There are a lot of tau-focused drugs in the clinic: antibodies, antisense. Which will read out first? Hopefully better luck than amyloid. Probably still too late in the disease process to work, but who knows?

Zogenix has themselves a great drug. I wonder how it works. Maybe just 2B antagonism? Anyone know?

Let’s continue with our R&D productivity analysis. Last time we determined Pfizer would have been better off never investing in R&D, and instead contributing their R&D expense to a hypothetical investment fund earning 5% per year. How about Merck?

Organic Merck R&D: Januvia/Janumet, Fosamax, Zocor, Mevacor, Singulair
Schering-Plough/Organon/Centocor/Johnson & Johnson: Zetia, Vytorin, Remicade, Simponi, Nuvaring, Claritin, Clarinex, Peg-Intron, Bridion, Temodar
To Be Continued…

Papers I’ve Read
Interpreting Genetic Variants in Titin in Patients with Muscle Disorders. Savarese, et al. JAMA Neurol 2018.
The odyssey of diagnosing a rare disease. Not always easy even when you know what you’re looking for.

Understanding Titin Variants in the Age of Next-Generation Sequencing–A Titanic Challenge. Dr. Carsten Bonnermann. JAMA Neurology 2018.
Editorial doesn’t add anything to the paper.

Genital inflammation undermines the effectiveness of tenofovir gel in preventing HIV acquisition in women. McKinnon et al. Nature Medicine 2018.
Lubricating and antiviral, not bad! Honestly, just take PreP pill. I guess I don’t understand global culture. How about a patch?

H3B-8800, an orally available small-molecule splicing modulator, induces lethality in spliceosome-mutant cancers. Seiler, et al. Nature Medicine 2018. This is really good drug discovery science but I fear really bad chemistry. Structure has ‘natural product’ written all over it and look at that chirality!

Dentate granule cell recruitment of feedforward inhibition governs engram maintenance and remote memory generalization. Guo, et al. Nature Medicine 2018. Fascinating! Not for the uninitiated.

Tau Positron Emission Tomography in Autosomal Dominant Alzheimer Disease: Small Windows, Big Picture. McDade & Bateman. JAMA Neurol 2018. See Tau comments above.

Ertugliflozin for Type 2 Diabetes. JAMA 2018.
Welcome to the dance.

Dabigatran in patients with myocardial injury after non-cardiac surgery (MANAGE): an international, randomised, placebo-controlled trial. Devereaux et al. Lancet 2018;391.
Very nice study as MINS and other postoperative complications are underrecognized.

An Incomplete Prescription. President Trump’s Plan to Address high Drug Prices. Sarpatwari et al. JAMA 2018.
This is a joke. The easiest way to lower drug costs is to allow interchangable biosimilars. Old, off-patent biologics are our biggest drug cost. Not mentioned here. The part that really irks me is the authors’ foolish CPI statistics. Yes, drug costs have outpaced inflation. Why, is the question? Why are consumers demanding these goods so much that their prices are rising? Its not a producer-only phenomenon. It has happened since the 1960s. We care about health. Companies are producing great innovations. We have more disposable income than ever. None of this is bad. What perverse insanity this writing is. Not to mention 90% of medical costs come from two letters and one punctuation mark: Dr.

Flatland by Edwin Abbott – A Modern Vantage Point
Flatland, though published in 1884, still has a voice that speaks to us today. A satire with a mathematical theme, Abbott not only indicts the backward Victorian-aristocrat thinking of his time but also wisely ruminates on higher dimensions. While Abbott foreshadowed the nearby Einstein (to a very small extent), he’d still be very happy to hear about Minkowski spaces and other manifolds where today’s minds contort themselves to understand higher spatial dimensions and fail. “We have no evidence to support the existence of a fourth spatial dimension, and if they do exist, they exist in a compressed and unobservable state”, a modern thinker might say. Not that Abbott was the first person to contemplate “4D” (Kant had him by a mile), but his narrative form is enchanting and illuminative for the simpler, 80-page readers among us.

What was Abbott saying from a psychosocial perspective? His perspective on heirarchy is timeless. Man’s attempt to find order in the world in relation to other men is futile and forgive me, circular. The sorrowful denizens of Flatland reasonably assign rank by the number of sides their person exhibits. The larger the number of sides, the more they approach the perfection ideal (that of a circle) and are accorded status as such. In today’s world, non-capitalist institutions such as politicians, government employees and the media resemble Flatlanders. Without the laissez-faires simplicity of financial order, the non-capitalists struggle to find order, and therefore, meaning. Capitalists have their own problems with meaning, which is an essay for another day. So, non-capitalists are Flatlanders, searching for a pecking order consisting mostly of who can make laws governing the capitalists, interpret and execute laws governing the capitalists, write stories about the capitalists, and sometimes simply and smugly, judge the capitalists. It’s good to govern (explicity in government and implicitly in the media) those you cannot compete with. This psychogical reordering is comfortable, like the pentagon who outranks the isosceles.

