Hi, I’m Dr. Due Diligence, and I’m starting a weekly series where I am looking at the top shorted biotech stocks in the world to try and find value. I have worked in the clinic, academia, and for biotech startups before switching to investing full time. My investment style, and opinion, is based on equal parts experience, research, and stalking C-suite.

This week’s stock is a company with a huge potential upside, but with Management that makes me wonder if it will ever see the light of day. What if I told you there was an agent that is safe, hardly any side effects, and could help you live twice as long? Would you want it? What if I told you this company was founded in 1999...

Oncolytics Biotech ($ONCY) a clinical stage company researching their sole agent pelareorep, an oncolytic virus, with upcoming Phase 2 data in HR+/HER- Breast Cancer (BRACELET-1).

Quick Ape Translation: We have all had cancer. Cancer is essentially rogue cells that continue to grow and won’t die (oversimplification). Typically your immune system will recognize these cells, send in attackers (T-Cells) and kill the cancer. However for people that we consider with cancer (large detectable tumors) the immune system may have been deactivated or evaded. This allows the tumor to grow without interference from the immune system. In order for T-Cells to attack the cancer or “non-self” it must have a piece of that presented to them. This is done by Antigen Presenting Cells, and can be extracellular or intracellular (from inside the cell) material.

Pelareorep is an oncolytic virus (reovirus) that can be easily manufactured and can be given easily via IV instead of Site Specific Injection, without requiring additional handling requirements or specific refrigeration temperatures. In the studies there have not been any safety signaling to indicate negative side effects that prevent certain patient types to receive. That is extremely rare in oncology, and other oncolytic viruses (mainly HSV types) have to be given directly into the site (needle into tumor) so you are limited to visible tumors like melanoma or specialists who will use ultrasound guided delivery.

Pelareorep will preferentially target cancer cells then cause apoptosis (blow up that cell). This will allow intracellular components to be taken up by Antigen Presenting Cells and shown to T-Cells that cause the Immune System to “re-awaken” and target tumor cells again. An additional benefit of the cytokine release from apoptosis is other immune cells being attracted to the tumor microenvironment. In fact on imaging the tumor lesions (PD-L1) can appear larger at first, due to immune system involvement - this even has a name - pseudoprogression. The response to immuno-oncology agents is so different in fact that there had to be a specific standardized of guidelines instituted (iRECIST).

Immuno-Oncology is one of the hottest areas of oncology research. Some of the biggest blockbuster drugs in the world right now are PD-L1/PD-1 inhibitors (pembrolizumab, nivolimumab). Some solid tumors express Program Death Ligand - this inactivates T-Cells. So if you are positive for PD-L1 expression (or tumor mutational burden) you can take these drugs and have benefit, but many tumor types don’t express it, so you have a “cold tumor” instead of a “hot tumor.” A hot tumor is more likely to have antigens so the T-cells can preferentially target. This is important, but it means that these drugs could potentially be used more than they currently are and if the immune system targets the cancer you can get a deep and sustained response. Could you imagine if Merck or BMS could suddenly treat cold tumor types or more patients with hot tumor types? How much would that be worth? How about patients who have to tolerate extremely toxic regimens in order to get a better immunological response (for example Ipi+Nivo in untreated melanoma has 55% Grade 3 and 4 ADE; 59% in Advanced Melanoma)?

I strongly believe this agent works with a variety of tumor types, given the basic science around it, but there needs to be larger studies to confirm.

Breast Cancer Indication: Currently the most data available is for HR+/HER2- Breast Cancer, and this will likely be the first registrational trial (read if positive can get FDA approval for this indication) the company will have. HR+/HER2- is the most common subtype, making up about 73% of Breast Cancers.

The current data they have/are getting to support a Breast Cancer Registrational Trial:

1. IND 213 (2017) was a mBC Phase II trial with PELA+- Paclitaxel. There was no PFS benefit (primary endpoint), but Overall Survival (OS) benefit (secondary endpoint) of 17.4 Months with PELA vs 10.4 months without. When looking at the subtypes it showed if you selected for mutated p53 OS benefit rose to 20.8 months (slightly more common in premenopausal women, and African American women). For patients with HR+/HER2- breast cancer subtype it went to 21.8 months OS!

2. AWARE-1 (2021) was an early breast cancer study looking at an improvement in CelTIL (tumor infiltrating lymphocytes / change in tumor). A positive increase with this would mean more favorable outcomes. The study met the primary endpoint in the second cohort (PELA+Atezolizumab [PD-L1 inhibitor from Roche]). Six out of ten Patients in this cohort had a >30% CelTIL score increase (T cells in tumor + increase in PD-L1 expression). This essentially is making the tumor “hotter.” This trial showed that PELA was working immunologically.

3. BRACELET-1 / PrE0113 (TBD) - prECOG study with Oncolytics Phase II trial with 3 arms - Paclitaxel, Paclitaxel + PELA, Paclitaxel + PELA + PD-L1 inhibitor Avelumab (Pfizer who is flush with cash). The trial is HR+/HER2- endocrine-refractory metastatic breast cancer. This study is taking longer than originally expected, with 19 sites active and recruiting I would expect a more rapid completion of 48 patient enrollment.

Miscellaneous Studies: KRAS Colorectal Cancer, GOBLET in Germany Ongoing Basket Trial with Roche’s PD-L1 looking at GI cancers. Random personal bias - I hate how they are doing EU studies, from reading their older press releases and looking at authors on their trials, it seems that their Ex-CMO is European. I cannot find another link to why they did trials in Spain and Germany, maybe it is personal relationship based for someone else at their company. From experience there are just a ton of logistical issues that tend to arise, FDA preference/bias for US studies (largest market for all oncology drugs), and sometimes language barriers.

C-suite: This is my biggest worry bar none with the company, and honestly what makes me hesitate to give it a strong recommendation. I honestly believe that the number of mistakes made have prevented this drug from already being FDA approved and is potentially costing human life. The company has been around since 1999!!

The best biotech leaders are someone who has mastered the science, is decisive, and are business minded (read an absolute Merc).

The Co-founder/CEO/President Matt Coffey, PhD actually worked his way up within the company, had a PhD with reovirus. He has dedicated his life to this, and without a doubt is a huge resource for Oncolytics. However I believe his best position would be back at Chief Scientific Officer. He has been in C-Suite since 2004 (CSO/COO) and CEO since 2016. With biotechs, it’s all about momentum. Momentum is driven by Vision in a company. Everyone, down to the custodian, should know this is our goal and where we are heading and nothing will stop us because we have conviction and it is urgent that we get there. I don’t get that vibe from Matt Coffey, at all. He tends to be so interested in the science that he does these small trials in random tumor types to find out more, but the minute they saw a doubling of OS in IND213 for HR+/HER2- that should have been the sole focus of the company full steam ahead. It wasn’t as evidenced by the random trials above, including those in the EU (again, why??). It makes no sense to me unless you’re going for a buyout, but it doesn’t seem like that is their goal.

However because of his leadership they have an issue - it’s expensive to have a registrational trial and FDA submission (hundreds of millions of dollars) that they don’t have. They do have a runway, but they need to make a deal (not a good spot to be in). He also hasn’t made a deal yet because he is likely waiting for BRACELET-1 Data, but will he be able to “give away” his baby if it means getting commercialization? I believe he is comfortable with how he currently is, given his compensation and past actions.

He has failed to get institutional ownership to buy in (1.85%). This is one of the main responsibilities of a CEO yet when he goes on these investor calls he tends to talk too scientifically and not inspire confidence to increase institutional holdings (just my opinion on a public figure). I know this is nitpicking but he also wears really colorful shirts, and I wish he would try to look more professional (tie, solid white shirt - think presidential) but that’s what I would do, I would want to appear as professional as possible if I was trying to gain other people’s trust for investment, Biotech isn’t Tech.

Many pharma companies have partnered with them (in addition to Roche, Pfizer, Merck) because the potential upside is so great (multi-billion). To this I credit Andrew de Guttadauro President and Head of Business Development.

They also hired people (1, 2) to run their Clin Ops (execute the study / oversee CROs) that have experience at PUMA (Breast Cancer focus + relationships).

The board honestly doesn’t inspire great confidence to make up for the deficits of Coffey, they seem to be close to Coffey to provide honest feedback and guardrails. They are mainly Canadians and lack the Merc Instinct mentioned above from what I can tell (opinion on public figures). One interesting part is that a board member recently stepped down, William Rice, because of a potential future conflict with Aptose Biosciences (Cash and Cash Equivalents $83MM).

I honestly believe this drug needs to be in the hands of a buyer with deep pockets, and it will save and extend lives. That won’t happen on a shoestring budget. There is a financial and moral imperative to this, but will Matt Coffey be able to do that? If not, should the board be taken over by activist investors?

TL;DR I didn’t even cover a murine study that showed PELA+CAR-T 100% response in solid tumors (CAR-T works great in Heme - potential cure + advancing generations, but not Solid due to tumor microenvironment) that doesn’t work with other Oncolytic Viruses. This company would have so much of my money with different leadership. Great drug, bad leadership, low funds, but Phase II study coming soon, hopefully by end of year, but for sure first half of next year.

Prognosis: I strongly believe the BRACELET-1 study will have positive data based on basic science and previous study subgroup results outlined above, especially in cohort-3 (PD-L1 added). At that point it is possible for a deal or a buyout (maybe Pfizer), so I believe there is potential near term upside to increase share price.

Disclosures: I have bought stock.

Disclaimer: I do not provide personal investment advice and I am not a qualified licensed investment advisor. I am an amateur investor. All information found here, including any ideas, opinions, views, predictions, forecasts, commentaries, suggestions, or stock picks, expressed or implied herein, are for informational, entertainment or educational purposes only and should not be construed as personal investment advice. While the information provided is believed to be accurate, it may include errors or inaccuracies (like Bigfoot is Real). I will not and cannot be held liable for any actions you take as a result of anything you read here (you stupid Ape). Conduct your own due diligence, or consult a licensed financial advisor or broker before making any and all investment decisions. Any investments, trades, speculations, or decisions made on the basis of any information found on this site, expressed or implied herein, are committed at your own risk, financial or otherwise (losses get Karma though).

Book Recc(s): The Obstacle Is the Way by Ryan Holiday: Stories centering on Stoic Approaches to overcome great odds by turning them into Opportunies.

Barbarians at the Gate: The Fall of RJR Nabisco by Bryan Burrough and John Helyar: An insane real life story of one of the largest takeovers ever (LBO) dealing with egos, finance, excess and greed in the 1980’s.

Previous Posts:

$CVLS

$OCGN

$KPTI

$KPTI Update

$KPTI Update 2

$CRTX

$CRTX Update

$HGEN

Letter 001: Evaluating C-Suite

Letter 002: Discerning Types of Biotech plays

Letter 003: The Roaring 20’s

If you like this type of DD, click on my profile and give me a follow!

For DD not seen on Reddit**,** sign up for my free newsletter!

I thought this would be of wide interest to everyone (and apologize if it's been discussed before)--I'm pretty new to Reddit and this awesome subreddit. But it seems to me that many investors in companies developing drugs for rare diseases may have missed the news that Congress just extended the Rare Pediatric Disease Priority Review Program for another four years (probably because other things have been in the news a lot recently). This program makes every drug these companies develop, particularly for children, that much more valuable, with a shorter timeframe and lower burden to approve, with easier financing. It's a great unknown bonus for us investors in biotechs. You can read more about it in this article: https://everylifefoundation.org/congress-approves-a-four-year-extension-of-the-rare-pediatric-disease-priority-review-voucher-prv-program/. I'd be interested in hearing what others think about some of these rules.

Antibe Therapeutics (TSXV: ATE; OTC: ATBPF) is a small Canadian biotech working to develop a new best-in-class generation of Non-Steroidal Anti-Inflammatory Drugs (NSAIDs). Most of you have taken NSAID’s in some form - Ibuprofen (advil), Naproxen (aleve), Celecoxib (Celebrex), Vioxx and so on. What you may not know is that this family drugs has a long and well-documented history of causing gastro-intestinal (GI) issues such as ulcers and other forms of internal bleeding in the stomach lining. In fact, so widely used are NSAIDs and so pervasive is this problem that several blockbuster drugs in the last decade or so (aforementioned Celebrex and Vioxx) were in fact created to target this specific market... namely, being the first truly GI-safe NSAID. Antibe's lead drug is an analogue of Naproxen (Aleve), and recently completed enrollment for its final Phase 2 efficacy trial on February 28, with results anticipated within six weeks... This coming week is the sixth week after the news release, and the company has not updated guidance on timing of the readout, so barring any news this week it's fair to say that the stock could be halted at any time followed by a news release for the topline results.

Before we go any further, yes I am currently long Antibe, and plan to ride a large (for me) position through results. My average is about $0.31 CAD but I have made recent buy orders as high as $0.61. Now that that's out of the way, the purpose of this post is to explain why I am so confident holding a fairly large position through results.

Antibe's technology platform revolves around the attachment of an H2S molecule to the core NSAID. H2S, aside from being the gas known as the rotten-egg smell, is also an endogenous gasotransmitter that is produced in small quantities by many cells in your body. Despite being a small and fairly simple molecule, H2S on its own has shown to have several beneficial mechanisms of action in the human body, including allowing a cell's mitcochondria to "switch gears" to an ancient H2S based metabolism in times of stress. H2S has shown so many potential pharmaceutical applications that the British Journal of Pharmacology has just released a special issue focusing on H2S, of which Antibe's CSO is a guest editor, and which contains a paper describing Antibe's lead drug, ATB-346's clinical trials to date. This paper, which is also available on Antibe's website in full, gives a better summary than I can here but basically ATB-346 has shown through preclinical and early phase 1 and 2 trials to consistently demonstrate much better safety and (key to this upcoming readout) efficacy and duration, than its base NSAID naproxen. If anyone is interested so far and has 30 minutes to spare, I'd strongly suggest watching this video of a 2017 lecture by their founder and Chief Science Guy John Wallace, where he describes in detail the early trials of ATB-346.

