Biotech portfolio update – 2013 summary and 2014 preview

Seattle Genetics (+65% in 2013)

In 2013, Seattle Genetics’ (SGEN) Adcetris reached market saturation in its approved labeling (relapsed/refractory HL), shifting market attention to label expansion. These include DLBCL, where Adcetris showed impressive efficacy in highly refractory patients (42% response rate, PFS of 5 months) and CTCL (73% response rate). Adcetris is in phase III for earlier stages of HL as well as CTCL, which are viewed as the next opportunity to grow sales. The company will outline its registration strategy for DLBCL in early 2014.

Partnered pipeline continued to mature with some programs generating promising data. The most advanced program is Celldex’s (CLDX) CDX-011 (glembatumumab vedotin), which recently started a pivotal trial in breast cancer and is not expected to generate meaningful data in 2014. Genentech reported positive results for 3 ADCs (out of a total of 8 programs). At ASH 2013, pinatuzumab vedotin (anti-CD22) and polatuzumab vedotin (anti-CD79b) had a response rate of 40%-50% in NHL at the highest dose, but this came at the price of considerable side effects. At AACR in April, Genentech presented phase I data for DMUC5754A (anti-MUC16) in ovarian cancer. There were 5 responses in the 29 patients who received the maximum tolerated dose. Although PFS was relatively modest, results are encouraging given the fact patients had platinum resistant disease.   

2014 catalysts

For Adcetris, the most important event will be preliminary phase III results from AETHERA (consolidation treatment after transplant) which are expected in 2H/2014. Other wholly owned programs are expected to read out, including updated phase I results for SGN-19A in ALL and NHL. Expectations for this program are limited given

the large amount of competing programs, including other CD19-targeting programs (Fc engineered antibodies, ADCs, CARs). 

The company is expected to report initial phase I data for SGN-33A (anti-CD33) and SGN-LIV1A (anti-LIV1) in AML and breast cancer, respectively. From an indication perspective, breast cancer appears to be more relevant for ADCs (especially ones that are using tubulin binders). AML is notoriously resistant to chemotherapy, and 2 other CD33-targeting ADCs have already failed in AML (Mylotarg and AVE9633). 

Seattle Genetics’ partnered pipeline is expected to have a busy 2014, with 16 programs in clinical development. Genentech’s pipeline is expected to generate a significant amount of data including results from a randomized study comparing its CD22 with CD79b ADCs, when added to Rituxan. Genentech may report phase I results for additional programs and advance some of the programs to phase II/III. 

Exelixis (+27% in 2013) 

Exelixis’ (EXEL) shares were range bound in 2013 but this will change in 2014, following phase III data for Cometriq (cabozantinib) in prostate cancer. In 2013, Exelixis started booking sales for Cometriq in a niche indication (Medullary thyroid cancer), with a quarterly run rate of ~$5M in the US. This represents a significant portion of the commercial opportunity reflected by the drug’s label (assuming minimal off label use).  

In terms of data release, Exelixis presented phase II results from a single arm trial for Cometriq in metastatic prostate cancer (discussed here). Results included a provocative bone scan effect (not seen to date with other drugs) coupled with improvement across several markers (pain, bone markers, circulating tumor cells). The median overall survival (10.8 months) is challenging to interpret without a control arm but it appears positive given the highly refractory patients.  

Cometriq also showed promising efficacy in RET-mutated lung cancer. Among 3 evaluable patients, 2 had an objective response and third experienced prolonged disease stabilization. 

Exelixis’ most advanced partnered program is cobimetinib, a MEK inhibitor partnered with Roche/Genentech. At ESMO 2013, Roche presented positive combination data with Zelboraf, demonstrating a response rate of 85% in 1st line melanoma patients with BRAF-mutated tumors. This is numerically superior to the 50% typically seen with single agent Zelboraf and comparable to what GSK presented for its MEK+BRAF combination. 

Exelixis initiated 2 additional pivotal trials for Cometriq in renal and liver cancer, respectively. Results are expected in 2015-2016.   

2014 catalysts

The most important event for Exelixis will be phase III   data in prostate cancer, representing a $1B opportunity in the US alone. In the absence of randomized phase II data, the market is pessimistic on the trial’s outcome. The 2nd most important readout will be from a phase III for cobimetinib in melanoma, expected in 2H/2014. Exelixis recently exercised its U.S. co-promotion option, which will enable it to commercialize the drug in the US alongside Genentech. Even when applying conservative market share assumptions, cobimetinib represents a ~$80M revenue opportunity for Exelixis. 

Additional data read-outs are expected for Cometriq across many indications (20+ open trials), the most important of which is RET-mutated lung cancer given the short time to market and high likelihood of success. Exelixis plans to start a pivotal phase II for this indication in the beginning of 2014 and may file for approval in 2015 based on response rate data. The commercial opportunity is still unclear but assuming 1000 eligible patients in the US translates to $100M in sales potential.

At its current valuation ($1.2B), Exelixis represents a good risk/reward profile. Cometriq’s opportunity in MTC and RET-mutated NSCLC coupled with the stake in cobimetinib should provide a valuation floor of $600M (excluding cash), if the prostate cancer trial fails. If the trial succeeds (30% likelihood), Exelixis will have global rights for a blockbuster with US sales potential of $1B, excluding additional indications. 

Arqule  (-26% in 2013)

As demonstrated by the stock graph, Arqule (ARQL) has been garnering little interest since the lung cancer phase III failure for tivantinib in 2012. In 2013, there were 2 important tivantinib-related events: Initiation of a phase III in liver cancer (METIV) and data publication from the failed lung cancer trial.

METIV evaluates monotherapy tivantinib in 2nd line liver cancer patients whose tumors express high levels of MET (tivantinib’s target). The trial was designed based on a positive survival signal in a randomized phase II, demonstrating a near doubling (3.8 vs. 7.2 months) in overall survival in MET+ patients. Results are expected in 2015. 

Shortly after starting METIV, Arqule reduced tivantinib’s dose by half due to safety issues (from 240mg to 120mg). It is unclear whether the lower dose will impact efficacy and to what extent, but one possible explanation is that liver cancer patients are poor metabolizers of the drug, which leads to higher exposure compared to other patients.


In September 2013, Arqule presented data from the failed lung cancer trial. Tivantinib did not have a survival benefit but retrospective analysis demonstrated a statistically significant survival difference (9.3 vs. 5.9 months) in patients with high MET levels. This suggests that MET inhibition is a relevant target in NSCLC and that tivantinib’s failure stems from inclusion of the wrong patients in the study. 

2013 saw the publication of several scientific papers which raise doubts about tivantinib’s mechanism of action. Some groups claim that tivantinib’s anti-cancer effect is mediated by modulation of additional targets and that MET inhibition is not necessarily the drug’s primary mechanism. Two examples can be found here and here.     

