surge in general and biotech indices I still believe we are in the beginning of a significant correction after a 10-year bull market. If a major correction occurs in 2019, I intend to use it and increase exposure to small cap biotechs as I still believe in their long term value proposition.

With respect to stock picking, the thriving biotech IPO market created a dichotomy. On the one hand, investors have a lot to choose from as the IPO class of 2017-18 includes so many high quality biotech companies. On the other, valuations for many companies (especially the ones without clinical validation) appear to be overblown, driven by hype rather than data. Continue reading

Biotech portfolio updates – Endocyte and AVROBIO

Endocyte – Surprise acquisition driven by scarcity value

Last week’s acquisition of Endocyte (ECYT) by Novartis (NVS) came as a surprise as Lu-PSMA-617 just started P3 and results are not expected until 2020. This is Novartis’ second radiopharmaceutical acquisition within a year, following the AAA acquisition, making Novartis the undisputed leader in targeted radiotherapy.

The decision to buy Endocyte was likely driven by the commercial performance of Lutahtera (originally developed by AAA), which generated Q3 sales of $56M compared to $24M in Q2. This trajectory in the first year of launch (approved January 2018) proves that radiopharmaceuticals can become meaningful products despite the logistic hurdles. Continue reading