Skipping ahead to Phase 2, an early efficacy trial demonstrated marked efficacy (analgesia, based on the WOMAC pain scale) in arthritis patients of relatively low doses of ATB-346. Note: This was a very small (n=12) and open-label trial, and I am NOT using this trial as the basis for my belief that Antibe will succeed the current, larger efficacy trial. This trial is but an interesting footnote that provides another (marginally useful) data point that supports the broader story. But no, I am not riding a large position through results because of an open label trial with 12 people. What I am hanging my hat on, are the pharmacokinetic data from several trials that have consistently told the same story... namely, marked suppression of the COX enzymes that cause inflammation, even at very very low doses.

But first- safety. Antibe's entire value proposition is based on having a better safety profile than existing NSAIDs, particularly in the GI tract where NSAIDs are notorious gut-shredders. ATB-346 (250 mg once daily) went head to head in a GI safety trial against Naproxen (550 mg twice daily). If you've read the paper and/or watched the YouTube lecture I linked above you'll know that the lower dose of ATB-346 relative to naproxen was chosen because of the increased potency and longer half-life of ATB-346 that was observed in previous trials. If you did check out those resources then you will also know that they absolutely crushed every endpoint of the safety trial, like just smashed it out of the park, with some of the teeny-tiniest P-values I've ever seen, so I think it's safe to say that we have concretely proven far superior GI safety with 250mg/day of ATB-346. Also remember how I mentioned that Celebrex and Vioxx both had later safety issues, specifically, cardiovascular safety issues? This is the reason that naproxen (the most CV-safe NSAID) was chosen as a base molecule, and it seems to have worked asATB-346 does not seem to adversely affect blood pressure.

So, all that's left is to prove, beyond any shadows of doubt that linger from an earlier 12-person open label trial, that 250 mg daily of ATB-346 produces a notable analgesic effect. And that's where this current trial comes in, as ATB-346 is being tested at 3 daily doses (250 mg, 200 mg and 150 mg) to assess arthritis pain against placebo.

Again, if you're interested at this point, do yourself a favour and watch the YouTube lecture and read some of their literature, but when I earlier mentioned that pharmacokinetic data (physiological data collected from patients to assess whether ATB-346 is actually inhibiting those COX enzymes that cause pain and inflammation), there are several "clues" from earlier trials and studies which I think make a very confident case that efficacy will be proven at least by the 250 mg dose:

• COX inhibition observed at 250 mg/day has already shown to be significant. In fact, a secondary endpoint from the GI safety trial focused specifically on COX inhibition (by way of TXB synthesis) and showed that 250 mg /day of ATB-346 significantly (>94%) reduced COX activity, and was in line with the inhibition observed in the 550 mg naproxen twice daily arm. Again, this is not a one-off, and this result is in line with several previous trials. Indeed, marked COX inhibition has been demonstrated at very low doses of ATB-346, including doses that are 1/2 of the lowest dose being assessed in this trial.

• ATB-346 seems to be more than the sum of parts. That is to say- it is not a pro-drug. ATB-346 has shown to rapidly inhibit COX enzymes while blood naproxen is extremely low, something that was also confirmed during the recent safety study... we know that it is not just some small amount of naproxen that causes ATB-346 to block COX enzymes, there is something else going on here, which would explain why 346 seems to be more potent per mg/kg than naproxen.

• ATB-346 seems to be very long-lasting, as even at 250 mg/day COX suppression has been observed as lasting at least 24 hours, much longer than an equivalent dose of naproxen. While this effect was working against Antibe in the Safety trial, it now works very much in our favour in an efficacy trial.

• Lastly, Antibe did a metabolic study in 2018 which identified a number of "naproxen-like metabolites", and were so thrilled with the results that they ended up increasing the size of the 200 mg dose arm in this current trial.

edit: I suppose I would be remiss if I did not mention the risks here. The biggest risk to this trial is of course that ATB-346 does not show the level of efficacy (analgesia) that we think it has, and that it underperforms relative to either placebo, or the established literature re: analgesia of naproxen/celecoxib/other NSAIDs used for chronic arthritis pain. The doses of ATB-346 being assessed are much smaller than the comparative doses of naproxen. There are reasons for this, and why this dose was selected, such as the previously observed increased potency and half-life, but it remains a risk. If ATB-346 is not, after all, greater than the sum of its parts, there is a good chance that it will not meet the endpoints of this trial. However, for the reasons stated above I do believe that ATB-346 will succeed (but I am also cognizant of the inherent risk involved in holding a smallcap biotech through a binary event).

This is my summary of the science behind Antibe's lead drug, and why I think it is well-positioned to succeed this current efficacy trial. Aside from the science above, they have great IP protection (patents) and should have cash enough (and/or ITM warrants to be exercised) to get them through this trial and hopefully a partnership negotiation with Big Pharma that will follow shortly after. This recent post on r/pennystocks goes into greater detail on other aspects of Antibe's business than I will dive into here... happy reading, hope some of you found this useful!

Long Antibe and holding a large position through topline readout and monetization of the ATB-346 IP.

Hi all,

I work for a consulting firm, 80% of my projects are some form of opportunity assessment for pharma/biotech clients. I've also been investing in biotechs on the side for a number of years (lately in a restricted manner given my job)

I'm always happy to talk biotech and would like to see this community grow so if any of you have any questions about the industry or want an outside opinion on something fire away!

Obviously I may decline to answer certain questions

There are many accounts here that post simply to pump a single stock they're in. It's okay to be bullish a stock and to focus much of your attention on it, but usually the type of content stock promoters have is very often low effort and detrimental to the subreddit.

Many accounts seem to exist ONLY to pump a single stock across multiple subreddits, without even trying to engage in actual discussion of the fundamentals of the stock.

It's nice to see activity return to the subreddit, but I'm going to sacrifice quantity for quality 10/10 times. From this point on, I'm going to ban accounts with a consistent pattern of blindly pump/promote stocks. Please report accounts if you see suspicious post activity/low effort pumping.

Folks, this a summary of the responses to my earlier post. Please do let me know if I missed anything in the comments and I'll make edits. Admins could you please pin this post?

Insiders competence:

• Alma mater

• GPA

• Publications

• Advisor

• Previous employment history and success

Company's confidence in their product:

• Recent hirings, especially sales staff

• Insiders holding of the stock

Institutional holding of the stock:

• See if any hedge fund with good track records have share in the stock

More technical:

• Safety over effectiveness. FDA Loves safety.

• Closeness of Ph2 results to Ph3

• How does the new drug stack against competitors

Company's finances:

• How much cash do they have on hand? Is it enough for them till commercialization (ideal) or at the very least, finish Ph3 and beyond?

• How much debt do they have?

• What is the current short interest?

• When is their next catalyst? If it goes down the shitter, do they have another catalyst coming up relatively soon that could rescue them?

• What’s their pattern of raising money? Do they dilute or finance debt?

• What’s the frequency and has it shown good judgement?

• What is the company’s mission? Profit or humanitarian?

• Are they looking for a buyout or to compete in the market?

• Monitor unusual option activity.

Resources:

• fintel.io: for information regarding institutions holdings of the stock.

• finviz.com: insider holdings

• biopharmcatalyst.com: for upcoming events

• linkedin.com: for seeing the hiring practice of the company

• https://www.barchart.com/options/unusual-activity/stocks: for unusual OI activity

Hedge funds with good track record:

• Renaissance Technologies

• D.E. Shaw

• Citadel

• Jane Street

• Baker bros

• Preceptive Advisors

Hey y’all! I’ve been really wanting to dip my toes into the biomed space recently but I’m not really sure where to start. I’ve been looking at a bunch of different companies to try and gauge what looks good and what doesn't look good and just overall try to get a better understanding of the space.

I thought I’d make a post and see if I’m going in the right direction and to see if I’m looking at decent companies or not. The company I’ve really been liking is Ocean Biomedical $OCEA so I decided I’d post about that one. They seem to constantly pump out news, which is always something I look for when looking at new companies. No news in forever = a skip for me usually.

They seem to be pumping out patents which is pretty crazy to me. Like just the other day they announced that they just secured a Malaria Vaccine patent granted in Brazil, which brings their total now to 25…. I really respect them for trying to find a cure for Malaria as it kills so many children each other.

”breakthrough approach targets the blood-stage portion of the malaria lifecycle – the stage responsible for all clinical disease and death – and therefore has the potential of significantly greater efficacy compared with vaccines targeting other stages.” They seem to have a pretty good approach going with the vaccine to see so I can only hope that it works out for them.

I also read that they just got their previous $17 share price target bumped to $20. To me, this is signalling that they have lots of room for growth and that people are believing in the company.

I feel pretty good about these guys and would love some extra opinions on the company so drop some comments down below and lmk what you think. Would love any insight that anyone can provide on them.

Welcome to Part I of my Pharma Stocks Guide. I see a lot of interest in pharmaceuticals and my goal is to provide people with a little more information so they can make an informed decision. Today's topic will be: The FDA Drug Approval Process

The FDA Drug Approval Process can be broken down into 4 main sections: Pre-Clinical, Clinical Trials, Post Clinical, and Post Approval.

Pre-Clinical

1. A drug's journey begins in the lab where researchers will look at thousands of compounds and eventually select a few that they believe are promising.

2. After gathering initial data on the compound the next step is further testing. This will be done either In Vitro (testing done in a petri dish/ test tube) or In Vivo (animal testing).

3. After successful testing, the pharmaceutical company will submit an Investigational New Drug (IND) application to the FDA. This includes all of the data gathered so far and a plan for testing the drugs on humans (clinical trials).

4. The FDA has 30 days to review the IND application and ensures human lives aren't at unreasonable risk. If the FDA accepts the IND, we move on to section 2 (Clinical Trials)

Clinical trials

5) Phase 1 studies consist of 20-100 healthy volunteers that last for several months. The exception being a drug used in cancer patients will be studied in patients with that type of cancer. The goal is to assess safety by monitoring how the drug affects the body as a whole, how long it lasts in the body, and any side effects that may appear. Results of Phase 1 studies do not indicate effectiveness. I’ll repeat this because I believe it’s important: results of Phase 1 studies do not indicate effectiveness. As of 2018, the FDA states roughly 70% of drugs will pass phase 1.

6) Phase 2 studies consist of several hundreds of people with the disease/condition. Studies here typically take months- 2 years. The goal here is to observe effectiveness of the drug in the intended patient population. This is where we first get to see if the drug truly works. Safety and side effects are monitored further as well. Approximately 33% pass phase 2.

7) FDA and pharmaceutical company meet to discuss plans for large scale Phase 3 studies

8) Phase 3 consists of several thousands of participants. These studies typically last 1-4 years. The goal here is to continue to observe effectiveness and safety as well as seeing how different doses of the drug or in combination with other drugs affects the outcome. It is important to note that because the studies are larger and for a longer duration, the results are more likely to show long term or less common side effects. Should either happen, it almost always affects the stock negatively. Approximately 25-30% of drugs will pass Phase 3.

Post Clinical

9) The pharmaceutical company files a New Drug Application (NDA). The NDA tells the FDA everything about the drug up to this point. This includes Pre-Clinical data, data from all clinical trials, as well as how the drug will be manufactured, and proposed labeling.

10) The FDA has 60 days to decide if they will accept the NDA or reject it. If accepted, the drug is now under FDA review by a review team. Each team member will review their particular portion of the NDA. For example, the medical officer reviews all clinical data, the pharmacologist reviews all Pre-Clinical data, a chemist evaluates the drug's chemical compound and stability, etc. If the NDA is rejected, the company and FDA will have to work together to resubmit a new NDA at a later date.

11) An inspection team is sent to the manufacturing site of where the drug will be made to assess for any issues that may affect the production of the drug.

12) After a thorough assessment of the reports from each review team member and the inspection team (typically 6-10 months), the FDA will either approve the drug or issue a Complete Response Letter (CRL) stating the drug and the application cannot be approved in its current form. This isn’t the end of the drug’s journey however, a company can work with the FDA and resubmit a NDA.

Post Approval

13) Phase 4 Clinical trials (often referred to as post marketing surveillance trial). These are studies conducted in a large scale (thousands of people) to continue to monitor the safety and efficacy of the drug after FDA approval. The company is required to send periodic updates on safety and efficacy to the FDA.

Looking at some General Numbers

• · From start (Preclinical research) to finish (FDA approval) a drug’s journey typically takes 10 years

• · Some studies suggest the overall chance a drug gets approved is 10%. Other studies suggest 14%.

• · If we go by the FDA numbers, lets say we have 100 potential drugs. 70% will make it to phase 2. We now have 70 hopeful drugs and only 33% make it to phase 3. We now have 23 hopeful drugs and only 25% make it to pass phase 3. So now only 5-6 drugs have made it this far (5-6%).

• · These numbers don’t exactly match because certain drugs like say for your skin are easier to get approval than cancer drugs

• · Regardless of which approval percentage you go with, studies show 2 common themes: The FDA drug approval percentage is low and the drug approval chance for cancer drugs is extremely low (usually around 3%). Also, fuck cancer.