2014 catalysts 

In 2014, Arqule will present results from another phase III trial for tivantinib in 2nd/3rd line NSCLC Japanese patients (The ATTENTION trial, run by Kyowa-Hakko). A survival signal in MET-positive patients will validate the signal from Arqule’s lung cancer study and could re-open a path in lung cancer (at least in theory). 

Tivantinib’s main competitor is Roche’s onartuzumab (Metmab), an antibody targeting MET. It is already in phase III for MET-high NSCLC with data expected in 2014. This means that even if Arqule and its partner, Daiichi, start a new trial in MET+ NSCLC, patient recruitment and market penetration will be challenging.  

Another open issue is how tivatinib’s benefit compares with that of onartuzumab. A cross-trial comparison favors onartuzumab, which showed a survival benefit of almost 9 months (12.6 vs. 3.8 months). Tivantinib had a ~3.5 months benefit (9.3 vs. 5.9 months). Onartuzumab’s benefit is impressive but should be viewed cautiously as it is based on a small subset (42 events) whereas Arqule’s data set is much larger (153 events). In addition, some of the effect seen in the onartuzumab trial is due to a significant imbalance in percentage of EGFR mutated patients (20% in the onartuzumab arm vs. 7% in the control arm). Because all patients received Tarceva, an EGFR inhibitor, one would expect the Metmab arm to be superior solely based on Tarceva’s effect. Moreover, Arqule’s data set implies MET inhibitors potentiate EGFR inhibitors in EGFR mutated NSCLC, which may further explain Metmab’s dramatic difference. 

If ATTENTION shows a similar survival benefit in MET+ patients, doing a phase III in MET+ NSCLC will take at least 2 years to complete and even if the outcome is positive, it is unclear whether it will be better than Metmab’s benefit.
Arqule has 2 programs in phase I: ARQ092 (Akt inhibitor) and ARQ087 (FGFR inhibitor). It is still hard to ascribe any value to the drugs, as they are in early stage development with multiple competing programs. I am more optimistic about ARQ092 given the differentiated clinical profile that included hyperglycemia (a proof of deep Akt inhibition) without severe rash (discussed here). I am less optimistic about FGFR inhibitors that do not inhibit VEGFR2, given promising data for Clovis’ lucitanib (discussed here).

I plan on holding the stock through 2014 as a cheap (market cap of $135M, ~$90M in cash) phase III biotech supported by a positive phase II signal and potential upside from 2 additional clinical assets.

Array Biopharma (+26% in 2013)

For Array (ARRY), 2013 was packed with trial initiations and early stage deals. Although pivotal data read outs will start only in 2015, the company has a diversified pipeline of early and mid-stage programs (partnered and wholly owned), on top of multiple preclinical partnered programs (with Celgene, Genentech, Clovis).

The company’s most advanced assets remain MEK162 and selumetinib, 2 MEK inhibitors partnered with Novartis (NVS) and AstraZeneca (AZN). During 2013, each compound started 3 phase III trials in non-overlapping indications: BRAF melanoma, NRAS melanoma and ovarian cancer for MEK162, KRAS+ NSCLC, thyroid and uveal melanoma for selumetinib.

In 2013, Array presented clinical results for its lead proprietary program, ARRY-520 (Ksp inhibitor), and outlined its registration strategy in multiple myeloma. The latest clinical update at ASH showed modest single-agent activity and an acceptable safety profile in combination with approved agents. The company also showed data on AAG-1 levels as a biomarker for patient selection, where low levels appear to correlate with response to the drug. Even after breaking down efficacy per AAG-1 levels, response rate improves to 19-24%. 

In July 2013, Array released positive phase II results for ARRY-502 in mild/moderate asthma. The drug led to a modest benefit (FEV1 decrease of 3.9%) in the entire patient population. The effect was more pronounced (6.8%) in a prospectively-defined subset of patients. The effect in the overall population is lower than that of Singulair (6-8%), but it can still be viewed as clinically meaningful, especially in patients who stop responding to Singulair. There are several promising investigational treatment for asthma but they are all antibodies that require injection and target more severe stages. Given ARRY-502’s benign safety profile, the novel mechanism and the fact it is an oral drug, it may have value in milder cases.     

2013 saw 3 early stage deals with Celgene (CELG), Oncothyreon (ONTY) and Loxo. The deal with Celgene was for a discovery program around an inflammatory target and included an upfront payment of $11M. The deal with Oncothyreon was a co-development pact for ARRY-380, a clinical- stage HER2 inhibitor for breast cancer, with an upfront payment of $10M (discussed here). The deal with Loxo was for a selective inhibitor of TrkA, traditionally involved in pain and inflammation but recently implicated in cancer. 

2014 catalysts 

For the MEK pipeline, 2014 will be a transition year without pivotal data although both MEK162 and selumetinib are being evaluated in tens of clinical trials. Results from these trials may open up additional indications.

Array plans to start 2 pivotal trials for ARRY-520 in multiple myeloma. A single agent trial in low-AAG patients may serve the basis for accelerated approval (similar to Kyprolis) and a randomized phase III trial in combination with Kyprolis will be used for obtaining standard approval.      

Array is trying to outlicense 2 wholly-owned programs after demonstrating phase II proof of concept: ARRY-502 for asthma and ARRY-797 for osteoarthritis. The market is skeptic regarding Array’s ability to get meaningful deals for both agents given the relatively limited effect for ARRY-502 and cardiotoxicity concerns for ARRY-797. Any partnering news for the 2 programs is currently not priced- in  and represents potential upside.

Visibility for earlier stage partnered programs is limited but it would be reasonable to expect several data readouts during 2014. These include 4 compounds partnered with Genentech, the most advanced of which (GDC-0068, Akt inhibitor) may have phase II data in prostate cancer. The 3 other programs are 2 Chk1 inhibitors and an Erk inhibitor (GDC-0994). Combination data for ARRY-380 in breast cancer may be presented in December.

Curis (-23% in 2013)

In 2013, Roche’s Erivedge continued to grow in the US  with sales of ~$50M for the first 9 months (Curis [CRIS] has a 5+% royalty stake in Erivedge). In mid-2013, the drug was approved in Europe and Australia, which should further accelerate sales growth.  Roche also initiated a new trial for Erivedge in AML and MDS. This is the first company-sponsored trial in an indication other than basal cell carcinoma (BCC) since Erivedge’s failures in colon and ovarian cancer.   

Curis ended 2013 with a negative sentiment around its development pipeline. CUDC-427 (IAP inhibitor) was put on clinical hold following a death of a patient who participated in the drug’s clinical trial. Earlier in 2013, CUDC-427, licensed from Genentech, demonstrated preliminary signs of efficacy in phase I (2 complete responses in ovarian cancer and lymphoma patients). At ASH 2013, Phase I results for CUDC-907 showed only limited efficacy in blood cancers.

