1/7/2019

962-964 days to go

Biopharma/Investing
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The BMY-CELG deal is not too unexpected. I had modeled a AMGN-CELG merger and felt it was too long-term dilutive to AMGN and it is probably also long-term dilutive to BMY, unless luspatercept does more than $3bn and the CARTs do more than $4bn combined, which is possible. Ozanimod also adds to the puzzle. My estimates were reasonable and the deal was too dilutive. BMY is betting that their commercial execution will outpace their R&D execution, which is basically a fair bet across all of pharma. With LAG, IDO and TIGIT looking disappointing, might as well launch new products that actually work. With very low debt costs, it is a reasonable transaction from a practical perspective. One can pontificate about theoretical alternative investment rates, but how many opportunities to deploy $75 billion are really out there? Nevertheless, BMY has waded into the REMSphere, where they will encounter a staunch opponent in the current FDA. Any attempts to delay generic entrance of Revlimid will be encountered by fierce resistance. Given the near-term generics for CELG’s top 3 drugs, BMY will regain their weird lumpy revenue/earnings profile (no kidding the deal is ‘accretive’ in the next few years!), resulting in a return to the Avapro/Abilify cliff story of the past.

During the year and especially at the end of the year I like to sort my universe’s stocks by YTD performance. I’ll try to present the winners and losers of 2018 in an upcoming blog post. Invariably some moron hedge fund manager says “this was a tough year”. No, stupid. This was a year where you failed to do your job–buy the stocks which appear at the top of the list and short the stocks at the bottom. I’m looking at Greenlight, -30% for the year. The list proves *someone* made money in this zero-sum game, and if you can’t spot the sucker at the table… I like pharmaceuticals because of the heterogeneity of the space, which allows for a no-excuses approach for the player, despite changes in alpha and its accessibility.

Hansa Bio (HMED in Sweden) is one of my favorite stocks. Maybe I’ll do a writeup!
Amgen is fairly valued. Detailed writeup soon!

Papers I’ve Read
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I’ve spent the last few weeks reviewing most (!!!) of the scientific literature of 2018, at least from the preeminent journals. There were a lot of great advances in 2018, especially in biomedical science. Here are some:

1) The evolution from CRISPR to Base Editors.
2) The clearer evidence that microglia is responsible for the pathogenesis of many CNS maladies.
3) CRISPR babies are out there.
4) Further CART successes, including BCMA.
5) Progress towards HIV clearance.
6) Further gene therapy successes, including SMA and hemophilia.
7) VRTX CF advances.
8) A stop codon read-through experiment actually works.
9) AlphaGo and other AI successes.
10) Microbiome successes and failures, further fleshing out of the reality of this niche.
11) Spooky action confirmed, again.
12) Success in quantum satellites/cryptography.
13) Quiet year for math as Goldbach theorem fizzles out and the ABC scandal remind us of the frailty of human logic.
14) Continued success in spinal cord injury restoration/rehabilitation.

Missed anything?

Hemoglobinopathies in the Fetal Position. Pasricha & Drakesmith. NEJM 2018 379;17.
Another “clinical implications of basic research”, a dumbed-down abstract form of another journal’s paper. In this case, Science published a dynamic paper on HRI kinase controlling fetal hemoglobin expression through adulthood. This will undoubtedly herald a race to synthesize a selective HRI inhibitor (send me crystal structure in the mail please). But, again, do us putatively dumb readers of the NEJM need this helping translational hand to read Science?

Microbial signals drive pre-leukaemic myeloproliferation in a Tet2-deficient host. Meisel et al.
Finally, a microbiome paper that isn’t… full of shit. UChicago researchers working with Tet-/- mice found pre-leukemic disorders where expansion of some myeloid cells are highly correlated with driving tumor progression. What is driving that expansion? Amazingly, they find some Lactobacillus snuck into the vivarium, colonizing mice gut microbiomes. This then resulted in IL-6 expression which drove the leukemia. Amazing! It is worth attempting Actemra, Roche’s IL-6 antibody, in some of these human conditions and seeing if the experiment replicates. There are some methodological issues with the experiment, but in general, it is very convincing and exciting.

TAS05567, A Novel Potent and Selective Spleen Tyrosine Kinaase Inhibitor, Abrogates Immunoglobulin-Mediated Autoimmune and Allergic Reactions in Rodent Models. Hayashi et al.
Taiho, not to be confused with Taisho, researchers outline their Syk inhibitor. The thinking here is the Syk inhibitors advanced heretofore have been too sloppy and this more selective kinase inhibitor will avoid the promiscuity seen in the past. I think this class of molecules will remain dead as the therapeutic impact just is not there.

Personal
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Saturday NFL match-ups look too close to call. Sunday I chose the Eagles, who came through ๐Ÿ™‚ I really like this team. They’re unlikely to proceed further, but they are far stronger than most think.
I sort of like the new Meek Mill album, an artist I mostly panned in the past.

15 thoughts on “1/7/2019”

  1. Here’s a brief tech catch up (2018 edition):

    – User data-centric and advertising companies taking some hits; US hearings on misinformation and fake news, celebrity de-platforming and censorship, data privacy issues (GPDR) and data leaks in focus. FB, GOOGL, SNAP.

    – Apple reached USD 1 trillion MC (briefly). Apple, Microsoft, and Amazon all around USD 700-800 billion MC. AAPL, MSFT, AMZN.

    – Disney (Walt Disney, Marvel, Pixar, Star Wars) announced its own streaming service to compete with Netflix. DIS, NFLX.

    – Heavy spending on fixed assets. Alphabet expected to spend USD 22 billion, Facebook USD 15 billion, Microsoft USD 12 billion. GOOGL, FB, MSFT.

    – E-sports, gaming and gamers are dominating the online popularity contest (*Fortnite*), Amazon/ Prime likely to gain from increased interest in livestream gameplay. AMZN.

    – Tencent Music announced IPO, currently estimated 50% market share for music streaming in China. TME, SPOT.

  2. Shkrelz, you diabolical genius. Prison word of the week is my latest source of enlightenment! I also thoroughly enjoyed the bit with comments during voir dire. No, no, no, no. WHY did you stop writing me, you asshole!๐Ÿงก

  3. Ay martin hope you’re doing as well as possible on the inside. The world needs Shkreli back on the outside. Stay positive and hope you get out soon.

  4. Is Martin able to make posts here directly, or is he relaying them through somebody.

    Just happened to stumble upon this, would be willing to setup a much nicer site!

    Maybe some other commenters can give me the low-down on the situation.

  5. All the people posting positive comments about this poor excuse of a ‘man’ are just as pathetic as he is.
    I really hope somebody will fuck you up, now or in 10jrs. Arrogant, anti-social piece of shit. I pray every day, hoping you’ll get terminally ill.

    You are the living embodiment of everything that is fucked up, wrong and twisted about this world.

    Please die, I hope it will be a long and painful proces.

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