The Sick Economist's Blog, page 3

BIOMARIN PHARMACEUTICAL: ONE STOCK I WOULD BUY TODAY

By Sudheer Narasimha, Equity Analyst 

 

There are many Biotech stocks to consider when someone thinks about purchasing. However, in order to build wealth, the company MUST have a bright future ahead of it. Also, for the average investor, it is best if the stock isn’t so volatile. There has to be a stock that has a bright future, and seems to be safe. Does something like this really exist? 

It does and the company is called BioMarin Pharmaceutical. BioMarin Pharmaceutical Inc. is a pioneering biotechnology company at the forefront of developing advanced therapies for rare genetic diseases and serious medical conditions. Established in 1997 and headquartered in San Rafael, California, BioMarin has consistently demonstrated a commitment to pushing the boundaries of science and medicine to address unmet needs within the medical community. With a dedicated focus on rare diseases, the company has garnered recognition for its groundbreaking research, innovative therapies, and patient-centric approach. Through a combination of cutting-edge research, strategic partnerships, and a dedication to improving the lives of those affected by rare disorders, BioMarin continues to play a pivotal role in shaping the landscape of modern biopharmaceutical development. BioMarin Pharmaceutical Inc. stands out as a stellar company due to its unwavering dedication to addressing the unique challenges posed by rare genetic diseases. The company’s commitment to scientific excellence is evident in its consistent production of groundbreaking therapies that have transformed the lives of countless patients worldwide. By concentrating on rare diseases, BioMarin fills critical gaps in medical treatment that are often overlooked by larger pharmaceutical entities. This targeted focus allows the company to allocate resources more effectively, resulting in a stream of innovative treatments that offer tangible benefits to patients and their families. Moreover, BioMarin’s collaborative approach, partnering with patient communities, medical professionals, and research institutions, demonstrates a genuine commitment to improving patient outcomes and advancing medical knowledge.

Niche Products for Big Needs 

We can go even further into this by taking a look at their pipeline. BioMarin Pharmaceutical Inc.’s robust pipeline reflects its continuous commitment to innovation and addressing unmet medical needs in the realm of rare genetic diseases. These are diseases that only effect a small group of people, but that small group often suffers disproportionately. One example would be the notorious disease Hemophilia A. This genetic defect causes patients to bleed uncontrollably, and may even have been responsible for the fall of the Russian Empire. Now, for the first time, BioMarin is offering a medication that fixes the genetic defect and essentially cures the dread disease.  By eradicating this small disease, BioMarin hopes to make a big impact on human health. 

With a strategic focus on advancing therapies from early-stage research to late-stage development, the company’s pipeline showcases a diverse range of potential treatments across various medical conditions. This includes investigational gene therapies, enzyme replacement therapies, and small molecule compounds designed to target the underlying causes of these rare disorders. BioMarin’s dedication to pushing the boundaries of science is exemplified by its pursuit of cutting-edge technologies and collaborations with experts in the field. By harnessing the power of genetics, precision medicine, and advanced therapeutic modalities, the pipeline demonstrates the company’s vision of bringing transformative solutions to patients who have long been underserved by traditional medical approaches. BioMarin Pharmaceutical Inc.’s carefully curated and innovative pipeline holds the promise of substantial profitability in the future, driven by several key factors. First and foremost, the pipeline’s focus on rare genetic diseases taps into a niche market with limited treatment options, often affording the company a competitive advantage and potential pricing flexibility. Moreover, the strong emphasis on advanced therapies, such as gene therapies and precision medicine, positions BioMarin at the forefront of scientific and technological advancements, allowing it to command premium pricing for cutting-edge treatments. Additionally, the company’s strategic collaborations and partnerships not only enhance the pipeline’s breadth and depth but also distribute development costs and risks, potentially leading to a more efficient and cost-effective path to market. As these therapies progress through clinical trials and gain regulatory approvals, BioMarin’s position as a leader in the rare disease space further solidifies, potentially fostering investor confidence and attracting further capital.

Sound Medicine, Sound Money 

More than their pipeline, something else that really stands out about BioMarin is their current profitability. Many other BioTech companies usually operate at a loss which makes it so they have to rely on continued fund raising to ward off the danger of running out of funds. However, BioMarin has a big advantage in that they can fund their own research through the profits they make. Going into their financials, we can see that BioMarin had a very strong second quarter in 2023. Their total revenue was up 12% and their GAAP net income increased by $23.8 million while their non-GAAP income increased by $28.4 million. The future is bright….the company boasts gross profit margins of 78%, and has about $1.6 billion in the bank. Plenty of dry powder to push promising research to its conclusion and bring lucrative products to market. 

Investors should consider BioMarin Pharmaceutical Inc. as an appealing investment opportunity due to its unique position at the intersection of cutting-edge science, rare disease specialization, and a demonstrated track record of innovation. With a pipeline showcasing a diverse range of advanced therapies, including gene therapies and precision medicines, BioMarin is positioned to capitalize on the growing demand for transformative treatments. The company’s history of successful drug development and commercialization underscores its ability to bring therapies from concept to market fruition. As BioMarin’s therapies progress through clinical milestones, investor confidence could increase, potentially leading to significant returns. Also, their current profitability and future sustained profitability is a huge plus for their research since they can fund themselves. For those seeking a blend of scientific innovation, market potential, and ethical investment, BioMarin Pharmaceutical Inc. stands as a compelling option in the biopharmaceutical landscape.

The post BIOMARIN PHARMACEUTICAL: ONE STOCK I WOULD BUY TODAY appeared first on Sick Economics.

HOW TO INVEST $10,000 TODAY

By Joshua Mazher, Biotech Equity Analyst 

 

Investing. If this word evokes fear in your heart, just know that you are not alone. For many, the act of investing is akin to walking across a tightrope, with only hope and a bit of luck keeping one from plummeting toward the depths of financial despair. With so many options out there, it can be challenging to know where and when to take the first step, much less survive the course and make it to prosperity. Well, I’m here to tell you that with a little bit of research, diversification, and patience, investing will be one of the simplest and most rewarding ways to make profits, all while taking factors such as luck and bankruptcy out of the equation.

Let’s say you have 10 thousand dollars lying around and are ready to take the first step towards investing it in something that is sure to grow. You’ve heard countless stories of the market’s volatility and just want to be sure that your ten thousand dollars will be able to only grow, without ever having to worry about losing money. To accomplish this, you would need to invest in a market that is continually expanding, has the capacity to always improve upon itself, and is able to withstand the ever-growing climate of both technological and social changes. Does such a market exist? Enter, biotechnology.

Biotechnology is the perfect market to invest in for a multitude of reasons. For starters, its whole essence relies on research and development. The more a biotech company is able to develop new drugs in its respective pipeline, the better it will perform. As an investor, research and development should be a key component in deciding which companies to invest in because it serves as a benchmark for future success. If a company is pouring in a lot of its on-hand cash in maximizing its research and development for products, it increases the chances of a breakthrough, which brings me to my next point.

Another reason to start investing in biotechnology is its capacity to continually make breakthrough products for the sake of human survival. It’s no secret that perhaps the most important products in the world are those that are designed to help one live for as long as possible. At its core, biotech provides solutions to help people fight off death, consequentially making its drugs the most sought-after products ever created. This means that there is essentially unlimited demand for newer and better products, meaning that biotechnology will inevitably continue to churn out improved products one after another. This in and of itself means that there is really no way to “lose” money when investing in biotech… as long as you are minimally investing a large portion of your money in the companies that reflect the market the most.

So we have established that as a whole, biotech is the perfect market for which there is always an incentive to create improved products, while never running out of demand. With that out of the way, how should one go about investing 10 thousand in a biotech portfolio? I recommend any beginner investors out there follow this basic structure: 50% Big Pharma ETF, 30% Biotech ETF, and 20% Individual Biotech Stocks.

Big Pharma, Big Profits 

Big Pharma ETFs  (Exchange Traded Funds) would include a bundle of stocks from the largest pharmaceutical companies in the world. Examples of these mega companies include Pfizer, Johnson & Johnson, BioNTech, and Roche. These companies have some of the most equity in the world, bringing in billions of dollars annually. As is oftentimes the case, Big Pharma companies tend to partner up with smaller biotech companies in order to take advantage of the next new innovation, meaning that the trajectory of these ETFs is almost certainly going to be an upward slope for as long as the biotech world continues to pump out new products. For you, the investor, investing in a Big Pharma ETF would ensure profit dividends within the time frame of 5 to 10 years. As I mentioned previously, biotechnology is a market that has an unlimited capacity to improve upon itself, and an audience that will always purchase the next new product if it means adding a few extra years to their own life.

