12/10/2018

Biopharma/Investing
————————–
GILD couldn’t have hired a better CEO than O’Day. Severin Schwan was never going to give up his job, so makes sense, even after 31 years with Roche. The only question is what to do with Gilead? Can you gain scale in cancer from zero? Does the O’Day hire imply a continued focus on oncology? Seems challenging… acquire/merge with Celgene or Jazz (not much scale) could be an option. If I were CELG, I’d hit the sell button on a $90b part cash/stock bid. Accretive to GILD, for a little while. Another option is to try and buy Genmab as Gilead has very little large molecule infrastructure. Morphosys is a favorite of mine and another obvious candidate, but one-drug-at-a-time doesn’t bring you scale. Another option is to actually just sell GILD to JNJ or PFE which I doubt could be accomplished (too big and probably not enough interest–JNJ does have an HIV vaccine in phase 2, though). I guess if I were O’Day, I’d start talking up a HIV clearance (cure) by 2030 as the next big commercial opportunity. The drug to end all drugs–a $50-100bn revenue per annum medicine that rids the world of HIV. Who better than GILD?

Poor Axovant with another failure.

Hikma drops its clobazam generic. This was a super-expensive medicine that many have/are raced/racing for an ANDA.

Papers I’ve Read
——————–
Transcription factor IZKF1 is degraded during the apoptosis of multiple myeloma cells induced by kinase inhibition. Liu et al. FEBS Letters 2015.
These Chinese researchers try, but fail to elucidate very much about the cereblon-IZKF1 interaction that is heavily implicated in Celgene’s IMID drugs. By using non-specific kinase inhibitors they tried the hypothesis that phosphorylation impacts degradation of IZKF1–they found the opposite of their hypothesis but did poor scientific work with cell line choices and the ugly choice of kinase inhibitors. We will see some better papers in the next blog post.

Personal
———–
Toothache completely disappeared and some modest pain is now back. Going to the dentist for the third time in two weeks tomorrow.

Happy 15th month in jail is coming up in a few days!!! Going to miss this place!

Football was quite “stochastic”. I dodged the Patriots-Dolphins, Redskins-Giants massacres, but did fall victim to the Rams-Bears and Broncos-49ers upsets. Thankfully, the Bengals kept it close enough to cover. This was the weekend that probably blew up quite a few bankrolls.

12/9/2018

Biopharma/Investing
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Chugai’s SKY59 C5-antibody may be a real threat to Alexion… Phase 1/2 data at ASH looked good.

China’s stock market is -30% this year. In US terms that’d be one of our worst years in history. US is flat YTD.

Alnylam is developing a RNAi for hypertension and also an amyloid-beta RNAi. You can’t make this up… talk about awful targets.

The Altria investment in Cronos is stunning. This isn’t related to healthcare but this is a sight to behold. Bubble or birth of a new industry?

Papers I’ve Read
———————
De Novo Truncating Mutations in WASF1 Cause Intellectual Disability With Seizures. Ito et al. Am J Hum Genet 2008;103,144-153.
These researchers used the Matchmaker Exchange to link together and find de novo mutations of WASF1. WASF1 is a fairly unique protein and I don’t see how one could therapeutically target it. It assists actin polymerization by creating a complex… complex. Maybe someone smarter than me can figure it out but I see brick walls. One of the problems is actin is so important in neuronal development and these patients had very profound intellectual disability from birth. Very sad.

Extramedullary Myeloma whole genome sequencing reveals novel mutations in Cereblon, proteasome subunit G2 and the glucocorticoid receptor in multi drug resistant disease. Egan, et al. Br J Haematol 2013.
Again, CELG background research. Interesting case report.

Cereblon is recruited to aggresome and shows cytoprotective effect against ubiquitin-proteasome system dysfunction. Sawamura, et al. Biochem Biophys Res Comm 2015.
One of many weak papers which grope for clarity on the IMID target cereblon. CELG background reading.

Personal
———–
I saw the very qualified and excellent dentist here today, again. He shaved the tooth down and it appeared the filling he did last week was a bit high and occluding a proper bite. I am suspicious and believe I am harboring an infection. He is of course, right, and there is almost certainly no infection, despite the pain I feel in my jaw. X-rays showed no abscess. Despite all this I will happily down a prescription of clindamycin, gleefully overusing antibiotics, destroying gut flora, all cost-free to me and $50,000 of annual taxes to you.

What is the DOJ doing arresting a Chinese MNC CFO? The rogue EDNY has again lost its mind. There are evidently not enough American criminals to prosecute. The ever-growing leviathan needs to be slayed. A 50% budget cut to DOJ and FBI would restore piority to these afflicted institutions.

