For whatever reason,
Janet Yellen does not like cheerful biotech investors and between her first policy speech as new chairwoman of the
Fed in April and comments last week decrying biotech and social
media stocks as inflated she caused two major sell-offs in RNA Therapeutics
stocks. As a result, industry
bellwethers ISIS Pharmaceuticals and Alnylam are trading at less than half
their 52-week highs, though better than ‘second-tier’ RNA Therapeutics
companies such as Tekmira and Arrowhead Research which are trading down even
more than that.
When the technology has matured to the point that it can
bring significant value to patients, pipelines rapidly progress and
expand, and with companies flush in cash by historical standards, this sell-off offers
in my opinion great risk:rewards. Here
is a run-down of my five favorite plays.
1.
$ISIS. ISIS Pharmaceuticals is my
current RNA Therapeutics core holding that I would not want to be out of. With ligand-targeted technologies offering
much lower tissue exposures and therefore much better safety margins, multiple
mechanisms of actions and a pipeline that rivals any in the industry, this
company is on track to become the most valuable in the industry- if not economy
(subject to the vagaries of the healthcare policy directions).
At a $3B market cap, no foreseeable financing
needs, and a healthy newsflow (especially regarding partnerships), the downside
should be relatively limited, and I will sleep tight even knowing that Yellen (who seems
to confuse the Dow and large cap biotechs with the broad biotech industry) might
open her mouth again to talk about something she obviously understands very
little about.
Best
long-term risk/reward.
2.
$TKMR.
Tekmira is the most beaten-up stock of the bunch that gets credit for almost
nothing. This is mainly the result of
the Ebola trial results which
were a disappointment- little doubt about that. However, translating these results from the
unthankful ‘
Haertetest’ to the rest of the pipeline is unwarranted. This is because a highly most potent knockdown
technology for the liver, should be able to carve out some market for itself. And if
the HBV product won’t require transient immune suppression and/or if its use is deemed acceptable in HBV with its expected finite treatment period, there is an
enormous opportunity for which the favorable newsflow is only about to heat up with the presentation of the preclinical dataset..
It is the newsflow from new product
candidates (esp. HBV)), clinical trial starts (liver cancer, HBV, alcohol
dependency), clinical trial results (ALN-TTR02 OLE, TKM-PLK1 interim phase II
with little to no expectations by the markets), and business development (mRNA), that makes TKMR an attractive buy at these severely depressed levels ($31 in April, now trading at $9). And with
the Ebola Haertetest on
Clinical Hold, TKM-EBOLA does not scare me anymore as an investor. It even offers a potential near-term catalyst
should the Hold be lifted.
Best
6-12 month risk/reward (until release of phase IIa HBV knockdown results).
3. $RGLS.
I’ve never liked Regulus much as a stock, mainly because of its anemic
pipeline that its own management does not even seem to be excited about given
that it now calls the potent GalNAc-targeted anti-miR122 product candidate for HCV merely a proof-of-concept for the company.
However, given that the HCV market emerges as one with a long-tail, not
all is lost for this pan-genotypic, potentially one or two-shot treatment when
used in conjunction with other HCV drugs.
When HCV-competitor Achillion recently surged on the back of the Merck takeout of HCV play Idenix as it reminded
investors of the long-tail nature of the market, Regulus was forgotten. It may reach investors’ consciousness when
they report phase I results possibly early next year. Solid financials with more than $100M in cash
and a reasonable $300M market cap given its prominent position in the microRNA
Therapeutics industry.
Speculative
buy with regard to single catalyst.
4. $ARWR. All eyes are on the outcome of the ARC520 phase
IIa study in HBV-infected patients which could be announced any day now. My prediction is a ~80% HBsAg knockdown at
the 2mg/kg dose. My problem is that I
have little idea about how the market will respond to that given that the trial
is not designed to achieve the ultimate goal for this therapeutic candidate: a
functional cure.
Most investors seem to expect an easy
double (or more) from current levels, an notion that I do not want to necessarily reject
for an 80% knockdown. It all seems to
depend on how the results will be framed by the analysts and how successful the
dueling hedge funds are in painting the tape to their advantage.
