Biotech portfolio updates – Esperion, Abeona , Sage and adding two more GTx names

It has been a hectic 5 months here at Pontifax (10 new investments, some yet to be announced) so unfortunately I didn’t have a lot of time to publish new posts. Going forward, I will try to make posts more concise so I’ll be able to publish stuff also during busy periods.Today, I will focus on what I consider to be the three winners in the portfolio in 2017 so far, not only from a stock performance but also from a strategic development perspective. All three will have important readouts in the coming 6 months.  

Esperion – Flawless execution, pivotal readouts in Q2/18

Despite its strong stock performance (+275% YTD), I still feel that Esperion (ESPR) and its management team don’t get the credit they deserve for their flawless execution in 2017. After starting 2017 with poor investor sentiment and great uncertainty about its clinical/regulatory strategy, Esperion is ideally positioned for pivotal readouts next year (Q2 2018). Although risk is still significant I am more excited than ever about Esperion for the following reasons: Continue reading

Biotech portfolio updates – Esperion, Trevena, Exelixis and ArQule

Esperion – Positive read-through from Repatha

Shares of Esperion (ESPR) doubled within two weeks after Amgen (AMGN) announced positive CVOT (cardiovascular outcomes trial) outcome for Repatha, Amgen’s PCSK9 antibody. Although this news will make the lipid-lowering field more competitive for Esperion, it also validates the LDL hypothesis and removes some regulatory risk around Esperion’s LDL-lowering pill, bempedoic acid (ETC-1002).

Until now, investors assumed Esperion will need to have CVOT data in order to file for approval but now the likelihood of FDA approval based on positive LDL readout in 2019 is much higher. Beyond regulatory uncertainties, investors’ primary concern revolves around whether an oral drug with a 25% LDL reduction has room in a market dominated by generic oral drugs (statins, Zetia) on the one hand, and branded highly effective (50%-60% LDL reduction) PCSK9 antibodies on the other. Continue reading

Biotech portfolio updates – ESMO 2016, Exelixis, Abeona, Esperion and Seattle Genetics

After a two-month break here is a recap of key highlights from the September/October time frame. On the menu today: PD-1 controversies at ESMO 2016, Exelixis’ (EXEL) launch in renal cancer,  gene therapy data from Abeona (ABEO), long awaited update from Esperion (ESPR) and a positive surprise from Seattle Genetics (SGEN).

ESMO 2016 – Merck wins by a landslide (for now…)

While ESMO is typically secondary in importance to ASCO, this year’s meeting overshadowed its US counterpart (which was relatively quiet to begin with…), generating big headlines in the PD-1 arena. Continue reading

Biotech catalysts for 2016

After last week’s pessimistic post, this week I am focusing on potential catalysts in 2016 that could improve sentiment towards biotech as a sector.

As if to remind us late stage trials don’t always fail, last week saw positive news from three different programs, all of which are antibodies in non-oncology indications. Regeneron (REGN) and its partner Sanofi (SNY) announced excellent data in atopic dermatitis, Alder (ALDR) reported positive results in a P2b in migraine and Pfizer (PFE) had positive P3 data for its PCSK9 program.

Below are four additional clinical data readouts that (if positive) may serve as important catalysts. Continue reading

Biotech selloff leaves Wall Street disillusioned

After 5 years of a raging bull market, more than 140 IPOs and tens of billions in proceeds, there is a debate on whether the violent selloff in biotech stocks is a hiccup or the beginning of a real correction. I have no idea where the sector is heading in the coming weeks but it seems like the overall sobering experience coupled with this month’s selloff changed Wall Street’s perception around biotech. Investors are finally realizing drug development is fraught with uncertainty and that biotech is an attractive but not infallible segment, which is why I expect the correction to continue in 2016. Continue reading

Esperion – Seeing the glass half full

Esperion (ESPR) has been the target of a lot of criticism lately, demonstrated by the collapse from $115 to $24 in just 5 months. Investors became skeptical about Esperion’s ability to get FDA approval without cardiovascular outcomes data, which may push approval by 2-3 years and decrease probability of success. Even if the drug obtains FDA approval, many are worried about a narrow label that will limit initial commercial opportunity. Continue reading

Biotech portfolio updates – Thoughts on ongoing correction and upcoming catalysts

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

Exelixis – Renal cancer data are too good to ignore

As followers of this blog know, I have been a long term Exelixis (EXEL) bull for many years but to date the stock has been one of my biggest losers. Despite this experience and although I have been proven wrong on Exelixis in the past, I feel the recent P3 success in renal cancer makes it an attractive story based on (for the first time ever) good visibility on a significant commercial opportunity and a differentiated product profile. Continue reading

Esperion and Aerie – Countdown to M&A

At first glance Esperion (ESPR) and Aerie (AERI) have very little in common. Although each company is focused on a clinically validated drug that employs a novel mode of action, the two products are very different: Esperion’s ETC-1002 is an oral cholesterol-lowering drug while Aerie is developing eye drops for glaucoma.

Yet from a market position perspective their situation is strikingly similar. To begin with, both companies address traditional indications characterized by heavily genericized markets and few innovative programs. Both indications require a huge global marketing infrastructure to reach meaningful penetration. In Esperion’s case, even getting regulatory approval necessitates initiating clinical trials in tens of thousands of patients. In other words, both companies must secure a partner or an acquirer by year end in order to extract maximum value from their drugs. Continue reading

Biotech portfolio update – 2014 summary and 2015 preview

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.

Ohad Continue reading