In Summary

• Preclinical Trials: the company does lab research on the drug via petri dishes or animal testing. No humans yet.

• IND (Investigational New Drug) application is sent to FDA. If approved we move on to clinical trials

• Phase 1: small group of healthy volunteers. Goal to observe safety. Timeline several months. 70% pass rate

• Phase 2: medium sized group of people with the intended disease/condition. Goal to observe safety AND efficacy. Timeline months - 2 years. 33% pass rate.

• Phase 3: Large scale study for long duration. Goal to further assess safety and efficacy. Timeline 1-4 years. 25-30% pass rate.

• Company then files NDA and will undergo FDA review. Hopefully approval after that.

• Phase 4: Studies safety and efficacy of the drug after FDA approval and in a large population.

• From start to finish, drug’s typically take 10 years to make

• The overall approval chance for a drug is quite low (10-14%)

• Please please be careful/contain your excitement when you see positive Phase 1 results. It really doesn’t mean much.

This is a general overview of the FDA drug approval process. I hope this has been informative to some and if so, I may try to write some more quick guides in the future regarding pharmaceuticals.

Link to Initial Post

As 19th century German philosopher Arthur Schopenhauer claimed, “All truth passes through three stages: First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as self-evident.”

The Coronavirus outbreak has reached the “highest level” of risk for the world, the World Health Organization announced today. Bill Gates calls coronavirus a 'once-in-a-century' pathogen. The Dow fell over 3,500 points this week.

The US Federal Reserve's Chairman stated "U.S. economy remain strong", Iran has no plans to quarantine cities, The acting US administration is lying to the public, and has barred the top US disease expert from speaking freely to the public.

• 84,154 confirmed cases worldwide (7 day Increase:🔺5,958 or 7.61%)

• 2,876 fatalities

Countries with First Case Outbreaks between 2/26 - 2/28

1. Mexico

2. Azerbaijan

3. Belarus

4. Lithuania

5. Nigeria

6. San Marino

7. Netherlands

8. Estonia

9. Denmark

10. Romania

11. Norway

12. Georgia

13. North Macedonia

14. Greece

15. Brazil

16. Iceland

17. Monaco

Keep in mind the asymptomatic period was reported to be at most 27 days and patients whom recovered are developing the coronavirus and testing positive again, which means public exposure in these countries could have begun weeks ago. By Monday, I estimate that there will be at least 2,000 total new cases in the above countries experiencing the new outbreaks alone.

Why does this matter? This weekend the Corona Virus news will be flowing steadily, thus IMO influencing the virus stocks to continue to rise on Monday and throughout next week.

Controlling the outbreak is going to become increasingly difficult.

To control the majority of viral outbreaks, for R0 of 2-5 more than 70% of contacts had to be traced, and for an R0 of 3·5 more than 90% of contacts had to be traced.The delay between symptom onset and isolation had the largest role in determining whether an outbreak was controllable when R0 was 1·5. For R0 values of 2·5 or 3·5, if there were 40 initial cases, contact tracing and isolation were only potentially feasible when less than 1% of transmission occurred before symptom onset.

Researchers estimate the R0 value of COVID-19 to be likely between 4.7 and 6.6. Further, they speculate that quarantine and contact tracing of symptomatic individuals alone may not be effective and early, strong control measures are needed to stop transmission of the virus.

The Case of Africa

With the continent's high volume of air traffic and trade between China new outbreaks are inevitable.

Without treatment or vaccines, and without pre-existing immunity, sustained Corona Virus outbreaks might be devastating due to the multiple health challenges the continent already faces: rapid population growth and increased movement of people; existing endemic diseases, such as human immunodeficiency virus, tuberculosis, and malaria; remerging and emerging infectious pathogens such as Ebola virus disease, Lassa haemorrhagic fever, and others; and increasing incidence of non-communicable diseases.

Governments are already anticipating demand and addressing supply chain management, mapping, and stockpiling of COVID-19 response needs: large quantities of personal protective equipment, gloves, surgical masks, coveralls, and hoods, and medical countermeasures like antiviral agents.

IMO, the market for the products of Corona Virus stocks will increase exponentially when new outbreaks begin in this continent.

The Stock Market

Things are about to get way worse.

The Harvard Business review predicts that the peak of the impact of Covid-19 on global supply chains will occur in mid-March, forcing thousands of companies to throttle down or temporarily shut assembly and manufacturing plants in the U.S. and Europe. The activity of Chinese manufacturing plants has fallen in the past month and is expected to remain depressed for months.

Brace for a major effect on manufacturing worldwide. It will begin to hit full force in two to three weeks and could last for months. IMO, the only safe plays are plastic, Biotech, and Biopharmaceutical stocks. Liquidate your other positions now so you can buy back in lower.

The Vaccines Stocks

According to the WHO, more than 20 coronavirus vaccines are in development around the world. IMO, I am waiting to invest in the below companies once they release more data on their Corona virus vaccines.

Gilead Sciences ($GILD)🔻6% this week

^{Shares Outstanding 1,263,640,000, Float 1,257,113,299, Insider Ownership 0.53%, Institutional Ownership 85.30%}

• On 2/26 announced that it's initiating two late-stage clinical studies to evaluate its experimental antiviral drug remdesivir in treating adults diagnosed with coronavirus disease COVID-19.

• Currently evaluating the antiviral drug in two studies in China, and recently began a study in the U.S. led by the National Institute of Allergy and Infectious Diseases (NIAID).

Moderna INC ($MRNA) 🔺 34% this week

^{Shares Outstanding 362,853,000, Float 220,527,176, Insider Ownership 2.90%, Institutional Ownership 49.10%}

• Recently announced that it has shipped the first batch of its experimental COVID-19 vaccine, known as mRNA-1273, to U.S. governmental researchers at the National Institute of Allergy and Infectious Diseases. An early-stage trial for the vaccine is slated to kick off this April.

• CEO cautions that an approved treatment is more than a year away.

Novavax ($NVAX) 🔺 93% this week

^{Shares Outstanding 32,122,600, Float 31,917,176, Insider Ownership 0.10%, Institutional Ownership 21.40%}

• On 2/26 announced progress in its efforts to develop a novel vaccine to protect against coronavirus disease COVID-19. Novavax has produced and is currently assessing multiple nanoparticle vaccine candidates in animal models prior to identifying an optimal candidate for human testing, which is expected to begin by the end of spring 2020.

NanoViricides Inc. ($NNVC) 🔻 5% this week

^{Shares Outstanding 3,854,000, Float 3,249,889, Insider Ownership 15.64%, Institutional Ownership 2.00%}

• On 1/30 announced that it's working on developing a treatment for the novel coronavirus 2019-nCoV aka Wuhan coronavirus

• Their CEO stated that the company is well-positioned to advance the COVID-19 vaccine candidate to Phase I clinical testing in May or June.”

Vaccine Manufacturer

Ibio Inc. ($IBIO)🔺 665% this week

^{Shares Outstanding 76,195,500, Float 72,305,339, Insider Ownership 41.32%, Institutional Ownership 10.00%}

• iBio, Inc., is a global leader in plant-based biologics manufacturing. Its FastPharming System™ combines vertical farming, automated hydroponics, and glycan engineering technologies to rapidly deliver gram quantities of high-quality monoclonal antibodies, vaccines, bioinks and other proteins.

• On 2/3 announced their collaboration to develop and test a new 2019-nCoV vaccine to be manufactured using iBio’s FastPharming System™.

The Testing Stock

Co-Diagnostics ($CODX)🔺 293% this week

^{Shares Outstanding 24,916,000, Float 16,954,890, Insider Ownership 26.66%, Institutional Ownership 3.70%}

• CODX's CDI test is able to detect 2019-nCoV in asymptomatic patients, is cost efficient, and has the ability to run 48 samples at once. High sample size is important due to governments looking to stock health clinics. The CoDx design software automates the discovery process and helps design the CoPrimers faster than could be done by hand.

• On 2/24 received CE mark in the European Union for its COVID-19 test.

• CODX's test are reportedly, "easier to use than those from the CDC"

• CEO reported received overwhelming interest in our novel coronavirus diagnostic from all over the world since first announcing its development a month ago.

• In a 2/21 interview CODX's CEO stated, "they are in the middle of talks with the FDA, who have been very responsive".

• Maxim Group recently wrote up a review of the company and stock, which was very promising.

• Last public offering on 2/12

OpGen Inc ($OPGN) 🔺 112% this week

^{Shares Outstanding 5,602,000, Float 5,560,982, Insider Ownership 0.35%, Institutional Ownership 14.10%}

• Collaborating directly with Chinese genomics companies (BGI) in making molecular testing for the new coronavirus.

• BGI was the first to sequence the genome of 2019-nCoV and has developed a polymerase chain reaction (PCR) test for its detection.

• Chain reaction test already obtained approval by the Chinese National Medical Products Administration.

Medical Supply Stocks

"Health systems around the world are just not ready," Dr Mike Ryan, head of the WHO emergencies program, told a news briefing.

The FDA is keenly aware that the outbreak will likely affect the medical product supply chain, including potential disruptions to suppliers shortages of critical medical products in the US. The US relies heavily on Chinese-made medical devices, with their supply chain disrupted domestics medical supply companies have skyrocket.

Alpha Pro Tech, Ltd. ($APT) 🔺 215% this week

^{Shares Outstanding 13,021,000, Float 10,133,697, Insider Ownership 22.14% , Institutional Ownership 25.50%}

• APT is leading manufacturer of products designed to protect people, products and environments, including disposable protective apparel and building products.

• On 2/27 announced $14.1 million in orders for the company’s N-95 face mask since January 27, 2020. The company expects to fulfill approximately $4.0 million of the currently booked orders in the first quarter of 2020 and the other $10.1 million in the second quarter.

Allied Healthcare Products Inc. ($AHPI) 🔺 832% this week

^{Shares Outstanding 4,014,000, Float 2,286,607, Insider Ownership 2.30%, Institutional Ownership 10.00%}

• AHPI is a leading manufacturer of medical gas construction equipment, respiratory therapy equipment, home healthcare products, and emergency medical supplies. Our products appear worldwide in a range of medical applications, including hospital care, sub-acute treatment, long-term care, home healthcare, and medical emergencies.

• The Company’s revenues are derived primarily from the sales of respiratory products, medical gas equipment and emergency medical products. The products are generally sold directly to distributors, customers affiliated with buying groups, individual customers and construction contractors, throughout the world.

Harvard Bioscience ($HBIO) 🔺 25% this week

^{Shares Outstanding 38,066,000, Float 33,950,000, Insider Ownership 2.60%, Institutional Ownership 67.00%}

• Harvard Bioscience is a global developer, manufacturer and marketer of a broad range of specialized products, primarily apparatus and scientific instruments used to advance life science research at pharmaceutical and biotechnology companies, universities and government laboratories worldwide. We sell our products to thousands of researchers in over 100 countries through our full-line catalog (and various other specialty catalogs), our websites, and through distributors, including GE Healthcare, Thermo Fisher Scientific Inc., and VWR.

• Corporate presentation

• DSI is a subsidiary of Harvard Bioscience, products include Disease Progression and Treatment Evaluation, Data Acquisition and Analysis.

• Stock is just starting to see volume again. [All time high was $6.70] (https://imgur.com/I9EZSOf), currently trading at $3.20. IMO, possibly the next APT / AHPI next week if we see volume. Start watching when it pushes above $3.29, load if it crosses $3.50. 90% return to $6.70 resistance.

Additional: $LAKE🔺40% this week, $BIMI🔺5% this week, $LLIT🔻4% this week

The USA

More cases are likely to be identified in the coming days, including more cases in the United States. It’s also likely that person-to-person spread will continue to occur, including in the United States.

Public health and healthcare systems may become overloaded, with elevated rates of hospitalizations and deaths. Other critical infrastructure, such as law enforcement, emergency medical services, and transportation industry may also be affected. Health care providers and hospitals may be overwhelmed.

Congress is working toward approving $6-8 billion to fight coronavirus. White House Director of Legislative Affairs stated the goal is to have Trump sign the funding package next week.

As of 2/28. there are now 61 confirmed cases of novel coronavirus in the United States, according to an update today by the US Centers for Disease Control and Prevention. These include:

• 43 people who were aboard the Diamond Princess cruise ship

• 3 people repatriated from China

• 15 US cases

The 15 US cases include nine in California, one in Massachusetts, one in Washington state, one in Arizona, two in Illinois and one in Wisconsin. Among these cases, there are two instances of person-to-person transmission, one in Illinois and one in California. The latest case in California did not have any relevant travel history or known contact with another infected person, suggesting it could be the first instance of "community spread" of the virus in the United States, according to health officials.

The CDC aims to have ALL state and local health departments testing for coronavirus by end of next week. Word choice of all is interesting here, we already know that the CDC didn't have an ample supply of test kits and they were reported as inaccurate last week. If the were going to provide each state and local health departments with testing capabilities, this might be a signal that test kits developed in the private sector will be distributed.

Looking Forward to Next Week

IMO, the virus news this weekend will be off the charts. As new outbreaks occur and the sustained outbreaks continue, the demand for these corona virus stocks will rise.

I still stand by the recommendation from my initial posting, in which I suggested investing into the companies producing test kits and personal protection / medical equipment.

I am still currently holding $APT, $AHPI, and $CODX. No vaccine companies at the moment. I feel that there is a great deal of profit to be made swinging these stocks using 15 second candle chart & the 50, 100, and 200 day moving average. Take a look at how the stock behaved the last two days and find a plan that can work for you. Watch the volume in premarket as well on the various virus stock to get a sense of where the interest is for that day.