12/6/2018

Biopharma/Investing
————————-
Samsung Biologics has been halted for 3 weeks? These accounting issues have been persistent and the stock did fine. I wonder what is going on in Korea.

Papers I’ve Read
———————
Isosteric analogs of lenalidomide and pomalidomide: Synthesis and biologic activity. Ruchelman, Muller, et al. Bioorg & Med Chem Lett 2013.
Not the world’s most impressive SAR paper, but exploring the decorations of the indole (phthalimide) and glutarimide moieties led to little improvements. Of course, the only measured changes were TNF response to LPS, IL-2 increase and cell line anti-proliferative effect. At the time, cereblon was already identified as the therapeutic target for the “IMIDs” so it is a bit surprising to see these assays. Also, the “isosteres” aren’t very creative. 4-CH3 improves Revlimid but ethyl does not and other, longer variants were not attempted.

tp53-dependent and independent signaling underlies the pathogenesis and possible prevention of Acrofacial Dysostosis – Cincinnati type. Watt et al. Hum Mol Genet 2018.
This ultra-rare disorder has only been described in a few humans. A ribosomopathy, I’m not sure if its embryonic lethal in all homozygotes or some hypomorphic alleles are compatible with life, or what. This one is caused by a mutation in a RNA Pol I subunit, creating the fundamental and ubiquitous ribosome. Despite that, the pathogenesis is very tissue-specific. It was exciting to read tp53 -/- somewhat ameliorates the POLR1A -/- phenotype but it doesn’t rescue it completely. This CCH group also discovered and named the first patients with the illness. I find it incredible how quickly progress can be made in these ultra-rare/newly discovered illnesses.

Exploring the speed limit of toehold exchange with a cartwheeling DNA acrobat. Li et al. Nature Nanotechnology 2018.
I don’t know anything about engineering but how this DNA literally cartwheels (while one strand is bound to the “floor”, the other strand moves end-over-end to move its free-end to bound again) is fairly incredible. Still, don’t expect DNA nanomachines fixing up your cells anytime soon.

Personal
———–
7 days in and my tooth is still killing me. All that anyone can talk about here is Meek Mill’s new album.

12/4/2018

Biopharma/Investing
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GSK acquisition of TSRO is very value-destructive and weakens faith in new GSK management. For $5bn, a drug that is a 50/50 to reach $500 million is quite the price tag.

GBT is probably a better long “up here” than before. The risk of an approval is gone. Commercial risks remain with Novartis’ drug seemingly superior in efficacy. A combination study would be wise. The market is big enough for both, though. I see GBT trading over $100 sooner or later.