With more than 10% of the float short and
given ARWR's historical trading pattern, great volatility is a given.
Highly
speculative buy, so much so that options may actually be the best way to
play it.
5. $SRPT. No matter the negative market
reception to the recent release of the
144-week study results, Sarepta and patients will get
their accelerated approval for eteplirsen.
The debate has reached a point that the drug development clock for Duchenne
Muscular Dystrophy cannot be set back another 5-10 years by rejecting the current class of
candidates of which Sarepta’s looks to be the most promising- despite the highly
anecdotal nature of the results. This is
because eteplirsen seems amazingly safe, so the potential harm from giving a
potentially non-effective medicine is limited.
This is clearly not the case for Prosensa’s exon skipping drug candidate,
and don’t even get me started about PTC Therapeutics …
Solid 12-month
risk:reward juiced by the large short position (>30%).
23 comments:
What! No Benitec. Can't you recognize a steal when you see one? lol.
How about Silence?
Benitec may have opened a lab, but
now there must be another reason not to value them.
Have you got an address for service on that lab?
It's like BLT itself. Best kept secret on the stock market.
Any thoughts on what could happen to TKMR if ARWR HBV data isn't too impressive? Are both outcomes likely to be positive for TKMR since the delivery tech is different?
ALT data for ARWR's 2A is an important wild card (not much downside b/c billed as bonus, but a lot of upside if some consistent positive results - across several patients - shows up). But I don't know if that data will be included with the topline results or not.
It would take a few more weeks (beyond the time when key HBsAg data would be ready), and they may wish to report sooner than later, and/or they may wish to isolate the HBsAg data in a report of its own, regardless of what the ALT data shows; perhaps - if there's something to talk about - coming out with ALT data 3 weeks or so later; or waiting to include it with the more formal fall presentations.
So there may (or may not) be TWO, rather than ONE, key reports from ARWR regarding Phase 2A.
Linda
Well Dirk, TT-034/AAV8 getting into the liver!
Get with the program old mate.
Alibaba IPO been delayed til end of summer from late August. Read it as markets to remain closed until then.
Might explain the need for two reports as per prior post.
Sorry. Should've said late July.
i think for arrowhead this phase 2 just as big of a de-risking event as phase 1 was. if arrowhead can prove they have a certain efficacy in humans the market knows they can increase dose to achieve necessary KD but what the market doesn't know yet is, if it even works on humans. just proving that will have considerable value, aren't there multiple phase 2b scheduled to get "cocktail" right? just my two cents. thanks dirk . big fan.
Alibaba IPO been delayed til end of summer from late August. Read it as markets to remain closed until then.
Alibaba got bumped outta the way by BBB (big blue n beautiful).
Why else would Dirk be making his recommendations. Gotta make himself look good, see.
As for the BLT sycophants, guess they can't see a cheap buyout until it smacks them in face.
You mentioned Sarepta and being the best of the three DMD candidates-do you not think Summit in the UK has an interesting candidate progressing well,very safe,some efficacy already but with delivery issues?
"Have you got an address for service on that lab?
It's like BLT itself. Best kept secret on the stock market. "
San Francisco. It's not a secret. Company has already announced it and was in Genome Web article.
"As for the BLT sycophants, guess they can't see a cheap buyout until it smacks them in face."
No adverse reaction in first systemic dose for ddRNAi, and shRNA turning up where it was designed to, via the magic of the DNA construct doing it's natural thing.
The sycophants are only saying Benitec's TT-034 trial, and ddRNAi as a whole, may be better than what the experts with the vested interests &/or good mates in competing companies don't want to let the market know.
As for your cheap buyout prediction, with benitec's IP if that was going to happen it would have happened when they were $15M market cap. But if you do have some reasoning behind your bold claim don't be afraid to share so we can follow along.
Dirk Is The Stupidest Guy
by investron • 3 minutes 58 seconds ago
.
I've ever known worth commenting on.
Usually stupid people are not worth a comment.
Here's the exception because so many appear to follow the pied piper.
Dirk keeps talking about KD percentage and implying that TKMR will do better.
