The Clock is Ticking on Micromet

Earlier this month, Micromet (MITI) concluded an impressive public offering of $75M, approximately 20% of the company’s market cap. The offering illustrates the transformation the company has undergone from an anonymous biotech play into a recognized industry leader. This is also echoed by the growing attention from Wall St. When I first wrote about Micromet in 2007, the company was covered by a single analyst, RBC’s Jason Kantor, who was one of the first to see the potential in Micromet’s platform. Today the stock is covered by six additional research analysts.  

According to the company, its strengthened cash position will provide at least two years of operations, assuming no additional funds are received. Most of the budget will probably be related to Micromet’s lead agent, blinatumomab, which is expected to enter a pivotal trial in Acute Lymphoblastic Leukemia (ALL) in the first half of 2010.

With almost $125M in its coffers, Micromet has just enough money for completing and generating data from the pivotal trial. Nevertheless, some of the money should be put to another use – getting the US rights for blinatumomab back from Medimmune (AZN). As discussed in a previous article, Micromet is trapped in a delicate situation where Medimmune is unwilling to develop the drug, nor is it willing to return the US rights for the drug. Prior to the offering, Micromet could not afford buying back Medimmune’s stake, but now, it can do so without jeopardizing its financial stability. Such a move will be an important value creation event for Micromet, who will finally be able to relicense blinatumomab at terms that are more attractive than those of the original deal with Medimmune. More importantly, such a deal will facilitate the broad global development program this promising drug deserves.

ALL is a niche indication which represents a fast and cheap route to market, so theoretically, Micromet could commercialize the drug in ALL on its own. However, blinatumomab has potential in a variety of other blood cancers, which represent a multibillion dollar opportunity. In order to capture a meaningful market share in these indications, primarily Non-Hodgkin’s Lymphoma (NHL), Micromet must have the muscle of a large partner on its side. With a large partner, Micromet will be able to accelerate blinatumumab’s clinical development that seems more crucial today than ever, as direct competitors are beginning to surface. 

The competitive landscape

Blinatumomab targets a protein called CD19, which is highly expressed on cancer cells. When Micromet presented first clinical data for this agent in the summer of 2006, it was the first CD19 antibody to show activity in cancer patients. To date, this status has not changed, but by year end there could be additional CD19 antibodies with clinical proof of concept.

Sanofi-Aventis’ (SNY) SAR3419 is the second most advanced CD19 antibody in development, making it an obvious threat to Micromet’s blinatumomab. SAR3419 is an antibody drug conjugate that was licensed from Immunogen (IMGN) in 2003. The drug entered the clinic in late 2007 and is currently being evaluated in three phase I trials, either as a weekly or every three weeks treatment. Although no data has been published from the studies, there is good reason to believe the drug is active.

The first indication for that was the 2008 agreement Sanofi signed with Korea based Celltrion for the production of SAR3419. One can assume that Sanofi would not go through this outsourcing process unless it had plans to advance SAR3419 further. Another positive indication is the launch of the weekly trial, approximately one year after the start of the every three weeks trial. This pattern is similar to what has been seen with other ADCs in the clinic, such as Seattle Genetics’ SGN-35 and Genentech’s T-DM1, implying yet again that Sanofi was happy with what it was seeing in the first study. Lastly, there is a constant buzz around SAR3419, following some formal and informal comments by Sanofi and Immunogen. The most recent of which was made by Immunogen’s CEO, Dan Junius, who said he is “sensing an excitement” at Sanofi around SAR3419. Sanofi is expected to present results from the every three weeks trials at ASH this December.

Another drug that will also have data at this year’s ASH is MDX-1342, which is being developed by Medarex [soon to become part of BMS (BMY)]. MDX-1342 is a CD19 antibody with improved capability to stimulate an immune response against cancer cells. Medarex chose to study this antibody in cancer as well as autoimmune diseases. At ASH, it will probably report data from the oncology trial.

Therefore, at ASH, there will be data for three CD19 antibodies in several indications. Although all three bind CD19, each represents a different class of antibodies with a different mechanism of action. Blinatumomab is a BiTE antibody, SAR3419 is an ADC and MDX-1342 is a non-fucosylated antibody. This will be the first opportunity to evaluate the three different approaches for the same target, although the three agents will not be compared head to head and the results will be from small uncontrolled studies.