In Flatland, one irony is that large-sided polygons are so circle-like, but can never reach circlehood because they’re actually going backwards in the number of sides required: one. If anything, the lowly women, who are but “two-sided” (and often invisible) are closer to perfection than the 500-sided elder “circle”. So, too, it is with the non-capitalist group I described. What could be more frustrating right now than to be a lifelong politician/”civil servant”? To arrive in 2018 and realize you’ve accomplished nothing: President Trump just decided to become President and you are just some 200-sided shape trying to be 210-sided. The usurping of the aristocracy and the idiocy that created it in the first place is the point of Flatland. We don’t have an aristocracy in America, but we do have a strange edifice resembling some aristocratic properties. The government and media thrives on self-importance. Nothing makes journalists I confront angrier than when I tell them their stories don’t matter. No one reads them, no one believes them. You can call me “the most hated man in America”, but the reality is people cheer me and shake my hand everyday. I’ve gotten hundreds, maybe thousands of fan mail and two pieces of hate mail. Two! I’ve been in federal prison for ten months and have been treated like a hero for confronting media and government. If I’m hated, I’d like to see what loved looks like. Is that what Elizabeth Warren is? Nothing makes politicians/government officials angrier than when I make fun of them, often to their face. Don’t I know who they are? That they could put me in jail!?

The facade of the aristocracy’s power is what Flatland exposes. The facade is both the frustrated actions the edifice takes to self-perpetuate (laws, journalist output, the miasma of South Parkian smug filling our lungs) and its precious self-delusion, which must also not be shattered. Letting bubble-dwellers enjoy their setting is a reasonable way to handle their existence. Unfortunately, natural entropy occurs and the popping of safe spaces reminds the self-appointed enlightened that the path they chose is dim and foggy. The shape with the fewest sides, indeed, has the sharpest angles.

The 13th is my favorite day of the month, as I was remanded on the 13th and it’s easy to count the months. I have about 3 years left exactly. That I’ll spend 5% of my life in isolated study isn’t pleasant but books like Frankel’s “Man’s Search For Meaning” puts things into perspective! Everyone said the biggest downside to jail is boredom. I am not bored… very, very far from it.

What’s the point of free speech? I’m censored from Twitter/Periscope, Twitch, Okcupid (!), Tinder (!!), and other websites. Why say anything if it’s not the consensus? CONSENUS KNOWS BEST.

dyspnea. shortness of breath.
Heart Failure. A progressive and usually fatal cardiovascular illness where the heart cannot pump enough blood to meet the body’s demands.
Chronic Obstructure Pulmonary Disease (COPD). A progressive lung disease affecting millions of people where airways are obstructed.
spirometry. a breath test used to measure pulmonary function, resulting in important values such as FEV, FVC and lung volume.
cytokine (very important, very simple). A signaling protein, usually activates its cognate (matching) receptor (e.g. IL-6 binds IL-6R). Often used to send a pro-inflammatory or autoimmune signal. Target for many medicines including world’s best-selling drugs, the TNF antibodies.
interstitial (adj) / interstitium (n). the space between organs, sometimes called the “Third Space”.
alveoli (n., pl), alveola (n., si), alveolus (n., si), alveolar (adj). the basic, fundamental respiratory unit in the lung where oxygenation occurs.
pneumonia. inflammation of the alveoli


–Does anyone think there is room for a lowish-priced antidepressant with a new MOA (not TRD)? I guess ALKS does. I gotta look at the data again but I really didn’t think that drug worked. I guess it’s true what they say, run 4 depression Phase IIIs to get two positive ones. Even JNJ’s data was underwhelming. GP/internist drugs are so scary now after so many flops, but look at Eliquis, doing amazingly well. So is 90s pharma over or not?

–On Acadia I wouldn’t be as worried about the safety as I would be on the commercial opportunities and intellectual property. Also a lot of the gain on this short has been realized.

–Sarepta and Madrigal are the two biotech stocks up the most this year. Congratulations to whoever owns those stocks. One fascinating thing is the success of some medtech stocks, including Align and Abiomed, which were favorites of mine (but mostly my old partner) in 2009-2011!

–Will be glancing at some stocks soon, including Alnylam, Fibrocell, Jazz, Endo and others. Was a bit focused on other matters.

Papers I’ve Read
Fibroblast growth factor 19 regulates skeletal muscle mass and ameliorates muscle wasting in mice. Benoit, et al. Nature Medicine 2017.
Very interesting!

An approach to suppress the evolution of resistance in BRAFV600E-mutant cancer. Xue, et al. Nature Medicine 2017.
Seemed like an obvious conclusion to me.

Plk1 regulates contraction of postmitotic smooth muscle cells and is required for vascular homeostasis. Nature Medicine 2017.
Well, this is explains why volasertib failed. Isn’t tox supposed to ferret this kind of thing out?