The largest Big Pharma ETF as of 2023 is $PPH, otherwise known as the VanEck Pharmaceutical ETF. PPH has a weighted average market cap of $151.37 billion dollars alone, making it one of the most dominant ETFs in the world. This means that the average company in this basket of stocks is worth $151 billion dollars on the open market. These are substantial, established companies. As someone looking for the safest option to ensure profits within a five to ten-year timespan, this ETF will be your best bet. Notable companies in this ETF include Eli Lilly & Co., Novo Nordisk, and AstraZeneca. If have any prior experience of research into biotech companies, it is likely that you have heard about these companies at some point or another. Going back to our model, 50% out of your $10 thousand would equate to $5,000 that you should invest into an ETF like PPH.

Biotech ETF’s, A Fountain of Innovation 

Moving on to the next component of your biotech portfolio, let’s take a closer look at the Biotech ETFs. Perhaps the breadbasket of innovation, companies from a biotech ETF will typically spend a majority of their on-hand cash and expenditures on research/development of products designed to help aid diseases and problems that affect our everyday lives. Areas of particular interest in the 21st century are oncology, immunotherapies, cell diseases, etc. That said, breakthroughs don’t arrive every other week and often involve a number of clinical trials and processes before a product can reach the surface. Thus, these ETFs will tend to be a bit more volatile in nature, and one can expect to see fluctuations in price regularly. However, it is important to note that this “volatility” should not discourage an investor looking to test the waters of the biotech world. Patience is key in this regard, especially since the time frame that we are looking at is at a minimum of five years.

There are a variety of options when it comes to choosing biotech ETFs to invest in, with some including but not limited to SPDR S&P Biotech ETF $XBI, iShares Biotechnology ETF $IBB, and Virtus LifeSci Biotech Products ETF $BBP. Each of these funds is comprised of notable biotech companies that have made massive strides in the past decade including Vertex Pharmaceuticals and AbbVie – both of which have been instrumental in discovering solutions for chronic illnesses like cystic fibrosis and rheumatoid arthritis. While these ETFs certainly don’t have the same magnitude as the Big Pharma ETFs, they are instrumental for diversifying your portfolio and ensuring that you receive returns from companies with a history of creating innovative new products each decade. For reference, XBI has a weighted average market cap of $13.7 billion, with an estimated 4.76% 3-5 year EPS growth rate. For reference, the weighted average market cap of an index refers to the mean market capitalization value (sum of all a company’s shares multiplied by the price of the share) of all the companies in the index.

As is a common theme in biotech investing, you should be focused on investing, not day trading, meaning that you should expect to hold your investments for at least five to ten years. This will provide the maximum returns for you and will keep you safe from volatility bias. 30% out of your $10 thousand would equate to $3,000 that you should invest into biotech ETFs such as XBI, IBB, BBP, etc.

The Few, The Proud, The Individual Stocks

Finally, the last segment of your portfolio should include individual biotech stocks. At this point, you should have a more comfortable understanding of the biotech world, and have more confidence in your own biotech decision-making abilities. Whereas the majority of your investment will be in relatively safe hands in the ETFs, investing in individual companies themselves can reap the most rewards… or losses. Going into this process, it’s important to realize that picking individual stocks is never a guessing game, but rather an informed decision. This means that preliminary research is MANDATORY if you want to expect the best results. The best way to do this is by keeping up with the latest trends in the biotech industry. This is far easier than one might expect, and you certainly don’t have to delve into several peer-reviewed publications to figure out which companies are best to invest in for you. All you need is a basic understanding of the status quo of a trendy healthcare topic, and then discover the companies that have the most headwind in terms of developing a product designated for that particular problem. For example, as of August 2023, the world of oncology is experiencing massive traction, with news about successful clinical trials appearing every other week! However, most analysts predict that the drugs won’t be commercialized until 2030 at the earliest. Patience is key. 

If you’ve paid attention to this article up until this point, you know that 2030 fits right in the middle of that five to ten-year span, meaning it is a great time to invest in biotech companies that are having the most success in developing cancer treatments. This is just one example of the many different types of healthcare fields that are experiencing a surge of development. Keeping up with the model, the remaining 20% of your $10,000 leaves you with $2,000 to work with. This gives you room for picking anywhere between 5 to 15 different biotech companies that are leading the field in their respective pipelines. Something to take into consideration is that when investing in individual biotech stocks, you will naturally experience the most volatility, with daily fluctuations. At this point I’d like to reemphasize a point I’ve made previously: You are investing, not day trading! It is paramount that the daily volatility doesn’t affect your understanding of the broader trends that are developing. In the age of the internet, identifying trends that biotech experts believe will manifest themselves within ten years is a quick Google search away, so take advantage. For reference, you can check out my other articles discussing cancer vaccines and the liquid biopsy revolution for ideas on companies that you can include in your portfolio. Also, you could check out our sickpicks, right here.

Remember, this website and others can provide investing ideas, but you must commit to doing your own research if you want to reap the full benefit owning individual biotech companies.

By this point, you’ve hopefully gotten a glimpse of the possibilities of including a biotech portfolio in your list of investments. Through the highs and the lows, one thing remains the same: biotechnology is always present. Whether the world is going through a depression or an expansion, the value of human life will always keep biotech up and running.

The post HOW TO INVEST $10,000 TODAY appeared first on Sick Economics.

CANCER VACCINES: AN INJECTION OF PROFIT FOR YOUR PORTFOLIO?

 

By Joshua Mazher, Biotech Equity Analyst 

 

Cancer remains one of the most challenging diseases in the U.S. In the previous year alone, there were at least two million new cancer diagnoses. Unfortunately, this statistic is expected to rise by the end of 2023, leaving the scientific world searching for more effective treatments to this universally dreaded disease. A vital new approach is finally materializing as Merck and Moderna recently released a bombshell statement on the matter. 

On July 26, 2023, big pharma giant Merck announced to the public that its cooperation with Moderna in developing a cancer vaccine that targets melanoma – the most deadly type of skin cancer – is now entering a phase III study. Cancer vaccinations have been almost mythical ever since research began. However, this myth may materialize into reality sooner than later, as more and more biotech companies seem to be adopting cancer vaccinations in their pipelines. That said, with the recent developments of Merck and Moderna, investors should expect an incoming wave of cancer vaccinations on the horizon. Those who get in early may benefit tremendously. 

M&M 

Merck’s flagship immunotherapy product Keytruda has been a staple in the field of oncology ever since it first debuted in 2016. Meanwhile, Moderna has been utilizing its own successes from the pandemic in order to fund the development of its mRNA-4157/V940 vaccine, or just V940 in short. V940 is designed to be an investigational mRNA personalized cancer vaccine and in a nutshell, Merck and Moderna plan to pair Keytruda with the V940 vaccine in order to enhance Keytruda’s abilities.

This phase III study indicates that the world is one step closer to seeing a personalized cancer vaccine hit the shelves, one with the unprecedented ability to target solid-body tumors like Melanoma. The specific perk of an enhanced immunotherapy drug is that it reduces the chances of the tumor returning. Often as is the case with chemotherapy and immunotherapy, solid-body tumors are especially prone to returning after some time. This malignant feature is the key reason why cancer is so deadly and usually lasts a lifetime once a patient develops it. However, in V940, there is “a single synthetic mRNA coding for up to 34 neoantigens that is designed and produced based on the unique mutational signature of the DNA sequence of the patient’s tumor”. The result makes the probability of the tumor returning much lower than before, effectively “curing” the cancer once the tumor is removed. The partner companies announced breakthrough results from a phase II trial, for the first time demonstrating that a cancer vaccine can work. 

While this news marks a milestone in the development of oncology as a whole, experts predict that the drug won’t be available for purchase until at least 2029. That said, the trend of cancer vaccines is quickly growing, with biotech companies like BioNTech, Gritstone bio leading the way

Competitors in the Vaccine Race 

BioNTech ($BNTX) has one of the largest oncology pipelines in the world and is renowned for its focus on novel therapeutics. Similar to Moderna, BioNTech is using their earnings from COVID-19 to help harness a new generation of cancer research, and research they certainly have done. In their oncology-focused pipeline, they already have 8 candidates in phase II trials, a protein-based therapeutic drug class in phase III, and 18 candidates in phase I. For investors looking to own a company with a broad oncology pipeline, with a handful of highly prospective drugs on the horizon, BioNTech is an excellent option. Big pharma giant Roche has already partnered with BioNTech for their work on a cancer vaccine that is targeting pancreatic cancer, which will likely encourage other large biotech firms to consider a partnership in the future. Cancer therapeutics are a growing force in the biotech world, with a CAGR of 9.1% between 2021-2030. This means that the size of the oncology market should roughly double every 8 years. 