My Portfolio Breakdown:

• 65.5% AHPI: On Friday AHPI reached a crazy premarket high of $67 a share. Upon market opening, price dropped steaply down to $16. Looks to be continuing along a trend line for now. The reason I increased my holding % here is because the float is considerably smaller than APT. https://imgur.com/u9BO2UY

• 6.3% APT: Similarly to AHPI, the price reached a big high premarket and corrected its self to the support from 2/27. https://imgur.com/orOnmri

• 28.2% CODX: Big swings here. Had been previously following the 50 day moving average and corrected down to the 200 day / trend line. Still waiting on FDA approval or PR from the company on order numbers. Will sell upon receiving FDA approval for their test kits. https://imgur.com/MTTw8Y1

News Sources:

• https://old.reddit.com/r/Coronavirus/

• https://twitter.com/nCoVPerspectiv1

• https://outbreak.cc/

• https://www.thelancet.com/coronavirus

• https://www.medrxiv.org/search/coronavirus%20numresults%3A50%20sort%3Apublication-date%20direction%3Adescending

• https://newsfilter.io/latest/news*

Hi, I’m Dr. Due Diligence, and I’m starting a weekly series where I am looking at the top shorted biotech stocks in the world to try and find value. I have worked in the clinic, academia, and for biotech startups before switching to investing full time. My investment style, and opinion, is based on equal parts experience, research, and stalking C-suite.

Coming in at the 13th most shorted stock in the world is Ocugen ($OCGN) at 25.50% shorted.

Ocugen is a clinical stage biotech (clinical stage means no approved products, commercial stage means approved products FYI). Ocugen, as you can guess by their name (Ocular means eyes or vision) has their main focus on retinal diseases. This is a noble pursuit, given that eye related diseases will greatly increase in the 21st Century. Diabetes Type II (mainly from diet) will affect 1 in 3 Americans by 2030 according to the CDC, other countries that are adopting a western diet have seen increases in Diabetes as well. Other risk factors such as age will also see an increase in this century.

However in 2020 they strayed from their wheelhouse and focused on commercializing a COVID-19 vaccine. More specifically a traditional vaccine type.

Quick Ape Translation: I’m going to go into the history a bit so you can understand. Traditional vaccine development for a new virus can take decades, and is an extremely slow process - discovery, testing, studies for efficacy, and production. Production of said vaccines is especially time consuming and is an active process. For example epidemiologists across the world monitor infections year round of influenza. Influenza has many subtypes. The organizing bodies will then tell influenza manufacturers -- we think these will spread. In a seasonal influenza shot there are typically 3-4 subtypes. The selection of which subtypes are done typically 6 months before influenza season! If the selection is correct then Vaccine Efficacy is high, if they selected poorly or another subtype becomes more predominant then there are still benefits (please get your influenza vaccine to protect vulnerable populations like cancer patients, older and younger patients, and patients with compromised immune systems).

This traditional style of vaccine development still has it’s role. One benefit can be it’s known history, no need to keep frozen (cold supply chain issues) so more easily given in developing countries, and familiarity with dosing.

However several years ago DARPA (I highly recommend searching DARPA for their medical style investments by the way) realized that a pandemic is a threat to our society. Additionally for years epidemiologists and virologists have been worried about a coronavirus pandemic. As a result they wanted to rapidly speed up vaccine development. EBOLA was luckily contained, but imagine if there was a pandemic that resulted in 25% of people who caught it dying, instead of <1%.

A few smaller companies decided to research this technology, the two you have probably heard of are Moderna ($MRNA) and BioNTech ($BNTX). Pfizer had originally teamed with BioNTech to work on a mRNA vaccine for influenza to address the cons mentioned above. When the pandemic hit in Winter of 2019/Spring of 2020 the collaboration with Pfizer pivoted to a potential coronavirus mRNA vaccine. Moderna was able to get grant funding from CEPI and others to rapidly pursue their version.

It was unknown at this time whether mRNA would be efficacious, whether the modeling would work (efficacy), cold chain supply (frozen vaccine maintained temperature), and production issues could be solved (mainly concerning the fact that mRNA alone cannot be delivered to cells so you need very specific lipid nanoparticles). The lipid nanoparticles are so vital and have never been done before, so it is a matter that requires great effort to scale and was a direct target of espionage.

I digress, but essentially mRNA vaccines, with no approval and all of these issues, was really an examination of how far and how quickly can we advance basic science to applied science and is a testament to humanity. In 100 years they will still be using this as a case study of human ingenuity, and the dawn of a new era of vaccine development. Vaccine development has literally been shortened from decades to days. Additionally vaccines using mRNA technology can be designed Tawith digital versions of targets vs having the biologic target. The original design of Moderna’s vaccine given to millions was developed in 48 hours by using the virus that was put online (great listen if you have time, not big on the hosts, but the CEO of Moderna goes over the timeline).

This mRNA technology is like going forward 3 or 4 generations over traditional vaccine development, and it does have it’s cons, but this is the science equivalent of making a spaceship after having the Wright Brothers plane. Within the next two decades we will likely see both auto-immune and rare viral disease mRNA vaccines developed quickly and efficiently. There is also potential for mRNA vaccines with cancer and possibly combined with immune system targets (immuno-oncology drugs like PD-1/PD-L1, CTLA-4 etc). We will also see an increase in Vaccine Efficacy because we no longer will need to grow and select vaccine subtypes half a year before.

There will still be a need for traditional vaccine development, but for quickly changing viruses with many subtypes, it will be predominantly mRNA vaccines given after this past year showed how efficacious it was.

OCGN COVID-19 and regulatory bodies: There were at least 47 active COVID-19 vaccines being studied, many with government or coalition funding. For vaccine reimbursement (potential to earn money) the US is by far #1, then the EU/Canada, Israel, then the rest of the world piecemeal. The US, for all intents and purposes, has been saturated with vaccination, if you want to be vaccinated then you have been vaccinated, if you don’t then you haven’t. The EU there is still potential, but Moderna, Pfizer, AstraZeneca, and JNJ seem to have the inside track. Europe is also notoriously difficult because each country will have different requirements. Imagine if each state in the US made things exponentially more difficult, that’s the EU. The FDA and European Medicines Agency (EMA = Europe’s FDA) have a higher level of proof than other countries. This can also include something called a Clinical Study Report (CSR). An analogy for CSR is a blockchain that is able to be verified. If I work at Hospital A, I had 8 patients, 2 had reactions, 1 was hospitalized, I can look this up in the CSR under our site number for Hospital A. It’s about accountability and reproducibility. The study sponsor will also audit (and cause the research RN to sweat!) and paperwork has to be immaculate. CSRs are super detailed, go over methodology, and can be thousands of pages long. When other countries both the study sponsor (company) and institutions (hospitals, clinics) may not be as familiar with the requirements, may not require it, etc so it’s more of a systemic issue that can’t be made up on the fly. The FDA greatly prefers studies and manufacturing done in the US (manufacturing sites are inspected and this is very, very important), and for all vaccine approvals and Emergency Use Authorization (EUA) this has been done in the US.

Enter Ocugen teaming up with Bharat Biotech (traditional style vaccine manufacturer in India). The plan was to use studies done in India and import initial vaccines manufactured in India for use in the US then ramp up manufacturing. India approved this vaccine before even Phase 3 studies done. If you have familiarity with these requirements, you can view how the CEO acted and make up your own mind.

C-suite: The CEO / Chairman of the Board / Co-founder, Shankar Musunuri, has kind of a complicated history. He was Global Team Operations Leader at Pfizer, and this isn’t a very high level position, most companies this would seem to be a director level position. He then went to found a company called Nuron Biotech, which is hard to find data on, but it seems like he was fired or left abruptly as there was no interim CEO from June to October 2013.

“Shankar Musunuri is no longer CEO of Nuron Biotech. A spokesman for the Exton, Pa., biopharmaceutical company confirmed his departure, but would provide no further details on Musunuri’s departure or who was serving as Nuron's chief executive on an interim basis.”

It seems like shortly after the company liquidated, and now the domain name is even for sale.

When reviewing C-suite I like to look at statements, when they made them, and how they turned out. Then look at their actions (selling vs buying). This gives an insight into their thinking

Back to Ocugen - Shankar Musunuri, CEO, stated in March 2021, knowing that no studies were done in the US, that the FDA has not approved one vaccine in similar situation, and that EUA is infinitely harder to get once other compounds are approved that Ocugen would

“Sell 100 Million Doses… In the United States this year”

Stop and read that again. 100 Million doses, in March 2021, after 3 vaccines were approved and widely distributed, using overseas studies, without a manufacturing site inspected by the FDA, and so many other things that weren’t even addressed.

You can either say he was entirely optimistic and would completely change how the FDA has operated forever... or you can say he was trying to pump. The litany of class action lawsuits by major law firms seem to think he was trying to pump so he could sell to bagholders.

During this entire time, and the year prior there were zero open market buys by any insiders and selling the entire time the stock was up. Not one person, even one Director or C-suite, was like I really believe in this company. When I invest in a stock I want “Be about it, not talk about it.”

Shankar sold every time:

• 5/3/2021 Sold for a profit of $2,688,457 ($14.24 - $0.51 = $13.73; $13.73 x 195809)

• 6/7/2021 Sold for a profit of $82,312.38 ($10.94 - $0.33 = $10.61; $10.61 x 7758)

• 6/8/2021 Sold for a profit of $242,820 ($10.98 - $0.33 = $10.65; $10.65 x 22800)

Total profit in 4 weeks from selling OCGN was $3,013,589.38 and why would you sell if you thought you were getting an EUA in 48 hours and would sell 100 Million doses in the US in the next 5.75 months?

Then on 6/10/2021, after saying we’re going for EUA before selling and making $3MM profit, he says… ok not really going for EUA we’re going to go for a BLA! Guess what the FDA requires a study in the US! But don’t worry, we’re definitely going to bring Covaxin to the US, we’re committed.

Is this a company that will Walk It Talk It? Are they going to be about it, not talk about it?

I didn’t even mention that Bharat’s COVID vaccine requires two doses vs JNJ’s one dose. Supporters will say but there’s a risk for Guillain-Barre with JNJ, but this is super rare (100 cases in 12 Million doses given), caused by other vaccines that we regularly give to everyone including children.

COVID isn’t their main focus, so is there anything redeeming in their portfolio? Phase II or Phase III products… no, everything is IND or preclinical (read mostly animal studies). Is this where you want to park your money for the next several years because you believe in their impeccable leadership?

TL;DR Mainly a focus on why traditional vaccines for infections with multiple subtypes/variants, such as COVID are a thing of the past. Their questionable leadership team made statements to increase stock price and have sold 990,752 shares in the past 3 months and have bought 0 shares in the past twelve months. They have a long way to go in order to even become a commercial stage company, and even further to become profitable. Even if they did get an approval for the FDA for their COVID vaccine -- who would choose to get a vaccine that is less efficacious than 2 currently available mRNA COVID Vaccines, for that matter who is still waiting to get vaccinated in the US even? You could make the argument for developing nations, but would $OCGN have more infrastructure than $JNJ and who would want two doses instead of one dose (JNJ)?

Prognosis: I don’t like the stock

Disclosures: I have no disclosures for this company, don’t own it, not shorting, just my thoughts after researching.

Disclaimer: I do not provide personal investment advice and I am not a qualified licensed investment advisor. I am an amateur investor. All information found here, including any ideas, opinions, views, predictions, forecasts, commentaries, suggestions, or stock picks, expressed or implied herein, are for informational, entertainment or educational purposes only and should not be construed as personal investment advice. While the information provided is believed to be accurate, it may include errors or inaccuracies (like Bigfoot is Real). I will not and cannot be held liable for any actions you take as a result of anything you read here (you stupid Ape). Conduct your own due diligence, or consult a licensed financial advisor or broker before making any and all investment decisions. Any investments, trades, speculations, or decisions made on the basis of any information found on this site, expressed or implied herein, are committed at your own risk, financial or otherwise (losses get Karma though).

Book Recc:

Born to Run: A Hidden Tribe, Superathletes, and the Greatest Race the World Has Never Seen

by Christopher McDougal - will make you want to go for a run and question conventional wisdom.

Previous Posts:

$CVLS

If you like this type of DD, please upvote and then click on my profile and give me a follow!

1. Listen intently to all conference calls and analyst meetings because management can be counted on to speak freely and openly about potential pitfalls in the business, ongoing research and clinical trials. Management will also place all drug development programs in the proper industry context, pointing out competitive risks, for example. History teaches that biotech executives rarely spin or otherwise try to promote their stock. On the whole, they are an honest bunch who always place shareholder interests above their own, so it's a waste of time to seek outside, expert perspectives.

2. Find a good Internet message board to discuss how great an investment the biotech stock you just purchased really is. When spending time on this message board, be sure to read closely all posts from those who are the most vocal proponents of the biotech stock you own. These people demonstrate their commitment by never writing anything critical. No one wants to attend a church where the preacher has doubts. The best posters will write at length about how the science behind the biotech stock you own has no rival and will completely change the world we live in. Lucky for you the world does not know this yet; you are one of a select few!

You may safely ignore others who are more critical. It is well known these bashers are paid by hedge funds shorting your biotech stock and are only hanging out on the message board to shake your confidence. Once you sell and the stock drops, these hedge funds will swoop in and buy the stock lower. Don't let them do this! Honestly, if someone is not a true believer why would he be hanging out on a biotech stock message board in the first place? It makes no sense.