moscaism. Different genotypes present within a cell pool.
myc tag. Another small peptide tag used for protein identification and purification. Similar to the FLAG tags I used in my first experiments.
GFP. green fluorescent protein. A good reporter of gene/protein expression.
SNP (elementary concept, essential importance). single nucleotide polymorphism, a variation in a nucleotide at a specific position.
Hardy-Weinberg equilibrium. In genetics, an equation that predicts allele frequency. Often used to quality check sequencing in GWAS.
eQTL. expression quantitative trait loci – analysis of genetic loci that influence level of mRNA/protein expressed
Sanger sequencing. An older type of DNA sequencing relying on chain terminators. Still used in basic experiments, but not in NGS (next-generation sequencing).
cAMP. messenger molecule created from ATP by adenylate cyclase after a GPCR Gs receptor is activated.
parietal cortex.
MADRS. Montgomery-Asberg Depression Rating Scale. A commonly used scale for measuring major depression. >20 is depressed. Control patients usually have a rating of 0-1.
SSRI. Selective serotonin reuptake inhibitor. Class of drugs approved for depression including Zoloft (sertraline), Celexa (citalopram), Paxil (paroxetine), Lexapro (escitalopram) and others. All SSRIs are now generic.
Protein Kinase A.
phosphodiesterase. Also known as PDE, a class of enzymes that break phosphodiester bonds, including the one present in cAMP.
anoxia. lack of oxygen.
prefrontal cortex. area of the brain responsible for “executive function” including personality, complex behavior, decision making, etc. Mine is clearly highly developed.
cortical. refering to cortex areas of the brain, not the motor or sensory areas, but “higher” processing
subcortical. “below” cortex structures such as the amygdala, hypothalamus, etc.
bulbar dysfunction. neurological finding resulting in abnormal speech and swallowing. the bulbar structure is composed of the cerebellum, medulla and pons, with the medulla being the “bulb”.
bioavailability (elementary concept, critical importance). a PK measurement that compares the dose administered to the patient with the available drug level in the blood. It is a ratio sometimes indicated by the variable name F. The F of any IV administration of a drug is always 100%. Some drugs have very low bioavailability (10-20%) and pose a potential risk if blood levels are variable. Protein binding is an important consideration in contemplating drug availability in conjunction with bioavailability.
gene amplification. in an oncology context, a copy number change, often induced by selective/evolutionary pressure
splice variants. the product of alternative splicing (very important concept).
prometaphase. the phase in mitosis before metaphase where kinetochores form.
metaphase. the phase in mitosis before anaphase where chromosomes align prior to separation
cytokinesis. when the cytoplasm of a single cell divides into two.
monopolar spindles. a spindle defect.
kinetochore. a protein that forms the attachment point for the spindle to separate sister chromatids.
chromatid. the copy of a chromosome attached to its template by a centromere.
apraxia. the inability to complete a fine motor task.
GPCR. G-protein coupled receptor. 7-transmembrane family of receptors coupled to a G-protein. Very common pharmacological targets.

I hate correcting the media. Some Vanity Fair reporter Emma Stefansky apparently said that my Wu-Tang album was no longer ‘mine’. That’s interesting since I pay for it to be stored and insured every month. Maybe someone can reach out to her and ask her who has it? Because I don’t know, I think I do. Maybe I’m wrong? Let me know.
The same thing applies to my finances. People know about 10% of the story. I’m wealther than I ever have been. Liquidity has always been a struggle for me. I don’t think I’ve ever been really liquid, basically ever. That’s just how it works with serial entrepreneurs who put everything they have into their companies. Elon Musk once said he couldn’t pay his rent. I think mere mortals don’t understand the concept of giving all you’ve got.
I’m sitting pretty though, as the IRS owes me a $4 million refund, I’m hopeful that the insane $7 million judgment gets reversed on appeal (which I’ve already paid most of), and I have about $22 million in uncashed options from my first company that I should probably cash in. It’s been difficult to do basic things like that since I was remanded for “hairjokegate” 2017. I guess I gotta find a notary here, they supposedly have one in the prison, but I’ve only been here for two months. Anyway, my private holdings are growing more valuable by the day, so I find it funny reading all the misinformed stuff about me.
One person told me “eh, don’t correct aynone, it will be even funnier when you buy a sports team and people will say ‘what a comeback'”. But, there’s nothing to “come back” from. Jail is adult time out. I haven’t learned anything profound from this experience, other than doing what most prisoners do, which is to stew and grow more resentful of our overreaching and corrupt law enforcement. I’m innocent and was narrowly convicted with the assistance of witness coercion, the government obtaining illegal evidence and all kinds of other government tricks. They certainly prosecute the person, not the crime. Lucky Luciano, Al Capone, you name it. A bad guy is a bad guy, doesn’t matter what they did. They’re trying to do it to our President as we speak. What law did he violate, so that we can get vengence for the political policies we don’t like? Shame on the FBI–it should be shut down. [End Count of Monte Crisco rant.]

Is Drake’s new album any good?

I’d like to see more responses in comments!!!!


Acadia. I still don’t think this drug will ever sell too much. There are a few D2 sparing 5-HT2a antagonists (nothing as pure as pimavanserin, given), but the company’s spending is a bit insane. The drug is probably great for PDP given the levodopa interference at the dopamine receptor, but what good is the drug for the other illnesses when you can use Risperdal, Abilify, Seroquel, etc. Re spending, I understand that one needs to invest in a brand, and it will stop at some point, but this is quite dramatic cash use. I am skeptical of the intellectual property of pima, so I expect a generic sooner than others.

Continuing our Pfizer (Merck next) R&D productivity analysis, what is fascinating is almost all of Pfizer’s drugs were discovered by other companies. I suppose it is not too surprising given the mega-mergers that have occured. Still, the idea that Pfizer has only created 11 drugs in the last 30 years despite spending >$100 billion on R&D fascinates me.