Another company with a notable program in their cancer pipeline is a relative newcomer, Gritstone Bio ($GRTS).  Founded in 2015, Gritstone has committed itself to developing vaccines that target a patient’s own immune system and use it to fight unwanted cancer tumors that may be lingering post-chemotherapy. Sound familiar? It should be since this is synonymous with the V940 vaccine developed by Moderna mentioned at the beginning of this article. As we can see, cancer vaccines are picking up steam across the biotech industry, and the practice will inevitably be broadcasted to the healthcare industry as a whole sooner rather than later. Going back to Gristone, their flagship cancer vaccine program is called GRANITE, an individualized neoantigen vaccine program. What makes GRANITE unique is its ability to target early cancer in a person’s body, and then trigger the production of specific T-cells within a person’s own immune system to further enhance its performance in eradicating tumor cells. Currently, GRANITE is in phase II out of III and is steadily making progress. With a market cap of $159.16 million, the company is faring quite well given that it hasn’t been in the industry for even a decade yet. But a market capitalization under $200 million, makes Gritstone  just a minnow in a world of hungry, ravenous big fish. If they continue to demonstrate clinical success, they are a likely acquisition target for a larger company that wants to jump on the vaccine bandwagon. These kinds of transactions are often lucrative for shareholders who got in at the right price. 

To summarize, cancer vaccines represent a promising new avenue in the fight against cancer. Unlike traditional vaccines that aim to prevent infectious diseases, cancer vaccines work to stimulate the body’s immune system to recognize and attack cancer cells specifically. Oncologists estimate that creating treatments that are personalized and patient-specific will allow our body’s natural immune system to adjust to the cancerous cells much better. Tangentially, this methodology ensures a safer option compared to traditional chemotherapy, which oftentimes harms a patient more than helps them in the long run. By accelerating the immune system’s response to certain antigens, cancer vaccines aim to enhance the effectiveness of our natural body’s ability to fight off cancer. The demand for such cancer vaccines is growing each day, and it is only a matter of time before prescription cancer vaccines start becoming available for purchase. Nonetheless, the drugs won’t be cheap by any estimation, and we are still a ways away before any of these vaccines can become mass-produced. However, cancer vaccines are inevitably the future, and investors would be wise to purchase shares while the drugs are still in production and before the commercialization process truly begins. Sometimes there are real rewards for shareholders who jump on a trend before it enters the limelight.

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TWIST BIOSCIENCES: STAYIN’ ALIVE?

Twist Biosciences specializes in a kind of industrial production that would have been unimaginable just a few decades ago: the manufacturing of DNA for scientific and commercial purposes. There is no doubt that Twist has broken all kinds of scientific ground. But is it viable business worthy of your investment? 

By Sudheer Narasimha 

 

Twist Bioscience is a pioneering biotechnology company that has revolutionized the field of synthetic biology through its innovative approach to DNA synthesis. Founded in 2013, the company utilizes a proprietary silicon-based technology platform that enables high-throughput, massively parallel synthesis of custom DNA sequences. This approach has far-reaching applications in various domains, including medicine, agriculture, and industrial biotechnology. By offering researchers and industries access to high-quality, custom-designed DNA strands, Twist Bioscience has played a significant role in accelerating advancements in areas such as gene editing, protein engineering, and DNA data storage. With its commitment to pushing the boundaries of genetic engineering, Twist Bioscience continues to be a driving force in shaping the future of biotechnology and its transformative impact on multiple sectors.

Twist Bioscience’s mission revolves around empowering scientists, researchers, and industries to unleash the potential of synthetic biology for positive global impact. The company is dedicated to democratizing access to high-quality, custom DNA synthesis, thereby enabling breakthroughs in fields such as medicine, agriculture, and data storage. Twist’s vision is to drive innovation by providing the tools necessary to engineer biological systems with precision and efficiency. By offering a scalable and cost-effective platform for creating custom DNA sequences, Twist Bioscience aims to accelerate the development of new therapies, sustainable agricultural solutions, and advanced biotechnologies. The company’s commitment to responsible and ethical genetic engineering underscores its mission to usher in a new era of scientific progress that addresses some of the world’s most pressing challenges.  In short, Twist manufactures the building blocks of 21st century biology, which should, theoretically, mean unlimited growth ahead. 

Great Science, Questionable Finances…..

The issue is, in today’s economy, interest rates are fairly high. Rising interest rates tend to have a constraining effect on financial liquidity. As central banks and monetary authorities opt for a tighter monetary policy to control inflation or manage economic growth, borrowing costs for individuals, businesses, and even financial institutions increase. This subsequently leads to reduced borrowing and investing, as the higher cost of capital deters individuals and entities from engaging in financial activities. Consequently, asset markets, such as equities and real estate, might experience decreased trading volumes and increased bid-ask spreads as market participants become more cautious due to the elevated borrowing expenses. Moreover, higher interest rates can prompt investors to shift their portfolios towards fixed-income assets, seeking better yields in the form of bonds, which can further impact the liquidity of other asset classes. 

For a small biotech startup, like Twist bioscience, the confluence of rising interest rates and low liquidity can pose significant challenges. The increase in interest rates translates to higher borrowing costs, potentially limiting the startup’s ability to secure funding for research, development, and operational expansion. This can impede their capacity to innovate, bring new therapies to market, or scale up their operations. Moreover, low liquidity in financial markets can hinder the startup’s access to capital through avenues like initial public offerings (IPOs) or secondary offerings, as risk-averse investors might be hesitant to invest in riskier assets like early-stage biotech companies in such an environment. With limited access to financing, the startup’s growth prospects could be constrained, potentially leading to delays in critical research milestones or commercialization efforts. The reduced availability of funds could also impact the startup’s ability to attract and retain top talent, as they might struggle to offer competitive compensation packages or invest in necessary resources. 

Twist was born in an era of unlimited liquidity; just a few years ago the most questionable biotechs could easily raise capital as long as they could demonstrate promising science. However, times have changed. As 2023 moved forward, the new reality of much tighter funding became inescapable. In May, Twist made several changes to confront the funding challenge head on. First, they laid of 25% of their workforce, determined to do more with less. Second, they announced a goal to produce positive EBITDA by the end of 2024.  This would mean that, by the end of 2024, Twist would become a self funding enterprise, without the need to rely on fickle capital markets to survive.

Progress Report

Twist just released their 3rd quarter fiscal report a few days ago and it seems to be a bit in the gray area. On paper, their fiscal results are all positive. Since they made their vow of positive EBITDA,  their revenue has gone up, and their expenses have gone down. However, both their revenue increasing and their expenses decreasing has only been a marginal amount. Overall, the company is still at an operating loss of about $55 million per quarter. Their gross margin is still around 36%, and revenue may not be growing fast enough to offset the significant expenses that a start up accrues when attempting to pioneer new technology. They re-affirm their target of financial self sufficiency by the end of 2024, but it’s going to be very close indeed. 

That being said, Twist’s science and technology is definitely cutting edge and very promising and they also have around 325 million dollars in cash to work with. Therefore, Twist is a very risky stock that definitely isn’t for the faint of heart. For people who dare to take a chance, it could prove to be very profitable but, with the current state of the economy, there is also a chance that Twist may not survive for very long. 

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3 ALZHEIMER’S STOCKS TO WATCH

 

After decades of nothing but frustration, 2023 has been a watershed year in the battle against Alzheimer’s Disease. The FDA has approved two new agents proven to slow the progress of the dread disease by 30-60%, and Medicare has agreed to cover the new agents. While these results still leave much to be desired, they mark what could be a real turning point: whereas before biotechs only saw failure and financial ruin, now many are willing to take a risk on Alzheimer’s research. Below we discuss three biotech innovators aiming to make their mark on this burgeoning new treatment market. 

 

By Sudheer Narasimha, Biotech Analyst 

 

1) Axsome Therapeutics ($AXSM) 

Axsome Therapeutics is a biopharmaceutical company that develops innovative therapies for various central nervous system (CNS) disorders, including Alzheimer’s disease. AXS-05 is one of their experimental drugs, and it represents a novel approach to tackling the complications of Alzheimer’s disease. Many caregivers of Alzheimer’s patients can tell you horror stories about patients acting out with intense verbal or physical violence, a challenge which worsens an already tough situation for caregivers. AXS-05 is specially formulated to help with this kind of Alzheimer’s associated agitation. 