In terms of efficacy, it is highly unlikely that any of the two competitors show comparable efficacy to that of blinatumomab, which had a response rate of 92% in a small cohort of patients (12 patients at the highest dose level). SAR3419, which is based on Immunogen’s proven technology, has better chances to come close to blinatumomab. In contrast, the technology Medarex uses is still unvalidated. Earlier this year, Medarex published results for a similar antibody, MDX-1401, which targets CD30. As previously mentioned here, the results were inferior to what Seattle Genetics (SGEN) demonstrated using its ADC technology for the same target. 

On top of the difference in clinical activity, each of the three will probably have a different product profile, which is where blinatumomab might face some challenges.

Blinatumomab’s main weakness lies in its mode of administration, as the drug has to be continuously infused for at least a month. Although Micromet reported no compliance or technical issues related to this administration mode, patients and physicians prefer drugs that are injected less frequently, every several weeks or so. MDX-1342 may be more suitable for autoimmune indications because of a longer bloodstream circulation time, thus potentially enabling a less frequent dosing schedule. Micromet also encountered some safety issues with blinatumomab, especially CNS toxicities (confusion, disorientation etc.), which might limit the drug’s use. According to the company, it found a method to work around these issues, which will be presented at ASH. In addition, as blinatumomab is a novel type of antibody, there is always the risk that larger trials will reveal new side effects. Lastly, SAR3419 or MDX-1342 can be given to patients until progression, as opposed to blinatumomab, which is given for 4-8 consecutive weeks. This probably diminishes blinatumomab’s ability to maintain clinical responses in comparison to what it could have achieved.

There are currently additional antibodies against CD19 that will enter the clinic in the near future, thus making the field even more competitive. Newcomers include Seattle Genetics’ ADC, SGN-19A and Xencor’s XmAb5574.


Accelerating development

Micromet must not count on the superb activity blinatumomab has achieved so far. First and foremost, the response rate in larger trials will probably be lower than the staggering 92% it achieved in the phase I study. In addition, physicians will start using whatever reaches the market first, even when there are more promising drugs in development. Therefore, if blinatumomab is the second or third CD19 antibody to get approved for NHL, market penetration will be more difficult.

In terms of number of patients treated, Micromet has already lost the lead in NHL to Sanofi, who will probably have ~100 patients enrolled by year end. A company like Sanofi can support fast enrollment  due to its financial resources and large footprint. Indeed, it seems like SAR3419 is receiving a high priority at Sanofi.

It is clear that Sanofi has become very active in oncology drug development, based on the latest shopping spree that included the BiPar acquisition and the huge licensing deal with Exelixis (EXEL).  Sanofi’s main oncology assets, Eloxatin and Taxotere are coming off patent, so there is a lot of pressure on the company to bring new drugs to market as quickly as possible. If SAR3419 demonstrates good activity, Sanofi will surely pursue this opportunity aggressively. It could launch a battery of large trials in the different subtypes of NHL, before Micromet could even conclude its phase I NHL study.

Potential Catalysts

Micromet has three potential value creation events in the coming six months.

First will be the reacquisition of blinatumomab’s US rights in the coming months, which should have a positive effect on the stock price.  

The second important event will be data presentation for MT110, a new BiTE antibody currently in a phase I dose escalation trial in solid tumors. Results will be announced at the ECCO meeting next month, where the company will present results in 15-20 patients with solid tumors. Given the very low starting dose, it is unlikely to see pronounced tumor shrinkage, thereby diverting most of the attention to the drug’s safety profile. Assuming a trial design similar to blinatumomab’s phase I study, Micromet reached a dose of 15µg/m2 per day. In the blinatumomab trial, there were clear signs of activity at this dose level, but MT110 will have to be further dose-escalated since solid tumors typically require higher doses relatively to blood cancers. Therefore, MT110 must demonstrate a clean safety profile at these sub-therapeutic doses in order to enable Micromet reach the relevant doses. Any clinical activity observed in the study, especially among patients at the higher doses, will be regarded as extremely positive.  

The third event will be an update from the ALL and NHL trials at ASH in December. Investors would like to see additional responses as well as response durability in both studies. Assuming the results are consistent with what the company previously reported, Micromet should build on these results to partner the drug. Of note, Micromet has access to the data, so it could share them with potential partners and strike a deal even prior to ASH.