2014 catalysts 

Curis’ most significant 2014 event is data for Erivedge in operable BCC, which may significantly expand the drug’s market potential. The focus will be on whether Erivedge’s safety/efficacy ratio is sufficient for approval. Initial data in AML may also be available. Following the approval in EU and Australia, royalties are expected to increase on a quarterly basis.

Curis will also provide an update on CUDC-427’s clinical hold and initiate new studies if the hold is removed. Curis’ partner, Debiopharm may present monotherapy and combination data with Debio 0932, an oral Hsp90 inhibitor.  

Morphosys (+91% in 2013)

In 2013, Morphosys signed 2 impressive deals for MOR103 (anti-GMCSF) and MOR202 (anti-CD38) within the same month. MOR103 was licensed to GSK (GSK) for an upfront of $29M and $550 million in milestones. MOR202 was licensed to Celgene in a co-promotion deal with an upfront payment of $152M (including an equity investment) and $818M in milestones. Such remarkable economics for a phase I asset with early clinical data demonstrates the excitement around CD38 antibodies in myeloma.

Morphosys’ third proprietary program, MOR208 (anti-CD19 Fc engineered antibody from Xencor), was advanced to 2 phase II trials in ALL and NHL. Phase I results in CLL demonstrated a 30% response rate, which compares unfavorably to the 70-80% response rate seen with other new agents such as Imbruvica (ibrutinib) and ABT199.

Morphosys’ partnered pipeline continued to progress and now includes 16 antibodies in clinical development. Morphosys retains only modest economics in these programs, but the cumulative value is significant as many of them represent multi-billion dollar opportunities. The most significant event was the initiation of a pivotal trial for Novartis’ bimagrumab (anti-ActRIIb) in a rare muscle wasting disease. The antibody is being evaluated in additional more prevalent indications (COPD and cancer related  cachexia).

2014 catalysts

Going forward, Morphosys’ most significant upside potential will be in MOR202, which should have phase I data in 2014. To date, Morphosys did not publish any clinical data for the antibody although the rich deal terms imply results are positive. The data will be compared to results generated by Genmab’s daratumumab and Sanofi/Immunogen’s (IMGN) SAR650984.

Visibility is limited for other partnered programs, but some may have phase II read- outs during 2014. These include Novartis’ anti-C5 antibody for ophthalmology and J&J’s (JNJ) guselkumab, which may be Stelara’s successor in psoriasis. Stelara is threatened by Novartis’ IL-17 antibody, which demonstrated phenomenal phase III results.  It still remains to be seen whether selective inhibition of IL-23 by guselkumab is more effective or safer than Stelara’s dual IL-12/IL-23.

Incyte (+198% in 2013)    

2013 was Incyte’s (INCY) 2nd year as a commercial organization, with healthy sales growth from 2012 levels (~$225M vs. $136M) for Jakafi, the 1st ever approved drug in myelofibrosis. Jakafi sales in the US reached a quarterly run rate of $60M and royalties from Novartis were $8M in Q3. The company also emerged as a more diversified story with multiple data readouts for Jakafi as well for its maturing pipeline.  

At ASH 2013, Jakafi continued to show an impressive survival benefit. The benefit appear to diminish with longer follow up but the signal is still strong, especially given  the crossover design the small sample size. Incyte submitted a sNDA in order to add the survival benefit to Jakafi’s FDA label.

Jakafi’s competitive landscape improved following Sanofi’s decision to terminate development of its JAK1/2 inhibitor, fedratinib, due to safety concerns. Fedratinib was Jakafi’s most advanced competitor with comparable efficacy. Gilead’s momelotinib is now the most advanced JAK 1/2 in development, currently in head to head randomized phase III trial vs. Jakafi.

Jakafi’s most importat data read out was from a phase II trial in pancreatic cancer. Although Jakafi did not improve survival in the overall population, there was a strong signal in a pre-defined undisclosed subset. Incyte did not reveal how this subset was selected, but it appears not to be a molecular marker of the tumor (Might be a blood marker like LDH, CA19-9 or a clinical parameter).

Incyte presented results for its Jak1 selective inhibitor in 3 indications: Rheumatoid arthritis, myelofibrosis and psoriasis. RA is viewed as the most important indication for Jak1 inhibitors due to what appears to be a “TNF-like” efficacy but with a better safety profile compared to Pfizer’s Xeljanz (pan-JAK inhibitor approved for RA).

INCB39110’s RA trial was small and included 4 doses, all demonstrated some clinical benefit. Although the highest dose had a strong performance (ACR 20/50/70 of 91%/64%/55% vs. 33%/17%/8% for placebo), there was not a clear dose dependent efficacy at the lower doses. Importantly, INCB39110 had a clean safety profile with no myelosuppression or infections (with a limited follow up).  

INCB39110’s MF data was underwhelming relatively to Jakafi in terms of spleen reduction, which implies that JAK2 has an important role in MF (as opposed to RA). Nevertheless, the drug had an effect on symptoms with hints for a favorable effect on anemia (increase in hemoglobin levels), which might make it suitable for patients without an enlarged spleen or those who cannot tolerate Jakafi due to myelosuppression.

Incyte’s MET inhibitor (INC280, partnered with Novartis) is still an under-appreciated program despite being actively pursued by Novartis. In 2013, Novartis started a phase II in “MET-dysregulated” liver cancer (still unclear how MET dysregulation is defined), triggering a $25M milestone payment to Incyte. Novartis started 4 additional combination trials during 2013. 

2014 catalysts

Jakafi’s sales trajectory will be of high interest in 2014, as investors are hoping to see continued growth in MF as a result of increased market penetration (especially in less severe cases)  and treatment duration. An FDA decision on inclusion of the survival benefit in Jakafi’s label is expected in 1H/2014 and could be an important driver.

Incyte expects to present results from 2 phase III trials in polycythemia vera (PV), another bone marrow disease where Jakafi showed phenomenal activity in phase II. The likelihood of technical success in PV is very high but there is still a debate about market potential and the true unmet need in PV, which is more prevalent than MF but also less severe in most cases. Incyte’s management stated that the PV opportunity is as big as MF. This can be validated only in 2015 after Jakafi’s is approved in late 2014. As I previously discussed, I expect $1B in Jakafi global sales based solely on MF and PV, using fairly conservative assumptions.

Incyte is expected to start a phase III for Jakafi in pancreatic cancer and disclose the patient selection criteria. Results from the phase II are expected at ASCO in June 2014.