Warner Lambert/Parke-Davis: Lyrica, Ibrance, Lipitor, Neurontin, Accupril
Wyeth: Prevnar, Enbrel (Immunex/Amgen), Bosulif, BeneFIX, Refacto/Xyntha, Premarin, Pristiq, Effexor XR, Rapamune, BMP2, Zosyn, Tygacil
Pharmacia/Sugen/Upjohn/Monsanto/Searle: Sutent, Celebrex, Genotropin, Somavert, Xalatan, Detrol, Xanax, Xalkori, Bextra, Camptosar, Ellence, Detrol, Cleocin, Inspra, Zyvox, Depo-Provera, Aromasin, Medrol, Fragmin
Bristol-Myers: Eliquis
Eisai: Aricept
Medivation: Xtandi
Pliva: Zithromax
Agouron: Inlyta, Viracept
Merck Kgaa: Bavencio
UCB: Toviaz, Zyrtec
Anacor: Eucrisa

Unasyn – FDA approved in 1986
Cardura, Diflucan – FDA approved in 1990
Zoloft – FDA approved in 1991
Norvasc – FDA approved in 1992
Viagra – FDA approved in 1998
Vfend, Relpax – FDA approved in 2002
Revatio – FDA approved in 2005
Chantix – FDA approved in 2006
Xeljanz – FDA approved 2012

I assumed net margins on pharmaceutical products are 50% (well above what they really are but around what they are on a steady-state well-managed level). I assumed 50% of R&D is spent on discovering or running clinical trials for in-house projects (as opposed to clinical trials for acquired products). At a 3% discount rate, PFE made 32B for shareholders from 1991 to 2017 (16 years) investing in R&D. All of the profit was from 1992 to 2006, indicating very roductive R&D in the 1990s, creating monsters like Norvasc, Viagra and Zoloft. Net income of this “inHouseR&DOnlyCo” reached as much as $2 billion in some years. Net income turned negative afterwards, ranging from breakeven to negative 1 billion per annum since 2006.

If, instead of doing R&D, Pfizer invested the R&D cost (50% of reported cost) in a fund returning 5% after-tax, it would have generated 124B in value as opposed to the 32B NPV. I have never seen an analysis like this done (it has taken me the better part of 3 days).

I’ve been having a recurring dream about being able to go back in time and see the future and live the past simultaneously. I’m working at a hedge fund and I somehow know the future years in advance. I know that Facebook will get started in 2004. I know that Google is a great buy at or before the IPO. I know what drugs will work and what won’t (although I know that today). I knew the market will crash in 2000-2002 and recover in 2003. I guess this is what insider traders feels like?

Papers I’ve Read Recently
Idiopathic Pulmonary Fibrosis. Lederer & Martinez. NEJM 2018:378;19.
This is the kind of review article I like to see in the NEJM, especially as it covers emerging therapeutic options. Bravo!

cAMP signaling in brain is increased in unmediated depressed patients and increased by treatment with a selective serotonin reuptake inhibitor. Fujita et al. Molecular Psychiatry 2016.
Fascinating paper with important implications.

A paper in Molecular Pharmacology I cannot discuss.

Efficacy of Exome-Targeted Capture Sequencing to Detect Mutations in Known Cerebeller Ataxia Genes. Coutelier et al. JAMA Neurol 2017.
Nothing too exciting here, very standard in today’s diagnostic odyssey.

Review of Neurological Implications of von Hippel-Lindau Disease. Dornbos et al. JAMA Neurol 2018.
Just catching up on a rare disease.

adnexal. the area consisting of the ovaries, fallopian tubes, their support structures, etc.
endolymphatic sac tumor (ELST). common tumor of VHL disease, fairly benign.
hemangioblastoma. common tumor of VHL disease, fairly benign.
saltatory. growing in an unpredictable pattern.


Biopharma & Investing
In demonstrating PFE and MRK to an inmate here, I was reminded of the poor R&D productivity of big pharma. I’ll do a little more of an in-depth analysis but if you take the aggregate R&D spend of these two “industry leaders” and evaluate what projects ended up being successful, what are we left with? Only compounds definitely from within count. Buying Schering who bought Organon and lucking out on Keytruda doesn’t count. I’ll try and trace back the origins of each compound.

Organic Merck: Januvia, Cervarix, Isentressp
Organic Pfizer: Ibrance?, Lyrica, Xeljanz, Inlyta, Chantix, Celebrex, Neurontin, Lipitor
Inorganic Merck: Keytruda (Organon/Schering), Remicade (Centocor), Simponi (Centocor), Vytorin (Schering), Zetia (Schering)
Inorganic Pfizer: Prevnar (Wyeth), Enbrel (Wyeth), Sutent (Sugen/Pharmacia)

This analysis will continue. Anything I missed?

–Very glad to see the WSJ take Greenlight down a notch. There’s a joke in there about me. Well, I guess the jokes on Einhorn. He passed on my company and I project that is up about 4x. Meanwhile his Greenlight fund is… uh… not doing so well, apparently. I’m far better off than he was at my age, and at the rate he is losing money and I’m making it, I’ll be wealthier than him soon even without the 15 years he has on me. Keep shorting NFLX and AMZN bro, you gotta be right someday.

Book Review
The Dhandho Investor – Monish Pabrai

This is one of the worst books I’ve ever read. Most investing books suck, and Pabrai breaks new ground in the arcane field of suction engineering. Pabrai is what I would call a weak-form Buffett clone, and appropriately comes off as embarassingly clueless. The only property of this work worse than its content, which lacks one original thought, is Pabrai’s putrid writing style. I lost count at how many times he printed his meaningless platitude “heads I win, tails I don’t lose much”. Pabrai believes he’s doing the world a favor by writing, but I suggest he finds a new hobby. As if the secrets of wealth are contained in 180 pages of regurgitated “value investing basics”, Pabrai’s arrogance is intolerable. He doesn’t mention that, like any investment strategy, value investing can become wildly overcrowded and ineffective. Why are all the value hedge funds doing so poorly? I guess they haven’t picked up this classic.