On top of the obvious risks associated with early stage drug development, Micromet’s shares might be affected by the SAR3419 results Sanofi presents at ASH. Owning Immunogen as a hedge against this event could be an option for Micromet investors. In fact, owning Immunogen going into the fourth quarter of 2009 irrespective of SAR3419 is not a bad idea, as will be discussed in the next article.

Portfolio Updates and performance

Since inception more than ten months ago, the biotech portfolio, managed by Ran Nussbaum and myself, had a return of 53.5%. This compares with favorably with the broader indices as well as the leading healthcare indices. So far, the leading index is the AMEX Biotechnology index, which achieved a return of almost 37%.

We are adding NeurogesX (NGSX) and Myriad Genetics (MYGN) to the portfolio.

                                      The biotech portfolio as of Aug 23rd 2009    




72 thoughts on “The Clock is Ticking on Micromet

  1. Why buy mygn now?
    Should we wait til earnings is out on aug 25?
    Are you expecting a positive surprise (guidance, clinical development, etc.)?

    As for ngsx…I have noticed the major catalyst (PDUFA) in November but may wait hoping for a better entry price (hopefully).

  2. Ohad,

    Thank you for your latest informative article on Micromet. I greatly appreciate your articles, and have learned a lot about several promising companies as a result of your excellent research. Thanks so much for sharing your experience and insights with everyone!

  3. sam

    Both MYGN and NGSX could trade lower in the near term but to us they represent two opportunities with limited risk and a lot of upside.

  4. Enjoyed the article, although I believe that estimating value in MITI should not be based on MT103 or MT110 alone. Another potentially huge event is the Bayer option on an undisclosed target which has to be exercised by Jan 1, 2010. There is also supposed to be a partner deal before the end of the year and possibly the use of BiTE to extend/improve existing drugs (e.g. Erbitux). The fact that MT103 gets approved at all (Europe, US, whatever) as a proof of market concept for BiTE technology would be a huge price driver for the company, regardless of who wins the CD-19 NHL race. If BiTE is proven an effective technology, MITI is worth billions, as it will have potential for many broad based applications, including non-cancer related.

  5. Found about your blog thanks to a link provided by another reader of yours. Very nice summary on the anti-CD19 competitive landscape! Would appreciate your opinion on the following 2 points:

    1. Have you had an opportunity to quiz oncologists on prescription of an insulin-infusion pump delivered blinatumumab? One would think this inconvenience would be well balanced out by efficacy if the 92% response rate were to be proven in larger trial, and safety advantage due to the short half-life which allows the drug to be quickly eliminated from the system as soon as treatment related adverse events are discovered.

    2. What’s your thought blinatumumab’s ability to eliminate minimal residual disease (MRD) in the bone marrow and how that will differentiate blinatumumab from the other anti-CD19’s.


  6. Dear Ohad,
    just wondering, are your information about when MITI is going to present certain data results of careful reading of generally avialable materials (SECs, PRs, newspaper articles, blogs) or do you have some special realation with the company? Must say you are my favorite biotech commentator.

    As for NGSX. How do you interpret the results of the bridging study? I found its language pretty PRish.

    “Preliminary results of Study C123 showed the mean duration of patch application was 60.2 minutes, versus a target duration of Qutenza patch application of 60 minutes. No patients removed the Qutenza patch prematurely (i.e.< 90% of the intended full application time). ”

    As can be read at there was neither defined “target duration” nor a definition of what prematurely means. Mean duration of patch application 60.2 minutes together with the info about no “premature” removals suggests that most of the patients did not reach the full application time. In the extreme case you can have all but one patients with time of application 60*0.9 min and just one capsaicin “junkie” taking the average above the “target time”.

    Clinical trials that lead to the approval used t=60 min (whence probably the target time) and to my knowledge data related distribution of time of removal were not published. Only t=60 mentioned suggesting that there were no premature removals. There is no indication as of whether t=60*0.9 is still beneficial. Will be FDA happy with shorter time with no know clinical relevance? In fact sold NGSX when the bridging study results were published with a reasonable benefit and I am going to play buy after the complete response letter game here. What is your opinion?


  7. Hi Shelly
    I agree with you MITI has much more potential beyond MT103, but all the events you mention are not meaningful in the sense they do not generate clinical results or bring to a strategic change. Approval in ALL will be great, but why not use the first mover advantage to make some money in larger indications? Besides, there’s no guarantee the drug will get approved in ALL , and in order to get the strongest proof of concept, MITI should strive to test MT103 in as many patients and indications as possible to prove BiTE works.

