8/26/18

Investing/Biopharma
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PD-1 drugs approved: MRK’s Keytruda (pembrolizumab), BMY’s Opdivo (nivolumab), ROG VX’s Tecentriq (atezolizumab), PFE/MRK DE’s Bavencio (avelumab), AZN’s Imfinzi (durvalumab). I think I got all those right (off the dome).
PD-1 drugs on the way: SNY/REGN, TSRO/ANAB, INCY, WALVAX, CELG/BGNE, CSTONE, NVS, JNJ,
MGNX? INNOVENT? Walvax?, MRK DE bispecific, etc.

So, my guess is BGNE’s valuation is mostly a function of zanubrutinib, their potentially best-in-class BTK inhibitor. It would still make it a very expensive drug company. Further, my cursory glance at their data vs ibrutinib reveals no significant difference, at least in WM. Will have to keep looking.

Papers I’ve Read
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Regulation of the neuropathy-associated Pmp22 gene by a distal super-enhancer. Pantera, et al. Hum Mol Genet 2018.
CMT1A is a big disease!

Acetylcholine Receptor Stimulation for Cognitive Enhancement: Better the Devil You Know? Baxter & Crimins. Neuron 98, 2018.
Quick preview of Vijayraghavan’s paper (to appear in next blog) showing muscarinic 1 agonists don’t aid cognition, at least in this weird animal saccade model.

Clinical Trials
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Single-Dose PK Study of Benapenem in Healthy Patients. Sihuan Pharmaceutical.
Sihuan stock has dropped a bunch in the last 12 months or so. I always thought it was a little overvalued. Interesting to see a seemingly new carbapenem, however. Too bad antibiotics are no longer a viable business. It is humorous to see ‘reporters’ opine about how we’re facing a superbug crisis, when the facts are very different.

Neoadjuvant study of pyrotinib in combination with trastuzumab in patients with HER2 positive breast cancer. Jiangsu Hengrui Medicine Co.
JH is the largest mainland China listed drug company (about $30B USD market cap). The financials are not in English. I am slowly learning Mandarin.

Study of the Safety and Efficacy of APR-246 in Combination with Azacitidine. Aprea Therapeutics AB.
This is why it pays to read random clinical trials all day. Aprea apparently developed a mutant p53 chaperone. The response rates are fairly good. I wonder if there are any papers or patents some friends are willing to mail to me on this mysterious new drug. p53 has been this important tumor suppressor for so long, but largely undruggable for somewhat obvious reasons. Given the revolution in tumor genotyping, it makes sense that restoring abberant p53 function (akin to the Vertex approach with misfolded CFTR) would be useful.

Treating paroxysmal noctural haemoglobinuria patients with rVA576. Akari Therapeutics.
This drug has been through a lot. I almost bought it 4 or 5 years ago as a competitor to Alexion’s Soliris. Recent studies have shown it appears to be not quite as effective as the real McCoy. Eculizumab is, of course, being replaced by an even better antibody. There are other anti-complement drugs out there. Still, at a $30m market cap or so, Akari is tantalizing (that does not mean attractive).

Virtual Reality for External Cephalic Version. Columbia University.
External Cephalic Version is when the baby is coming out upside down. Usually you have to C-section that, but you can try and flip the kid around. I guess the VR would help momma through that presumably traumatic process? Or train the doc?

Factor VIII Gene Therapy Study in Patients With Hemophilia A. Drug: BAY2599023 (DTX201). Bayer, Dimension Therapeutics.
Ultragenyx owns Dimension now. So many players in curing Hemophilia. Looks like BioMarin may be a year ahead of most.

Personal
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Sorry I’ve been very busy lately! I was somewhat ill the last few days. I’ve been working hard on some math problems, some of which I may have solved. I’m reviewing lots of medical literature and data I’d rather not share, and I reviewed the appeal of my criminal case, which will be filed in short order.

Our building won the first series of our softball tournament, so I’m also pleased by that.

9 thoughts on “8/26/18”

  1. Two questions, if you get them and find either one of them worth the time to answer.

    Question 1 ) What would you think of a strategy that attempted to make successful investments in drug companies based almost entirely on base rate statistics regarding development, approval, and commercialization and the incorporation thereof into relevant valuation computations? I might rephrase this in a slightly different but related question of the potential for generating alpha from a certain kind of statistical mis-pricing more than from the kind of fundamental mis-pricing you are naturally more focused on.

    Question 2 ) To what extent do you think more long-term, more higher level predictions can be helpful in drug and medical device investing. For example, you mentioned antibiotics as being no longer a viable business, which got me wondering whether that was a basically predictable development. I tried to think of what kind of predictions someone might try to make today. I’m not the person two generate the best examples, but for the sake of illustration, these two occurred to me: (a) the broad development/commercialization strategy in oncology in the near to medium term (you mentioned PD-1’s, as an example, but could one make any projections around whether combination trials will eventually lead companies to incorporating different therapies and MOAs into “single” drugs and the impact on pricing and industry dynamics), and (b) the prospects for genetic screening of embryos to impact the development of therapeutics for certain orphan disorders over the near to medium term. You might have thoughts on such predictions in general, these two example predictions, or ideas about other predictions that you would make or would be interested in making.

    I don’t expect that these are intelligent questions, but hope that they are not unintelligible. Either way, I would add that I appreciate you sharing your thoughts via the Internet for the benefit of others. Thanks.