As of now, AXS-05 has been FDA approved making it a breakthrough for the company and Alzheimer’s treatment as a whole. AXS-05 is a combination drug that consists of bupropion (a norepinephrine-dopamine reuptake inhibitor) and dextromethorphan (an NMDA receptor antagonist). This unique combination is believed to work synergistically to address multiple pathways implicated in Alzheimer’s disease, potentially offering a more comprehensive treatment approach. Axsome could establish itself as a key player in the Alzheimer’s therapeutics market, potentially commanding premium pricing for AXS-05 due to its distinct mechanism of action and potential benefits over existing treatments. Moreover, being one of the few approved therapies for Alzheimer’s, Axsome could benefit from market exclusivity, further enhancing its profitability. The revenue generated from sales of AXS-05 in the Alzheimer’s market could be reinvested into the company’s research and development efforts, supporting the exploration of other potential CNS therapies and driving further growth. Additionally, successful commercialization of AXS-05 in Alzheimer’s could also open doors for exploring its potential in other CNS disorders, expanding Axsome’s market reach and potential for long-term profitability. 

2) Alnylam Pharmaceutical ($ALNY) 

Another potential big player in the world of Alzheimer’s is Alnylam Pharmaceutical. Alnylam Pharmaceuticals is a leading biopharmaceutical company focused on the development of novel RNA interference (RNAi) therapeutics. Founded in 2002, Alnylam is a pioneer in the field of RNAi, which is a natural cellular process that regulates the activity of specific genes. The company’s proprietary RNAi platform allows for the targeted silencing of disease-causing genes, offering a promising avenue for treating a wide range of genetic and rare diseases. Alnylam’s commitment to scientific excellence and cutting-edge research has led to the successful development of several groundbreaking RNAi-based treatments that have been approved by regulatory agencies. Alnylam continues to advance a robust pipeline of investigational therapies across various therapeutic areas, striving to bring hope and improved quality of life to patients with unmet medical needs.  Alynlam can use its RNAi technology to revolutionize Alzheimer’s treatment, which they are already in the process of doing. RNA interference (RNAi) holds great promise as a potential therapeutic approach for Alzheimer’s disease. Alzheimer’s is characterized by the accumulation of abnormal proteins, such as beta-amyloid and tau, in the brain, leading to neurodegeneration and cognitive decline. RNAi technology allows for the targeted silencing of specific genes responsible for producing these toxic proteins. By using small RNA molecules to interfere with the expression of these genes, RNAi can potentially reduce the production of beta-amyloid and tau, thereby slowing or halting disease progression. Just this past July, the company announced positive phase 1 results, demonstrating a proof of concept, that RNAi can be used to reduce harmful proteins in the brain. 

Additionally, RNAi can be designed to target other genes involved in inflammation and neuronal damage, offering a multi-faceted approach to tackling Alzheimer’s. Although challenges remain, such as the effective delivery of RNAi molecules to the brain, ongoing research and advancements in the field continue to show promise in harnessing the power of RNAi for Alzheimer’s therapy, offering hope for a future where this devastating disease can be more effectively managed or even treated. Overall, Alnylam seems to be another key player in the Alzheimer’s market who could prove to be very profitable in the future. 

3) AC Immune  ($ACIU) 

The final potentially big player in the Alzheimer’s field is AC Immune. Founded in 2003, AC Immune specializes in developing therapies and diagnostics targeting misfolded proteins associated with Alzheimer’s disease, Parkinson’s disease, and other neurodegenerative disorders. The company leverages its expertise in understanding the complex interactions between proteins in the brain to create innovative drug candidates that aim to prevent, slow, or halt disease progression. AC Immune’s approach includes the development of vaccines and small molecule drugs to target the abnormal protein aggregates, such as beta-amyloid and tau, which play a critical role in the pathogenesis of neurodegeneration. Furthermore, AC Immune collaborates with leading pharmaceutical companies to advance their research and increase the potential impact of their treatments. One of these leading pharmaceutical companies is Johnson and Johnson. In 2021, AC Immune published a press release that showcased positive phase 2 results for their new antibody that targeted the Tau protein. This kind of treatment has no approved rivals, currently. Targeting the Tau protein is considered a promising approach for several reasons. Firstly, tau pathology is closely associated with the cognitive decline observed in Alzheimer’s patients, making it a key target for intervention. By reducing the levels of pathological tau, the treatment aims to slow down or halt the neurodegenerative process and potentially preserve cognitive function.  In fact, AC Immune has a whole cohort of different therapies that target the dysfunctional Tau protein. Many thought leaders believe this kind of innovation is likely to be profitable in the future. 

 

According to the American Alzheimer’s Association, more than six million Americans are currently living with Alzheimer’s.  As the Baby Boom generation continues to age, this staggering number could double. These stark facts represent a powerfully enticing risk/reward calculation to all three companies listed above. Now that we have two FDA approved Alzheimer’s treatments, we have proven that humans are capable of generating new science that can modify the disease state. However, the two recently approved treatments still leave much to be desired, and the field is wide open for any biotech brave enough to push forward with new approaches. Axsome Therapeutics, Alnylam Pharmaceuticals and AC Immune have accepted the challenge.

 

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ACELYRN, INC: A RARE IPO, A RARE BIOTECH OPPORTUNITY?

 

By Joshua Mazher, Equity Analyst

 

Navigating businesses in a post-pandemic world has been rocky, to say the least. The lingering effects of economic turmoil amidst unprecedented developments in the market have left many companies struggling to find a solid foothold. Biotech is certainly no stranger to economic downturns, and the past few years have not been an exception. To understand the current state of the biotech economy, it’s important to first understand the root of the current economic climate.

The year is 2019, and all seems right in the world… The Fed stabilizes interest rates at around 3.94%, the market is functioning as intended with no significant supply or demand shocks, and the stock market is operating at an even-keel pace. Suddenly, the COVID outbreak occurs and the world comes to a grinding halt. Global markets quickly shut down, leading to a cascading effect of economic contractions. The biotech industry is particularly sensitive to economic contractions, as it is a capital-intensive industry. This means that companies need to invest heavily in research and development, which can be a risky proposition in a time of economic uncertainty. As a result, many biotech companies have been forced to cut back on their research and development spending, which has slowed the pace of innovation in the industry. One of the best measures of financial prosperity in the biotech sphere is the number of newly formed IPOs in a given year.

In 2021, the combination of micro interest rates and large government stimulus packages to fight the pandemic prompted companies to begin their transition from private to public in a heartbeat. A total of 1,035 IPOs were formed in 2021 alone, leaving many companies and investors optimistic about the future of the stock market, with biotech being no exception. In 2021, Biotech companies had 152 offerings that raised over $25 billion. Such numbers gave a good reason for investors to begin to expand their portfolios to include various biotech firms with large valuations. Unfortunately, these expectations were a bit too grand. Many investors grew wary of the surge of new IPOs entering the market and began holding on to their funds. By the end of the year, many companies with great hopes ended up flopping. Oscar Health Inc. is one such firm that bit off more than it could chew, as its initial public offering sold at $39.00, but went all the way down to around $6.00 one year after the start of its IPO. That is a price reduction of approximately 84.6%. Sana Biotechnology Inc., a biotech company that showed a lot of promise, was another company that ended up falling drastically in value. Their initial public offering stood at $25.00, however by the end of the year it fell to $8.81. This represents a loss of approximately 64.8%. While the highs of 2021 certainly outweighed the lows in totality, signs of a crash-and-burn effect were in full throttle going into 2022.

By 2022, soaring inflation rates and higher energy costs prompted the Fed to hike  interest rates and decrease the money supply. This process of cooling down the economy was expected, but not to the extent it did. The number of biotech IPOs in 2022 slumped to a meager 47, totaling approximately $4 billion. As aforementioned, the amount of investment is paramount to the success of a biotech company, so having a decreased money supply means that the amount of spending on research and development goes down, spelling trouble for companies attempting to go public.

That leaves us here, in the middle of 2023. Interest rates are climbing, meaning investors can seek a sure return on their money, instead of risking it on unprofitable biotech companies that may eventually make money. Halfway through the year, there have only been 86 IPOs as of July 20, 2023. The market woes for startups have continued since 2022, however, what does this tell us about the companies that do manage to go public even in times of financial uncertainty?