  8. Hi Joe
    There’s definitely a tradeoff between efficacy and patient convenience. If blinatumomab continues to demonstrate this level of activity (especially in terms of response duration), it will be much easier to convince patients and physicians. Safetywise, the short half life is an advantage but bear in mind that other antibodies and ADCs tend to have a very good safety profile, so physicians will probably feel comfortable giving them. BiTE antibodies are more of a black box and we still don’t know exactly how safe they are in larger patient populations. This brings us again to the need for a partner that can support larger trials.
    The ability to eliminate MRD is very impressive and could be an important differentiator going forward, but it is too early to tell. Other antibodies such as Rituxan and Mylotarg penetrate the bone marrow as well, but I think blinatumomab has an edge due to its size and unique mode of action. Again, we’ll have to see how other CD19 abs behave in that setting.

  9. Thanks beo

    All the info regarding these events is publicly available through the usual sources you mentioned.

    Regarding NGSX, I am still in the learning process with this one, so there’s not much I can say.


  10. Hi Ohad, greetings from Germany. Please excuse the bad English. This is a Google translation. Myriad Genetics, looks very interesting. How can they achieve this kind of high margins (nearly 90% gross, almost 45% EBIT)? This is wonderful and a little rude… :-) They have no competition? How do you estimate the risk that in the future margins to fall (perhaps because other companies could enter this attractive market)? Thank you for your great work here. I translate every item in your blog (as best I can) and I have learned a lot here. In Germany, many people are pleased with your article about MorphoSys. With respectful regards, Sepp

  11. Thanks, Sepp.

    Glad to hear about Morphosys. It is an excellent company although I have been hearing rumors that CNTO888 did not achieve proof of concept in the autoimmune trial.They’ve got plenty of other shots on goal.

    With respect to MYGN, there is a simple amswer to that – patents. MYGN’s IP covers the use of BRCA for evaluating the risk of developing breast cancer. This is why there are no direct competitors. IMO, The risk for MYGN’s margins is from the reimbursers but so far things look ok.


  12. Fair enough that MITI should press its advantage should ALL be approved in Europe. Since administration of BiTE is a major concern in your article, have you heard any recent speculation on MITI’s programs to change the regimen that they announced over a year ago (daily injections, use of insulin pump, etc.)?

  13. I think the only thing that can be done is switch to subcutaneous administration and insulin pumps. Don’t know how the drug can be given in daily injections, and even if it can, no one would want to use that mode.

  14. Hopefully we’ll get updates on MITI’s progress with alternative delivery methods at one of the upcoming venues. If you don’t mind me asking, you never mention MT201. Have you given up on this program as making any meaningful contribution? I would have expected the program to die after the initial failure to meet end points, but after skewing the data to high EpCAM expression results Merck Serono and MITI seem to want to keep at it.

  15. Basically i don’t ascribe any value to that program. The low vs high EpCAM differential activity could make MT201 more interesting but it’s still very early. The nice thing is that the antibody is safe, which might be a good sign for MT110.

  16. Some have said HGSI has a promising multibillion dollar drug in late stage trials and may be one of the first to treat lupus.
    You’ve said that incyte will most likely have its drug approved.

    How likely do you believe Benlysta will be approved?
    When could it be approved?
    If approved, what would be the fair value of its shares now trading near $20?
    Many thanks.

  17. Oh, I forgot to mention that I am worried to trade hgsi because it had showed promising results like how synta did and we all now how that ended.

  18. HGSI’S Benlysta proved effective in a large, well designed phase III trial under an SPA. SNTA’s elesclomol generated good results in a smaller phase II trial.
    It’s hard for me to speculate whether the second Benlysta trial will turn out to be as positive as the first trial. If it does, then the stock can go much higher since HGSI will own 50% of a $1.5-2.5B drug.

  19. Sorry Ville, but I cannot go into details there. I’ll just say that it is only an indication from someone familiar with the project and not anything definite.

  20. On MT201, if anything positive does develop it could be a huge plus for MITI as I believe most have totally written it off. No downside as poor results shouldn’t affect the stock price any longer. One great benefit that MT201 did provide MITI is the experience with EpCAM and how to prepare findings for studies on this target. I am relatively sure that in September we will see at least two sets of data on MT110; that which shows an overall response (hopefully impressive by itself) and that which shows results based on high EpCAM expression. Of course, MITI may have already stacked the deck here, only enrolling those of the latter category.

