Sunday, August 18, 2019

Achillion: Shifted Gears For Success

Summary
Achillion Pharmaceuticals delivered extremely robust outcomes for the Phase 1 study of ACH-5228 and thereby galvanized the shares to trade multiple folds higher.
The second-generation Factor D inhibitor (ACH-5228) demonstrated over 95% inhibition of the alternative complement pathway.
With stellar data, Achillion advanced ACH-5228 into a Phase 2 study. An investigational new drug application for ACH-5228 is expected by year-end.
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You only have to do very few things right in your life so long as you don't do too many things wrong. - Warren Buffett
Though successful innovation entails mega-profits, the field is fraught with risks. Therefore, a bioscience theme that I like is when a company genuinely admits failure and thus abandons a former area of focus. In my view, it's prudent to shift gears when either the drug did not generate promising data or the market is overcrowded. The aforesaid phenomenon epitomizes the saga of unfolding events centering Achillion Pharmaceuticals (ACHN).
After years of tinkering with molecules for the hepatitis market, Achillion shares took a beating. Make no doubt, Achillion can make excellent medicine. It's just that hepatitis isn't a fertile investment field. With the prowess similar to Achilles, Achillion switched aim to shoot for the mega prospects of the complement-mediated disease market. As it rolled in uncanny data, the stock recently enjoyed a gargantuan rally. The elephant in the room is whether there is further upside. In this research, I'll present a fundamental analysis of Achillion and provide my expectation on this intriguing grower.
Figure 1: Achillion chart (Source: StockCharts)

About The Company

As usual, I'll deliver a brief corporate overview for new investors. If you are familiar with the firm, I suggest that you skip to the subsequent section. Based in Bluebell Pennsylvania, Achillion is focused on the development and commercialization of small molecule complement inhibitors. Poised in the delivery of hopes to patients, Achillion is striving to serve the strong unmet needs in neurology, nephrology, hematology, and ophthalmology.
Achillion initially targets markets without an approved medicine. Moreover, the company seeks to capture niches having a robust demand for better treatment options. Accordingly, the ongoing development includes paroxysmal nocturnal hemoglobinuria (PNH), C3 glomerulopathy (C3G), and immune complex membranoproliferative glomerulonephritis (IC-MPGN).
Figure 2: Therapeutic pipeline (Source: Achillion)

Wednesday, July 31, 2019

Atara: The Silver Bullet For Multiple Sclerosis

Summary
Atara recently published excellent tolerability data for ATA-188 at the 5th Congress of the European Academy of Neurology (EAN) in Oslo Norway.
In 2H2019, the company will deliver initial efficacy results for the first cohort taking ATA-188.
That aside, the firm will report Phase 3 results for its lead franchise tab-cell this year. The positive outcomes will erase doubt and fear regarding the departure of senior management.
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We always live in an uncertain world. What is certain is that the United States will go forward over time. - Warren Buffett
In my view, a copycat drug usually procures meager sales. By the time a biosimilar comes to the market, a legion of "me too" therapeutics already decimated the profit margin. On the contrary, the largest investment profits typically arise from a molecule with a novel mechanism of action. Essentially, investors reward for innovation rather than duplication. Despite my affinity for tab-cel, I believe that Atara Biotherapeutics (ATRA) has two wildcards with a disruptive mechanism of action that can galvanize the company's prospects.
Specifically, ATA-188 and ATA-190 are designed as silver bullets for the dread condition (multiple sclerosis). They attack multiple sclerosis as if the disease is of viral origin rather than autoimmune. This is in stark contrast to the conventional paradigm that multiple sclerosis is strictly autoimmune. As such, I believe that any positive news on this front will induce a vigorous rally. In this research, I'll present a fundamental analysis of Atara while focusing on the multiple sclerosis franchise.
Figure 1: Atara chart (Source: StockCharts)