Contradicting himself repeatedly, Pabrai screws up basic calculations, doesn’t explain (frequently being wrong) key inputs to important formulas. He stresses simplicity, but misses the point that investing, in fact, is anything but simple. Take Buffett. I consider myself a Buffettologist and have learned a lot about this legendary investor. From what I can tell, Mr. Buffett and Berkshire Hathaway have been a leveraged, long-only beta bet on American equities. It has worked well. The false conclusion drawn by Pabrai and his sorry acolytes is that we should be like Buffett. America has changed. We are a very leveraged country and much larger, among other differences. I have no idea if the great bull run of the 60s-present day will continue. Neither does Pabrai. The US may be the next Japan or Russia (two leading countries in the 70s), or worse. The question of ‘why is it so easy?’ apparently never enters Pabrai’s mind. The answer is because it isn’t. Nowhere does Pabrai suggest holding cash in a portfolio or entering into more complex transactions.

Even in relative bright spots, like a fairly pathetic tour of his successful investments, Pabrai’s level of ignorance is astonishing. His funeral home example excludes the company’s gigantic debt load from his calculations, happily allowing him to pronounce his purchase of the company’s stock at 3x cash flow. Yes, I too can ask Bloomberg to print me out a list of enormously overvalued companies ‘trading at low P/Es’. I was perhaps this ignorant when I was 17 years old, in my first year on Wall Street. Some examples, like his Level Three convertible bond “analysis” are superficially fun, but show the Buffett sycophant syndrome. He buys these bonds because Buffett buys the bonds. Okie, dokie. Pabrai’s application of the Kelly criterion is also laughable, often humorously suggesting to put 90% of one’s portfolio in an equity.

I hate to criticize other investors or beat my chest and imply “I’m richer than you” or “I’m smarter than you”. But I must implore you to ignore this book, or read it with an eye to correcting it. I’m not sure who sent it to me, but you hurt me. Why are you hurting me? One should read about great investors like Buffett, but try to abstract the governing dynamics of their actions. “Buffett started an insurance company. So should I!” “Buffett bought a lot of American Express during their crisis, I should do something like that!”. These are all unoriginal and overly simplistic thoughts that will teach you nothing and lead you astray. Investing actions are a manifestation of your investing theory. If you discover and understand, and then extend theory, you can create actions that aren’t simple acts of mimicry.

There are exceedingly important questions the advanced investor has to ask: are there times when I can discount future cash flow at very low (close to zero) rates? Is investing a “zero-sum game”? What is the relationship between arbitrage and crime/ethics? What can we infer from liquidity? Pabrai reminds me of the old SNL skit “Deep Thoughts”, the modern day equivalent of the philosoraptor. Except, even those constructs grope for a further truth and a refinement of technique. Not Pabrai, he’s got Dhandho.

Papers I read today and yesterday

The protocadherin 17 gene affects cognition, personality, amygdala structure and function, synapse development and risk of major mood disorders. Chang et al. Molecular Psychiatry 2018,23:400-412.
Interesting paper on a new target. First thing I ask myself when I read something like this is, how many AA is PCDH17 and is there a crystal structure?

The Lymph Node and the Metastasis. Tjan-Heijnen & Viale. NEJM 378;21.
Another “Clinical Implications of Basic Research”. Oh boy. Here we debate the irrelevant question of how tumors seed metastases. I don’t think it matters.

Correction of a splicing defect in a mouse model of congenital muscular dystrophy type 1A using a homology-directed-repair-independent mechanism. Kemaladewi et al. Nature Medicine 2017.
I reread this paper. It actually is a bit of a breakthrough, delivering CRISPR through AAV9 and selecting just the right PAM to excise/correct/create just the right donor splice-spite mutation in post-mitotic tissue. The animal data is impressive and augurs well for humans. I’m a little wary of the immunogenicity of the humorous delivery of gene editing through a viral vector. I also have questions about what drives expression from the episomes, but you can’t argue with the data!

Transglutaminase 2 overexpression induces depressive-like behavior and impaired TrkB signaling in mice. Pandya et al. Molecular Psychiatry 2016
Not terribly impressed here. Maybe I’ll re-read it.

synapse. The gap between neurons where chemical or electrical messages are sent. Understand the difference between presynapse and postsynapse.
amygdala. Bilateral brain structure in the temporal lobe responsible for a variety of functions including memory and emotion (not just rage as we’re taught in school). Close in proximity to the hippocampus.
hippocampus. Bilateral brain structure in the temporal lobe responsible for memory consolidation among ther functions.
temporal lobe. Major area of the brain responsible for interpreting sensory input and many other things.
dendrite. branched extensions of neurons that receive impulses/signals.
dendritic spine density. the arborization of dendrites is thought to be important for various illnesses. the more dense the better.
GWAS. genome-wide association studies. The study of entire genome (or exome) and its correlation to some phenotype. Beware multiplicity statistical errors, which are frequent in GWAS.
NHEJ. Non-homologous end joining. Contrasted with HDR, NHEJ allows for double strand break correction without a template. More error prone than HDR.
Protospacer-adjacent motif. A target region for Cas9 nuclease activity.
Single guide RNA. Guides CRISPR to nuclease site.
spliceosome. Cellular apparatus that removes introns from RNA.
donor splice site. 5′ site of intron to be spliced out.
post-mitotic cell. Cell that will no longer undergo mitosis. E.g. neurons.
hemagglutinin-tag. Similar to other tags like His6, FLAG, SUMO etc., tag proteins with short amino acid sequence to assist purification and identification. Used FLAG for my first proteins until I realized it really is a research tool. I believe there is one FDA approved drug with the tag intact, however (LOL!).
syngeneic model. An animal model using a tumor allograft from the same species/background to ensure immune competence.


