I had some great discussions with CEOs, CSOs etc. of some companies that I follow closely during the breakout session. I will post a separate article summarizing my insights when the conference finishes on Wednesday.
Meanwhile, some trade ideas (HOT OFF THE PRESS, FROM THE HORSE MOUTHS OF CEO/CSOs etc FROM COWEN'S ANNUAL HEALTHCARE CONFERENCE AFTER I GRILLED THEM SHAMELESSLY) are (all with time-frame 3-4 years): Many will be bought out at big premiums.
1. Short Wave Sciences, WVE: they are claiming new RNAi therapy better than others like ALNY but I was surprised to learn they plan weekly iv infusions of their mRNA thrapy (which is antisense, not RNAi) in DMD. IV weekly infusions to increase persistence in DMD when there is no need for it > patient has portacath> increased bloodstream infections > increased medical care costs due to need for visiting nurse, etc. This was one of my fav. stocks but this trial design changed everything. In the short-term may go up to 55-60 with data momentum but I will short around that level with 3-4 y timeframe, 75% haircut potential and 2% allocation.
2. Long Moderna Therapeutics, MRNA: I thought their main focus is ID vaccines which seems like from public website. But the hidden secret is FIVE ongoing immune-oncology programs which are being done in combo with anti-PD1 checkpoint inhibitors. The website says these are monotherapy but the CEO said they are combining all 5 immune-onc programs with anti-PD1 monoclonal antibodies. This is huge since I did not expect good data from monotherapy of their cancer vaccines, or IL-12, etc. Excellent work, guys....
3. Long Insmed, INSM: Rationale: Arikayce is approved in refractory MAI infections but the real secret is that they are planning a phase trial of standard of care (ethambutol+rifampin+macrolides) plus Arikayce as first line tratment in MAI. FDA decision on the design of phase trial is expected in June. This is HUGE as the TAM with first line MAI therapy is many times that of its current TAM as a therapy for MAI infections refractory to standard of care. If they get approved as first line +SOC, the stock could double to $50.
4. Long Magenta Therapeutics, MGTA: novel HSCT founded by a Harvard researcher. Reason: they may totally replace current technique of bone marrow transplant, (HSCT) with their own version. Current version of HSCT has risks like graft versus host disease. Magenta is developing its own novel HSCT cells which will have a switch (in form of antibody drug conjugate) which can be just switched off in case any signs of acute GVHD are seen. Second reason: novel T cell therapy in cancers which could be better than CAR-T. Modified T cells, ex vivo using gene editing from yet unidentified company, targeting CD45 and Cd127 expressing tumors. Preclinical stage. Big potential. This technology is revolutionary.
5. Long Axovant Gene Therapies, AXGT: I have a double on it in less than 2 months. The stock was up >45% earlier today after they released encouraging phase 1/2 data from 2 patients in Parkinson's disease, PD from lentiviral gene therapy. They enrolled very severe patents with baseline UPDRS 58-60, still excellent results in reducing UPDRS score and improving clinical symptoms of PD. I talked to CEO/CSO on why they are enrolling this wide range of UPDRS at baseline 38-60, they will likely do better if they stick with just 38-40 like in deep brain stimulation trials, etc but good to see that strong effect even in very severe cases. More patients being enrolled and data to be released throughout 2019-2020. The management also released encouraging data from first in human trial of gene therapy in Tay Sachs disease. The stock has a bit of run-up recently but this one is a $10-$15 PT minimum in 2- years with their diverse gene therapy pipeline and still very undervalued vs. other gene therapy stocks like RGNX, QURE, etc.
Quick XBI update:
Very strong momentum upwards today, IMO, we could have bottomed in this little pullback last week. First PT is 90-91 but high likelihood that we may blow past it. and if we do, PT 115-120 by Q1, 2020. LABU can be traded for 3x leverage using XBI's direction as a guidance. Will post more later but staying long LABU for now.
A detailed SWOT analysis on T2 Biosystems (TTOO) is in the works and will be posted exclusively in this service tomorrow. Wait to find out if the stock founded from the labs of MIT/Harvard is a Buy or Sell?
Risks in the investment:
Investing in developmental stage biotechnology/pharmaceutical companies is risky and may not be suitable for all investors. It is possible to lose the entire capital invested if the product candidates fail in clinical trials. Unexpected side effects may be seen in clinical trials which may cause FDA to place a clinical hold on ongoing trials. Capital raises can cause the stock to fall.
This article represents my own opinion and is not a substitute for professional investment advice. It does not represent a solicitation to buy or sell any security. Investors should do their own research and consult their financial adviser before making any investment. Investing in equities, especially biotech stocks has the risk of significant losses and may not be suitable for all investors. While the sources of information and data in this article have been checked, their accuracy cannot be completely guaranteed.
I/we are long LABU, MGTA, TTOO. The positions can change at any time since I trade actively.
Bhavneesh Sharma covers biotech as one of the original contributing analysts at FATRADER. A market expert with a medical degree and MBA, he is ranked among the top 15 financial bloggers and top 100 overall financial experts (including Wall Street analysts) on TipRanks.
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