Also at ASCO, Incyte is expected to present combination results for its IDO inhibitor, INCB24360. Although the drug had no activity in phase I, it is garnering a lot of attention due to the excitement around cancer immunotherapy as well as comments made by Incyte’s management on an ongoing combination trial in melanoma. Although the trial is a single arm study evaluating INCB24360 in combination with Yervoy, the company stated they are seeing a high response rate compared to historical data with Yervoy.

Baricitinib, Incyte’s JAK1/2 inhibitor for inflammatory diseases, is in several phase III trials for RA. The trials, run by Incyte’s partner, Lilly (LLY), may start to read out in late 2014.

Incyte is expected to shed more light on INCB39110’s development program. The most straightforward indication is RA, following the footsteps of Galapgos’ JAK1 inhibitor (GLPG0634), partnered with Abbvie (ABBV). Incyte already disclosed its plans to evaluate the drug in solid tumors such as lung and pancreatic cancer, with trials expected to begin in 2014.

The biggest question for INCB39110 is whether Incyte decides to partner the drug or wait until it has a large phase II data set. In line with the strategy for its JAK1/2 drugs, Incyte might split indications between INCB39110 and a backup JAK1 inhibitor INCB47986. As a benchmark, Abbvie paid Galapagos $150M upfront and has an option to in-license the program after phase IIb (will trigger a $200M payment).     

Synta (-45.6% in 2013)

Synta (SNTA) had a negative 2013 due to disappointing results from a phase II study evaluating ganetespib (Hsp90 inhibitor) in lung cancer. Preliminary data from this trial (GALAXY-1 trial) were the basis for the 2013 initiation of phase III in a subset of NSCLC patients with “chemo-sensitive” disease.  As the phase II data set matured throughout 2013, the survival benefit diminished to a point where it was not statistically significant. The company blames this deterioration on “geographical differences” and shows that excluding patients from Russia and Ukraine yields a statistically significant survival benefit.

Phase II trials are often used to identify patient subgroups (even retrospectively) who will benefit from a given drug. The problem with Synta’s strategy is that it involves too much data mining, relying on 2 subset analyses in order to reach statistical significance. As a result, probability of success is lower than what I originally thought.

Synta reported updated results for ganetespib in patients with HER2+ or triple-negative breast cancer (ENCHANT study). The drug led to objective responses in 3 of 4 (75%) HER2+ patients and in 2 of 11 (18%) patients with triple negative patients. Although these results show ganetespib has clear activity in breast cancer, the small sample size and the fact patients had not been treated with anti-cancer agents in the advanced stage/metastatic setting make it hard to assess the drug’s potential. In any case, it does not appear potent enough for as monotherapy for unselected patients. 

2014 catalysts

Synta is expected to provide updates from GALAXI-1 and ENCHANT-1 studies. Of the 2, only ENCHANT-1 is expected to have meaningful updates with new patients. The company will likely increase the size of GALAXY-2 and may conduct the first interim analysis during 2014.

Synta will also outline its strategy for breast cancer although it has stated in the past it would wait for a partner to pursue a registration program. The company has been mentioning a potential geographic deal (ex. US or Asia rights) for more than 2 years, so expectations on that front are low as well.

Ganetespib is being evaluated in over 10 additional clinical studies, most of which are investigator-sponsored trials. The most intriguing are 2 trials evaluating ganetespib as a single agent or in combination with Xalkori in ALK+ NSCLC. Hsp90 inhibitors, including ganetespib, have clear activity in this patient subgroup, but they are probably not potent enough to be pursued as monotherapy. The 2 ganetespib studies were initiated in April 2012, so both should have a reasonable amount of patients in 2014. Synta’s decision not to pursue ganetespib as monotherapy in ALK+ NSCLC, implies the drug is not potent enough on its own. Nevertheless, a 15-20% response rate coupled with positive signs in combination with Xalkori should be enough to justify a combination phase III.

In summary, I still view ganetespib as a promising drug but its activity is limited to a small minority of patients. In some cases, the activity can be explained by a specific Hsp90-addicted mutation whereas in other cases the effect cannot be attributed to a specific factor. Therefore, Synta’s strategy should shift to molecularly-defined niches, where ganetespib is added to mutation-specific inhibitors. These niches include some of the rare mutations in NSCLC (ALK, ROS, RET, TrkA etc.) where there is a strong rationale for Hsp90 inhibition as well as clinical or preclinical proof of concept. Each of these mutations are rare but have a cumulative prevalence of ~10% of cases.    

Celldex (+246% in 2013)

Celldex (CLDX) concludes a successful 2013 driven predominantly by pipeline progress and increased market awareness but also by clinical data. Data readouts included results for rindopepimut in glioblastoma (GBM) and phase I results for CDX-1127 (anti-CD27).

The rindopepimut trial evaluated the cancer vaccine in combination with Avastin in EGFRvIII-positive GBM in 2 cohorts: Avastin-naïve and Avastin-refractory. In the Avastin-naïve cohort, addition of rindopepimut resulted in a 4-month overall survival benefit but the sample size was very small and therefore unreliable. Response rate and PFS were also improved but the magnitude of effect was modest (3.7 vs. 2 months). In the Avastin-refractory cohort (25 patients), there were 4 cases of tumor shrinkage but the effect was transient in 3 cases and only 1 case was validated as a response by an independent reviewer.

CDX-1127’s highly anticipated phase I results included 42 patients. There was 1 complete response in a Hodgkin’s lymphoma patient and several cases of tumor shrinkage or prolonged disease stabilization. These preliminary results are encouraging and CDX-1127 fit well into the cancer immunotherapy theme but so far CDX-1127 does not look as potent as PD-1 antibodies. Its biggest value will be in combination with other immune-modulation antibodies, which is becoming a popular theme in the industry.  

In December 2013, Celldex initiated a phase III in breast cancer for CDX- 011 (glembatumumab vedotin), an ADC targeting GPNMB. The trial is based on positive phase II results demonstrating a survival benefit as well as superior response rates in patients with high levels of GPNMB. Of note, the trial compared CDX-011 monotherapy to an active control arm (chemotherapy), representing a high bar for efficacy. The strongest signal was observed in GPNMB+ TNBC, which is the phase III population.

Celldex initiated a pilot study for CDX-1135 (soluble complement receptor 1) in a rare kidney disease (dense deposit disease). Dense deposit disease is associated with a mutation in the complement pathway that leads to uncontrolled pathway activation. There are high hopes around CDX-1135 given the fact that the drug’s mechanism of action is similar to that of Alexion’s (ALXN) Soliris.

2014 catalysts

The most important catalysts for Celldex in 2014 will be interim analyses from CDX-011’s  and rindopepimut’s phase IIIs. Given the high unmet need in TNBC, Celldex chose response rate and PFS as co-primary endpoints. This is in contrast to other breast cancer pivotal trials where overall survival is the primary endpoint. The primary endpoint for rindopepimut is overall survival. Both analyses are expected to occur in 2H/2014.      

