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 – Exelixis, Spark, buying more gene therapy stocks

Exelixis – Decreasing exposure on valuation

Exelixis (EXEL) continues to look very strong after hitting a 15-year high on Friday, which is never a bad point in time to realize some gains. While I still view Cabometyx as the most effective agent ever approved in renal cancer (even better than Opdivo), a valuation of $5.1B seems to fully capture the current label. 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

Buying more Exelixis following positive renal cancer data

The past six months have been quite frustrating for Exelixis (EXEL) investors (myself included). The company had a string of positive announcements for cabozantinib (cabo) and Roche-partnered cobimetinib (Cotellic) including positive overall survival readouts for both drugs. Since the July announcement on the METEOR study in renal cancer, the stock is up only 16% despite having a wholly owned drug with a blockbuster potential, imminent approval and significant label expansion potential. 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

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. Continue reading

ECC 2015 – Renal cancer showdown between BMS and Exelixis

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

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

Biotech portfolio update – Three readouts and an acquisition

There was a lot of activity in my coverage universe in the last two weeks, including positive data readouts for three companies and an acquisition announcement. However, of the four cases, only two resulted in share appreciation.

Ambit – To keep or not to keep (the CVR)

Two weeks ago, Ambit (AMBI) agreed to be acquired by Daiichi Sankyo in a deal that included a $15 upfront payment and $4.5 in Contingent Value Right (CVR) per share. The CVR represents a milestone-like mechanism in which Ambit’s shareholders may eventually get additional payments equal to 30% of the initial purchase price. Continue reading