DEEP DIVE – CELGENE – PRICE TARGET: $91.00
——————————————————–
Revlimid (lenalidomide) is 2/3rds of Celgene’s revenue, with $10 billion in revenue expected for this year. The composition of matter patents on Revlimid expired (the IND for Revlimid was filed in 2000), as Revlimid is simply a derivative of Thalomid (thalidomide). We will spend some time on the indole-pyridine scaffold of thalidomide. While the structure of Revlimid is very similar to Thalomid, the drug does have some advantages over its predecessor. Nevertheless, nearly 30 patents which “protect” Revlimid will likely be found invalid or not infringed by would-be generic entrants. The first entrant, NatCo (partnered with Teva), has settled with Celgene for a partial distribution deal starting in 2022. The strongest patent is the ‘800 polymorph patent, expiring in 2027. NatCo is allowed a full launch in 2025, with their 2022 “low-single-digits” participation in Revlimid growing to one-third in that year. This would have been a fairly good deal for Celgene if no further ANDAs were filed. But when you have the world’s second best selling drug, you can count on competition. Dr. Reddy’s is at the plate as we speak, with expert discovery concluding in the near future and a trial likely for late 2019 or early 2020. More importantly, their 30-month stay will expire in late 2019. So, how strong is a polymorph patent? I initially felt that Celgene would have a very low likelihood of prevailing at trial, and their Natco settlement indicates weakness. Further research revealed polymorph patents do occasionally prevail, and I believe Celgene has a roughly 50-50 chance of having the patent upheld. The details of the ‘800 fight are beyond the scope of this review, but take a look at the docket and some case law in polymorph patents–many white papers are available. After Dr. Reddy’s, 5 more ANDAs have been filed: Zydus, Cipla, Lotus, Apotex and Sun are all waiting in the wings.
Ultimately, there isn’t enough Revlimid to go around for Celgene and the generics. The Natco settlement worked for one company, and there is enough room for Dr. Reddy’s, but ultimately Celgene will not be able to settle every generic as each subsequent filer finds each subsequent settlement offer less attractive than a trial. Imagine being the fourth ANDA here–do you really want the 3.5% of Revlimid starting in 2024 and up to 2025 but nothing if the patent is overturned in the future? Someone will break ranks and go to trial and overturn what is probably a flimsy patent. So, I have 2019 revenue of Revlimid at $11.5b, 2020 at $12.7b and 2021 at 50% of that: $6.3b, 2022 at $3.5b. Someone launches in 2021 is my best guess. One year later adds roughly $10 per share, so risk is weighted to the upside (probably) here. The three remaining points on Revlimid are the success of generics, replacement by the IMID portfolio and recent data.
Revlimid generics may not do so well, commercially, from the outset. Somewhat like the dynamics of a biosimilar, I predict that the first generic entrants for Revlimid may not find the marketplace too easy. Revlimid’s REMS program has a lot of mindshare with doctors and their assistants–switching to a Dr. Reddy’s program may not be facile and the near 100% generic switch rates we see with oral solids may not take place here. See Clozaril and Accutane for historical reference.
Revlimid is still alive, with the AUGMENT data showing remarkable efficacy. AUGMENT is actually a bad thing, I think, for Celgene, as it takes the wind out of potential NHL data for avodomide and iberdomide, the two named “IMID” follow-ons. If I wanted to transition revenue to those drugs, I’d delineate and differentiate them from Revlimid. Instead, we see Revlimid is potent in R/R NHL with Rituxan. So, where do we go with iberdomide and showing how it is different from generic Revlimid? It may not matter as clinical data you can see is better than hypothetical differences, but if I had my druthers I’d have saved non-MM/MDS for the follow-ons. I have no revenue at all in my model for the next-generation IMIDs. Part of the reason for that is they share the indole/pyridine scaffold. They are the same-old structure of thalidomide, which is really disappointing. A direct cereblon modulator should be doable at this point, and even Novartis has created such molecules. Again, I’m being conservative, but perhaps for good reason.
Pomalyst is also a thalidomide derivative and is relying on a polymorph patent. I have it going away in 2023. It is remarkable that practically the entire company is disappearing in a few years. The pharmaceutical world has never seen such a dramatic patent cliff combination in its history.
Otezla is also a thalidomide derivative, with a sulfonamide decoration which makes it a PDE4 inhibitor. It also relies on a weak polymorph patent, and there are many ANDAs on file, just like thalidomide, lenalidomide and pomalidomide. I suspect generics will enter in 2023, if not sooner.
Abraxane is going generic soon too. Like I said, the entire company disappears in a few years.

So, to counter the record large simultaneous patent cliffs, you have to build the world’s best pipeline, right? Celgene has tried their best, but nothing will replace the nearly $20 billion in peak sales that will be lost to generics. Ozanimod, luspatercept, lis-cel, BCMA CART, and fedratinib make my model and only reach about $6 billion in revenue for “the new Celgene”. This is still enough, as its growing and promising revenue that is conservatively forecast (could be $10 billion if everything goes right). But make no mistake, there is absolutely no way Celgene survives the patent cliff as we know it.
Ozanimod is the tortured S1P acquired from Receptos. I have it peaking at $1.6B and this is my most conservative forecast. It is possible ozanimod does far, far better than this. There are some other S1Ps, with Novartis actually having beaten Celgene’s refiling of ozanimod with their next-generation of Gilenya (fingolimod), siponimod. Still, with $4 billion of Gilenya sales despite a toxicity profile that shocks the conscience, it is blue skies for the fumbling ozanimod. Assuming approval in 2020, they won’t have much time to replace very much of Revlimid, but they might be able to soften the blow if they execute well, which I suspect they will.
I model $1.5B in net revenues from all BCMA CARTS (Juno and Bluebird). This might be conservative as well, but with the rapidly changing environment, it is hard to be confident of any CART revenue projections. Competition abounds from all fronts, CART and non-CART, so who knows if the numbers are accurate or not. Again, I tried to keep risk skewed to the upside. There are many that feel this paradigm shift will be a $5 billion+ opportunity for EVERY player. It is possible. The 80% response rates seen at ASH are remarkable for such late-stage patients. The 50-50 with Bluebird limits some revenue potential, however.
I model $1.0B for luspatercept, net of Acceleron’s share. This drug isn’t a miracle as the ASH data shows. It is still very good, and will change the lives of many MDS patients. Where can you price it though? You’re trying to wean people off of RBC transfusions and there are other options potentially coming. Some feel this will be far larger than I think, but the XLRN stock price is perhaps telling us something different. My numbers could be conservative here as well.
I only model $900m peak for lis-cel. I am a CART bear and I think drugs like MorphoSys’ will be seen as preferable. CART reminds me of Zevalin. You can squeeze out a tiny bit more performance relative to the mab, but is it worth it? Plus, you have Allogene and others making better CARTs. I’m just not ready to have $3B+ forecast for no reason. If Yescarta puts up a few more good quarters, perhaps a revision to $1.5B may be necessary. Again, conservative in most places, but I think I’m right on here.
Fedratinib: I don’t get this one. I see $400 million peak sales in the Jakafi-dominated myelofibrosis/PV indications. This isn’t going to be a blockbuster.