At ASCO 2014, Celldex is expected to present updated results for CDX-1127. Updated results will include expansion cohorts in melanoma and renal cancer, which were chosen based on the sensitivity of these tumors to other immunotherapies. Celldex will also present results for CDX-1135 in a small cohort of DDD patients.

Genmab (+172.5% in 2013) 

In 2013, interest in Genmab (GEN.CO) continued to mount thanks to daratumumab, an anti-CD38 antibody for the treatment of multiple myeloma. Although Genmab and its partner ,J&J, presented very little new data, excitement within the industry around CD38 as a target translated to better market awareness and price appreciation. In parallel, investors grew more skeptical about the commercial opportunity of Genmab’s marketed product, Arzerra (anti-CD20 antibody licensed to GSK).

Key 2013 events for daratumumab were mostly regulatory or competition-related. Following the 2012 licensing deal with J&J, Genmab did not report meaningful clinical data in 2013. At ASH 2013, the company reported strong efficacy from a phase I in combination with Revlimid but it is challenging to analyze the data given Revlimid’s strong efficacy as monotherapy and the small sample size.

As the leading CD38 antibody, daratumumab enjoyed a positive sentiment around CD38 antibodies. This was demonstrated by receiving a breakthrough designation from the FDA and a huge licensing deal between Celgene and Morphosys. Sanofi, which also has a CD38 antibody (licensed from Immunogen) reported encouraging efficacy as well.

Investors became less excited about Arzerra following results for Roche’s Gazyva (anti-CD20). Cross-trial comparison of the 2 antibodies in CLL clearly favors Gazyva as a more efficacious CD20 antibody with proven superiority over Rituxan. As the CD20 field is evolving, Arzerra is not doomed but its fate is unclear.    

2014 catalysts          

In 2014 Genmab’s shares will be subject to a “clash” between the excitement around daratumumab and the negative sentiment around Arzerra. Genmab and J&J are expected to announce a broad and aggressive development program during 2014. The first pivotal trial in relapsed/refractory myeloma, evaluating 2 regimens of daratumumab monotherapy, was already launched in 2013. Combination studies with Revlimid in earlier treatment lines are expected to be announced in 2014. A phase I evaluating daratumumab with other approved backbones (see link) is expected to begin shortly.

Results for competing CD38 programs from Celgene/Morphosys and Sanofi/Immunogen are also expected in 2014. Both programs are likely to start pivotal studies in 2014.

Infinity (-62% in 2013)                  

Infinity lost 75% of its market cap from the April 2013’s 52-week high. Although the company’s lead agent, IPI-145, (isoform-selective PI3K inhibitor) demonstrated high response rates in multiple blood cancers (CLL, iNHL) Infinity could not demonstrate a differentiated profile from Gilead’s (GILD) PI3K inhibitor (idelalisib). In addition, IPI-145 is competing with highly effective agents with different mechanisms of action such as J&J’s/Pharmacyclics’ (PCYC) Imbruvica and Roche’s/Abbvie’s GDC-0199. As a result, investors are now questioning the future role of IPI-145 in CLL and NHL.         

One potential differentiation is activity in T-cell lymphomas, with a 38% response rate in 26 evaluable patients. T cell lymphomas are irrelevant indications for idelalisib and other novel NHL agents, which do not modulate T cell signaling. IPI-145’s activity in this indication is attributed to modulation of PI3K- gamma.

In 2013, Infinity initiated a phase III in CLL and a pivotal single-arm phase II in indolent-NHL. Both studies are evaluating IPI-145 as monotherapy and replicate the registration strategy for Imbruvica and idelalisib, respectively.

2014 catalysts 

In 2014, Infinity is expected to report 3 important data sets. The company will report updated results for T- cell lymphomas in January and is expected to provide guidance on its plans to pursue these indications later in 2014. Two phase II trials in asthma and RA are expected to read out in Q1/2014 and H2/2014, respectively.

2014 is expected to be a quiet year in CLL and NHL, as pivotal results are expected only in 2015. Infinity’s competitors will generate a lot of late stage data which may put more pressure on the stock.

Ambit (+30.5% since May 2013 IPO)

Ambit (AMBI) concludes 2013 as a mixed year for its lead agent, quizartinib (Flt3 inhibitor for AML). From a clinical standpoint, the company generated positive data which enabled it to identify an optimal dose range with good efficacy and a favorable safety profile. From a regulatory standpoint, Ambit experienced a setback after the FDA’s refusal to consider approval without a full-blown phase III. 

At ASH 2013, Updated results for lower doses (30/60 mg) of quizartinib demonstrated an impressive response rate in relapsed refractory AML patients with Flt3 mutations. Despite demonstrating a CR in ~50% of patients, most patients had a CRi (CR with an incomplete neutrophil recovery). In addition, responses were short- lived in the majority of cases.

Although not ideal, quizrtinib’s activity in AML is unprecedented for a single agent, let alone a targeted therapy. Refractory Flt3+ AML has such a poor prognosis (survival of 2-3 months) that even a 2-month survival benefit should be viewed as clinically meaningful. Moreover, a drug with a high CR rate can be patients’ only hope to reach stem cell transplant, the only treatment option with a favorable long-term outcome.

Despite the strong efficacy, the FDA refused to consider accelerated approval for quizartinib in last line patients based on the drug’s monotherapy data. The FDA did not view CRi as a relevant surrogate endpoint for long term clinical outcome and required Ambit to conduct a randomized phase III before approval.

At ASH 2013, Ambit also reported encouraging combination data, demonstrating a good safety profile and intriguing signs of efficacy In 1st line AML patients. The CR rate for was 65% across the different regimens, including a 100% CR rate in 7 patients with FLT3 mutations.        

2014 catalysts

Ambit’s most important event in 2013 will be initiation of a global phase III randomized study of quizartinib in relapsed FLT3+ patients. The trial, expected to start in the coming months, will compare quizartinib with chemotherapy with overall survival as the primary endpoint. Patients on the quizartinib arm who undergo a transplant will receive the drug as maintenance therapy, which may further enhance the drug’s benefit.

Ambit also expects to start phase I for its CSF1R inhibitor (AC708). CSF1R has emerged as an important target for cancer immunotherapy. In contrast to most immunotherapies in clinical development that target T cells, CSF1R inhibitors target macrophages, especially those that reside in the tumor and support its growth.  There are several CSF1R programs in development including a small molecule from Daiichi (PLX3397) and an antibody from Roche. Array’s/Celgene’s CSF1R entered phase I in 2012 but its development was subsequently discontinued.