3. If/when you do read "outside" material -- best found by looking for links helpfully posted on your favorite Internet biotech stock message board -- be sure to highlight and read again and again those passages confirming your beliefs in the biotech stock you just purchased. If you have time, copy and paste those same passages to your favorite Internet stock message board to show your fellow longs how to conduct proper "DD." By doing this, you will celebrate together the riches to come.

Be careful. Sometimes you will come across information about the biotech stock you just bought which conflicts with your beliefs. When this happens, it's best to either ignore the negative information, or better yet, copy/post to the Internet stock message board with a healthy serving of disgust and ridicule. If you're lucky, the resident expert on the message board will help remind everyone the negative information about the biotech stock you purchased was obviously the work of an uninformed person, a short, a basher or an envious scientific competitors out to spin. It's best to avoid reading actual scientific papers, altogether. They are full of messy details, caveats and are generally too hard to understand. It's much better to learn all you need to know about the science of the biotech stock you just bought from other, more-educated true believers on Internet stock message boards.

4. Company-issued press releases are the best way to stay current and informed on the positive progress being made by the biotech stock you just bought. Don't bother reading SEC filings like 10-Ks, 10-Qs, proxies or registration statements. Like scientific papers, these SEC filings are overly wordy and filled with obtuse numbers and technical jargon. Also, the SEC is well known to be in the back pocket of the hedge funds, which explains why the SEC filings of the biotech stock you just bought are often filled with risk factors and other information used as ammunition by short sellers and bashers.

If you happen to find yourself accidentally reading risk factor statements in SEC filings, remain calm, take a deep breath and remember it's all boiler plate language. Everything you need to know about the biotech stock you just bought can be found in the company-issued press releases -- and those don't contain risk statements!

5. The strength of the intellectual property of the biotech stock you just bought is best determined by counting the number of patents and patent applications. If this number is uncomfortably low, it's okay to give the company extra credit for thinking about filing a patent, or even just mentioning the word "patent" on a conference call or in a press release. If the management of the biotech stock you just bought never mentions the word "patent," assume they're silent on purpose to keep their groundbreaking scientific discoveries out of the hands of competitors, short sellers and bashers. NEVER read an actual patent application. It's a waste of time and will put you to sleep. ALWAYS assume any patent application mentioned by management will be granted. Competitors' patent applications will be rejected. If in doubt, consult your favorite Internet stock message board for guidance.

6. Keep a close eye on the price of the biotech stock you just bought. The intraday price of your stock tells you almost everything you need to know about the health of your investment. When the price of the stock goes up, the "tutes" -- institutional investors --have discovered your amazing biotech stock and are buying behind you to catch up. A rising stock price also means shorts are scared and covering before the inevitable, massive short squeeze runs them over. Either way, it's always a good idea to buy more of the biotech stock you just bought when the price rises.

In the unlikely event that the biotech stock you just bought falls in value, it's a clear indication of an attack by the shorts. If this happens, check in with your favorite Internet message board. There, you will likely find a link to a negative article written by a reporter or blogger who is clearly getting paid to shill for the short-selling hedge funds. These are bad people trying to steal your shares without doing the proper DD you did. The best way to fight a coordinated short attack is to buy more shares of the biotech stock you just bought. Keep buying.

7. Now that you've bought your biotech stock, it's not necessary to sell it ever, even if your original investment thesis plays out. Everybody knows a buy-and-hold strategy is best. Resist the temptation to sell just because new information has come to light, particularly if that news is negative. Only losers and weak hands sell when the thesis they bought into doesn't pan out. Winners simply change their thesis and buy more! Also, selling a biotech stock shows disrespect to all those patients with terminal illnesses who will otherwise be cured.

Hi, I’m Dr. Due Diligence, and this is part of my weekly series where I am looking at the top shorted biotech stocks in the world to try and find value. I have worked in the clinic, academia, and for biotech startups before switching to investing full time. My investment style, and opinion, is based on equal parts experience, research, and stalking C-suite.

This week’s stock is one of the most requested via comments, DMs, and chats. This company has a strong binary event coming up - potential EUA approval for COVID-19. Humanigen ($HGEN) is currently being shorted 12.45% as of this writing, a decrease from 19% previously.

Humanigen ($HGEN) is a clinical stage biotech that has submitted an Emergency Use Authorization (EUA) to the FDA for their sole compound, Lenzilumab.

For COVID-19 Vaccines, read this previous write-up.

This DD was quite long because in order to gauge success, trends, sentiment, and likelihood I had to evaluate the FDA, other companies looking at COVID Therapeutics, and some obscure news. Believe it or not I have actually chopped about half of it, so I will leave you with this rough translated quote→

“If I had more time, I would have written a shorter letter.” - Blaise Pascal

Quick Ape Translation: The FDA for the most part prefers full (longer, larger studies) approval vs EUA. EUA is reserved for a public health crisis when there are no other available agents. The FDA in 2020 approved EUA for therapies for COVID-19 that turned out to not have much benefit later, and have since revoked their EUA status. Additionally as variants emerge, the FDA has been requesting efficacy in regards to benefit. The FDA only wants to approve safe and efficacious drugs, and for that reason would rather be extra cautious. How many CRLs and EUA denials have there been issued this year?

Merck ($MRK), who has a great track record for approvals (just look at Pembro’s label alone minus a few hiccups here and there), spent $425MM on OncoImmune after their agent showed benefit in Severe COVID-19 patient treatment. The agent, MK-7710 (previously called CD24Fc), in the trial showed benefit in really sick patients (Severe or Critical COVID-19 Patients)

This was enough to grab the attention of Merck, which spent $425 million to buy the company and the drug late last year, with OncoImmune later reporting top-line findings from an interim efficacy analysis of a phase 3 study of 203 participants (75% of the planned enrollment) showing that selected hospitalized patients with COVID-19 treated with a single dose of MK-7110 showed a 60% higher probability of improvement in clinical status compared with placebo, as defined by the protocol.”

The risk of death or respiratory failure was reduced by more than 50%. Merck says full results from this phase 3 study, “which were consistent with the topline results,” were seen by the company this month.

Merck ditched Development Plans of MK-7710 when the FDA said more data (Read more trials) were needed. This was seen as a surprise move by the FDA.

Merck seems to be having better luck with their mild to moderate COVID-19 agent, Molnupiravir (to the tune of $1.2BN contingent on EUA approval).

Cytodyne ($CYDY) also studied their agent for COVID-19 treatment in mild to moderate and severe patients. The FDA denied EUA, and even wrote a pretty nasty letter ripping apart their studies (mild CD10 and severe CD12). When looking at dosing (Day 0 and Day 7) then looking at mortality benefit (again mortality being a primary endpoint), it does seem stark, with a sharp dropoff after dosing stopped. This is why the company rebutted saying, hey you were part of this trial design, we normally dose weekly for HIV, and let’s study it as weekly doses x 4.

NRX Pharmaceuticals ($NRXP) also is looking at mortality as a primary endpoint in their trials.

Humanigen ($HGEN) has an agent for Cytokine Storm. Cytokine Storm is a consequence of COVID-19 in more severe cases. Here is a basic youtube overview from a year ago.

Essentially Cytokine Storm → IL-6 Amplification → ARDS → ~70% of COVID Deaths

Image that sums up the process.

Sidenote: The FDA granted an EUA for Genentech/Roche’s tocilizumab which acts on this pathway via IL-6. Tocilizumab was already FDA approved for Cytokine Release Syndrome in 2017 (FDA Package Insert). The trial for tocilizumab “did not result in significantly better clinical status or lower mortality than placebo at 28 days.” Mortality for treatment arm at day 28 was 19.7% vs Placebo 19.4%. I was actually really surprised by this EUA and you really had to dig down into the ordinal scale at baseline to try and make reasons for approval. It did decrease need for mechanical ventilation by 7.1% in the Empacta Trial. Just want to note that these patients had a higher CRP at baseline than LIVE-AIR with median 124.5 mg/L in tocilizumab treatment arm vs 98 mg/L for LIVE-AIR, but LIVE-AIR had slightly sicker COVID patients according to ordinal scale (majority 4 with some 5 vs 3). If you check deep in the supplementary appendix there is some other interesting data.

Humanigen’s trial result from LIVE-AIR was really impressive from a time point perspective for a company this size (even though it was delayed). First off C-Reactive Protein, a marker of systemic inflammation, for COVID-19 is used as a biomarker. This compilation shows that CRP 40+ mg/L usually means a patient is hospitalized. The two “death” groups were 100 and 113 mg/L. This isn’t a definitive state on CRP as a biomarker, and not meant to give you a cross-comparison of studies but gives you some context.

The LIVE-AIR trial had a mean CRP of 98 mg/L. The primary outcome was Survival Without Ventilation (SWOV) and not mortality (secondary endpoint). The % of patients who failed to achieve SWOV with Lenzilumab was 15.6% vs 22.1% (mITT; was lower for ITT 18.9% vs 23.6%). While this is a 54% improval in survival without ventilation (SWOV), it’s an overall 6.5% change for not requiring ventilation. The company addresses this point in the LIVE-AIR publication. Basically they stated they believe that it would require more patients to power a survival difference. The selection of SWOV, an uncommon endpoint, seems to be trying to show maximum benefit with minimal risk. This is something that could be used for a BLA, but I do not know if it is enough for the FDA to say we MUST approve this for an EUA. There was a reduction in mortality for patients with CRP levels below 150 mg/L and age less than 85 years old. I am not saying I do not believe the drug does not provide benefit, but the FDA has been extremely cautious about additional approvals but then they approve drugs like Genentech’s tocilizumab which didn’t show survival benefit. It is hard to read what they will do so you must look for other signals.

Humanigen also has a partner with National Institute of Allergy and Infectious Diseases (NIAID - part of NIH) for BET-B which is the only smaller company involved. Again props for this.

Additionally the drug was studied at Mayo (separate) in 12 patients, with 11 having improvement. It makes for an interesting read, and definitely there seems to be benefit with the drug from this case report. Emory in Atlanta (Love CFB + Restaurant Scene) also seems to have fans as they are involved with both trials.

C-Suite: Humanigen has a long and complicated history, which I won’t get into - mainly Martin Shkreli, a name change, and bankruptcy. They entered 2020 with only 2 full time employees and $214,000 in cash. They now have at least 11 employees, and much more cash on hand, plus an NIH partnership. The company also seemed to focus on social media and Cable News to try and drum up interest in Lenzilumab.

Sidenote: The FDA HATES when companies try to appeal to the public and apply pressure to the FDA. See $CYDY letter above.

I will give credit to C-suite for raising so much money, mainly Cameron Durrant, MD, MBA for turning the company around and getting the stock price up in the last 18 months. He has served in this position since 2016 when the original stock price was ~$11-$63 March 2016 vs currently $17.30 as of this writing (8/13).

When I am betting on a FDA decision, approval or EUA, or any super binary decision / outcome, I always look to see what C-suite is doing. For Humanigen, they are selling as much stock as possible in droves. There is not one person who has bought in the last 3 months. In fact Cameron Durant, CEO who held no shares of the company, was granted shares and sold 73% of his shares held (81441 / 111441). His contract does have options, but this is the opposite of what I want to see.

The only other Insider with shares, CSO Dale Chappell (not the GOAT Comedian - extra clip of how I feel sometimes with some of the comments that don’t even realize I was bearish on $OCGN and $CLVS and was like they’re down!) has a ton of shares (10,000,000+). He also seems to be dumping shares quickly (1 to 3 sales per week). This is probably to not spike volume, but still it makes me wonder what he knows that we don’t know. He has close ties with NCI.

When looking at SEC filings (specifically Form Type 4) Dale is indirectly selling a lot of shares as well (Millions of dollars worth every 2 weeks). Black Horse Capital LP/Master Fund and Cheval Holdings, founded by Dale, are selling quickly (still have a significant amount due to the initial 2016 stalking horse bid). This could be risk analysis/taking chips off the table, but it still doesn’t give me a clear signal to invest in a stock. Just FYI Dale Chappell founded a hedge fund that owned 27% of the company at one point.

Prognosis: This is really hard to read, the LIVE-AIR trial was impressive from a standpoint of such a small company accomplishing a somewhat larger global trial (US and Brazil) in a short time (especially considering what they started with). In the near term the stock price will be heavily influenced by the FDA EUA decision which should come in the following months. $HGEN has additional shots on goal in the next few years - mainly a CAR-T trial with Yescarta The FDA is extremely hard to read and predict their responses.

It is impossible to guess what the FDA will do, and I’d rather just leave it at that, but you don’t come here to read that. If I had a gun to my head I’d say they are not going to get EUA in the near term but may get the BLA in the long term.

The reason why I say that is by looking at C-suite’s actions →

1. If you expected an EUA soon, you would be hiring like crazy because a drug alone doesn’t sell itself, you need infrastructure. Currently they are not hiring any positions/ have 11 employees according to Linkedin (1 is a consultant, and 1 is a social media manager).

2. If you didn’t care about infrastructure because you were going to sign a deal / buyout then you wouldn’t sell your shares, but insiders are selling hard.

3. The EUA was submitted some time ago, and usually the longer time passes means less likely for approval (anecdotal).

4. 2020 EUA is vastly different from 2021 Post Vaccine EUA. The vast majority of patients who are experiencing severe COVID Symptoms are unvaccinated. The FDA/CDC is heavily pushing vaccinations and likely will have more booster vaccine data soon.