Celgene still has a few years before “impact” and that is really important. With $25B or so of high-margin Revlimid revenue prior to expiry to deploy, and $40B or so if you count pre-full cliff of Rev+Pom+Otezla, there is plenty of capital to do a few more deals. They passed on Tesaro, which is a good start. Celgene has generally been pretty good at BD. The Acceleron deal is a good example (signed for $25 million if I recall correctly). The Juno deal makes me nervous that they’re feeling desperate, but there is still plenty of firepower for acquisitions. A few smart deals will not save Revlimid, but they don’t need to. We’ve all digseted the impact of the cliff and what is important is to value the copious cash flows between now and then, and value the “stub” remainder that the pipeline represents. It’s worth a lot, more than the current fear-based stock price of $71. If you believe my nervous nature was too conservative on all the pipeline, the stock is probably worth $100 or $110 or perhaps more if they can execute Revlimid flawlessly. With Revlimid lasting a bit longer than I think and just one drug like ozanimod surprising to the upside, you could get $120 or $130 out of the stock. For such a big company, that is an attractive return. However, a dud of an acquisition (Tesaros abound) or further buybacks make the risk profile uncomfortable. Celgene has a gun against their head and most management teams are not known for patience during shareholder pain.

Papers I’ve Read
——————–
Timing the Landmark Events in the Evolution of Clear Cell Renal Cell Cancer: TRACERx Renal. Thomas J. Mitchell, et al. Cell 173, 1-13, 2018.
Workers here did serial biopsies of ccRCC progression and unveil some interesting findings. First, mutations in UTR region of TERT abound. Next, a tiny clonal population of the 3q deleted region found in this disease of just a few hundred cells can give rise to the visceral tumor decades later. Really cool work and likely to be therapeutically relevant as we screen for these chromothrpsis-bearing patients.

Activity-based E3 ligase profiling uncovers an E3 ligase with esterification activity. Kuan-Chuan Pao, et al. Nature 2018.
Fancy footwork in this paper to discover an E3 ligase that ubiquitinates atypical substrates.

A direct link between MITF, innate immunity, and hair graying. PLoS Biol 2018. Harris ML, et al.
Harris & colleagues do a nice job of showing the innate immune system impact on hair graying. We’ve seen similar work in alopecia and vitiligo, so here comes Rituxan for balding! Jokes aside, this was impressive work, using poly(I:C) to simulate infection. Actual infection would have been interesting, but probably not necessary. The MITF-inteferon connection is made plain here by the researchers.

Personal
———–
My tooth abscess still bothers me from time to time. I am almost done with my course of amoxicillin. Fans, friends and family: Please give Trashy a good life if you don’t hear from me!

11/30/2018

Biopharma/Investing
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I’m almost done with Celgene deep dive. I have some conflicts of interest so there a few things I won’t discuss. I’ve also been busy with other reading, so, sorry for the delay. The upshot is CELG is fairly valued at worst and slightly undervalued at best. Incredible execution would allow for a good return, say, 50-100% over the next 5 years. It would take extraordinary executive performance, that is unlikely to occur, however. Probably not worth touching in general but somewhat tempting long. More details (pages and pages) soon.

How bad is “STAT”? My friends send me news summaries on biopharma everyday and the STAT one is the sorriest. STAT publishes more on public health issues than pharmaceuticals. That’s fine, I guess, if you’re morbidly interested in Ebola and don’t care about new FDA approvals and interesting clinical data. SCRIP is far better from my perspective, for the pharma professional, at least. Also, the anti-pharma and anti-Trump viewpoint of STAT shines through. It’s like they want all the failings of a major news organization without any of the benefit of being healthcare-focused. I predict a shutdown within 24 months. Mic has recently shutdown. I will not be surprised when more web properties shut down as Google/Facebook continue to gain Internet ad spend share, spend which will decline in a recession, leaving leaders like Vice, Business Insider, Buzzfeed, etc. scrambling for capital and cost-cutting, and totally bankrupting most of the “New Media” no one reads and fewer (readers or advertisers) pay for.