What to make of Sage? I am skeptical. PPD is unlikely to be a major market and I’m suspicious of the preliminary findings with the GABAergic agent. Studying the history of “GABA antidepressants” (misnomer) has been interesting thus far. Lilly, Roche and others have published in this field on mostly anxiety agents and still found it very hard to differentiate from benzo-like properties.

Nektar. No, the cure for cancer is not pegylated Proleukin. Some in the biopharma industry lost its collective mind for a minute or two. You can’t call it a bubble without some inflation. Back to reality… this drug doesn’t work.

BeiGene. I believe this emporer may have no clothes. Or, at least at this price, you’re paying Armani for Old Navy. It remains to be seen if cancer drugs will sell well in China, and if their own Revlimid is any indication…

Wuxi Biologics. I wish I could think of the right meme here. What is going on with this company? Holy moly. I gather if you look at Celltrion, Samsung Biologics and Wuxi Biologics as a basket of biosimilar companies, you will do see expectations are too high. In full disclosure, I pioneered the idea of comparing Celltrion and Hospira 6 years ago when Celltrion was worth $7B. Today it’s $30 or $40B (who the heck even knows? or cares?). So the total value of these three monsters is close to $100B. Biologic drugs themselves subject to biosimilar competition is, say, $60B. 18 + 7 + 7 + 7 + 6 + 4 + 4 + 4 (Humira, Remicade, Enbrel, Rituxan, Avastin, Prolia, EPOs, Neupos). The possible biosimilar share is arguably 50% — innovators can discount and biosimilars are not interchangable. so you are chasing $30B of business. The problem is these three companies don’t keep all the economics for their drugs — they have an array of deals with various players (BIIB, etc). And they’re not the only three games in town: Amgen, Biogen, Bohringer, Teva, Mylan, Pfizer, Biocon, Allergan, Apotex and others are all developing biosimilars. I’m not saying these companies will never make money, but, I think you can safely bet against them at this point.

Papers I’ve Read Today

When less is more: a case of phenytoin toxicity. Robertson K, et al. BMJ Case Rep 2013.
Random case report as I navigate the world of epilepsy.

Preventing Sudden Unexpected Death in Epilepsy. Devinsky, et al. JAMA Neurology 2018.
No comment.

Nivolumab plus Ipilimumab in Lung Cancer with a High Tumor Mutational Burden. Hellmann, et al. NEJM 2018 378;22.
It always puts a smile on my face when Yervoy actually does something. A double smile for whenever antibodies beat chemotherapy heads-up. May the next generation never utter the words ‘platinum-taxane doublet therapy’. Where’s Avastin in all of these studies? Out with angiogenesis, in with immunooncology (what does that say about ‘IO’?)

Essential Tremor. Haubenberger & Hallett. NEJM 2018;378:1802-1810.
Scary illness, not many treatments. What to do? Will read more. Interesting that ethanol resolves symptoms. Perhaps an NMDA antagonist should be tried here… perhaps I should keep that to myself.

Battling the biology of opioid addiction. Nature Medicine 2017;23:790.
Haven’t made any progress in a year. The NIH could be a cool thing for Trump to turn upside down.

Correction of a splicing defect in a mouse model of congenital muscular dystrophy type 1A using a homology-directed-repair-independent mechanism. Kemaladewi et al. Nature Medicine 2017.
More tomorrow…

A tripartite complex of suPAR, APOL1 risk variants and alphaVbeta3 integrin on podocytes mediates chronic kidney disease. Hayek et al. Nature Medicine 2017.
The Sever/Reiser team publishes more of their work on suPAR. The science is clear, compelling and straddles all methodologies: in vitro, in vivo and human. I’ve always been impressed by Reiser but this work is still incomplete and missing the bullseye. I can’t put my finger on it but pharma should be paying attention to suPAR/APOL1.

Biopharma self-education
I’m a big proponent of self-education because there’s no other kind. Here are some concepts or terms you should know if you follow medicine/biopharma. I take these terms/concepts from the papers I’m reading and note which a person with a career in biopharma should be familiar with. Generally, terms are easy to understand, but remembering them is tricky. Concepts are tricky to understand, but remembering them is easy. A lot of these are really simple but I think most people have only vague understandings of important things. But some are truly elementary and designed for beginner education. I’d highly recommend you understand these core concepts. These are all my own definitions and subtleties or even errors may exist. I’ll keep a running list of them and make a separate page for just terms I think you should know.

Core concepts:
Penetrance. Simple concept, the likelihood a genotype will manifest as a phenotype. Be able to explain why an illness may display high penetrance or low penetrance.

Haploinsufficiency (related term). The result of a non-functional allele in a biallelic state, leaving one working copy of a gene/gene product.
Haplotype. Genotype of a haploid gene, really an allele. Some other usages include linkage-related phenomena.