Acelyrin Swims Upstream

Enter Acelyrin, a biotech company founded in 2020 with an anomalous financial proposition. Acelyrin has a plethora of qualities that make it stand out from the pack, but perhaps the first to note is that it is a late-stage clinical biopharma company. This in and of itself is an anomaly as late-stage biotech startups are virtually nonexistent. This means that Acelyrin has at least one drug program in its pipeline that is already near commercial development. This program has an interesting yet memorable name Izokibep and its purpose is to overcome the limitations of monoclonal antibodies in the application of immunology therapies. A traditional monoclonal antibody is designed to replicate and enhance one’s immune cells. Acelyrin’s Izokibep is an antibody that promises to be more potent yet compact in size, allowing for better tissue penetration. Additionally, results show that the molecule used has an extended plasma life, meaning a longer-lasting antibody, meaning that just one dose of the medicine may work for longer than other agents. The range of such a tool is immense and Izokibep is currently in late stage testing against a wide range of immunological diseases. The world of biotech as a whole can greatly benefit from such a drug, making Izokibep one of the most notable pipeline drugs in the industry right now.

The results of the clinical testing trials have been fantastic, with multiple reports of success. Acelyrin’s press release says it best as Izokibep, “continues to support the hypothesis that the high potency and small molecular size of izokibep can lead to clinically meaningful, differentiated benefits for patients, including resolution of important manifestations of each disease associated with residual pain and severity of disease.” According to Acelyrin’s reports, the market for the drug could grow to over $28 billion globally by 2030.

Not Your Typical Leadership Team 

“An ounce of practice is worth more than tons of preaching” — Mahatma Gandhi. Leadership is best shown through example than through words, and Acelyrin fits this mantra to a tee. Shao-Lee Lin, MD, Ph.D. – CEO and Founder of Acelyrin – is a woman with over three decades worth of experience in biopharmaceuticals. Her extensive portfolio includes an MD / Ph.D. in immunology at Johns Hopkins, as well as an undergraduate degree in chemical engineering and biochemistry from Rice University. She has served as a clinical scholar at Rockefeller University, and as adjunct faculty at Cornell, UCLA, Stanford, and Northwestern medical schools. Her career as a dedicated physician bodes well with her experience as a biopharmaceutical executive. The same can be said of Acelyrin’s entire senior leadership team , which happens to be female-majority. This notion is huge as even by today’s standards, having female-majority leadership in any field, nevertheless one tied so heavily to the capital market, is a rare commodity. Statistically, only 16% of leaders in the healthcare industry are female. Going against such numbers proves that Acelyrin isn’t afraid of being the odd one out, which could also explain their ability to acquire their rather impressive finances.

Financing and Prospects

Acelyrin has secured over $1 billion in private and public funding since its founding in 2020. According to their 2023 first-quarter financial results, the company has $289.2 million on-hand cash, with a net total of $862.9 million coming from their IPO proceeds and existing cash balance. Their stock hit the market at $18.00 in June, and received a market cap around $2 Billion.  Just to give you an idea about current valuation vrs future potential, the global market for psoriatic arthritis (just one of the many target markets for Izokibep) is projected to reach $12.4 Billion by 2027.  Just based on that indication alone, if the company arrives at a successful launch of Izokibep, the company’s market capitalization could double or triple. 

As mentioned earlier, research and development spending is vital for the long-term success of any biotech company, and Acelyrin has been quick to note that a significant portion of its newly acquired funds have gone to research and development. When taking into account its experienced leadership panel and its already well-credentialed status in biological sciences in general, it’s hard to believe that Acelyrin won’t have several late-stage drugs in its pipeline in the next few years to come.

Investors have already begun to see Acelyrin’s prowess as evidenced by the large amount that the company was able to collect in a short period of time. From 2021 to 2022, even during times of financial strife for the world, Acelyrin was able to bring in half a billion dollars from investors. The majority of this funding went towards developing its pipeline, specifically with the aforementioned program Izokibep. As Izokibep continues to garner attention and provided a long string of positive results, it’s only a matter of time before pharma giants like Eli Lilly and Novartis get on board. Only time will tell if Acelyrin’s growth trends will continue at their current rate, however with inevitable partnerships on the horizon, picking up shares now would seem like a great option.

 

 

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RECURSION PHARMACEUTICALS, INC: AN INTELLIGENT BET ON ARTIFICIAL INTELLIGENCE?

By Nathaniel Suryabudi, Equity Analyst 

 

Recursion Pharmaceuticals is a cutting-edge biotechnology company that combines artificial intelligence, machine learning, and high-throughput biology to accelerate the discovery and development of new therapeutics. Founded in 2015 and headquartered in Salt Lake City, Utah, Recursion has emerged as a leader in the field of drug discovery and precision medicine.

The company’s unique approach revolves around the utilization of high-resolution cellular imaging, automated microscopy, and advanced data analysis algorithms. Recursion’s platform enables the screening of hundreds of thousands of disease models, allowing researchers to rapidly identify and prioritize potential drug candidates.

Recursion specializes in the treatment of rare genetic diseases and other complex disorders that currently lack effective therapies. By leveraging its innovative technologies, the company aims to discover novel drug targets, develop new small molecules, and ultimately bring life-saving treatments to patients in need.

One of the distinguishing features of Recursion’s approach is its utilization of recursive algorithms, which are mathematical techniques that involve solving complex problems by breaking them down into simpler, self-referential steps. In the context of biotechnology, recursion allows the company to generate vast amounts of biological data and learn from iteration, leading to the identification of promising drug candidates with high precision and efficiency.

Recursion has established collaborations with academic institutions, pharmaceutical companies, and patient advocacy groups to leverage their collective expertise and resources. These partnerships help accelerate the translation of scientific discoveries into tangible medical advancements, ultimately benefiting patients worldwide.

The company’s mission is to revolutionize drug discovery and redefine how diseases are understood and treated. By harnessing the power of artificial intelligence and biology, Recursion strives to improve patient outcomes, address unmet medical needs, and contribute to the advancement of precision medicine.

Partnership with NVIDIA

A new partnership between Recursion Pharmaceuticals and Nvidia marks an exciting development in the field of AI-powered drug discovery. Recursion’s platform, backed by artificial intelligence, continually improves as it identifies new drug candidates. Despite already having candidates in clinical trials, the company is determined to strengthen its technology further, leading to the collaboration with Nvidia.

As part of the agreement, Nvidia will provide Recursion with a $50 million private investment in public equity financing. Additionally, Recursion will gain access to Nvidia’s cloud-based tools for AI-powered drug discovery. This news had a significant impact on Recursion’s stock price, which more than doubled following the announcement.

Recursion utilizes AI-powered models to identify and design new therapies, and it offers these models to other drugmakers, including industry giants such as Roche and Bayer. By leveraging Nvidia’s cloud platform, Recursion will train its AI models using its vast biological and chemical datasets, which currently exceed 23,000 terabytes. These datasets continue to grow at a rapid pace, expanding by “hundreds of terabytes every week.” Just to give a bit of contextualization,  a typical novel, such as “To Kill a Mockingbird” by Harper Lee, is around 1-2 megabytes in digital form (eBook). With 1 terabyte, you could store the equivalent of 500,000 to 1,000,000 novels.

The collaboration with Nvidia enables Recursion to potentially license its AI models on BioNeMo, Nvidia’s cloud service for generative AI in drug discovery. This cloud-based platform, introduced earlier in the year by Nvidia, would support Recursion’s internal drug pipeline as well as the initiatives of its present and future partners.

Recursion’s CEO, Chris Gibson, expressed enthusiasm about the long-term prospects of the partnership, stating that the company believes in leveraging technology, automation, and the latest tools in biology and chemistry to accelerate the pace of drug discovery. Recursion is currently conducting human trials for five of its drugs, with data readouts expected in the coming year. These include a treatment for neurovascular disease caused by malformation of small blood vessels and a therapy for a specific type of ovarian cancer. Recursion’s drug discovery platform, known as Recursion OS, has already yielded promising candidates for various diseases and therapeutic areas. By utilizing machine learning algorithms to analyze their extensive genetic and pharmaceutical database, Recursion identifies potential drug targets and compounds. Some of their AI-mined drugs are already in phase 1 or 2 clinical trials, targeting rare diseases, mutant cancers, and familial adenomatous polyposis, among others.

Beyond these ongoing trials, Recursion is actively working on late-discovery and preclinical phases for potential new cancer drugs. They also have numerous programs in the early discovery stage across rare diseases, oncology, neuroscience, and immunology.

Nvidia’s investment in Recursion reflects the increasing interest and recognition of AI’s potential in the pharmaceutical industry. Many drugmakers are embracing AI to expedite the development and delivery of life-saving treatments. Nvidia, a major player in the AI field, has experienced substantial market growth and recently reached a trillion-dollar market value.

For Recursion, this partnership with Nvidia further solidifies its focus on AI-driven drug discovery. The company has already made strategic moves in this direction, acquiring two AI-driven drug discovery companies in May for $87.5 million. 

