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 →
It is hard to overestimate the impact of the Novartis (NVS) /Avexis (AVXS) deal. So far, big biopharmas have had limited exposure to gene therapy and those that did get into the field focused on early-stage collaborations: Pfizer/Bamboo, Biogen/AGTC, Roche/ 4DMT, Abbvie/Voyager etc. This is understandable given the unique product profile gene therapies represent: One time irreversible treatment, lack of long term follow up and creative reimbursement models.
The $8.7B acquisition of Avexis, just three months after the deal with Spark (ONCE), makes Novartis the first pharma to embrace gene therapy as a commercial opportunity. The deals also make Novartis the undisputed gene therapy leader with (hopefully) two products on the market next year. Continue reading →
Last month Spark Therapeutics (ONCE) reported initial results for SPK-8011, its hemophilia A gene therapy program. Despite their preliminary nature, the data are very positive and put Spark in a strong position vs. Biomarin (BMRN) and its Hemophilia A gene therapy, BMN270. Providing the signal is corroborated with additional patients, results may have broad implications on the liver-targeted gene therapy. Continue reading →
Readers of this blog know I have high hopes for gene therapy, a field with a checkered history but disruptive potential that may finally be ready for primetime. After two years of dramatic progress 2017 is shaping up to be a year of incremental progress, focusing more on establishing and validating results seen to date. Continue reading →
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 →
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 →
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 →
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 →
In a field characterized by binary “make or break” events, Avalanche Biotechnologies (AAVL) is a poster child. The company derives the majority of its valuation ($819M) from AVA-101, a gene therapy treatment for wet AMD (age-related macular degeneration) currently in phase 2. Top line results are expected within 1-2 months and should have a dramatic impact on the stock as well as the entire ophthalmology industry. Continue reading →