Dork is apparently the only one who does not see the irony of ARWR's pumping 2mg/kg into people with no ill effects...
ARWR's Ph 1 passed with flying colors and Ph 2a is apparently concluding without getting halted.
This is now the only game in town for a long, long time!
. .
Lock Him Up And Throw Away The Key
by investron • 20 minutes ago
.
He's Baaaaacccckkkk!!!
by investron
.
Dear Leader is back to pumping TKMR hoping for preclincals to lift the stock.
Trouble is, I don't think preclinicals will cut it for TKMR anymore.
Not after a Ph 1 blow up.
The trouble with Dirk is the guy shifts like quick sand trapping all who follow.
How many times did he pump and sell out this stock, I'm losing count?
Just two weeks ago he was posting TKMR wasn't it anymore.
Now pumping to unload for a quick profit while again trying to minimize ARWR about to report on Ph 2.
TKMR should lock up his funds indefinitely.
In all seriousness Dirk, how come no Rxi?
Am looking at Tufulipo's post on IV where he provides the following link on masking agents for delivery. Though he has it under ARWR it is what Rxi does as well. If it is the billion dollar difference, why aren't you on it?
http://www.ncbi.nlm.nih.gov/pubmed/12526692
Perhaps Dirk could head to San Francisco and seek some tutelage from David Suhy. Seems he has a much broader understanding of the mechanism and application of RNAi. Benitec were right to turn down Dirks offer of employment years ago, such a one-eyed 'analyst' would go nowhere.
Anonymous @ I would like to invite you to write about Benitec on rnai.technology
If you intrested, Just send a comment
Wanna see a write up on Benitec Biopharma check out my SA article then " Benitec: An Undiscovered Biotechnology With A Twist"
http://seekingalpha.com/article/2054223-benitec-an-undiscovered-biotechnology-with-a-twist
Also some nice reading on RXII as well
"Why I’m Still Long Rxi Pharmaceuticals After Recent Developments"
http://www.biotechpicklist.com/why-im-still-long-rxi-pharmaceuticals-after-recent-developments/
Dirk, you've done a great job of analysis over the years. First you were attacked by ISIS followers, now some of the competitor's followers are attacking you. To be attacked by such a wide range of people and interests, must mean you're doing something right.
The Art Krieg decision should color your SRPT view somewhat I imagine.
I don't know if it is a good thing or a bad thing.
Attacked by ISIS followers. What a crock. He was running them in to the ground then and now he is singing their praises. On other words, he was wrong and they were right. But he would've known that then and we can now see it as yet another attempt to influence the market through his blog.
I think the influence bit is well overrated by a over inflated sense of worth, an out of control ego and a huge desire to ingratiate himself with those he perceives to be higher up on the totem pole all in the pursuit of riches.
World Hepatitis Day on Monday. Would be a goodly day to say something if you have something worthwhile to say about hepatitis. No matter what the strain...or company.
http://en.wikipedia.org/wiki/World_Hepatitis_Day
Dirk, did you ever hear that story about the wife of Citi's boss or something being so loose lipped that they lost control of foundation ssRNAi IP and the deep genome sequencing software?
I don't know if it's true or urban myth. That's why I'm asking.
Probably a Ripleys.
Stop Squabbling ...
Same article continues ...
While Krieg was a senior figure at Sarepta, he wasn’t centrally involved in the eteplirsen program or dealings with the FDA, according to former colleagues. He focused on more basic research. Corporate reshuffling isn’t pleasant, but in the big scheme of things, it’s not as important as whether a life-extending drug gets to people who need it. Krieg’s departure may eliminate a source of distraction and allow the company to move beyond a period of infighting, one longtime Sarepta investor told me.
did you ever hear that story about the wife of Citi's boss or something being so loose lipped that they lost control of foundation ssRNAi IP and the deep genome sequencing software?
Totally true story I think. I know something happened on this website.
www.sharetrader.co.nz/
If you can believe the, sometimes too tall to be real, stories she posts under the name Capitalist and someone else called Enumerate was in the middle of it all.
It was years ago and probably all been deleted now.
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