  2. Hi Martin, first of all its inspiring to see you make the most of your situation. I’m not sure I could handle it mentally – stay strong (p.s. gl with the softball). I’m a pharma noob but I find your comments on BGNE interesting. Other than being late to a crowded market in PD-1 (tho the CR they posted in the headline data seems pretty good to me despite not being a primary indication??), do you have any angles on the BTK or otherwise? It seems that the data from ASH (I’d mail u the paper but you asked us to check with you first) and the upcoming head to head with Ibrutinib as well as management comments indicate that they’re quite confident. I’m too much of an idiot to think critically about the data they’ve shown, can you point me in the right direction (what to read up on next)?

  3. Hi Martin, first of all its inspiring to see you make something positive out of a shitty situation and best of luck with your appeals process (are you playing softball or nah?).
    I find your comments on BGNE quite interesting, I’m a pharma noob so can I ask if the headline pd-1 CR number they posted for HL worth paying attention to (seems rly high to me but im too much of an idiot to think critically about the data)? Also for the BTK, the mgmt comments and the willingness to do a head to head with Ibrutinib seems like they think they’ve got hot shit but I dno what to make of the data they showed at ASH (can send the paper and presentation to but u asked us to check with you first), toxicity/AE looks better than Ibrutinib at least. Other than PD-1s being crowded af and BGNE being late, anything else that makes it ur favourite short?

  4. Makes me mad that you are in prison. Absolutely a mockery. Just shows you that politicians will get you if you mock them.

    Hope they release you soon.

    p53 restoring aberrant function is a fools game. Don’t chase.

    Yeezus

  5. Two questions, if you get them and find either one of them worth the time to answer.

    Question 1 ) What would you think of a strategy that attempted to make successful investments in drug companies based primarily on base rate statistics regarding development, approval, and commercialization and their incorporation into the relevant valuation computations? Perhaps another way to ask this is about the potential for generating alpha from a certain kind of statistical mis-pricing rather than the notion of fundamental mis-pricing which you emphasize.

    Question 2 ) To what extent do you think longer-term, higher-level predictions can be helpful in drug and medical device investing. For example, you mentioned antibiotics as being no longer a viable business, which got me wondering whether that was a basically foreseeable eventuality. I tried to think of what kind of predictions someone might try to make today. I’m not the person to generate the best examples, but for the sake of illustration, these two occurred to me: (a) the broad development/commercialization strategy in oncology in the near to medium term (you mentioned the status of PD-1’s today, as an example, but could one make any projections around whether combination trials will eventually lead companies to incorporating different therapies and MOAs into “single” drugs and the impact on pricing and industry dynamics); (b) the prospects for genetic screening of embryos to impact the development of therapeutics for certain orphan disorders over the near to medium term. You might have thoughts on such predictions in general, these two example predictions, or ideas about other predictions that you would make or would be interested in making.

    I don’t expect that these are especially intelligent questions, but I hope that they are not unintelligible. Either way, I would add that I appreciate you sharing your thoughts via the Internet for the benefit of others. Thanks.

  6. Hi Martin, Swedish reader here.

    I know about the Swedish p53 company, private Aprea. P53 of course notorious target. ,
    I have also been checking out a US public company called Aileron working on p53 albeit in a different manner, by inhibiting 2 regulatory proteins.

    Of course p53 is involved with malignancy either as a non functioning protein, or by down regulation.

    ((Recommended deeper dive on p53, google this 43 page review, great read:

    “Keeping p53 Active: The Challenge of Cancer Therapy”

    ))

    Proteins Mdm2 and MdmX are heavily involved in controling p53. Mdm2 promotes enhanced nuclear export of p53 and also polyubiqiuitinates p53, thus targeting it for proteasomal degradation. MdmX blocks p53-mediated transcription. Mdm2 and MdmX shackles p53. ALRN-6924 shackles Mdm2 and MdmX.

    ALRN utilizes a technology that they ridiculously calls ”stapled peptides” ( i wish they came up with another name, it sounds stupid, maybe its to blame for the stocks performance :)). They can stabilise alpha-helical peptid motifs by “stapling” them with hydrocarbon bonds, producing drugs of smallish size capable of targeting protein-protein interactions intracellularly, no less. Cue ALRN-6924, active in the nucleus of cancer cells, freeing up p53 to do its apoptotic work.

    Over expression of Mdm2 and MdmX in malignant cells is achieved via different mechanisms, including gene amplification, increased transcription, enhanced mRNA stability and altered post-translational modifications, leads to the inhibition of p53 function in many cancer types, including sarcomas, gliomas, haematological malignancies, melanomas and carcinomas.

    ALRN-6924 is the only dual inhibitor of MDM2 and MDMX in clinical trials. Several others, including Roche, Sanofi, Merck, are trialing MDM2 inhibitors and MDMX inhibitors. When you look into it (se below), there is evidence that dual inhibition is superior to inhibiting just one. Small Swedish private outfit called Aprea of course is working on a way to correct the folding of a faulty p53 protein.

    6924 is active in monotherapy. In the dose escalation portion of the trial in AML a patient with very high counts of blasts died from tumor lysis syndrome caused by the drug. Tragic, and solid proof of drug efficiency. Trial protocol has been amended and cleared with the FDA, no clinical hold.

    Recent company presentation:

    http://wsw.com/webcast/canaccord30/alrn/?lobby=true&day=2

    Here is a text on the rational of 6924:

    http://www.hematology.org/Thehematologist/Diffusion/8673.aspx

    Any way, hope you enjoy that!

    Best regards, stay out of trouble
    HO, MD

  7. I just found out that CMT1A causes atrophy, so I wouldn’t recommend wearing tight pants! L o l. Seriously , there happen to be a lot of Neurotoxic medications that are fatal to this disease. There could be something more helpful than harmful.

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