Finances

Recursion’s cash position as of March 31, 2023, was $473.1 million, indicating a healthy cash reserve. However, the company reported a net loss of $65.3 million for the first quarter of 2023, which is an increase from the net loss of $56.0 million in the same period of the previous year. At this rate, Recursion has enough cash on hand to last about two more years. 

The increase in revenue from $5.3 million in the first quarter of 2022 to $12.1 million in the first quarter of 2023 is positive and can be attributed to progress made in the Roche-Genentech collaboration. This suggests that Recursion’s partnerships are generating revenue growth.

On the other hand, research and development expenses have also increased from $32.4 million in the first quarter of 2022 to $46.7 million in the first quarter of 2023. This rise in expenses is due to the expansion and upgrading of Recursion’s capabilities, indicating their commitment to advancing their drug discovery platform.

General and administrative expenses also increased slightly from $21.1 million in the first quarter of 2022 to $22.9 million in the first quarter of 2023. This increase can be attributed to the growth of Recursion’s operations, including an increase in salaries and wages and other administrative costs.

Considering the net loss and the increased expenses, Recursion’s financial standing may be seen as less favorable in the short term. However, it’s important to note that the biotech industry often requires significant investments in research and development, and profitability is typically achieved in the long term after successful drug development and commercialization.  Will Recursion’s clinical pipeline progress enough in the next two years to make investors confident in advancing more funding to the currently unprofitable biotech? Well, Nvidia certainly seems confident.

Conclusion

In conclusion, while investing in Recursion Pharmaceuticals involves inherent risks associated with the biotech industry, the company shows promise for long-term growth and success. With its AI-driven drug discovery platform, strong partnerships with industry leaders like Nvidia, and a robust pipeline of potential therapies, Recursion has the potential to make significant advancements in the field of precision medicine. If an investor is willing to wait patiently for the results of clinical trials, navigate regulatory hurdles, and understands the risks associated with biotech investments, adding Recursion to their portfolio may offer an opportunity to participate in the potential future successes of AI in biological discovery. However, it’s important for investors to conduct thorough research, seek professional advice, and assess their individual risk tolerance and investment objectives before making any investment decisions.

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KEEPING AND EYE ON ADVERUM BIOTECHNOLOGIES, INC.

Slowly succumbing to blindness is one of the greatest fears that confronts today’s senior citizens. Treatments for age related macular degeneration are available, but currently they only offer limited efficacy and they require constant, uncomfortable injections directly into the eye. Is there a better way?  

Biotech Analyst Nathaniel Suryabudi explores……

 

Adverum Biotechnologies is a prominent clinical-stage gene therapy company that is at the forefront of developing innovative treatments for ocular diseases and rare genetic disorders. The company is headquartered in California, United States, and has gained recognition for its pioneering work in the field of gene therapy.

Gene therapy is a rapidly advancing area of medical research that aims to treat diseases by introducing genetic material into a patient’s cells to correct or modify faulty genes. Adverum focuses on leveraging gene therapy to address serious eye-related conditions, particularly those affecting the retina.

The retina is a vital part of the eye that plays a crucial role in vision. Diseases such as wet age-related macular degeneration (wet AMD), diabetic retinopathy (DR), and retinal vein occlusion (RVO) can cause significant damage to the retina, leading to vision loss and impaired quality of life for patients. Adverum is dedicated to developing gene therapies that can provide long-term benefits by targeting the underlying causes of these conditions.

The Pipeline

A key focus of Adverum’s efforts is on wet age-related macular degeneration (wet AMD), a leading cause of blindness globally. Approximately 20 million people in the United States have AMD and with aging populations on the rise (Between 2010 and 2050, the estimated number of people with severe AMD will more than double from 2.1 million to 5.4 million) the incidence of wet AMD is increasing. Current treatment options, such as painful eye injections of anti-VEGF therapies, are administered by retinal specialists every 4-8 weeks. However, these treatments often fall short in effectively preventing blindness in real-world use.

Recognizing the burden and limitations of the current standard of care, Adverum aims to address these challenges with their investigational gene therapy, Ixo-vec. This potential breakthrough therapy is being developed to offer an alternative to the recurring and painful eye injections. Instead, Ixo-vec is designed to provide an in-office, single-administration intravitreal (IVT) therapy.

The innovative aspect of Ixo-vec lies in its potential to extend the treatment benefit from weeks to years. By delivering a therapeutic gene through a single IVT administration, Adverum aims to provide long-lasting and sustained effects. This approach has the potential to significantly reduce the treatment burden for patients, eliminating the need for frequent visits and injections.

The convenience and extended treatment duration offered by Ixo-vec could have a transformative impact on the lives of patients with wet AMD. It may improve treatment adherence and reduce the risk of vision loss associated with missed treatments. Moreover, by targeting the underlying cause of the disease, Ixo-vec has the potential to achieve functional cures, restoring vision and preventing further progression of wet AMD.

Adverum’s pursuit of developing Ixo-vec as a gene therapy for wet AMD reflects their commitment to advancing the field of ocular gene therapies. By leveraging the power of gene therapy to provide long-term benefits and minimize treatment burdens, Adverum aspires to make a substantial difference in the lives of patients affected by wet AMD and other ocular diseases.

It’s important to note that while Adverum’s investigational gene therapy shows promise, it is still undergoing clinical trials  (currently stage 2). The ultimate success and approval of Ixo-vec will depend on the results of these studies and subsequent regulatory processes. Initial results have shown promise, but there are not guarantees in biotech. 

Competition and The Market

The potential of gene therapy in treating various eye diseases has garnered significant interest from major pharmaceutical companies, including Novartis, Biogen, and Johnson & Johnson. This groundbreaking approach has also attracted the attention of smaller biotechnology firms such as Regenxbio, which are actively testing gene therapies for common forms of vision loss. With the aim of revolutionizing treatment options, these companies are exploring the potential of gene therapies to address the unmet medical needs of patients suffering from debilitating ocular conditions.

Major pharmaceutical companies, such as Novartis, Biogen, and Johnson & Johnson, recognize the immense potential of gene therapy in transforming the treatment landscape for eye diseases. These companies have made significant investments and formed strategic partnerships to advance research and development efforts in this field.

Novartis, a global pharmaceutical powerhouse, has been actively involved in the development of gene therapies for ocular diseases. Their efforts include investigating treatments for retinitis pigmentosa, an inherited condition that causes progressive vision loss. Novartis has also initiated clinical trials for gene therapies targeting other eye conditions, such as X-linked retinitis pigmentosa. Norvatis’s leading medicine, Beovu, also known as brolucizumab, is a medication that has been used for the treatment of certain eye conditions. However, it is believed to cause serious eye injuries, including vision loss and even blindness.

Biogen, renowned for its expertise in neuroscience, has expanded its focus to include gene therapies for ocular diseases. The company is investigating treatments for common forms of vision loss, including geographic atrophy associated with age-related macular degeneration (AMD). Biogen’s leading drug is BYOOVIZ, which is FDA approved. 

Johnson & Johnson, a diversified healthcare company, has also entered the field of gene therapy for ocular diseases. The company aims to develop innovative treatments that address significant unmet medical needs in ophthalmology, including gene therapies for inherited retinal diseases. The acquisition of rights to Hemera Biosciences’ investigational gene therapy, HMR59, by Janssen Pharmaceuticals (a subsidiary of Johnson & Johnson), reflects the company’s interest in expanding its presence in the age-related macular degeneration (AMD) market. By acquiring the rights to HMR59 (phase 2), Johnson & Johnson aims to expand its portfolio in ophthalmology and position itself as a potential competitor in the AMD market.

In addition to the major pharmaceutical players, smaller biotechnology companies are actively involved in advancing gene therapy for vision loss. Regenxbio, a notable player in the field, is conducting clinical trials for gene therapies targeting common forms of vision loss, such as wet AMD and diabetic retinopathy.

Regenxbio’s investigational therapies utilize adeno-associated viruses (AAVs) as vectors to deliver therapeutic genes into retinal cells. Their innovative approach has shown promise in preclinical and early clinical studies, raising hopes for potential breakthrough treatments in the future. ABBV-RGX-314 is an investigational gene therapy being developed by AbbVie in collaboration with REGENXBIO. It aims to provide a one-time subretinal treatment for retinal diseases by utilizing a NAV® AAV8 vector that carries a gene encoding for a monoclonal antibody fragment. ABBV-RGX-314 is currently in Phase 2 of clinical development.

All of this means that Adverum faces substantial competition in the race to cure age related blindness. But it also validates the impressive commercial potential that this line of treatment represents.