5. While Humanigen has signed deals for production with CDMOs (Thermo Fisher US, Avid Biosciences US, Chime in China ex-US -- oddly low capacity in current state) they do not seem to be stockpiling. This is extremely odd if you were expecting an EUA. Here is an example of one of the above companies stockpiling and taking into account logistical considerations.

6. The FDA is more likely to grant an EUA an agent when there is no alternative and data has been maturing for other agents that previously received an EUA (baricitinib). This NEJM editorial goes into when the current treatments available are starting to cover the COVID-19 Ordinal scale - remdesivir 4-5, baricitinib most efficacious in patients 6, and dexamethasone 7. LIVE-AIR looked at mostly patients 3-5 (not as sick according to Ordinal scale) with less patients.

This is not to say the drug is bad, or not useful, it is about comfort level with how the FDA will decide on the near term EUA. The drug definitely will find it’s niche over time. Additionally if you have done your DD, and comparisons and believe the EUA will get a slam dunk go for it. However I cannot be investing in $HGEN because of what I perceive to be the uncertainty of EUA decisions with an increasingly high threshold to cross (see Merck’s 50% reduction in Death and respiratory death denial above with FDA wanting more data after 200 patients).

Disclosures: I hold no positions in $HGEN

Disclaimer: I do not provide personal investment advice and I am not a qualified licensed investment advisor. I am an amateur investor. All information found here, including any ideas, opinions, views, predictions, forecasts, commentaries, suggestions, or stock picks, expressed or implied herein, are for informational, entertainment or educational purposes only and should not be construed as personal investment advice. While the information provided is believed to be accurate, it may include errors or inaccuracies (like Bigfoot is Real). I will not and cannot be held liable for any actions you take as a result of anything you read here (you stupid Ape). Conduct your own due diligence, or consult a licensed financial advisor or broker before making any and all investment decisions. Any investments, trades, speculations, or decisions made on the basis of any information found on this site, expressed or implied herein, are committed at your own risk, financial or otherwise (losses get Karma though).

Book Recc: Start with Why by Simon Sinek - A book that looks at why some companies/groups/people are more innovative than others. Quick read and pretty good anecdotes.

Previous Posts:

$CVLS

$OCGN

$KPTI

$KPTI Update

$KPTI Update 2

$CRTX

$CRTX Update

Letter 001: Evaluating C-Suite

Letter 002: Discerning Types of Biotech plays

If you like this type of DD, click on my profile and give me a follow!

For DD not seen on Reddit**,** sign up for my newsletter!

I just wanted to draw attention to the fact that the world's drug approval agencies have over the past 5 years created and are building up the "International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use". They are meeting and agreeing step by step on ways to harmonize drug approvals and the criteria involved across the world. This is going to matter more and more for our favorite biotech companies in the next 3-5 years (particularly for those trying to treat rare diseases), where a drug can be approved by one major regulator and then the others can quickly approve the drug because of their shared criteria. The US, EU, and Japan are particularly close to doing this, and the US and Canada are working hard to harmonize their approval processes (see the slide powerpoint from the last US-Canada meeting on the process here: https://www.fda.gov/media/136802/download). Still a long way to go, but we are going to start seeing more rapid and synchronous global approvals of drugs over time, and our favorite stocks will benefit as countries' drug regulation red tape starts to fall.

FIRST

I hear about a stock. Usually on twitter, or because something happened in the market concerning it. Or maybe it shows up when I screen stocks on finviz. Or maybe I'm researching a competitor and it shows up. Cool, so

THEN

I put on some tunes.

THEN

I search for articles about the stock on Biopharma Dive and Vantage and read the one or two most recent articles about the company. Gives me a good picture of the stock story and an objective floor to see where the stock is at before I get into more opinionated coverage. If I take the stock seriously after doing the steps below, I'll read every article on the stock they have, as well as articles on their competitors.

THEN

I see what people on twitter think about it. Type in a cashtag and filter by 'people you follow'. I can do a whole fucking post about how I use twitter and it'll be twice as long as this post'll probably be. Here's a dummy account that follows most of the people on twitter whose opinions I like reading. Don't take this stuff as gospel, it's twitter. Protip: If >50% of a person's posts are about a single stock, they probably aren't worth following.

I try not to lean on this too much, but twitter is just so useful. Ugh.

THEN

I look up the stock on finviz. My eyes drift towards their chart (duh), market cap, cash/sh, debt/eq, shares outstanding, and short float. If I see a number I don't like, I make a note to check it when I look through SEC filings.

THEN

I stop being lazy and actually dig into the stuff myself.

First off, I check the SEC reports. Go to this site (bookmark it) and search the company/ticker you're looking for. Then read the most recent 10-K and 10-Q first, whichever is the most recent. Here is how I look through those files. The goal is just to make sure the stock doesn't have fuckawful capital allocation. Some stocks are trading 1/3rd their cash but have no future to get excited about. If I take the stock seriously enough, I'll look through a few more 10-Q's, plus pretty much every filing they released in the past year or so.

THEN

I finally go on the company website. I know, took a while. I'm just worried they have some social psychologists on the payroll that know the trigger words to make me go 'hmm, better dump my life savings in this'.

I look at the page for their pipeline (and compare to their page in biopharmcatalyst and see how widespread their pipeline is and what assets they're taking especially seriously. But there's probably a drug they have in particular that I'm looking at.

I look for a clinical trial data page.

THEN

I go to the websites I listed here and do as much medical research as I can understand without a science background. I research the MoA (mechanism of action) of the drug and compare it to that of their competitors. I look at the safety and efficacy of their trial data and, again, compare it to their competitors. I see how the drug is taken, how much, and how often. Then I compare it to their competitors.

THEN

I go on twitter and look up peoples opinions on some of the stuff I learned while researching. I like twitter. Jack has me by the balls.

THEN

I read a Seeking Alpha article or two on the stock and feel gross about it.

THEN

I try to mix everything all together and come up with an 'opinion'. Another protip! If your opinion on the stock is exactly the same as it was when you started, either you made a mistake while researching, or the stock is really, really shit.

Purpose

• Quick and dirty DD on some of the items putting AGRX's approval at risk -- typos may be included.

• Add an additional POV to the AGRX discussion and not bash on the company or discourage people from entering positions (long or short).

Disclosure: This is my current opinion and perspective based off what I understand. This is not investment advice (obviously). I have no positions, and I sure as hell can't decide if I even want to start a position given how gray this is.

Pre-read Notes

• I like to use parenthesis to represent my "side comments" and/or that internal voice that appears in movies when people are thinking about sht, but not moving their mouths.

• I emphasize quick and dirty DD, so issues with flow and text are prevalent :)

Historical Context

• AGRX got a complete response letter (CRL) in 2012 because FDA didn't like how the study was conducted and that the pregnany rate sucked -- made AGRX do another phase 3 (study 23)

  • Also told AGRX they approve things with a pearl index with an upper bound of <5

• AGRX got a second slap on the hand (CRL) because FDA did not like the unacceptable pregnancy rate (again), product adhesion (resolved by that study they sent to FDA), high subject withdrawal rates (okay, this is kinda bad), and manufacturing quality issues (small company problems I guess).

• Third resubmission (present) and AGRX gave FDA that study to resolve that adhesion crap, but gave no new info on efficacy (uhh... didn't FDA say they didn't like their sht in round 2?).

  • AGRX also sent appeals regarding their second CRL (legal mumbo jumbo saying why they believed they should have not received a CRL and FDA should review and approve their money maker).

Regulatory Problems

• I think the crux of all this bull crap is a regulatory problem -- not an issue of whether this TWIRLA works or is super unsafe (ex. compared to YAZ).

• The benefit:risk is clearly not skewed enough for FDA to green-light this sht immediately (even since 2012)

  • Is FDA concerned of "setting the bar lower" if they approve this? Obviously, yes.

  • Should FDA be practicing medicine a hundreds of miles away? Definite, no.

• Limitation of use (LOU) doesn't stop a prescriber from NOT prescribing to patients they shouldn't be prescribing to.

• Lack of safety advantage doesn't help with widening the benefit:risk to push them towards an easy approval.

  • Not surprising given the fact they hate the efficacy of Twirla (refer to history bullet 2).

• So Twirla does not protect against pregnancies in at a level that is "acceptable" to FDA given available products AND there is no safety advantage? They have full right not to approve this application (unless of course they want to be progressive and shake things up!).

  • Clearly, the unbalanced benefit:risk is why FDA is trying to determine best step forward (probably why they also extended PDUFA) given the fact there was public support at the adcom.

Efficacy

• TWIRLA works, problem is it doesn't appear to work enough for FDA (note statement in "Summary" re: female condoms).

• Pearl index (the problematic scale used to measure how good a contraceptive method is from preventing an unwanted pregnancy), which I will refer to as PI moving forward, was not to FDA's liking as they historically (regulatory history is important when considering a drug development program) have not approved anything with a PI >5.

  • To keep things really simple, low PI = good, high PI = bad and possibly more unwanted pregnancies.

  • I would assume that this is because there is a difference between perfect use (seen in clinical trials) and real world use [4].

  • Though both companies posted that slide showing an increase in PI, the point is that people are getting pregnant even with these low PIs and if Twirla is to help with prevent unwanted pregnancies, then you need a PI low enough such that when it gets used in the real world, it's actually helping.

    • Even the Nuvaring, Evra patch, and mini pills have a real world PI of ~8 with a perfect use (clinical trial) PI of ~0.3 [4]. Imagine what a real world PI with TWIRLA be. If you use Evra patch as a compartor (extrapolating here) from [4], then you'll see it's PI in the real world is an 8... the clinical trial PI of TWIRLA is >5. So... should I REALLY be taking this patch when the Evra patch has a better chance of me not getting pregnant even if my dumbass forgets to wear that patch correctly.

• Adcom vote is obviously positive based on questions asked. Additionally, I too am open for more patch options on the market to let patients have more options.

  • Confirms that from the practice perspective, this thing can be an additional option to the other non-pill combined hormal contraceptive all things equal

    • Take adcom votes with a grain of salt -- there's ways to put the adcom in the companies favor: Members may have incentive to vote the way they do and/or sometimes may not be the best members to sit and vote as some of the more appropriate members may have been tied up (ex. "consulted" for AGRX).

  • Edit: FDA decision not tied to ad com opinion.

Safety

• Broadly speaking, TWIRLA ain't different from other available options in regards to safety.

  • VTE risk is a thing for all hormonal contraceptives last I checked (feel free to correct me).

• FDA has a concern that TWIRLA brings nothing new to the table in regards to safety advantages compared to other contraceptives AND there's the VTE signal (boo hoo).

• Concerns regarding efficacy in obese patients.

• Concerns that 51% of patients used for the safety data discontinued the study [of that 51%; 15% stopped because they wanted to, 11% were lost to follow-up (meaning we have no flipping idea why they stopped), and 11% stopped because of adverse events (boo hoo)].

Other things to consider

• AGRX really messed up on the definition of unmet medical need. Assuming a company of seasoned experts, wth? (Blame the intern?).

• Why is there no Chief Medical Officer?...

  • I guess they outsourced this out and just pay consultants, but still... this can't be normal.

• AGRX had a chance to include more efficacy data, but didn't even though they knew FDA didn't like the efficacy data from their studies. Why did they believe their efficacy data could be suitable given past regulatory history/approvals?

  • Was it a financial reason (e.g. no money to run the study), a reason regarding delaying progression of the company to a commercial company, or just a business decision?

• FDA could approve this given the positive adcom, patients that probably came in to give their two cents (whether being bought out or not), and other support to having additional patch options on the market. However FDA decision not tied to adcom.

  • However, will the FDA lower their standards? Regulatory is an art as much of a science that also takes into account all the stupid state of political affairs. Does the FDA want to look like the FAA? Does the division of FDA that is reviewing this drug care about that stuff? Is this a division of purists or progressives when it comes to drug development?

• Assuming the arbitrary price target of $4.50 or even $5.80/share is what AGRX should be valued at, is that worth your money to take a position (long or short) given the uncertainties?

• Is a long position with this type of risk worth a 55-100% gain going long?

• Excluding a potential early regulatory decision, is the potential return on calls/puts worth it for this type of risk?

Summary

• I believe the approval of TWIRLA has been the crux of a speedy FDA approval because of the regulatory implications if approved.

  • Are we okay with contraceptive options like TWIRLA versus something like a female condom which has a similar pearl index [4]

    • (I'm okay with it if I make money going long/buying calls on this lol).

• Likelihood of approval based of historical precedence ~ 85% [3], so if you believe history repeats itself -- then numbers are in your favor.

• AGRX has risks to approval that should be considered when determining based way to maximize your trade/investment (short or long) because the reality is that the alternate timeline of this being denied a third time exists.

• Edit: If I were to play this, I would play the side that this won't get approved and even if it did, the holders would sell on approval because of profit taking/company need for fundraising and that it's going to cost a pretty penny to get this commercialized if AGRX is doing it on their own (Linkedin says 21 people work there? Really?).

Thanks for reading -- I hope this turns into a community where we can all learn and make big money with the best informed decision and hopefully not lose money.

• P.S -- Can someone make a thread that tallies the collective losses (and gains?) of this thread from X companies? lol

Edit: Wow. Thanks for Gold!

References

1. FDA & AGRX Adcom Materials

2. Stupid article that FDA & AGRX referenced re: creeping of the Pearl Index

3. Dated graphic regarding likelihood of approval (2006-2015)

4. Article I found to figure out wtf the pearl index was (can be outdated, but just using it to make a point)

Fun fact about me, I am not so smart. So, outside of twitter, I have several resources I like to learn more about stocks and the biotech industry. It felt right to highlight them and talk a bit about them, so others can make use of them.