Papers I’ve Read
———————
Structural basis for dual-mode inhibition of the ABC transporter MsbA. Hoangdung Ho, Anh Miu, Mary Kate Alexander, Natalie Garcia, et al. Nature 2018.
Gram-negative bacteria employ a “double membrane” to maintain cellular integrity. Lipopolysaccharide, or LPS, composes the outer membrane and generally keeps drugs out of the cytosol. LPS, of course, drives our human toll-like receptors wild. MsbA (a unidirectional transporter) transports cytosolic LPS to the outer membrane. These Genentech scientists took the first high-resolution co-crystal of MsbA with an inhibitor discovered from a 3,000,000 compound screen. Normally I don’t read antibiotic papers, but this is quite the exception given the famous intransigence of the outer membrane. This high-quality work is the kind one aspires to.

Sports/Games/Poker
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2-2 in NFL weekend. The Cardinals bet was meant to be tiny. The Dolphins and Bills came through, but the Eagles disappointed by letting the Giants keep it close. The Giants looked great in the first half!

Have been playing around 1800 ELO in chess. Will post some games.

Went 1-1 with GS and IND last night in basketball. Didn’t touch the incredible DAL-NO NFL game. Formulae said go with DAL but only marginally.

Personal
———–
I’ve been suffering from a terrible toothache the last few days. This has led to record lows in productivity and new milestones in whining.

They sell bacon here. I have a lot of expired bacon. I eat it anyway. IDGAF.

Update: I had the tooth filled. I think I have an infection, though. The healthcare people here are really good. And free. I love my free, government-paid-for healthcare.

11/25/2018

Football today. 4 picks. Dolphins, Eagles, Bills and Cardinals. 3 underdogs. No more luck for Luck. Eagles should destroy my G-Men in reversion to mean. The Cardinals is the weakest of the four picks, but +13.5…

Good luck!

11/23/18

Papers
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Cyclin-Dependent Kinase 12, Immunity, and Prostate Cancer. Emmanuel S. Antonarakis. NEJM 379;13:1087-1089.
So CDK12 mutants are PD1-inhibitor sensitive. The bigger question is why am I reading a summary of a Cell paper in NEJM? If I wanted “basic research”, I’d read (and I do) Cell (although this work is more “translational” than “basic”, if you can figure out that meta).

Status dystonicus due to missense variant in ARX: diagnosis and management. Gorman et al. Eu J Pediatric Neurology 2018.
I’ve always followed epileptic encephalopathies. They’re tragic and have so many different causes–a good combination for a drug developer. I don’t know much about ARX–just a non-descript development protein to me–and this paper doesn’t help much. Having said that, status dystonicus is extremely rare. Sometimes found in PKAN.

Limiting State Flexibility in Drug Pricing. Bagley & Sachs. NEJM 397;11:1002-1004.
Bagley & Sachs use Exondys as a scapegoat for changing Medicaid law. This is a drug that is so rarely used it is not even close to 0.1% of drug spend. But they need to rewrite laws because of it. Is anyone else sick of this? If this was a peer-reviewed journal, it would never fly.

Personal
———–
Had a very nice Thanksgiving here! Turkey sandwich was banging.

Poker is a little better. I have to play more aggressively. No more 2x raises (unless it is for misdirection). Tightening up a bit in the situations where I lose a lot: Ace and low kicker (9 or less). I did get crippled on one hand:

I’m dealt AKo in late position. UTG calls, I raise 3x, villain-felon calls. Flop is rainbow AK3. He bets the pot and I call. The next card is a 7. He bets the pot and I call. I figure he has A and a low kicker, maybe even two pairs. Finally a J shows on the river. Can you predict the rest? He bets I reraise, he calls and flips the Q10o. I could have just called or folded I suppose. The hand would have cost a lot less.

From Inside A Hole – A Poem
————————————
the slit opens.
the tiny portal to the world.
slices of fetid turkey are thrown through.
the cold floor greets the meal.
a cranberry sludge drips through the hole,
obscuring a gang oath since rescinded.
“Happy Thanksgiving.”
a surprised grunt returns my valediction
and the door slams.
it’s enough.