In 2021, the market size of global age-related macular degeneration reached a noteworthy valuation of USD 9.84 billion. Looking ahead, it is projected to exhibit a steady growth trajectory with a compound annual growth rate (CAGR) of 6.9% from 2022 to 2030. This growth rate would mean that the market should double to almost $20 billion annually in just one decade. This forecast indicates a promising outlook for the age-related macular degeneration market, suggesting sustained expansion over the next decade. With Adverum currently valued at just over $200 million, this means that any effective treatment at all could easily triple or quadruple the stock price. 

Financial Standing and Conclusion

Adverum, a company with an exceptional financial standing, demonstrated robust cash reserves and financial stability. As of March 31, 2023, their cash, cash equivalents, and short-term investments amounted to $164.3 million, indicating a strong financial position. Although this figure decreased from $185.6 million reported on December 31, 2022, the cash balance remains highly significant. Moreover, Adverum confidently projects that their cash position as of March 31, 2023 will be sufficient to fund their operations well into the year 2025. This assurance of extended financial sustainability reflects Adverum’s excellent financial position and their ability to effectively manage resources.

In light of Adverum’s strong financial standing and the promising growth prospects of the global age-related macular degeneration market, the company presents itself as an attractive candidate for inclusion in one’s investment portfolio. With a robust cash position and the ability to fund operations into 2025, Adverum demonstrates a solid foundation for long-term success. Furthermore, the projected growth rate of the age-related macular degeneration market provides a favorable market environment for Adverum’s innovative therapies and treatments. Considering these factors, Adverum’s potential for delivering value to shareholders makes it a compelling choice for those seeking to diversify and capitalize on the opportunities in the healthcare sector.

 

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CARIBOU BIOSCIENCES: WELL POSITIONED TO TRAILBLAZE

Curing cancer is not easy. It’s a long, expensive road for even the most bold scientists and investors. In today’s tight funding environment, many biotechs will never get a chance to bring their science to fruition. But Caribou Biosciences ($CRBU) stands out from the pack. A recent investment by a renown pharmaceutical giant may be a milestone for this research stage biotech.

By Sudheer Narasimha, Equity Analyst 

 

Caribou Biosciences might be one of the most revolutionary companies in the field of cancer research. Caribou Biosciences is a leading biotechnology company at the forefront of cancer research and therapy development. Leveraging the power of CRISPR-Cas9 gene editing technology, Caribou aims to revolutionize the treatment of cancer by developing innovative and precise therapeutic solutions. Their primary focus lies in utilizing CRISPR-Cas9 to target and modify cancer-related genes, thereby disabling or enhancing their functions to combat the disease. Caribou’s dedicated team of scientists and researchers work diligently to design and optimize CRISPR-based therapies, especially immunotherapies to boost the body’s immune response against cancer. By harnessing the potential of CRISPR technology, Caribou Biosciences aims to bring about a new era in cancer treatment, providing hope for patients worldwide. Lately, Caribou’s science looks more and more promising. 

More specifically, Caribou is on a path to revolutionize treatment of various blood cancers. Currently, the treatment for these blood cancers is a slow and expensive process. They require the treatment to be custom made and tailored to each individual patient, making it tedious and expensive. Caribou is focused on creating an off-the-shelf treatment option. The goal is to reduce the time and cost associated with manufacturing personalized CAR-T therapies for each patient. Unlike autologous CAR-T, which requires collecting and modifying the patient’s own T-cells, off-the-shelf CAR-T treatments can be manufactured in advance and stored for immediate use. This type of treatment is also known as allogeneic CAR-T. This streamlined process enables faster access to treatment, especially for patients with aggressive or rapidly progressing cancers. Also, off-the-shelf CAR-T therapies eliminate the potential logistical challenges involved in cell collection, transportation, and production. By simplifying the treatment process, off-the-shelf CAR-T therapies have the potential to improve patient outcomes and broaden access to this cutting-edge form of cancer treatment. Additionally, these treatments have the potential to be standardized and scaled up, ensuring consistent quality and reducing the variability often associated with autologous CAR-T therapy. Overall, off-the-shelf CAR-T treatments offer the promise of more accessible, cost-effective, and efficient cancer treatments, bringing hope to a greater number of patients in need. This is Caribou’s mission. 

Capital is King….

When investing in biotech, you are really investing in innovation and Caribou shows great promise with their novel approach to cancer treatment. However, an important question to delve into is, does Caribou have enough funding to keep this research going? No matter the approach, it all comes back to the money. If Caribou doesn’t have the funding, they can’t continue their research, meaning investing in them could lead to losses. The good news is, Caribou seems to have a plan for funding. Currently, Caribou has enough cash for 2 years worth of funding. Moreover, they also have a partnership with AbbVie. To give a brief summary on AbbVie, AbbVie is a prominent global pharmaceutical company specializing in the research, development, and commercialization of innovative healthcare solutions. Established in 2013 as a spin-off from Abbott Laboratories, AbbVie focuses on several therapeutic areas, with a particular emphasis on immunology, oncology, neuroscience, virology, and general medicine. The company’s diverse portfolio includes a range of medications and therapies that address various diseases and conditions, such as rheumatoid arthritis, psoriasis, multiple sclerosis, Parkinson’s disease, hepatitis C, and cancer. All in all, AbbVie has a lot of money. Due to the partnership, Caribou shouldn’t have any issues with funding. Additionally, another major pharmaceutical firm has recently taken a liking to Caribou. 

Market Potential 

Now for another important question, what does Caribou’s innovative technology really mean for investors? Currently, Caribou’s market cap is around 400 million dollars. Now, if we look at the total addressable market for cancer research globally, it is around 200 billion dollars. 

If Caribou can even capture 1% of 200 billion, they can earn 2 billion dollars. If they push towards 5% of the total addressable market, they can earn upwards of 10 billion dollars. If Caribou were to approach these numbers at some future date, they could easily increase the stock price by a factor of 10! Just on the simple arithmetic, Caribou Bioscience could be a very profitable company to invest in for the long run. 

Breaking News! 

Late last week, there was a significant jump in Caribou’s stock price. This was due to Pfizer giving Caribou its stamp of approval in the form of a large stock purchase. When Pfizer gives Caribou Biosciences its stamp of approval, it signifies a significant validation and endorsement of Caribou’s scientific capabilities and potential. Pfizer, being a renowned global pharmaceutical company, possesses extensive expertise and resources in drug development and commercialization. With Pfizer’s stamp of approval, Caribou Biosciences gains access to Pfizer’s vast network, including its research and development capabilities, clinical trial infrastructure, and regulatory expertise. This collaboration opens doors for Caribou to leverage Pfizer’s industry experience and guidance, accelerating the translation of Caribou’s cutting-edge research into tangible therapeutic solutions. Additionally, Pfizer’s stock investment enhances Caribou’s credibility and reputation within the scientific and medical communities, attracting potential investors and partners who recognize the value of this endorsement. Overall, a partnership with Pfizer offers Caribou Biosciences a powerful boost in advancing its cancer research and increasing the likelihood of bringing effective and transformative therapies to patients in need. Pfizer’s $25 million stock purchase also adds to Caribou’s funding pile. They now have at least $291 million dollars in cash on hand to continue advancing their cutting edge research.  On the back of the latest promising clinical results, management decided to take advantage of the company’s rising share price to raise an additional $125 million in research capital.  

 

Good enough for Pfizer, good enough for you? It might be very worthwhile investing in Caribou Biosciences right now. 

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3 WELL FUNDED BIOTECH INNOVATORS

As interest rates have risen sharply over the last year, “survival” has become the name of the game for early stage biotech companies. Higher interest rates both make it more expensive to fund money losing operations, and make rival investments more attractive than many nascent biotechs.  Here are three biotech companies that maintain positive momentum in their ground breaking research, and likely have enough funding in place to become viable businesses. 

By Nathaniel Suryabudi, Biotech Analyst 

 

The biotechnology industry is renowned for its potential to revolutionize healthcare through innovative therapies and treatments. Within this dynamic landscape, some emerging biotech companies are capturing attention despite their current lack of profitability. These companies possess a common thread that sets them apart: promising pipelines brimming with potential breakthrough therapies that could transform patient care in the future.

In this article, we delve into the world of biotech companies that are not yet profitable but offer a glimpse into a future filled with groundbreaking advancements. We explore three such companies that have dedicated their efforts to pioneering novel treatments and leveraging cutting-edge technologies to tackle unmet medical needs. These companies are on the precipice of transforming the healthcare landscape, with their pipeline candidates showing immense potential for treating a wide range of diseases.