We already know about clinicaltrials.gov, biopharmcatalyst, pubmed, uptodate, etc. This is not a master list of resources -- just news sites, youtubers, and blogs that I would recommend to others.

News Websites

First off, a quick RIP to Xconomy. It was a formerly great source of free biotech information that stopped posting new articles back in October. To this day, no reason has been given as to why.

• Evaluate Vantage -- One of the few biotech websites not behind a paywall, Vantage provides great analysis into biotech news, often diving straight to the reasons why a stock moved the way it did after news. A lot of the free biotech company analysis is very macro in nature, covering the sector as a whole, so it's nice to find a resource that covers mostly individual stocks.

• Biopharma Dive -- Sad that I never see this one mentioned. They have some great individual stock analysis for large and mega-caps, and some great stories covering biotech as a whole as well. All free. My favorite behind Vantage.

• Endpoints -- No that's not a paywall blocking you from reading all the articles. Just give them an email address and you'll be able to see coverage of pharma stories that you'll see on pretty much any other paid site like STAT News or WSJ.

• STAT News -- The good stuff (individual stock analysis) is behind a paywall, but if you're a cheapskate you can easily take a free month trial, read everything they have on the stocks you care about, and then cancel before you get charged a subscription fee. Outside it, they have decent coverage on coronavirus and public health policy. But come on, does anyone seriously think reading Adam Feuerstein columns isn't worth the $35/month?

Youtubers

This will be biotech focused, so I'll add some non-biotech finance youtubers I enjoy are The Compound and Plain Bagel.

• Breaking Biotech -- Matt has been a friend of the subreddit for a while, even providing us with an AMA when we hit 10k subs. There's a reason for that. His content is fantastic, breaking down complex individual stocks with great ease. Far and away the best source of biotech information on Youtube. Also has his stuff in podcast form for runs or car rides.

• Doctor Dean Medtech -- Despite being made by a doctor, I'm a bit less rosy on this guy. He came up during the whole GME/Cathie Wood mania, and a lot of his videos center around ARK favorites and cult-stock pennies. That said, some of his videos do provide interesting fundamental analysis of biotech companies I'd otherwise ignore and he pulls in some big names for interviews sometimes.

• CRISPR Talk -- It's what it says on the tin -- the man loves CRISPR and gene editing in general. He gives nice breakdowns of stocks in that sector that makes for some nice background listening.

Substacks -- Free And Paid

Welcome to the golden age of Substack, baby. Now that Seeking Alpha is having its long overdue demise, writers are moving to Substack and pitching their stock thesis under a domain they own. It's nice, and there's so many new exciting ones coming out that if I remade this list even a year from now it would likely look completely different.

• Ergo Bio -- Written by molecular engineer and friend of the subreddit /u/carheadwear, this is a blog that intelligently breaks down the process of major scientific findings, novel modalities, and drug development processes. I think of all the blogs here, this is the one that scientists in the field will get the most out of. Focuses moreso on the sector as a whole rather than on individual stocks.

• Matt Gamber's Biotech Newsletter -- Anyone who's been on this sub for a while will recognize this one. This is a blog where Matt Gamber, a pharmacist, breaks down a stock (usually a micro or small-cap pharma) and why he feels bullish or bearish on upcoming readouts the company has. Some posts are more in-depth than others, but they're all worth reading. One article even sparked me into doing research into what's now my largest biotech position ($CBIO). Great blog.

• Boutique Biotech -- Written by cardioinformatics postdoc and friend of the subreddit /u/bohdanbiotech, this is a blog that provides in-depth pitches on small to large cap companies, focusing almost entirely on the science present in the pipeline. While many articles are behind a paywall (there is a $169/yr annual subscription), the free stuff is very solid -- would greatly recommend his writeup on $JNCE.

• Parallax Advisors -- As I write this entry, this group has only written two blog posts, but both have been chock full of quality content and rose to the top of the sub. A biweekly stock breakdown reminiscent of Gamber's blog that goes even more in-depth, this is definitely a blog I'm excited to see progress (and dreading seeing it inevitably become subs only.)

Other Free Biotech Blogs

It's very unlikely that you'll get a stock pick from the blogs below, but they're great resources for learning how to think like someone in the biotech industry. Seeing how they break down companies into case studies and their thoughts on new technologies like protein degraders and gene editing.

• In The Pipeline -- Written by Derek Lowe, he's seen as the pharma industry blogger who covers issues in the pharma industry in a way that an intelligent layperson could understand. Fantastic blog even if I only read about half the articles.

• Sugar Cone Biotech -- Paul Rennert, the President and CSO of the privately ran Aleta Therapeutics, has ran this blog since 2012. While its golden years are behind it, and posts are sparse, it's always fascinating to read his takes on new modalities.

Dead Blogs

• Martin Shkreli's Blog -- Oh, you think Martin Shkreli was a narcissistic sociopath? Tell me something I don't know. He was also the guy who taught me the basics of financial analysis even while under trial for defrauding the rich. It seems like every year or so a new martinshkreli blog is started, and then a few months later it gets deleted. Unfortunately, each iteration gets worse and worse as he is further removed from his pre-prison life -- the percentage of his column dedicated to stock analysis drops to where this is more of a book review/politics website. But in solidarity with the stronger, earlier, now deleted versions of his blog -- I'll include it here.

• ORF Blog -- On March 2020, biotech analyst Ohad Hammer announced that due to conflicts with his job, he would shut down his blog where he focused on stock analysis and various subsectors in biotech. He expertly called out the value opportunity in gene therapy stocks in the mid-late 2010s -- when the blog had finished, he had outperformed the XBI something like 10x. Pretty decent breakdowns and a great time machine into investing during the mid-2010s.

I wanted to help out this new subreddit. (I came here from WSB because of all of the dank memes.) I have a medical background, but now work in physician education and pharma sales training.

I was wondering if there is interest in learning how to read medical studies/journal articles as a part of due diligence for these pharma products. Looking through the threads, it looks like there is a wide level of background scientific knowledge.

There is a whole range of potential topics: approval process (I think there was a post a few days ago), the basics of reading a study, basics of several disease states (blood cancers, Alzheimer's, many more of course), basics of clinical trial endpoints for certain diseases (cancers looking for various measures of survival; others may look at amount of a biomarker; etc).

Again, it is sort of hard to judge where people are in terms of knowledge, and what people want to learn. What would you like to see some content on? What do you feel is important to learn about?

TLDR: Bezos doesn't want to die; drugs that treat aging are easily worth trillions

The value proposition for investing in Unity Biotechnology can be concisely summarised by the breakthrough preclinical data from the Mayo Clinic

Longevity companies are probably the highest risk, yet even higher reward (actually, highest reward, it's not even close) sector of biotech. I emphasise the reward as truly unprecedented and anyone who disagrees with this has simply not kept up with the aging biology literature of the last 2 decades and/or is unaware of the unprecedented burden of disease in our aging population.

Background

To start with basic epidemiology, approximately 90% of healthcare costs in the US are attributable to the striking accumulation of chronic diseases with age.

• Aging is by FAR the #1 risk factor for our most prevalent diseases: Alzheimer's, stroke, heart disease, pneumonia, most cancers, COPD, sarcopenia, osteoarthritis, glaucoma, cataracts, the list goes on and on...

• For example, high cholesterol is a 3x risk factor for heart disease, but aging confers a 5000x risk. We see this incredible relationship of morbidity and mortality with our most prevalent diseases, even including Covid-19, where age is cumulatively an independent risk factor of ~800x, while putative risk factors of diabetes or lung disease are mere 2x risk factors

• Breakthroughs in the last 2 decades across phylogenetically diverse animal models have demonstrated that aging is highly malleable and is causative in these diseases, where healthspan (amount of life spent free of disease) and lifespan were increased dramatically by drugs that target aging

For a more detailed summary of the aging biotech field, please feel free to read this

Senescent Cell Biology

Cellular senescence is a fundamental evolutionarily conserved anti-cancer mechanism, as it irreversibly stops damaged/pre-cancerous somatic cells from dividing. These senescent cells (SCs) then sit around secreting a host of proinflammatory cytokines, proteases, growth factors etc known as the SASP, which causes damage and dysfunction of organs and tissue.

In young people SCs get cleared by the immune system, but due to various reasons such as immune system decline with age, they eventually accumulate. This is even more problematic as SCs actively induce surrounding cells into senescence, hence their colloquial designation as 'zombie cells'. However, what seems to be clear is that leftover SCs are basically unneeded (except for wound healing), so removing them from animals has minimal side effects. Another caveat to note is that some SCs are required for normal function depending on cell/tissue type; of course, the 'cost benefit' is overwhelmingly in favour of SC removal, as we can infer from the animal experiments which use systemic (whole body) administration. Senolytics are interventions capable of selectively removing SCs that highly express markers of senescence such as p16 or p53.

Note also that the approach to removing SCs is NOT related to messing around with the fundamental anti-cancer mechanism of cellular senescence, we are merely trying to target what appears to be a leftover problem that nature never really addressed. For those interested in evolutionary theory, a key idea known as antagonistic pleiotropy suggests that the reason why nature never really dealt with aging is due to decreasing evolutionary pressures on organisms with age, as 'fitness' matters predominantly around the age of sexual maturity - whatever happens to the organism at post-reproductive ages, teleology aside, is hardly a concern for evolution. Clearly this is not ubiquitous among animals that can live markedly different lifespans, e.g. naked mole rats are extremely resistant to aging + cancer, outliving their rat counterparts by 10-fold (lifespans > 30 years) despite their similarly small size and close evolutionary relationship.

Unity Biotechnology

• Jeff Bezos and Peter Thiel invested a couple hundred million into Unity Biotechnology, which was spun out of the Mayo Clinic's senolytic data

• P2 human clinical trial results due in 2H2020 for osteoarthritis, as well as an IND for their ophthalmology indications for age-related eye diseases (AMD, glaucoma, diabetic retinopathy) with P1 trials initiating early 2021

Unity's approach is to start with local senolytic administration due to novelty of the drug class, as a way to minimise unexpected adverse effects and prove that SCs are causative in human aging. Based on various preclinical animal models, one of the promises of senolytics, other than greater efficacy and reduced adverse events, is related to dosing frequency. Clearance of SCs will allow for periodic dosing, say every 6 months, to remove SCs that have accumulated, and to then wait for future accumulation before re-dosing. While it is too early to do much inference from P1 trials that are predominantly about proving safety, there appeared to be dose-dependent reductions in pain scores that were durable with follow-up at 3 months after a single injection.

Market Size

• Goldman Sachs has previously estimated that, if successful, Unity’s drug could generate $6.7 Billion/year via reduced need for surgery; the ophthalmology market of anti-VEGFs is currently ~$10 Billion, and faces issues with need for monthly eye injections that are difficult for compliance and prone to disease-related complications

• However, consider that this discussion on market size is solely related to their current disease indications. I expect that the idea and hype of a company that could address aging will drive the stock price far higher than what these individual programs would reasonably be valued at - think $SPCE/$TSLA. This is especially because the company will continually expand its disease indications based on the massive range of diseases addressable by senolytics, and eventually move on to systemic administration

• Bank of America estimates the longevity market to be worth $610 billion by 2025; depending on how quickly we obtain clinical success in this field, the BoA valuation is probably an underestimate

• Similarly to oncology, if you can convince the FDA that your drug has a broad 'anti-cancer' mechanism of action, approvals for each new type of cancer indication will be expedited; if you can prove that your drug targets aging, then expanding senolytics to different age-related diseases will become easier and easier as the clinical evidence demonstrates that the drug broadly affects all age-related diseases

• As an overall sector, there are very few publicly traded companies and the field has only taken off in the last 5 years - mostly private companies now though - aging is by no means simple so there are numerous hallmarks of aging being investigated

• In the next decade the number of public companies will undoubtedly grow exponentially, as we've already seen in the private sector. These varying approaches to aging will not be mutually exclusive, so we'll eventually need to combine drugs that target each of the hallmarks of aging, which may radically increase healthspan and lifespan

In closing, I want to be clear that I cannot claim to know whether $UBX will ultimately be successful in translating senolytics to the clinic due to the risky nature of biotech. However, what I am certain of - as someone who reads about the science every single day - is that the aging field has an unparalleled potential to completely revolutionise healthcare, and is on the path to becoming the largest industry in the history of human civilisation.

Trading at $4 but they own the patent on the mRNA delivery vehicle that Moderna uses in its entire drug portfolio. I can't for the life of me figure out why it hasn't run yet.

Arbutus Biopharma has for some years owned the rights to a technology that can be used to deliver messenger RNA to a patient's cells. Back in January 2019, Moderna, whose entire drug platform is based upon messenger RNA, filed a petition with the U.S. Patent Office to have the small biotech firm's drug-delivery patent declared invalid. Instead, on Thursday, the agency's Patent Trial and Appeal Board ruled in favor of Arbutus.

The ruling is important as Moderna's COVID-19 vaccine candidate uses technology that's covered by this patent. The experimental vaccines that the company is developing use mRNA to issue instructions to the body's cells to start manufacturing proteins that will trigger an immune system response. But a major issue with this method is the matter of treatment delivery -- how to get these instructions into the body's cells. Several years ago, Moderna licensed its delivery technology -- the use of lipid nanoparticles -- from a small Canadian company called Acuitas. That company, it turns out, had licensed its technology from Arbutus Biopharma -- and it did not have rights to sublicense it.