  21. Thanks for the excellent information on MITI. Considering I started accumulating my position when it was in the mid-$3.00 level, the stock has performed well. In the coming months, MITI is scheduled for more than 20 presentation with the first one coming next week. (9-02-09) Next weeks presentation probably will not case much activity, but the one later in the Monday when they release the solid tumor data…….should be interesting and a mover for the stock.

    My second largest biotech holding is in (PSDV). Watching this one, due to float, is like watching paint dry. However, they have a Phase III drug that is fully enrolled(more than 900 patients)and data is scheduled in 4th Q. Money is tight for them, but they indicate that they have enough to get them through Phase III data release and expected milestones that will be triggered. Pfizer has a 10% position in their stock…….but the end result and future of the stock will be positive Phase III data.

  22. OOPS! Should have proofed my earlier post… is corrected comments…

    1. Thanks for the excellent information on MITI. Considering I started accumulating my position when it was in the mid-$3.00 level, the stock has performed well. In the coming months, MITI is scheduled for more than 20 presentations with the first one coming next week. (9-02-09) Next week’s presentation probably will not cause much activity, but the one later in the month(Germany) when they release the solid tumor data…….should be interesting and a mover for the stock.
    My second largest biotech holding is in (PSDV). Watching this one, due to float, is like watching paint dry. However, they have a Phase III drug that is fully enrolled(more than 900 patients)and data is scheduled in 4th Q. Money is tight for them, but they indicate that they have enough to get them through Phase III data release and expected milestones that will be triggered. Pfizer has a 10% position in their stock…….but the end result and future of the stock will be positive Phase III data.

  23. Hi Cary

    Regarding the solid tumors data for MT110, we shouldn’t expect a lot of new on the efficacy front. The comapny tried to lowerexpectations, calling the doses “sub therapeutic doses”. The crucial thing is safety, there must be a clean safety profile in order to reach therapeutic doses.

    I Don’t follow PSDV

  24. Excellent series of questions, comments and responses Ohad. As you said in the article concerning MT110, “Any clinical activity observed in the study, especially among patients at the higher doses, will be regarded as extremely positive.”

    To what factor(s) do you most attribute the recent price rise? Successful financing stock offering? Short covering? More awareness of MITI’s BiTE potential? Takeover possibility? Also, since there have been suspicious movements in the stock price ahead of previous news (e.g. Medimune/AZN’s bowing out of MT103 trial), do you think there may be some leakage from ESMO concerning MT110 Abstracts? (deadline for late submission was 5 Aug).

  25. Chad,
    You are correct about the solid tumor data coming next month, MITI will probably focus in on the safety issue due to stated low expectations at this point. This certainly makes sense at this stage of development, due to previous safety issues that MITI’s platform has faced.

    I understand your area of concentration is cancer, the only reason I mentioned PSDV was the intriguing valuation that it has relative to potential. Should the Phase III data continue to reflect efficacy and safety data already shared, then from the current MC for the stock the milestone payment would be more than 50% for this current MC valuation. This is a link to a recent presentation made by PSDVs CEO…….

    Anyone interested…….let me repeat! Float is very small and spreads between B/A range is normally more than .10 cents………don’t put in a market order. Make the MM come to your price –don’t let them gouge you! Safety issues appear to be nil, but either the Phase III efficacy data is there……..or company will be history. So go into the investment with that understanding.

    Good luck to us all with MITI…..could be a paradigm shift for cancer treatment!

  26. Thanks Ohad. I wouldn’t have thought to weight the buy back of MT103 that high on the value scale for MITI, so you have given me a new perspective on that issue. I do hope they are of the mind to use some of their proceeds from the stock offering to make that a reality, as you have suggested.

  27. Hi Ohad, thanks for your response. So key to physician adoptation of continuous infusion is a superior efficacy compared to the other single-agent NHL therapies.

    Blinamab is clearly superior to Rituximab. I understand that Rituximab is mainly used in combination with chemotherapy. Limited monotherapy in refractory setting showed a response rate of less than 40% in folicular cell lymphoma, which contrasts to the 92% response rate from the 12-subject dosed at 60mcg of blinatumomab. In addition, blinamab also demonstrated very promising activity in mantel cell lymphoma for which rituximab plus chemo induced only 34% remission.