Ambit looks like an ideal acquisition target given its low market cap (<$200M) and a wholly owned program in phase III. Quizartinib is exactly the type of product large companies are looking for:

1) A late stage product with a derisked regulatory route

2) Compelling phase II efficacy in a biomarker-defined subset

3) Data readout within 18 months

4) A large market opportunity (~10k FLT3+ AML patients in developed countries)

5) Sufficient funds to complete the trial

As a result, there is a reasonable likelihood for Ambit to get acquired during 2014. A licensing deal is also an option but less likely given Ambit’s market cap.

Esperion (-5% since June 2013 IPO)    

In 2013, Esperion (ESPR) presented positive results for its LDL-C lowering drug (ETC-1002) from multiple trials. A phase II in statin-intolerant patients demonstrated a 29% placebo adjusted reduction. Based on these results, Esperion launched a phase IIb study evaluating ETC-1002 with or without Zetia vs. Zetia alone. Another trial which evaluated ETC-1002 in combination with Lipitor, demonstrated an additional 22% reduction in LDL-C levels.   

As an oral drug with a mild safety profile to date (follow up is still limited), ETC-1002 may be used as another treatment line or as add-on to existing oral drugs before moving to injectible PCSK9 antibodies. The market for LDL lowering drugs is huge, so even a minority share in statin-intolerant patients (2 million in the US) represents a significant market.

2014 catalysts

The most important event will be phase IIb results in statin intolerant patients. If positive, the data will guide Esperion’s registration strategy in this indication. Potential strategies may include a head-to head trial vs. Zetia or a combination with Zetia. ETC-1002 may have a broad metabolic effect on glucose levels, weight and blood pressure. Any additional signal in the phase IIb beyond the LDL effect will boost the drug’s attractiveness.

Clovis (+255% in 2013)      

Clovis  (CLVS) concludes 2013 with a pipeline of 3 advanced-stage oncology programs, each characterized by a strong clinical proof of concept in molecularly defined patient populations.

CO-1686, a mutation-selective EGFR inhibitor, is the company’s lead asset which is responsible for the share price appreciation in 2013.  In a small cohort of NSCLC patients with T790M EGFR mutation (confers resistance to approved EGFR inhibitors), the drug had a response rate of 67% (6 of 9 patients). Importantly, patients reported minimal skin and GI toxicities, which are common with other EGFR inhibitors. If corroborated in larger trials, CO-1686’s clinical profile should enable Clovis to reach the market with a single arm phase II trial.

CO-1686’s main competitor is AstraZeneca’s AZD9291, which also demonstrated impressive activity in T790M+ NSCLC (58% response rate). With the caveat of cross-trial comparison, both drugs look promising although the Clovis study appear to include a more challenging population, as patients were recruited immediately after failing available EGFR inhibitors and most patients were 3rd line or beyond. In addition, EGFR-related side effects were more common with AZD9291 (but safety was still much better than Tarceva). 

Clovis recently acquired EOS pharma for its dual VEGFR/FGFR inhibitor, lucitanib. Lucitanib, which is partnered with Servier in Europe, is the only drug to date that demonstrated meaningful single agent activity in FGF-dysregulated cancer. Of 12 evaluable patients, 6 (50%) achieved a partial response (5 confirmed) and 5 achieved disease stabilization with a median progression-free survival (PFS) of 9.4 months.

As I previously discussed, lucitanib appears to have the right spectrum of activity by selectively targeting VEGFR2 and FGFR1. Other FGFR inhibitors in clinical development are either too selective (no VEGFR activity) or too promiscuous. This makes Clovis the leader in FGF-aberrant tumors, which represent a substantial untapped commercial opportunity across many tumor types (Breast, squamous NSCLC and bladder cancer)

Clovis’ PARP inhibitor, rucaparib, also demonstrated encouraging signs of efficacy in patients with BRCA-mutated tumors (Breast, ovarian and pancreatic cancer). The competitive landscape for PARP inhibitors is challenging, with multiple active compounds and limited differentiation among them. Clovis recently started a phase II biomarker study in ovarian cancer patients with the goal of identifying new biomarkers that predict sensitivity to PARP inhibitors.

2014 catalysts

2014 will be a crucial year for Clovis with updates for CO-1686 and lucitanib.

CO-1686 is expected to have multiple data updates, the first of which will occur in March. Key focus will be on whether responses are seen in additional patients and durability of response. Clovis has already decided to start a pivotal single arm phase II in 2nd line T790M+ patients in 1H/2014. A phase II in 1st line EGFR mutated NSCLC is also expected, and positive results may lead to a head to head pivotal trial vs. Tarceva. AstraZeneca is expected to follow a similar path.  

Updated results from an ongoing European trial for lucitanib are expected to be presented during 2014. In addition, Clovis and its partner Servier will start 3 phase II trials in FGFR1-amplified squamous-NSCLC and breast cancer. If lucitanib’s activity profile is corroborated in additional patients, Clovis will end 2014 with a breakthrough drug in pivotal testing with a blockbuster potential and practically no competition.

Portfolio updates

We are adding a 2nd position in Ambit as a cheap phase III hematology asset. We are selling one of our 2 positions in Synta following the disappointing GALAXY-1 results. We intend to maintain a significant cash position going into 2014 in anticipation of a correction in the biotech sector.  


Portfolio holdings – January 6th, 2014

biotech portfolio - Jan 6 2014 - after changes

biotech ETFs - Jan 6 2014

101 thoughts on “Biotech portfolio update – 2013 summary and 2014 preview

  1. Kirk
    thanks for the replay and detail.
    Yes, i was familiar with Vogelstein and some of his work.
    I can really see the scientific merits and the importance of this, but I am still not so convinced about the business model.
    Unless FMI turns into a drug developer or partners with drug developers?


  2. Bouschka- As I wrote in the past I don’t have any insights on ONTX. Without a strong p2 data set, i don’t think their chances are good but i haven’t delved into their data seriously.

    Chris- that was my initial respons to EXEL as well but they managed to pull it off nicely this time (good price).

    Aviv – people interpret BMS’ decision to go with nivo monotherapy as a bad sign for the nivo+yervoy combination



  3. Hi Ohad,

    I like Biotest AG w/ the CD4 antibody (right partner here) and CD-138 ADC, which had nice combo data at 100mg dose in MM, on par w/ dara ( small #s, cross trial).

    What is your take on them?


  4. Ohad – If BMY is having issues with nivo+yervoy combo, it could be a good thing for Innate Pharma as it might increase the importance of lirilumab to BMY. That’s only if lirilumab combo data with nivo and also yervoy reads out positive at the end of this year of course. I’m still holding Innate, though I may take at least some chips off the table at some point before key combo data comes due at end of this year.