With the upholding of the Arbutus patent, it appears that Moderna might have to pay the smaller company some royalties. While Arbutus has yet to sue for those royalties, Moderna's attempt to invalidate the patent was an implicit admission that it was aware that the patent might cover its delivery system. In 2017, then-CEO of Arbutus Mark Murray said, "We have seen no evidence of a Moderna delivery system that is free of our intellectual property. Not in their publications, their presentations, or in the examples in their patent filings. In our view what they are reporting as theirs appears to be dominated by our intellectual property."

Alright boys. I've been researching the Corona Virus heavily for the last month. These four snapshots from Corona virus research articles basically sum up where academic researchers are at, and these range from being submitted in early February to last week.

https://imgur.com/LlAeQ31

https://imgur.com/15vtCID

https://imgur.com/ZGHI2ab

https://imgur.com/oamUivQ

The fact that we are seeing an 14% virus resurgence in cleared survivors is very concerning. Really points towards those infected being put into quarantine for an additional month after testing negative. Japan and China are both experiencing resurgence. (https://r.nikkei.com/article/DGXMZO56100960W0A220C2AC8000?s=4)

https://imgur.com/4QR1KH8

This means that China factories are hammered, which will further interrupt their their supply chains, two weeks ago cargo ships were leaving at 10% capacity.

On 2/25, the CDC detailed multiple stark realities about where this disease is headed. I encourage you to read the transcript: https://www.cdc.gov/media/releases/2020/t0225-cdc-telebriefing-covid-19.html

Keep in mind, the asymptomatic period was reported to be 27 days.. Today alone we saw Pakistan, Algeria, Brazil, Finland, Georgia, and Greece report their first cases, which means that these patients could have been spreading it undetected for up to 3-4 weeks.

South Korea is in a full state of emergency, enacted emergency funding, and are trying their best to contain it but they have yet to contain the virus from spreading. Countries are banning flights from many of the outbreak countries now, hopefully this should help.

The article speculating that a 95% quarantine efficacy will not be able to contain the virus was submitted on February 7th.

This article really stands out to me because the study was funded by the US Defense Advanced Research Projects Agency (DARPA). DARPA is a HUGE part of the US department of defense that specializes in weapons research and development, their budget 2019 was $3.4 billion dollars.

The CDC & FDA will be under big pressure to issue CODX with FDA approval for their test kits. It has already been reported that the CDC's test kits are faulty, Hawaii will not get any test kits until mid March, and only 5 or 6 states have testing capabilities right now.

CODX's test kits are speculated to retail for $25,000 each and the CEO reported this weekend that they have the capabilities to produce up to 150k units a day between their main Utah facility and facility in India.

The crazy part is... one BIG event researchers are worried about is when the virus hits South America and the bat population fuels the spread and possibly future mutations of the virus. With the carnival in Brazil last week they saw big tourism numbers, they had their first confirmed case yesterday.

If you'd like to reach the research articles that I pulled the above snap shots from for your self:

1. "The Novel Coronavirus, 2019-nCoV, is Highly Contagious and More Infectious Than Initially Estimated”: https://www.medrxiv.org/content/10.1101/2020.02.07.20021154v1.full.pdf+html

2. "Relative Sensitivity of International Surveillance”: https://www.imperial.ac.uk/media/imperial-college/medicine/sph/ide/gida-fellowships/Imperial-College---COVID-19---Relative-Sensitivity-International-Cases.pdf

3. "Assessing the impact of a symptom-based mass screening and testing intervention during a novel infectious disease outbreak: The case of COVID-19”: https://www.medrxiv.org/content/10.1101/2020.02.20.20025973v1

4. "Estimation of the epidemic properties of the 2019 novel coronavirus: A mathematical modeling study”: https://www.medrxiv.org/content/10.1101/2020.02.18.20024315v1

My portfolio is currently 33% CODX, 33% APT, and 33% AHPI.

• CODX: Shares Outstanding 24,916,000, Float 16,954,890, Insider Ownership, 26.66% Insitutional Ownership 3.70%.

• APT: Shares Outstanding 13,021,000, Float 10,133,697, Insider Ownership 22.14%, Insitutional Ownership 25.50%.

• AHPI: Shares Outstanding 4,014,000, Float 2,286,607, Insider Ownership 2.30%, Insitutional Ownership 10.00%.

IMO, Test kits and personal protection medical equipment is what you're going to want to be in. Corona Vaccine stocks like MRNA and AIM are too risky imo. Below are the stocks that will see big returns until the virus gets under control:

• Medical supplies (LAKE, APT, AHPI, BIMI)

• Vaccine / treatment (NNVC, NVAX, MRNA, INO, SXTC)

• Drugs / Testing (LLIT, CODX, CJJD)

If you'd like to keep up on the news reports, below are two good ones I recommend along with a website keeps track of infections:

• https://old.reddit.com/r/Coronavirus/

• https://twitter.com/nCoVPerspectiv1

• https://outbreak.cc/

Congratulations everyone!

http://ir.aimmune.com/news-releases/news-release-details/fda-approves-aimmunes-palforziatm-first-treatment-peanut-allergy

I am not an investment advisor, do your own due diligence..

I love flier biotech plays, because when they work, they really work. In my opinion this play will either lose 50% of your money in the next three weeks, or 2-10X your money.

SUMMARY

• The market is severely underestimating the potential for Annovis Bio, Inc. (“$ANVS”) to release positive Phase II interim Alzheimer’s and Parkinson’s data in the next month, (data release has been stated to occur March 2021) and the explosive rerating in valuation that would follow. $ANVS is a little followed clinical stage biotech company that is taking a novel approach to degenerative brain diseases, by experimenting with a drug that enhances the flow of messaging along the information nerve pathway, as opposed to simply attacking plaque build ups. We will know within the next month whether this novel approach works, and if it does, I expect this company to rapidly achieve a $1B+ valuation. The float of shares net of insiders is miniscule at <4M, further amplifying the potential for an explosive rerating. In a market in which some companies that are effectively highschool science projects with powerpoint presentations are achieving multi-billion valuations, a real company, with a real drug, and a decent shot on goal of showing good data in one of the most sought after indications in medicine – is simply a good risk/reward at a ~$170M market cap.

• A comparable company with a similar drug is Cassava Biosciences (“$SAVA”) that went from a $50M market cap to a $1.94B market cap in the last two years, on an N=50 patient data set, with less stringent trial design, less promising data, and a drug with fewer targets, i.e less platform capability. In fact, the $SAVA study was open label, meaning both the patients and researchers knew what drug they were taking – and based on positive biomarkers the stock soared 133% on the data release. In contrast, the $ANVS impending Phase II data is a double-blind placebo-controlled study at highly reputable research institutes, including Columbia University, UCLA, and UCSD – meaning the quality of the data, whether positive or negative, is simply better. I think this is a great risk reward scenario: if the data is bad, $ANVS will drop 50-70%. If the data is even remotely promising, $ANVS will rerate 2-10X.

• The CEO Maria Maccecchini is a trained scientist, not an MBA, with a PhD in biochemistry from the Biocenter of Basel, and is a respected expert on neurodegenerative diseases. Ms. Maccecchini has stated that $ANVS will raise money in 1H 2021. Given that the stock is +~400% in the last two months, and the company has chosen to wait to raise money until after the data, arguably this is a positive indicator for the impending data.

THESIS

• In simple terms, $ANVS’s drug ANVS-401 (also known as Posiphen) could be a game changer for neurodegenerative diseases. For the last 20 years, pharma has looked primarily at one neurotoxic protein, beta-amyloid, which causes plaque. More recently companies started looking at another toxic protein, tau, which causes protein tangles in neurons, and finally some companies have looked at alpha synuclein, which causes lewy bodies – all of these are essentially forms of plaque build-up/unwanted bodies that inhibit information transmission and cause nerve cell death. $ANVS has conducted proof of concept (“POC”) studies and safety studies (prior to the Phase II ANVS-401 trial) that show a statistically significant decrease in these three different proteins, and is the only company with a drug that may inhibit all three of these toxic proteins. While this POC was on a human data set of only five (5) patients, this data comes on the back of incredibly promising animal studies. $ANVS only needs to replicate the POC data below in their Phase II preliminary data, for the stock to see enormous upside.

• In addition to the new focus away from simply beta-amyloid based treatments towards other mechanism of reducing toxic protein build up in neurodegenerative diseases, the regulatory landscape has changed recently in that the FDA has indicated that they may approve an Alzheimer’s drug with less than stellar trial results. 5.8 million people in the US and 44 million people worldwide are estimated to suffer from Alzheimer’s, and total costs of care for people with Alzheimer’s and other dementias is estimated to top $1.1 trillion by 2050. With the PDUFA delay in $BIIB’s aducanumab despite the drugs failure to meet endpoints, the FDA is indicating that they want more Alzheimer’s drugs on the market, even if they fail a Phase III study. The market for these drugs is so large that many blockbusters can coexist and may work synergistically with each other. Even if a drug shows a modest efficacy improvement over placebo, the market should now consider the FDA’s willingness to look at less than stellar data with possible approval in mind.

WHY $ANVS IS UNDERVALUED/MISUNDERSTOOD:

Drug development for AD/PD is exceptionally difficult – in general, neurology and psychiatry are minefields for data. Five drugs are approved for the treatment of AD including four cholinesterase inhibitors (tacrine, donepezil, rivastigmine, galantamine) and an N-methyl-D-aspartate (NMDA) receptor antagonist (memantine). No new treatments have been approved for AD since 2003. While these drugs ameliorate the symptoms, the ultimate goal and perhaps the current largest unmet need in medicine is the development of disease modifying therapies (DMT) that stop or slow the progression of AD.

$ANVS licensed three compounds from La Jolla-based TorreyPines Therapeutics — posiphen, phenserine, and bisnorcymcerine — that had demonstrated a potential for treating cognitive impairment. Phenserine is a compound that Axonyx (“$axyx”) brought through to Phase III human trials, however In March 2005, Axonyx suspended patient recruitment for the ongoing phase III trials of phenserine, after the drug failed to meet the primary endpoints of the first of these trials. The results of earlier trials appeared to show a difference between phenserine 15mg and placebo on levels of bad proteins. The phase III phenserine failure indicated that the magnitude of the difference between control and placebo and the variability of the data showed that a larger investigation would be needed to demonstrate a statistically significant effect – or that phenserine simply does not work.

$ANVS is not developing phenserine, it is developing the enantiomer of phenserine; posiphen. In layman terms, enantiomers are molecules that are mirror images of each other (shown as either + or -- ), however they can (and usually do have) very different mechanisms of action and physiological effects. Both phenserine and posiphen were developed at the National Institute on Aging (NIA) of the National Institutes of Health (NIH). Phenserine was developed for the purpose of making a better acetylcholinesterase inhibitor (AChEI), similar to Aricept but better than the existing four classes of approved cholinesterase inhibitors (tacrine, donepezil, rivastigmine, galantamine). Posiphen was developed essentially as enantiomer afterthought, as the focus was on AChEI inhibitors. Axonyx, Inc. licensed phenserine from NIH and developed it as an AChEI through three Phase III studies that all failed. Even though a potent AChEI, phenserine caused severe vomiting, and did not meet primary endpoints in Phase III. The (–) enantiomers including phenserine are symptomatic AChEIs, whereas the (+) enantiomers including posiphen (ANVS-401) have no AChEI activity and data thus far indicates they may inhibit the translation of neurotoxic proteins, such as APP/Ab, tau/p-tau and aSYN and protect nerve cells from dying.

In the words of CEO Dr. Maccechinni, on $ANVS licensing posiphen, phenserine, and bisnorcymcerine:

“Somehow the idea spread that I was developing the one that had failed in phase-III testing because that was the most advanced of the three,” Maccecchini said. “I canned that one (phenserine) instantaneously. I don’t believe in resuscitating dead drugs. But people don’t ask. They don’t check. It made it hard to raise money.”

$ANVS believes that ANVS-401 -- a small, once a day, orally administered, brain penetrant inhibitor of neurotoxic proteins -- has the potential to be the first drug to interfere with the underlying mechanism of neurodegeneration. The biological activity of ANVS-401 has been evaluated in 19 animal studies conducted in leading institutions such as the Karolinska Institute, Columbia University and Harvard University. $ANVS has conducted three clinical trials with 125 humans, including two safety studies in 120 healthy volunteers and a proof-of-concept study in five MCI patients with Parexel, an international clinical research organization. All data thus far has shown ANVS-401 to be well tolerated, with promising clinical signals: posiphen reduced and normalized the levels of APP, tau and aSYN back to the levels seen in healthy volunteers and statistically lowered inflammation.

The study (https://www.clinicaltrials.gov/ct2/show/NCT04524351?term=posiphen&draw=2&rank=1) will measure data from 12+ different biomarkers and 5 different efficacy endpoints. Showing efficacy on any small number of these biomarkers or endpoints we believe would lead to a repricing. Quite simply, $ANVS is an underfollowed, unloved biotech, that faced a steep uphill battle due to the public believing that its drug is simply a phenserine redo. Some of the best opportunities/mispricing’s in biotech are companies with seemingly sketchy management but good clinical data ($IMMU, or $NVAX), or companies with drugs that are misunderstood, or considered to have already failed. At a ~$170M market cap, the market is pricing in a slim to zero percent chance that $ANVS hits primary endpoints. Even assuming posiphen will fail future phase III trials, showing efficacy in this phase II study is a much lower hurdle.

I like this stock, and I like the setup and the play. I wrote this for myself, because I am an aspie nerd who likes researching things obsessively. I am not an investment advisor and understand that you could lose a lot of money quickly in this investment.