About The Company

As usual, I'll deliver a brief corporate overview for new investors. If you are familiar with the firm, I suggest that you skip to the subsequent section. Headquartered in San Francisco California, Atara is focused on the innovation and commercialization of allogeneic T-cell immunotherapies (“A-TCI”) to serve the strong unmet needs in cancer and autoimmune diseases. Since A-TCI functions similar to a CAR-T, it activates the most important cells of the immune system (i.e. T-cells). I noted in the prior research,
Instead of engaging CD4 (helper T-cells), A-TCI primes CD8 (killer) T-cells with intelligence to improve these cells’ adeptness at detecting and destroying cancers and virus. Powering by A-TCI, Atara is growing a robust pipeline of immunotherapies. The partnership with Memorial-Sloan Kettering (MSK) also enabled Atara to deliver the next-generation mesothelin-targeted CAR-T (i.e. MT-CART).
Figure 2: Therapeutic pipeline (Source: Atara)

Saturday, June 15, 2019

ArQule: Profiting From Tyrosine Kinase Inhibition

Summary
Though not exhilarating, value and growth investing usually garner outsized returns. Nonetheless, it takes time for the value of growth equity like ArQule to be unlocked.
After years of dormancy, Arqule bulls rallied to the strong clinical reporting of ARQ-531 for various blood cancers. And, I forecast that advanced trials will deliver positive results.
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Time is the friend of the wonderful company, the enemy of the mediocre. - Warren Buffett

Author's Note: In honoring my father, I'm offering a 50% membership discount to new subscribers. Message me if you'd like to receive your Father's Day gift.

Aside from his prowess for numbers, Warren Buffett has the excellent temperament for investment. In my view, Buffett's mega success is the cumulation of his hard work and rigorous learning. With a voracious appetite for knowledge, Buffett read financial report daily in his office. The man is a learning machine. That aside, the fact that Buffett lives in the golden land of opportunity also helps him grow Berkshire Hathaway (BRK) to become a multibillion-dollars franchise. In following the footsteps on the giant Buffett, I made it a habit to exercise my due diligence by researching every day and periodically reviewing my investment thesis. This learning process reinforces my growth and value investing approach that is adapted specifically for the life science industry. Over the years, I'm convinced that the Buffett wisdom - time being on your side when you hold a fundamentally sound stock - is true. As such, my pick on the oncology innovator ArQule (ARQL) exemplifies the Oracle's teaching.
Figure 1: Arqule stock chart. (Source: StockCharts)
From 2016 to early 2018, the shares were trading at a depressed level, around $1.5 per share. During the time, I realized that there is much room for growth ahead due to the quality of its molecules. And, I was even more excited because ArQule was undergoing a period of market unpopularity. Consequently, it enabled the stock to trade at a deep bargain to its true worth or intrinsic value as Buffett calls it. In just over a year, ArQule has appreciated over 37%. Despite the modest gains, the best is yet to come. In this article, I'll present a fundamental analysis of ArQule and provide my expectation on this young grower.

About The Company

As usual, I'll deliver a brief corporate overview for new investors. If you are familiar with the firm, I suggest that you skip to the subsequent section. Headquartered in Burlington Massachusetts, Arqule is focused on the innovation and commercialization of precision medicine to serve the unmet needs in oncology. Harnessing the power of various tyrosine kinase medicines, Arqule is brewing a robust pipeline of three molecules (ARQ-531, miransertib, and ARQ-751) for various cancers.
Figure 2: Therapeutic pipeline. (Source: Arqule)

Wednesday, June 12, 2019

Intercept: Amid The FDA Draft Guidance OCA Will Be Approved

Summary
Intercept is an excellent contrarian bet due to a stream of negative news flow amid the strong fundamental development. As such, there is definitely a silver lining in the dark.
The current pessimism against Intercept is the 2019 NASH draft guidance. Mr. Market believes that the draft will hamper the prospect of obeticholic acid's approval. This is certainly overblown.
As the light that shines in the darkness, the Phase 3 REGENERATE trial for obeticholic acid covers all bases. With strong data, OCA will gain approval for all NASH stages.
You only have to do very few things right in your life so long as you don't do too many things wrong. - Warren Buffett
In Benjamin Graham's book The Intelligent Investor, the Father of Value Investing epitomizes the fickle nature of the equity niche as "Mr. Market." Driven by emotion, Mr. Market usually makes impulsive decisions that are disconnected from the stock's fundamentals. His mood is reflective of a pendulum that swings to either extreme optimism or grave pessimism. As I'm cognizant of his behavior, I'm enthused by a good investment prospect disdained by Mr. Market. In my view, investors have a much better chance of uncovering undervalued equities during a stock's period of unpopularity. If all experts are opining positively on a stock, chances are that it's either optimally priced over overpriced. A prime example of this phenomenon is Intercept Pharmaceuticals (ICPT).
Figure 1: Intercept chart (Source: StockCharts)
The current market consensus believes that there are irreparable safety issues centering the lead medicine obeticholic acid (Ocaliva). Nonetheless, OCA is already approved for another liver disease for years. Therefore, it's acceptable safety profile is established. As I addressed those specific issues in prior articles, I'll defer from going over the same issues. That aside, it seems that Mr. Market is now having a fit regarding the latest FDA guidance for nonalcoholic steatohepatitis ("NASH"). Despite the grim outlook, the fundamental picture of Intercept is brighter than ever. In this article, I'll present a fundamental analysis of Intercept while focusing on the ramification of the FDA draft guidance.