Splice-site mutation. Any mutation that result in an exon/intron shift, resulting in an incorrect gene product.
Homologous recombination. The process by which DNA strand breaks/errors are fixed using a homologous strand of DNA.
HDR pathway. The homology-directed repair pathway that uses homologous recombination to fix genetic errors with a DNA repair template.

Ataxia. Common neurological finding where the patient is unable to coordinate broad motor function due to lack of coordination of muscle movements.
Nystagmus. Common neurological finding where patient is unable to control eye gaze, resulting in aberrant and involuntary eye movement.
Diplopia. Double vision.
Dysarthria. Speech dysfunction secondary to neurological dysfunction.
Past pointing. A neurological test to detect cerebellar dysfunction.
Intention Tremor. Contrasts with Essential Tremor as a low frequency tremor.
Dystonia. Involuntary muscle contractions.
Paresthesia. Abnormal tingling feeling.
Cerebellum. The “small brain” which controls motor function, movement and coordination.
Hypotonia. Lack of muscle tone, or weaker than normal muscle tone.
Schwann cells. Peripheral nervous system cells that form myelin (among other things).
SUDEP. Sudden Unexpected Death in Epilepsy
Generalized Seizures. Seizures with bilhemispheric origin.
Tonic-clonic seizure. Formerly known as a grand-mal seizure, features both tonic and clonic aspects.
Tonic seizure. Seizure featuring rigidity/muscle tightening.
Clonic seizure. Seizure featuring jerking/contracting movement.
Focal seizure. Formerly known as partial seizure. A seizure originating from a definitive brain area.
Ictal. Related to a seizure.

Surface plasmon resonance (SPR). A laboratory technique sometimes used to measure ligand affinity. Works best with two proteins if I am not mistaken. Not very commonly used as there are simpler methods.

Hazard Ratio. Common statistical measurement to determine the risk reduction of one intervention as opposed to another. HR=0.50 is a 50% reduction in the risk of an event over the course of time. This is opposed to odds ratios, which do not account for area under the curve in a Kaplan-Meier plot and are “landmark”-type analyses. Be able to explain why 1-year overall survival and hazard ratio could be very different statistics for the same RCT.

Copy Number Variation. A phenomenon where a stretch of DNA (as little as a trinucleotide or as large as an entire gene) is repeated. May result in no phenotypic change, or some change due to gene product instability, translation changes or gene dosage.

De Novo Mutation. A genetic mutation arising for the first time in a patient, not passed through a classical inheritance from the parents.

Music is hard to come by here. We have prison-issued MP3 players. Many of the newer albums (and older) aren’t available on our system. You can generally forget about anything mainstream. One song I had on yesterday that I really enjoyed was Pianos Become The Teeth’s “Repine”. I listened to it a lot prior to prison. I’m told they finally have put on a new album but I haven’t heard it. A friend of mine even sent me the lyrics! Imagination’s all I’ve got.

Liberals must be losing it. Are Trump’s approval ratings increasing? I have no idea. The economy is doing well, North Korea is finally behaving (imagine he wins a Nobel Peace Prize? perhaps with a bit more progress, he should!), and a new conservative Justice is coming to the Supreme Court. Bad era for the other team, which is why it’s important to remember, we’re all team America. Grow up, liberal pussies. As a conservative, and something of an intellectual, I am dismayed at the sanctimonious left. You’re not better than anyone else, and you’re damn sure not better than me.

Oh, I hope some people are not upset that I’m trolling Lauren Duca. How can you troll your own wife?

I’m going to be paying a lot of attention to sports going forward. I’ve always been a sports fan, as a natural competitor. I’ve ignored the major sports, save for following championship games. You can guess why I’m interested in this, all of a sudden. Lebron is going to the Lakers. Not sure what that means quite yet but will make for interesting games later this year.

Disclaimer – You should assume I have a conflict of interest on everything I talk about (even in sports, music and politics!) given my web of complex holdings. I don’t give stock advice, and you should not ever listen to anything I say because I’m an idiot. Never come back here again.

June 30th, 2018

Welcome to my first blog. I’ll be discussing biopharmaceuticals and other topics. I am not recommending any stocks or making investment advice. This is merely me “thinking out loud”. I’ll try to mark sections clearly for those who are here for industry commentary as compared to my personal life.


–Tesaro and Jazz sold products they don’t want anymore. For those that business, this was noteworthy.

–Recordati’s sale to private equity marks the probable end of an era, but we’ll see if the family sticks around. An incredibly well managed roll-up for the naysayers out there. Rollups are best done slowly (see Berkshire, Loews, but not Valeant).

–Global Blood Therapeutics intrigues me. I will write in further detail in the near future.

–SEL-212. I think this drug should do well, take new patient starts away from Krystexxa. Not a huge problem for Horizon or anything, but notable.

–Novartis’ much-telegraphed sale of Alcon and the continued implosion of GE reminds us conglomerates are more out of fashion than probably at any point in the history of business. This flies in the face of mechanical logic, but practically makes sense. Finding good managers is hard (I’ve maybe found a very small handful of decent managers out of close to 1000 I’ve employed over the years) and conglomerates can only work if you have an engaged CEO (about 5% of CEOs) and engaged managers (less than 5%? less than 10%?), which probability tells you is far lower. The flipside is you get enormous diversification and cash flow stability. Even Bayer pruned some assets, but Berkshire continues to prove everyone wrong. Anyway, I’d rather have a well-managed conglomerate than a well-managed single-focused MNC anyday. Vasella’s failure in buying Alcon was the asburd price paid at the time. Now, divesting it for half the purchase price (~10 years later!) is a sad day for his legacy. The purchase price was $50 billion, but including opportunity cost, the company lost $50 billion on Alcon ($25b asset value, $25b lost opportunity). Given Novartis is still top 5 big pharma, a great performance from the rest of the business.