While profitability is a crucial metric for the long-term sustainability of any business, it is equally important to recognize the significant investments and time required for biotech companies to bring their discoveries to fruition. Despite the absence of current profitability, these companies have captured the attention of industry experts, investors, and patients alike due to their innovative approaches and promising pipeline candidates.

Through this article, we aim to shed light on the notable achievements and ongoing research efforts of three biotech companies: Axsome Therapuetics, Voyager Therapeutics, and Unity Biotechnology, Inc. We will delve into their respective areas of focus, highlight key pipeline candidates, and discuss the potential impact these companies could have on patient care and the biotech industry as a whole.

Axsome Therapeutics ($AXSM) 

Axsome Therapeutics, Inc. is a clinical-stage biopharmaceutical company headquartered in New York City. The company was founded in 2012 with a focus on developing novel therapies for central nervous system (CNS) disorders.

Axsome Therapeutics aims to address unmet medical needs in the field of CNS disorders by developing innovative treatments that target specific pathways and mechanisms of action. The company’s approach involves identifying and repurposing known compounds or developing new chemical entities to create potential therapeutics.

One of the notable aspects of Axsome Therapeutics is its emphasis on a precision medicine approach. The company strives to identify patient subpopulations that may respond better to their therapies, allowing for more targeted and effective treatments. This personalized medicine strategy has the potential to improve clinical outcomes and minimize side effects.

Some of their most promising medicines include AXS-05 (bupropion/dextromethorphan).

AXS-05 is a combination of bupropion and dextromethorphan being developed for multiple CNS disorders. It has shown promise in the treatment of major depressive disorder (MDD), treatment-resistant depression (TRD), Alzheimer’s disease agitation, and smoking cessation. AXS-05 has received Fast Track designation from the U.S. Food and Drug Administration (FDA) for certain indications.

AXS-07 (MoSEIC meloxicam/rizatriptan):

AXS-07 is a combination of meloxicam, a nonsteroidal anti-inflammatory drug (NSAID), and rizatriptan, a 5-HT1B/1D agonist. It is being developed for the acute treatment of migraine and has demonstrated positive results in clinical trials. AXS-07 has received a Breakthrough Therapy designation from the FDA for the acute treatment of migraine.

AXS-12 (reboxetine):

AXS-12 is a selective norepinephrine reuptake inhibitor being developed for the treatment of narcolepsy. It aims to address excessive daytime sleepiness and cataplexy associated with this neurological disorder.

 

Axsome Therapeutics believes that it has ample financial resources to support its operations and reach a positive cash flow based on its current operating plan. The company already has at least three agents in phase three testing, the final phase before a drug is approved by the FDA. In light of this clinical momentum, the company’s existing cash reserves, combined with the remaining committed capital from the $350 million term loan facility, are deemed sufficient to fund anticipated operations. 

This financial position indicates that Axsome is well-prepared for the future. By having the necessary funding, the company can continue executing its clinical development programs, conducting research, and advancing its pipeline of novel therapies for CNS disorders.

Voyager Therapeutics ($VYGR) 

Voyager Therapeutics is a biotechnology company focused on developing gene therapies to treat severe neurological diseases. Founded in 2014 and based in Cambridge, Massachusetts, Voyager Therapeutics aims to address the unmet medical needs of patients by utilizing adeno-associated virus (AAV) vectors to deliver therapeutic genes to specific cells in the central nervous system (CNS).

The company’s approach involves using viral vectors to deliver genetic material to target cells within the CNS, aiming to provide long-term, potentially curative treatments for a range of severe neurological disorders. By leveraging the power of gene therapy, Voyager Therapeutics aims to address the underlying causes of these diseases at a genetic level.

Voyager Therapeutics has developed a modular gene therapy platform known as the Voyager VTR(TM) technology. This platform encompasses several components, including the selection of specific AAV vectors, engineering of optimized gene cassettes, and advanced manufacturing techniques. These elements come together to enable precise and efficient delivery of therapeutic genes to targeted cells within the CNS.

The company’s pipeline includes investigational therapies for various neurological disorders, including Alzheimer’s disease, Huntington’s disease, amyotrophic lateral sclerosis (ALS), and Friedreich’s ataxia. Each program utilizes Voyager’s gene therapy approach to target specific genes or cellular pathways associated with the respective disease.

All of Voyager’s medicines are in the early stages of research. However, because they focus on diseases that have serious unmet needs it may be smart to view them as a long-term project.

Voyager is dedicated to maintaining a robust balance sheet that effectively supports the advancement and expansion of its platform and pipeline. The company consistently evaluates its anticipated cash requirements for both present and future periods.

Voyager’s strategic objective is to ensure that it has ample financial resources to drive the progress of its operations. The company expects that its current holdings of cash, cash equivalents, and marketable securities, along with the $25.0 million options exercise payment received from Novartis in April 2023, will provide substantial support. In total, the company currently holds more than $300 million in cash. Additionally, Voyager anticipates receiving reimbursements for development costs through its collaborations with Neurocrine. 

This strong financial standing enables Voyager to confidently address its planned operating expenses and capital expenditure needs until 2025. By having sufficient resources, the company can continue its research and development efforts, clinical trials, and potential commercialization activities without being constrained by financial limitations.

Unity Biotechnology ($UBX) 

Unity Biotechnology is a biotechnology company focused on developing therapeutics to extend health span, with a particular emphasis on treating age-related diseases. The company, founded in 2009 and based in Brisbane, California, aims to address the underlying causes of aging and age-related diseases by targeting senescent cells.

Senescent cells are damaged or dysfunctional cells that accumulate in various tissues as a person ages. These cells secrete inflammatory molecules and other factors that contribute to chronic inflammation and tissue dysfunction, which are associated with age-related diseases such as osteoarthritis, age-related macular degeneration (AMD), and diabetic kidney disease.

Unity Biotechnology’s approach involves developing small molecule drugs and biologics that selectively eliminate senescent cells, aiming to restore tissue homeostasis and promote healthier aging. By targeting senescent cells, the company aims to alleviate the burden of age-related diseases and improve overall health span.

One of their most promising medications is UBX1325. UBX1325, a potent Bcl-xL inhibitor, represents a novel approach to treating age-related eye diseases. It is designed to selectively eliminate senescent cells that accumulate in diseased blood vessels of the eye while leaving healthy blood vessels intact. By specifically targeting and removing these senescent cells, UBX1325 aims to restore vascular integrity, reestablish barrier function in the eye, and potentially reverse disease progression.

Senescent vascular cells are believed to compromise the integrity of blood vessels and release inflammatory factors that contribute to the pathogenesis of conditions like DME, AMD, and diabetic retinopathy (DR). UBX1325 inhibits Bcl-xL, a protein highly expressed in pathological blood vessels in the retina, and promotes apoptosis (cell death) of the diseased senescent cells. In preclinical studies, a single dose of UBX1325 led to the selective elimination of senescent cells in diseased vasculature, allowing functional, healthy blood vessels to reorganize and regenerate.

The development of UBX1325 offers a potential alternative to current treatment modalities, providing a more targeted approach to neovascular treatments for eye diseases. By selectively removing senescent cells and sparing healthy blood vessels, UBX1325 may address the limitations of existing therapies that impact both diseased and healthy vessels.

In addition to its potential efficacy, UBX1325 may also offer advantages in terms of treatment burden. Current anti-VEGF therapies typically require initial loading doses followed by ongoing dosing at regular intervals, which can be demanding for patients. As UBX1325 represents a new class of therapy, it has the potential to provide a viable and much-needed alternative, potentially reducing the treatment burden and improving patient outcomes.

It’s important to note that while the potential of UBX1325 is promising, further clinical studies and regulatory approvals are needed to confirm its safety and efficacy in treating age-related diseases of the eye.

Unity, as of March 31, 2023, had a total of $83.4 million in cash, cash equivalents, and marketable securities. This figure represents a decrease from the $94.8 million reported as of December 31, 2022. Despite this decrease, UNITY believes that its current financial resources are adequate to sustain its operations until the fourth quarter of 2024.

While Unity maintains a decent financial standing, it is worth noting that its financial position may not be as strong as companies like Voyager and Axsome Therapeutics. The relatively lower cash reserves compared to those companies suggest that UNITY may have less financial flexibility or a potentially shorter runway to support its operations and planned activities.

While UNITY’s financial position may not be as robust as some of its peers, the company may have strategies in place to manage its cash flow effectively, explore potential collaborations, and optimize its resources to advance its pipeline of therapies. As with any biotech company, UNITY’s financial standing is subject to market conditions, the progress of its clinical trials, regulatory outcomes, and competition within the industry. Unity may be a speculative play for an investor who is comfortable with risk. 

 

 

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