11/20/2018

Biopharma/Investing
————————–
There have been a bunch of questions on generics. The first thing to understand is the generics world has always been an cottage industry compared to branded pharmaceuticals. The largest 3 generic companies, Sun, Mylan and Teva, have market caps (EV maybe more accurate!) that are very modest compared to pharma or even single/few-product biotech companies like Vertex, Celgene and Regeneron. The fact that one drug from Alexion is worth more than the biggest generics player in the world is telling enough.
Moving on, there is a “new normal” margin compression in generics. For a long time, generics companies enjoyed 50% (sometimes higher!) gross margins. I actually think this comes from assuming normative gross margins from specialty chemicals (where pharmaceuticals originally evolved). Why shouldn’t a fine chemical medicine company have higher or at least the same margins as someone making polymers? The world has changed. Chinese and Indian companies care little for convention and Western margin is their opportunity. 30% or less gross margin for generics has become the norm and it will continue to plummet until ROICs approach WACCs. In essence, we’ve had it too good for too long and the party is over. This happens in cottage industries, all the time. Why here? The scale of making generic medicines is modest. We’re usually dealing in kilogram scale and rarely tonnage of API. This means that no matter what the product, it is easily made with cGMP quality at low cost. Assuming you have your own manufacturing facility, what is essentially happening is you are entering into a cost-plus dynamic. With no IP, buying consortiums and a FDA quick to approve new generics, the best you can hope for is cost recoupment with a margin. Obviously the higher the margin you can get, you’ll eagerly take, but equilibrium will quickly align ROIC to WACC for most projects.
Companies like Mylan and Teva are surviving because the rest of the world isn’t the United States. In most other countries, generics are still not that substitutable and health agencies are slow to approve new ones (30+ months). That will change. Healthcare costs have been growing for decades, as demand outstrips supply. Turns out people like living longer and being healthy. Drugs are a small part of healthcare costs and earn disproportionate blame, but generics are a hero and will see continued support from global governments.
Generics are great for entrepreneurs. I would know. It is such a fragmented industry, one can “hit it big” with any ANDA. It’s the pharmaceutical equivalent of a dollar and a dream–a $2 million ANDA could bring you $100 million in wealth if you pick your spots correctly. The problem, of course, is it is very difficult to scale. Like any gambling game, entrepreneurs tend to play too many hands and end up looking like the larger companies they are trying to beat. Occassionally, you get an Apotex or some other company with a hot hand a smart management team selecting great projects. Biogenerics are really high return projects from what I can tell, for instance. Inhalers and topicals appear to be similar. Oral solid dose is dead and likely dead forever (with the caveat that conditions can change).

Steve Cohen says a bear market is coming. Cohen also mentioned that Buffett is no Cohen. Cohen has a much higher investment return than Buffett but Buffett built a company that gets a multiple. I forget how old Cohen is (60?). They are probably neck-and-neck in terms of wealth for inflation and age adjustments. Cohen’s long-term returns are probably still in the 30% range, which is nothing sort of astonishing. Reminds me of the Stephen King book, “The Last Gunslinger”. Nevertheless, many feel he deserves an asterisk next to his name, like Barry Bonds. Cohen built a company of sharks who swarmed the waters for any advantages. Needless to say, many crossed lines that they should not have. Despite that, Cohen’s work ethic and talent speak for itself. He is an innovator in so many respects: the use of trading psychology, the focus on short/medium-term (more than 1 day, less than 1 month) IRR to achieve very high returns, the investment in technology to increase returns, perfecting the hub-and-spoke model, supreme talent acquisition, etc. SAC still deserves special mention in the firmament of great investment houses: Soros/Druckenmiller, Buffett, Cohen, Simons.

Bloomberg gave away $2 billion. I guess that means he is running for President. Good luck, Mike. Michael is one of my business heroes and I was fortunate to briefly meet him in college. Politically and personally, I think he would be a decent president. He is a little too left for me, normally, but he is a very practical guy that would appeal broadly to Americans. Trump’s best challenger for 2020, by far.

I saw DNLI announced “positive clinical results” and when I opened the story, it was Phase 1 healthy volunteers. Poor PR/IR person there.

Papers I’ve Read
——————–
Thermodynamic characterization of the multivalent interactions underlying rapid and selective translocation through the nuclear pore complex. Hayama et al. JBC 2018.
These Einstein and Rockefeller researchers break the reader’s brains with their biophysics. The final frontier of molecular simulations amuses me. If you want to hurt your head, read this. They apparently solve the nuclear pore paradox. I, for one, didn’t know it existed. All jokes aside, this is interesting work on protein complexes that are “fuzzy”. I’m not sure they get it right because they’re probably not sure they get it right. I have to suspend enough disbelief to measure static in silico entropy changes.

Altered Mitochondrial Acetylation Profiles in a Kainic Acid Model of Temporal Lobe Epilepsy. Gano et al. Free Rad Bio Med 2018.
Never heard of this journal before but the workers do a good job demonstrating that SIRT3 is clearly a mitochondrial deacetylase and could be related to epileptogenesis. So let’s jump on it and make lysine acetyltransferase inhibitors? Not so fast. There is a lurking causality problem here, as usual. Despite that I think the results are worth further experimentation if you can find a selective enough inhibitor of acetyltransferases or SIRT3 mimetics.

Neuropsychiatric expression and catatonia in 22q11.2 deletion syndrome: An overview and case series. Butcher et al. Am J Med Genet Part A 2018.
Who isn’t fascinated by catatonia? This paper doesn’t add much to the picture but I certainly will follow-up on 22q11.2DS.