    How will blinatumomab compare to SAR3419? I look forward to your next write-up!

  28. Hi Joe

    I agree with the idea that better efficacy could override the inconvenient dose of administration.

    The reference for comparison depends on the setting. Bmab could compete with chemo regimens + rituxan as induction therapy, but it could also be evaluated as a post chemo maintenance therapy vs. single agent rituxan. We still don’t know whether Bmab will lend itself to being given in combination with other drugs, which could open up a myriad of additional options.

    SAR3419 is a black box. We’ll have to wait until ASH.


  29. hi ohad,

    ALTH has an FDA review expected next wednesday for their lymphona drug for PTCL that currently has not treatments.

    What are the chances that it will get a positve recommendation? Are you skeptical that it will get approved? Do you think the decision will be delayed or get an outright disapproval?

    Company insders are sellling the stock ahead of the
    decision (even if its through exercising their options).

    It seems like this drug will either make or break ALTH.

  30. please disregard my last question….I will only keep my questions and comments to those in your portfolio since thoes are the ones that you know alot about and recommend.

    Mygn is up more than 20 percent since you recommended it.
    Why did you recommend mygn a few days ago….was it a value play? You didnt go into much detail why it was a buy. Its too bad I hesitated.

  31. Actually, ALTH is in our potrfolio, although I rarely write about it. As far as I can tell, the recent FDA set of comments about the exact measurement on is not a show stopper. You are right, PDX will make or break ALTH. It will also be interesting to see the trial in NSCLC against Tarceva, where ALTH wisely excluded most of the patients who are likely to respond.

    MYGN is definitely a value play. It has a good product with bright prospects ( providing their IP holds up) and a good management. They won’t grow at rates we got used to but there is definitely a lot of value in the stock.


  32. How optimistic are you about allos getting an outright approval?

    Do you suggest we cut our exposure to allos before fda decision?

    Why hasnt allos found a partner to market the drug (are drug companies that skeptical of the chances of approval)?

  33. what do you mean by “interesting to see the trial in nsclc against tarcva, where alth wisely excluded most of the patients who are likely to respond”?

    why would it be wise?

  34. (ALTH)
    Just my opinion, but I wouldn’t touch their stock with a ‘ten foot pole’. The FDA isn’t going to be kind to these guys!

  35. Always glad to see a drug approved……appears the FDA gave them a ‘tuff going over, but ALTH prevailed in the final outcome. Congrats to those long the stock!

  36. With the favorable ODAC recommendation, the chances to see an approval on Sep 24th are very high in my opinion. From there, it won’t be long before someone pays $1B for the company with a drug with potential sales of $150M-$250M annually. Someone with a strong hematology franchise will be able to market the drug with a limited investment.

    In the NSCLC study, Allos excluded non smokers, who represent the lion’s share of patients harboring EGFR mutations. These patients typically have a dramtic response to Tarceva. Nevertheless, nobody factors in positive outcome from this trial.


  37. Ohad, where would you speculate on a price point for a MITI takeover should ALL results prove out in Phase III and MT110 continues to look promising? $2-3 Billion?

  38. It appears you are more optimistic about the drugs benefits than the panel otherwise their would have been unanimous recommendation for approval. The public doesnt seem very excited about its chances for approval.
    Can you elaborate on why nobody factors in the outcome of the nonsmokers?
    In percentage terms, what do you think the chances of approval are?
    If approved, what do expect the shares to trade for?

  39. Also, there seems to be so much insider selling recently, even if it were through the exercise of options.
    Why dont insiders wait to exercise those options when shares would trade higher if their drug were to be approved?

  40. Worried that allos will be the next dndn (of 20007).

    DNDN received a 13-4 yes vote on efficacy and 17-0 on safety in 2007 yet FDA still did not approve provenge in 2007.
    Allos recieved a 10-4 vote for approval so why should we expect allos drug to get approved why fda delayed the approval of provenge?

  41. Sam,

    SAC was short DNDN in 2007 and now they are long ALTH. That is why PDX will be approved. Not that I am a huge conspiracy theorist, but you just don’t have the same concentrated shorting by hedge funds that you had with DNDN.

  42. Who is SAC?
    How do you know they were short DNDN and now long ALTH?
    Is FDA approval already reflected in the stock’s price?
    It just appears that too many are expecting approval.