–In teaching discount rates to some of the guys here, we find dogma like ‘sovreigns always have less default risk than corporates’, when obviously most S&P 100 companies have lower default risk than the Eastern European countries I come from. Or my notion that a conglomerate should always have (all else being equal) less default risk than an industry-focused company. Certainly GE has more default risk than Amgen. You can slap together a lot of low-margin businesses with leverage and you’re far less safe than a well-run industry leader. But, ceritus paribus, the Novartis move is risk-neutral since healthcare conglomerates aren’t really conglomerates. Having an eye healthcare business isn’t particularly diversifying other than somewhat eliminating concentration risk which naturally comes with scale. GE selling Healthcare markedly increases risk, in my eyes. Any precision that comes from better operational focus is overwhelmed by the idea that one of their highest-return businesses is being spun off. Companies need to weather bad times. There’s a reason Berkshire Hathaway, the consummate rollup/conglomerate (dirtiest words possible) bailed everyone out in 2008.

–Alexion’s new antibody should position the company for further complement growth. No one is going to show up and eat their lunch. Having said that, owning this stock is a labor of love (actually, that doesn’t exist in finance!) similar to owning IDPH in 2002 (for you fellow old-timers!). In Idec’s case, you watched great growth of Rituxan but were always wondering “what’s next”. Alexion has their work cut out but sometimes the best solution is to just grow and grow with your middle fingers proudly displayed (a bit of AbbVie’s solution to product concentration risk).

If there is a biopharma company or medicine you want me to think about, email martin@thotpatrol.com (gets snail mailed to me by a friend) or send me a snail mail at:
Martin Shkreli
Register #87850-053
FCI Fort Dix
Federal Correctional Institution
PO Box 2000
Joint Base MDL, NJ 08640

Papers I’ve Read Today
Prostate Cancer Metastatis — Fueled By Fat? Cory Abate-Shen. NEJM 2018 378;17
NEJM should stop this ‘clinical implications of basic research’ section. It’s embarassing to dumb down basic research and this is the wrong audience. Just make a NEJM Biology journal or something.

Making Sense of Triple Inhaled Therapy for COPD – Suissa & Drazen. NEJM 2018
Authors are too critical of IMPACT, in my opinion.

Once-Daily Single-Inhaler Triple versus Dual Therapy in Patients with COPD. Lipson et al. NEJM 2018 378;18.
The “IMPACT” study worked. Disagree with the editorial. I like GSK.

Association of Serum Retinol-Binding Protein 4 Concentration With Risk for and Prognosis of Amyotrophic Lateral Sclerosis. Rosenbohm et al. JAMA Neurology 2018.
Embarassing this got published. Look at the delta in serum RBP4 between groups and you tell me that is of any value.

Identifying fast-onset antidepressants using rodent models. Ranmaker and Dulawa. Molecular Psychiatry 2017.
100 ways to torture a mouse.

Genome-wide association study of positive emotion identifies a genetic variant and a role for microRNAs. Wingo AP et al. Mol Psychiatry 2017.
Less fun paper than it sounds.

I have around 38 months to go assuming no success on an appeal. I spend most of my time reading. A newspaper misreported that I’m ‘buff’. This is not the case. Oh, the Wu-Tang album is still in my possession. As are all of my assets. I couldn’t have a lower opinion of newswriters now that I’ve had folks report on me. It’s astonishing, really. I understand that not everyone can be capable or excel at their chosen career, and the reporting of occurrences and chronicling of history is not a vitally important task to those charged with it. So, don’t pay too much attention (an admonishment to the reader and a reminder to myself). Anyway, the fate of the Wu-Tang album remains to be seen, but the choice is distinctly mine. I’m a bit frustrated by the Clan’s insistence on making a further album. I was told this would be the final work–I would have never purchased ‘Shaolin’ if that representation was false. That sounds like a violation of a certain section of Title 18 I’m familiar with, come to think of it. Anyway, I’ll decide at some point if I want to sell the album. If a higher-return troll opportunity occurs, I just might.

What else? Politics seem to be tearing this country apart. I think both sides have to start capitulating or perhaps California/NYC should become a special entity with their own federal government. The rest of the backwards nation will have to make do. It’s more practical than what we have going on. Same federal taxes but less whining. Just thinking way outside the box 🙂

You probably won’t find me talking too much about jail as I think it’s in bad taste. This will undoubtedly be read my inmates and staff and it’s easier (and safer) for me to just avoid certain topics. The only thing I can probably say is I miss my family, friends and cat, roughly in that order.

Well, this will be a living project. If you have any advice, like, “less this and more that”, leave some comments or email martin@thotpatrol.com (my people will slowly deliver this email to me in the form of printed snail mail — takes about 2 weeks from your email until I get it in the actual paper mail). I write this message on our “TRULINCS” prison email system to a friend. That friend posts it on the blog. Hope you enjoy this!