The cellular chloride channels CLIC1 and CLIC4 contribute to virus-mediated cell motility. Stakaityte et al. JBC 2018.
This was very interesting–MCPpV causes Merkel cell carcinoma. I don’t know the difference between a polyomavirus and an arenavirus but virus-causing cancers have always interested me. Their takeover of the CLIC4 and CLIC4 ion channels for motility is convincing and lends a clear pharmaceutical intervention. Very nice work.

Sports
———-
1-1 on Sunday. Titans stunk but the Bengals kept it close. Returning to mean, nothing to see here.

Poker continues to mystify me. “Game theory optimal”? Here’s one hand. I’m short stacked at a 6 player table. UTG raises 3x BB. One caller and then me. I’m holding KJs. I call, BB calls. Four of us are in. BB checks and the UTG raiser bets half the pot. Caller to the right calls. I raise, only doubling the bet (my stack is almost gone). Everyone calls and the original bettor goes all-in with a huge stack. 3 of us call (my stub stack calls for roughly 3x BB). Raiser turns over AKo, caller to the right flips over KQo and I’m stuck in third place. No consolation prize.

I also went all-in post flop in a button pre-frop-raise where the BB called me after seeing 8 2 2 flop. My hand? 3 3. He calls and turns over K K.

Personal
———–
It was nice to see the big homie speakeasy Sunday. One of my closest friends!

I like this Queens House of Representatives Democrat. Young woman. Hyphenated last name. You know who she is. She needs to go to college but at the same time she’s really independent and anti-establishment. Viva anarchy!

11/18/2018

Football
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Ran all the numbers (rather laborious) and believe the two mispriced games are TEN and CIN. I think TEN is twice as worthy as CIN. Everything else is fairly priced with one exception which is even less compelling than CIN. I did not include the late Sunday night game or Monday night game, due to fatigue.

11/17/2018

Biopharma/Investing
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Celgene deep-dive is progressing smoothly. I’ve skimmed hundreds of papers (4000 Revlimid entries in Pubmed), docket entries and more in preparation. Thanks for the crazy amount of mail.

Fascinating, if not desperate, deal to save $UTHR with $ARNA.

Papers I’ve Read
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Computational antimicrobial peptide design and evaluation against multidrug-resistant clinical isolates of bacteria. Nagarajan et al. JBC 2017.
I had fun flipping through this “end-to-end” paper that astonishingly starts with computer/math concepts and ends with in vitro testing. It’s too bad antibiotic resistance isn’t the threat some are making it out to be. The piper cites that deaths due to antimicrobial resistance are expected to exceed 10 million by 2050. I am very suspicious of that number and if you consider deaths by all infectious microbes, I’m not sure what the apples-to-apples comparison is.

Metabolic enzyme PFKFB4 activates transcriptional coactivator SRC-3 to drive breast cancer. Dasgupta et al. Nature 2018.
This brick-by-brick/no-tricks paper is a good example of core biology informing pathogenesis. This Baylor group starts with SRC-3 and tries to determine its phosphorylation kinase. The group convincingly demonstrates PFKFB4, a glycolysis (read: Warburg) enzyme, is the culprit. A series of experiments demonstrates enzyme/TF hyperactivity in a high-glucose environment. The noting of SRC-3/estrogen receptor coactivation unfortunately is not followed up on beyond some transcriptional data. I would have included ER antagonists to determine the functional relevance of PFKFB4 blockade vis-a-vis ER redundancy. Nevertheless, the group proceeds to microarrays where they demonstrate purine synthesis as the downstream consequence of this axis. One wonders if we’ve returned to square one with chemotherapy that often targets nucleotide synthesis. Anyway, once xenografts are included, we see etremely convincing evidence o this axis driving metastasis and tumor growth. Finally, they even find human evidence that SRC3-PFKFB4 overactive TNBC patients have poorer outcomes. Truly a Nature-worthy paper. Would be drug-hunters may be interested in developing PFKFB4 inhibitors.

Clinical Trials I’ve Noticed
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Study to Evaluate the Safety, Tolerability, Pharmacokinetics (PK) and Anti-tumor Activity of FN-1501 Monotherapy in Patients With Advanced Solid Tumors. Shanghai Fosun Pharmaceutical Development Co., Ltd.
SF is one of the bigger Chinese pharma companies. This is a FLT3/CDK2/4/6 inhibitor.

A Study Examining The Effect of eFT508 in Patients with Advanced Castrate-Resistant Prostate Cancer (CRPC). Effector Therapeutics.
This is a private company focused on MNK1/2 and eiF4A inhibitors. They raised $38 million in a Series C. Definitely one to watch.