  5. Care – Biotest is an interesting story, they are nicely branching out of blood derived products to propeitary antibodies. They were able to partner their CD4 antiobody to Abbott with a fairly small p2 data set. Regarding BT-062, I agree results wit Rev were robust, better than one usually sees in this setting especially in Rev relpased/refractory patients. I still think it will be hard for BT-062 to beat CD38 antibodies. The real wild card with 062 is solid tumors, where a p1 just started. I you want to bet on BT-062, IMGN may be a safer as well as more focused way (they have opt-in rights).

    mcbio – There are so many variables in the equation that it’s hard for me to reach any conclusion. It is plausible that the anchor will move fromYervoy to PD-1 across all the indications, so the KIR/PD-1 study may generate a new combo. BMY has several other immuno-oncology programs, each one may be relevant in a different setting.

    Bridgette – Good luck, I am still waiting for a better entry point.



  6. Hello Ohad,

    Medigene has acquired Tiranta, both are located in Munich. Do you see potential in the drug candidates of Trianta?

    “Trianta is at the forefront of personalized T cell immunotherapy, focussing on next generation antigen-tailored dendritic cell (DC) vaccines, T cell receptor (TCR)-based adoptive cell therapy and T cell-targeted antibodies (TABs). Trianta’s DC vaccines are being evaluated in two ongoing, externally funded investigator-initiated trials”


  7. Hey Ohad
    have you looked at PRAN again, PII results are expected this quarter. I know other companies (big pharma, is it BMY or AstraZ) are pursuing a similar strategy. What’s your perspective on PRAN and their probability of positive results for the two trials. Valuation is at around $350M now. Thanks a lot


  8. Martin – Agree, I was asking myself the same question a couple of days ago ;). I couldn’t find anything substantial to justify the current valuation, as clinical data for XLRN’s programs.

    Mike – Agree, ESPR’s safety profile looks attractive but bear in mind exposure to date has been limited to 2-3 months in most trials.

    Steve – They continue to bring good early statge deals so I guess the folks at the discovery depts of pharma companies view their platform as interesting. I still couldn’t find anything compelling in their pipeline.



  9. David – I think both are overvalued based on early stage unvalidated assets while their lead programs respectively are not attractive enough to support a ~1B market cap. Of the 2 I prefer MGNX, which has a truly innovative and exciting bispecific platform with a lot of partnerships. The problem with MGNX, similar to most biotech IPOs is valuation, which I find very hard to justify.



  10. Agree with you on valuation, nothing is cheap in bio land. In the IO space, it is tough to find investable bio company, personally not interested in mrk or bmy type.


  11. Hi Ohad,

    Seems correction is here! and what a breather 😦
    Is BLUE attractive at this level? and which stock of your portfolio you consider attractive at this point?

    Thanks as always


  12. Robert – Actually no. It is extremely hard to draw anything definitive from a single case study where it was hard to attribute improvement in the various metrics to the drug.

    Chris – I expect a much more aggressive correction to take place later this year- That’s just a guess but the market needs a breather indeed imo. I like BLUE despite the high valuation and believe the lentiglobin program has a decent chance to succeed. I admit most of the stock sin my portfolio have rich valuations. AMBI and ESPR still look cheap to me, so is CLVS. ARQL trades around cash but there is a major overhang over tivantinib as a cMET inhibitor.



  13. Alex – I still view CD38 antibodies as a multi-billion $ segment and dara should have a leadership position inthat market. What worries me is poor market performance for Arzerra so this may pressure shares in 2014. Other platforms/programs are pure upside.



  14. Hi Ohad,
    the market values PBYI at more than $3.5 billion primarily on promising PII results of Neratinib in HER2+ breast cancer (PBYI stated possible superiority over Herceptin last December and has tripled since). You said that ARRY-380 is 2 years behind but in theory at least as promising given that EGFR do more harm than good in HER+ BC. Why the market dosen’t give ARRY-380 any credit? Especially ONTY looks cheap if they can achieve POC in an ongoing PII. Recently PBYI declared they own meaningful patents covering T790M… any impact on CLVS?

    Do you think AAG is a valid marker for ARRY-520… I am a bit concerned that AAG levels increase in response to stress, inflammation and the cancer itself: Isn’t it possible to monitor AAG and adjust the dosing?

    Many thanks!


  15. ipollit – The only thing ARR-380 is lacking is clinical activity. The p1 had a signal but whether the drug is potent enough is still unclear. Another key question is whether ARRY-380 has activity in HER2 kinase mutations in lung and breast cancer (neratinib does).
    PBYI’s patent news is a good surprise because it might enable the company to collect royalties from irreversible EGFR inhibitors in Tarceva failures. I still doubt if the patent is upheld when the matter reaches to court. In addition, I don’t know if the patent covers 1st line use (Tarceva naive).

    Re:AAG , I share your concern. Even if AAG is validated as a biomarker response rate as monotherapy isn’t that great (<25%).



  16. Arry520….obviously they believe in this molecule… will probably have to be approved as combo therapy…something that works…its mech. of action is different from everything else…seems to play nice in the sand box with the other meds(toleration/synergistic)

    As deep as array pipeline appears to be…late stage it looks strictly like its down to mek inhibitors…which I feel have a good chance…all late stage meks are signed on to big oncology players….exels cobi with genentech…arry’s selumetinib with az…and their mek162 with nvs….players believe in mek and one has been approved mekinist …nvs thinks mek162 is best in class


  17. Hi Ohad,
    Combining a couple of themes, ARRY and bio pricing, how are you evaluating ARRY at current levels (or anyone else with a rationale to share)? I am tempted to add to position at current price under $5.
    As always, thanks for all you and the community contribute.


  18. Hi Ohad, I have one question regarding Ambit: What do you think is the probability that the PIII study for quizartinib will reach an OS advantage of 2 months or more, and that the drug will be approved? How do you asses the probability – greater than 50%?

    Many thanks!


  19. Ohad: have a listen to ARQL presentation at Leerink as they give some buzz for their P1 AKT/FGFR inhibitors that read out later this year. They say they are already seeing signs of efficacy with both. Also seem to imply their AKT is differentiated from the competition and FGFR may not be differentiated but, as a whole, FGFR becoming hotter target. Also mentioned for the first time they are working on an NQ01 inhibitor with U.S. academia (never heard of this target before).


  20. Robert – ARRY-520 may be valuable as an add on to Velcade or Kyprolis but as monotherapy it appears to have only modest activity. For me, this decreases likelihood of approval and market penetration. Agree about MEK as their most valuable asset. Any positive signals from other partnered programs (ARRY-380, Ventirx, Erk) are pure upside.