    Alth has 89.22 millions shares outstanding with a float of just 54.88 million shares.
    I am worried that those 30 million shares are stock options dilluting regular shareholders.
    What do you think about number of shares versus the float?

  43. Shelly – It’s hard for me to speculate on this issue. Too many unknowns.
    sam – ALTH’s data is not spectacular but the lack of other alternatives makes it very hard for regulators to turn it down, especially given the fact the trial was under SPA. I would say it has 80% likelihood of approval
    alex – Yes, I still like ARRY because they are very diversified and has at least 2 drugs with initial POC being developed in the hands of partners.


  44. Nice to hear from you again, Ohad.

    Do you believe alth stock price will go higher after approval or is approval already baked in the stock price?

    Would you suggest that we buy before or after approval?

  45. Given the recent stock brhaviour, anything is possible, but I still think there is value in getting a drug approved for a small indication which represents a highly unmet medical need. In other words – yes.

  46. Good answer on not speculating on a takeover price. I’m in no hurry and would rather see the company show progress on its candidates so that the price will already be alot higher when an offer is made (assuming they continue to be successful in their testing results). To this end it might not be such a bad thing if they don’t get to buy back MT103 NA rights back from AZN. If that is keeping MITI from being attrative as a takeover, better to have them continue to go it alone and (hopefully) achieve greater successes with BiTE candidates. If BiTE has teeth, the party hasn’t even started.

  47. hi ohad,

    I have been trying to do some research on alth (some could have been biased) and it appears the consensus is that they expect pdx to be approved and at worst just delayed. Moreover, large put spread have been bought/sold (not sure) on alth ahead of decision. I wish i could tell which because I remember there were a large purchase of put spreads on snta before it tanked.

    Thus, consensus of approval (perhaps may limit the initial upside and shares would tank just on any delay…makes it feel risky. (Snta is different, I know).

    Do you think it is better to put new money in incyte or allos?

  48. heymang,

    Results are in line with what most people expected. The good safety profile implies that they might be able to dose escalate MT110 to the clinically active doses, but it’s too early to tell.


  49. incyte is selling 18 millions shares at a price of 6.75 per share which was below the price it was trading for before the announcement.
    Is this a positive for incyte where it will help fund operations or is this a negative dilluting existing shareholders?

  50. hi ohad,

    do you own any of the stocks in your portfolio?
    do you plan on writing on a new biotech soon?

  51. Dear Ohad – I hope you can help m e. I am not an investor. My husband volunteered to participate in the Phase I study for MDX – 1342 (Medarex – now BMS) in Boston. His doctor (who was one of the principal investigators) and his participant contract assured him that all costs related to the study would be covered from the medication to travel. Just as he was due to undergo his fourth and final infusion, he began receiving bills from the hospital. He called his doctor leaving several messages. She never returned his calls. He cancelled the final infusion visit.

    He spoke with various people in the hospital billing department, from the clinical trials patient safety group, etc. protesting these charges. The hospital then billed his health insurance company. He alerted them and they ceased paying (I don’t know if they recovered any money). The hospital went after Peter again. Although he agreed to a payment plan he was contacted by a collection agency this week. This has been a real nightmare. We have contacted the state Attorney General.

    I am not web savvy but I have found that the trial was suspended apparently due to safety issues. We heard that several participants dropped due to immune suppression leading to infections. My husband contracted pneumonia during the study but persevered (unfortunately). I have failed to find any further information about he trial using clinical web sites. Since you follow these
    investigational drugs independently, I am hoping you know more.

    Do you know what happened to result in the trial’s suspension? I am also wondering if Medarex folded leaving the hospital to absorb the study costs – which it decided pass on to patients. Any information you may have would be greatly appreciated.

    Best wishes,

  52. Hi Ohad
    Do you still follow MITI?
    Do you still see a upside on this stock near $ 8 or should I sell it?
    Can you please advise.

  53. Hi Sam,

    Of course I still follow MITI. As you saw we sold some of our holdings in MITI but we’re still bullish re the stock long term. The current price isn’t that cheap but it is very hard to predict short term movements. All in all the company is progressing nicely and it’s competitors (Sanofi/Immunogen as well as Medarex) experienced setbacks. At ASH, I found the DLBCL data 3/6 CRs very intriguing.


  54. Hi Ohad
    Thanks for the reply.
    I can’t find your latest portfolio on the website.
    Do you still publish it?
    I am visiting your website after about an year.


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