Efficacy and Safety Evaluation of Glepaglutide in Treatment of SBS. Zealand Pharma.
Zealand is still alive and actually might be a decent investment.

REGN2810 in Pediatric Patients With Relapsed, Refractory Solid, or Central Nervous System Tumors and Safety and Efficacy of REGN2810 in Combination With Radiotherapy in Pediatric Patients with Newly Diagnosed or Recurrent Glioma.
If you’re Libtayo, this is the part of the cancer world not carved up by Opdivo and Keytruda. Cancer’s Australia, if you will.

VNRX-5133 With VNRX-5022 in Subjects With Varying Degrees of Renal Impairment. VenatoRx Pharmaceuticals.
VenatoRx is apparently an antibiotic private biotechnology company. Also known as a company that is unlikely to survive. See above comments.

Cell Therapy for High Risk T-Cell Malignancies Using CD7-Specific CAR Expressed on Autologous T Cells. Baylor College of Medicine.
Interesting…

Feasibility and Efficacy of the Ketogenic Diet in Alzheimer’s Disease. University of Kansas Medical Center.
Don’t hold your breath!

Study of Anti-CD19 CAR NK Cells in Relapsed and Refractory B Cell Lymphoma. Allife Medical Science and Technology Co., Ltd.
Another mysterious Chinese CART player.

Efficacy of Cannabinoids in Amyotrophic Lateral Sclerosis or Motor Neurone Disease. Gold Coast Hospital and Health Service. CannaTrust Inc.
Smonk weed?! What can this miracle plant NOT do?

Adherence to Walking on an Alter-G Anti-Gravity Treadmill. Texas Tech University.
Sign me up!?

NY-ESO-1 TCR Engineered T Cell and HSC After Melphalan Conditioning Regimen in Treating Participants With Recurrent or Refractory Ovarian, Fallopian Tube, or Primary Peritoneal Cancer. Roswell Park Cancer Institute.
Why not contact Roswell Park for a partnership here, if you believe in NY-ESO-1?

Study of SHR-1210 in Combination With Chemotherapy in Advanced Esophageal Cancer. Jiangsu HengRui Medicine Company.
This is a Phase 3 trial of camrelizumab in China, licensed to Incyte fo $25m. A PD-1 mab, and the… 5th? Chinese PD-1 mab (Innovent, Cstone, Beigene, Jiangsu and one other I’ve forgotten… not to mention PD-1s already approved in China: Keytruda, Opdivo and more coming…) Good luck to all.

A Prospective Study Evaluating the Effect of Ocrelizumab on Brain Innate Immune Microglial Cells Activation in Multiple Sclerosis Using PET-MRI With 18F-DPA14. Roche Pharma AG.
Ah. A Clue!

VX15/2503 in Combination With Ipilimumab or Nivolumab in Patients with Head and Neck Cancer. Vaccinex Inc.
Apparently, these guys are public: VCNX. This is an antibody to not such an exciting target (at first blush).

Investigating the Cardiovascular Toxicity Exposure of Electronic Hookah Smoking. NIH.

Brief Book Review – Chernobyl: The History of a Nuclear Catastrophe. Serhii Plokhy
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Plokhy takes you inside the control room as Unit 4 of the Chernobyl Power Plant explodes and threatens the viability of the Eurasian continent. The author can’t help but be riveting thanks to the subject matter. No film or novel could match the truth of April 26, 1986 and Plokhy does the moments before, during and after justice. Those expecting Patterson will be disappointed, however. Plokhy is still a plodding Harvard history professor and he admirably contextualizes Chernobyl in the appropriate Cold War milieu. Given a 10% meltdown of just one of four adjacent reactors more than thirty years ago threatened millions of people, one cannot help but be petrified of nuclear energy (or nuclear anything) today. I’m sure reactor design has improved substantially to the point where uncontrolled reactions are unlikely (if not impossible), but the risk of “unknown unknowns” (Fukushima comes to mind) would preclude my support for nuclear power. Anything where the option of wiping out the planet is on the table is a risk to great to bear. That’s just me.

Sports/Poker/Chess
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How about those Knicks?

I am so, so bad at poker. Can’t wait to play Ivey for $5 million when I get out.

What does everyone think of the Carlsen match so far? I bet he comes back strong in the back-to-back white games.

Personal
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Less than 33 months to go! There seems to be some incredulity here. 84 month sentence – 14 months in = 70 months – 13 months good time = 57 months – 12 months program referenced in sentencing = 45 months – indeterminate but no less than 9 month home confinement and no more than 12 month half-way house = 33 to 36 months. Read the statutes. Pending reform remove a month or two. Don’t forget my appeal and possible media exposure calling for my immediate release.