    Jeff – I feel comfortable with ARRY’s valuation solely based on te stake it has in its MEK programs. Both AZN and NVS are pursuing several lucrative markets where effective treatments can have cumulative sales of $1-$2B per drug.

    Bridgette – I don’t offer consulting services but am happy to help subject to time constraints.

    Hubert – I assume 50% likelihood of p3 success given the high CRi rate and the trial design which allows maintenance treatment in patients who undergo stem cell transplant.

    mcbio – I like ARQL’s Akt program and based on their good PD signs last year they should see responses in PI3K/Akt mutated tumors (similar to what was seen with AZD5363). Other than that it’s hard to assess the program until we see actual results. I also wasn’t aware of the NQ01 program.



  21. For people who worked on cMet kinase knows the quality of ARQL’s compound is not great, ARQL claimed selective cMet compound is not very potent cMet inhibitor, a kinase inhibitor with IC50 around 300 nM in enzyme assay is not going to be potent in cellular assay, the structure of the compound is ugly and can be easily oxidized. I would be careful with Arql’s akt and fgfr inhibitor, research through their akt and fgfr patent publications, I found a similar story to their cMet claim.


  22. The concerns around tivantinib as a cmet inhibitor are justified but it appears that they have 2 clinical signals demonstrating efficacy in met+ tumors (MARQUEE and p2 liver cancer).
    Don’t know whether there are any read-across to the Akt and FGFR compounds. P1 for the Akt drug demonstrated a textbook Akt inhibition profile (hyperglycemia+ rash) so it’s hard to claim there is no target inhibition there.



  23. Found this gem on $ABLX:

    From the article: “The findings have been so tantalizing that researchers started asking a simple question: if one checkpoint blockade drug could do so much for a small proportion of patients, could a cocktail of several such drugs — or a combination of checkpoint blockades with chemotherapy, genetic treatments and other types of immune therapies — help more of them?”

    Some background: I own shares of IMUC because their Phase I results for GBM were amazing. It’s a shame the Phase II trial didn’t produce the desired results, but I’m still in it because there really isn’t much of an alternative for GBM.

    I’d like to know, would addressing either of the checkpoints (CTLA-4 or PD-1) from the article work for GBM, or would big pharma need to find another checkpoint blockade? My thinking is that IMUC has a great chance to get a partner for ICT-107 because so many of the big pharmas would compete with each other to get an immunotherapy match to their checkpoint blockades.

    Also, has ABLYF’s deal with Merck changed your thinking on Ablynx?



  24. Hey Ohad
    what do you think of the results for PRAN today? The stock declined steadily from the highs a few weeks back ($13) all the way to $7.20s yesterday, and popped up nicely today. Are the results a turning point and proof PRAN can tackle other cognitive diseases?
    Thanks for sharing your views


  25. Davidmmp: Sounds like you work for an ARQL competitor (or used to) and are most likely biased. The OS signal in MET-high patients across multiple trials speaks for itself. In any event, the fact that ARQL shares barely trade above cash speaks to the negative sentiment out there for ARQL. I am long and happy to gamble here.


  26. mcbio, you are right, I used to work on a few kinase projects and not impressed with the quality of their compounds. but agree it might be a good short term trading stock based on their cash level, but I would not hold it for long term.
    Appears you like IO space, have you looked at NLNK’s Ido program?


  27. Davidmmp: I don’t think there has been a lot of buzz out there for IDO as a target. And, given that I don’t play P3 binary events, I certainly want no part of NLNK in front of their key boom-or-bust P3 binary event on their lead drug, particularly given the $1.2B market cap. Seems like a terrible risk-reward to me but I’ll concede that biotech can be unpredictable and you never know. Just something I personally have no interest in. Give me ARQL at about 1/10th the valuation. ; )


  28. Pete – Combining immune checkpoints with other immunotherapies is very popular, no doubt. Of all forms of treatments, my assumption is that cancer vaccines will have the lowest priority. This is why you see more antibody combination (PD1+LAG3, PD1+KIR etc.) other immunotherapies (PD-1+IDO) or targeted therapies (PDL1+Avastin, PDL1+Zelboraf.).
    Re Ablynx, the deal was impressive but it didn’t change my mind.

    Dan – Not a big expert on CNS trials but from where I sit this looks more like data manipulation than real breakthrough, see Adam F’s write up:

    chris – SNTA’s results are very intriguing and represent a new approach for targeted delivery but their programs are still very early so it’s hard to assign real value to them unless they strike a deal.



  29. Hello Ohad
    do you follow Hybrigenics ?

    I wonder if its a good strategy to sell the entire portfolio and wait for the biotech decline, because I think it will happen in the near future..


  30. Ohad. Please explain why immune checkpoint inhibitor and vaccine combo are a low priority. What are key hurdles you see? How can that perception change?


  31. Hi Ohad,
    TKMR has more than tripled since we have discussed it here. Do you think its market cap is justified?
    Do you plan adding BLUE to your portfolio?
    Do you consider ARRY cheap at these levels?
    Thanks as always and looking forward to your next post,


  32. Hello Ohad,
    Any thoughts if Cell Therapeutics JAK2 licensed to Baxter could be a legitimate player in the space. Now that Novartis is starting a broad program in solid tumors with Incyte JAK could this potentially dramatically increase the value of the CTIC Baxter JAK 2.
    Thank You!


  33. mike – I’ll try to post an article later today, if time permits.

    Alex – Sorry, don’t know Hybergenics. Re RIGL, it’s been a while since I’ve looked into the name but I am not optimisstic about their molecule in general (not selective enough) and their new indication.

    Bridgette – The reason I think cance rvaccines are a low priority is simply because as a class they have a horrible success rate whereas PD-1 and Yervoy proved that immune checkponts represrnt a much more effective approach. As a result, I suspect companies will prefer combining 2 immunomodulatory antibodies over and antibody+cancer vaccine.

    Chris – You are right, tmany RNAi stocks are benefiting from the positive sentiment around RNAi. Like many other biotechs, it’s very hard for me to justify these valuations. Tekmira at least has clinical stage projects as opposed to other companies (Dicerna, Regulus) that are still preclinical.
    Re BLUE – I am learning as much as can about them and gene therapy in general and so far I really like what I see. Their approach is practical enough in order to work and I plan on adding it in the near future.
    ARRY – Yes it’s still cheap based on its MEK programs but I am not so excitied about ARRY-520.

    Scott – I agree, CTIC found a real drug candidate for a change although their drug has safety issues and based on what I recall it’s not as efficacious as Jakafi and GILD’s momelotinib. The fact it’s JAK1-sparing may explain why it’s not as potent and can also be problematic in solid tumors (where Jak1 is considered biologically relevant).

    , it the data from what I recall (Onyx gave it back after seeing human data). At the current valuation I don’t think the stock is attractive


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