About The Company

As usual, I'll deliver a brief corporate overview for new investors. If you are familiar with the firm, I suggest that you skip to the subsequent section. Headquartered in New York City, Intercept is focused on the innovation and commercialization of a semisynthetic bile acid known as OCA to treat serious liver conditions. In binding to the “holy grail” receptor farnesoid X, OCA activates many key regenerative responses. On May 2016, the FDA approvedOCA as Ocaliva for the treatment of a rare and chronic liver condition, primary biliary cholangitis ("PBC").
Figure 2: Therapeutics pipeline (Source: Intercept)
Currently in a Phase 3 trial, Intercept is most likely the first company to launch a medicine for managing the highly prevalent fatty liver disease, NASH. As the crown jewel of Intercept is its fatty liver disease franchise, I'll shift gears to cover the recent market concern regarding NASH.

Sunday, June 9, 2019

IBI Top Picks For Summer 2019 Part II: Which Bioscience Stock Will Sit On The Iron Throne?

Summary
Last weekend, I featured Part I of the Top Picks for Summer 2019. I'll finish up this series by presenting four more growth companies.
As a leader in the non-alcoholic steatohepatitis space, Madrigal is most likely to deliver strong advance data and thereby takes its crown as the undisputed champion in the $25B market.
To honor of my Father, I'm giving out a 50% discount gift to new members this weekend in advance of next week's Father's Day.
One thing that could help would be to write down the reason you are buying a stock before your purchase. Force yourself to write this down. It clarifies your mind and discipline. - Warren Buffett

Author's note: In honor of my Father, I'm offering new subscribers a 50% discount gift in advance of next weekend's Father's Day. Send me a message if you wish to receive yours.

In Part I of my Top Picks For Summer 2019, I featured four powerful bioscience growth equities. To complete this summer expedition, I recently came out of the jungle of bioscience equities to deliver to you four more intriguing investment leads. In my view, they are low hanging fruits that can catapult your portfolio to the new high, provided that you hold them for the next several years. In my view, the most outsized returns arise from long-term investing.
If you take equity investment similar to buying a house, it'll make much more sense. One cannot expect to flip a house overnight for the most gargantuan profit. A house needs years to appreciate multiple folds. From the fundamental paradigm, equity investment works pretty much the same way. Time is simply a requisite for a growth business to unlock its full potential. Buffett said it best: "You can't produce a baby in one month by getting nine women pregnant."
My view is in line with the Oracle of Omaha, Buffett. Nevertheless, I believe that you can still bank short-term profits in bioscience. This occurs in situations known as "binary events" like an FDA approval or clinical data reporting. Nonetheless, one needs to have expert forecasting skills to have an edge over the market. Armed with all the arsenals, it's still quite risky. Moreover, the returns are not outsized as in ultra-long-term holding to make investing worthwhile.

Saturday, June 8, 2019

CRISPR: Vertex Doubled Down On The Reigning Champion CRISPR/Cas9

Summary
Monitoring pharmaceutical-partnership is a prudent strategy to assess the underlying value of a platform technology.
Due to its stellar CRISPR/Cas9 platform, CRISPR Therapeutics is able to expand its collaborative relationship with the pharmaceutical elite, Vertex.
Leveraging CRISPR's expertise, Vertex is marching into the lands of gene-editing to galvanize medicines for Duchenne Muscular Dystrophy and Myotonic Dystrophy Type 1.
To honor of my Father, I'm giving out a 50% discount gift to new members this weekend in advance of next week's Father's Day.
All there is to investing is picking good stocks at good times and staying with them as long as they remain good companies. - Warren Buffett

Author's note: In honor of my Father, I'm offering new subscribers a 50% discount gift in advance of next weekend's Father's Day. Send me a message if you wish to receive yours.

If you look at a fruitful marriage, chances are that the house is filled with joy and laughter. In bioscience investment, the pursuit of happiness also comes from partnership and acquisition. And, there is an aplenty of partnership to drive the common goal of delivering hopes for patients while reaping profits for shareholders. That being said, the most transcending situation occurs when a partner doubled down its initial commitment. In my view, there has to be something like an invaluable technology platform that enticed the partner. Consequently, I believe that this situation usually leads to an outright acquisition.
The prime example of the aforesaid phenomenon is the union between Vertex Pharmaceuticals (VRTX) and CRISPR Therapeutics (CRSP). Due to the partnership expansion, CRISPR shares appreciated 15% today and thereby procured a 119% profits for my Core Portfolio Alpha. Nonetheless, the best is yet to come. In this research, I'll present a fundamental analysis of CRISPR while focusing on partnership expansion.
Figure 1: Crispr stock chart (Source: StockCharts)

About The Company

As usual, I'll deliver a brief corporate overview for new investors. If you are familiar with the firm, I suggest that you skip to the subsequent section. Based in Switzerland, CRISPR Therapeutics is focused on the development and commercialization of gene-based therapies to serve the unmet needs in blood disorders, immuno/oncology conditions, and regenerative medicines. On the shoulders of its stellar gene-editing platform dubbed CRISPR/Cas9, CRISPR set out to make history. In a two-pronged approach, the firm is nourishing a highly promising portfolio of gene-editing medicines and CAR-T therapeutics.
As it galvanizes the next-generation gene-editing medicines, CRISPR attracted the attention of Vertex. In unison, the partners are developing up to six CRISPR/Cas9-based molecules. Nevertheless, CTX-001 is simply the first prodigy child in this harmonious union. But there is much more to come, as shown in the deep pipeline below.
Figure 2: Therapeutic pipeline (Source: Crispr)

Sunday, May 26, 2019

IBI Notable Community Discussion: The Best Is Yet To Come

Summary
Bioscience stocks commenced the week on a rally with the momentum building stronger toward the weekend. Nektar, Portola, Sesen, and especially Regenxbio are trading northbound.
Packing heavy punches, Sesen Bio is knocking market bears toward an approval. Due to the robust VISTA outcomes, Vicinium will ultimately replace Valstar as the standard of care.
In readying for an upcoming approval of NKTR-181, Nektar formed the new subsidiary Inheris. It'll ensure a robust launch for NKTR-181, the silver bullet for the prescription opioid abuse epidemic.
Special thanks of all Integrated BioSci Investing members who participated in our daily discussion. I'm grateful for your intellectual generosity.
In honoring our troops who sacrificed their lives for our freedom, I'm offering a time-limited 50% discounts to new members. Message me if you wish to get your Memorial Day weekend gift.
You only have to do very few things right in your life so long as you don't do too many things wrong. - Warren Buffett
For the Memorial Day weekend, I'll feature another Integrated BioSci Investing Notable Community Discussion ("NCD"). This series is born out of my quest to continually improve the service for our community. As follow, an NCD fills in the gap for members who are unable to join the daily chat due to work and other obligations. As such, present pertinent highlights that we discussed during the week.
On Tuesday, May 21st, Flamman initiated an excellent discussion. As the market traded lower, the opportunistic investor Flamman - at least that's how I viewed him - prudently picked up shares in some key companies. Some of his purchases included the red hot Sesen Bio (SESN), Nektar Therapeutics(NKTR), and Omeros Corporation (OMER). Of note, I recently published updates on both Sesen and Nektar. You should definitely check out those research if you haven't done so. My trading analytics suggest that the momentum is building in Sesen, Nektar, Omer, and Regenxbio. These stocks have been trading on an uptrend earlier in the week.
Figure 1: Notable IBI stocks (Source: Yahoo Finance)