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February 2 Biweekly Strategy Webinar Q&A

Below please find subscribers’ Q&A for the February 2 Mad Hedge Fund Trader Global Strategy Webinar broadcast from Incline Village, Nevada.

Q: Thoughts on Palantir Technologies Inc. (PLTR)?

A: Well, we got out of this last summer at $28 because the CEO said he didn’t care what the share price does, and when you say that, the market tends to trash your stock. But Palantir is also in a whole sector of small, non-money-making, expensive stocks that have just been absolutely slaughtered. And of course, PayPal (PYPL) takes the prize for that today, down 25% and 60% from the top. So, we’re giving up on that whole sector until proven otherwise. Until then, these things will just keep getting cheaper.

Q: Given the weakness in January, do you think we still have to wait until the second half of the year for a viable bottom?

A: Definitely, maybe. If things are going to happen, they are going to happen fast; we got the January selloff, but that’s nowhere near a major selloff of 20%. And the fact is, the economy is still great so that’s why this is a correction, not a bear market. At some point, you want to buy into this, but definitely not yet; I think we take another run at the lows again sometime this month. We just have to let all the shorts come out and take their profits so they can reestablish again.

Q: Why are bank stocks struggling?

A: A lot of the interest rate rises that we’re getting now were already discounted last year—banks had a great year last year—so they were front running that move, which is finally happening. To get more moves out of banks, you’re going to have to get more interest rate rises, which we will get eventually. We still like the banks long term, we still like financials of every description, but they are taking a break, especially on the “sell everything” index days. A lot of the recent selling was index selling—banks have a heavy weighting in the index, about 15%. So, they will go down, but they will also be the ones that come back the fastest. We’re seeing that in some of the financials already, like Berkshire Hathaway (BRKB) and Morgan Stanley (MS) which are both close to all-time highs now.

Q: What about the situation with Russia and Ukraine?

A: It’s all for show. This is a situation where both the US and Russia need a war, or threat of a war, because the leaders of both countries have flagging popularity. Wars solve those problems—that’s why we have so many of them by the United States. We’ve been at war essentially for most of the last 40 years, ever since Ronald Reagan came in.

Q: I didn’t exit my big tech positions before the crash, should I just hang onto them at this point?

A: The big ones—yes. The Apples (AAPL), the Googles (GOOGL), the Amazons (AMZN) —they’re only going to drop about 20% at the most, maybe 25%, and then they’ll go to new highs, probably before the end of the year. If you’re good enough to get out and get back in again on a 20% move, go for it. But most people can’t do that unless they’re glued to their screens all day long. So, if you have stock, keep the stock; if you have options, get out of the options, because there the time decay will wipe you out before a turnaround can happen. This is not an options environment, unless you’re playing on the short side in the front month, which is what we’re doing.

Q: When you send out the trade alerts, I have a hard time getting them executed. How do you advise?

A: Move the strike price, go out in maturity, and you can get our prices at slightly higher risk. Or, just leave it and, quite often, people’s limit orders get done at the end of the day when the algorithms have to dump their positions at the close because they’re not allowed to carry overnight positions. Also, even if you get half of my trade alerts, you’re doing pretty good—we’re running at a 23% rate in 6 weeks, or 200% annualized. And remember, when I send out a trade alert, you’re not the only one trying to get in there, so you can even go onto a similar security. If I recommend Alphabet (GOOGL), consider going over to Microsoft (MSFT), because they all tend to move together as a group.

Q: I am sitting on a 16% profit in the ProShares Ultra Technology (ROM), which you recommended. Should I take the money and run, and get back in at a lower price?

A: Yes, this is just a short covering rally in a longer-term correction, and you make the money on the volume. You win games by hitting lots of signals, not hanging on to a few home runs where people usually strike out.

Q: You said inflation will be short lived, so why would there be 9 interest rates after the initial 4?

A: It’s going to take us 8 interest rates just to get us back to the long-term average interest rate. Remember the last 2% is totally artificial and only happened because there was a financial crisis 13 years ago. So, to normalize rates you really need to get overnight rates back up to about 3.0%. And that means 12 interest rate hikes. If you don’t do that, you risk inflation going from controllable to uncontrollable, and that is the death of the Fed. So, that’s why I expect a lot more interest rate rises.

Q: Will the tension between Russia and the Ukraine affect the market?

A: No, it hasn’t so far and I don’t expect it to. Although, it’s hard to imagine going through all of this and not seeing a shot fired. When that one shot gets fired, then maybe you get a down-500-point day, which it then makes back the next day.

Q: Anything to do with Alphabet (GOOGL) announcing its 20 to one split?

A: No, it’s too late. We had a trade alert out on a Google 20 call spread which we actually took profits on this morning. So, nice win for the Mad Hedge Technology Letter there. There’s nothing to do with these splits, it’s not like they’re going to un-announce it, this isn’t a risk-arbitrage situation where there’s always an antitrust risk hovering over the deal that may crash it. This is pretty much a done deal and doesn’t even happen until July 1. People think bringing the share price from $3,000 down to $150 makes it available for a lot more potential retail buyers, which it does. It also makes call spreads on the options a lot cheaper too. When we put out these alerts, we can only do one or two contracts, even tying up $10,000—divide that by 20 and all of a sudden your cheapest Google call spread cost $500 instead of $10,000.

Q: Can you speak about the liquidity on your strikes? Sometimes we’re trading against strikes that have no open interest.

A: Whenever you put in an order for one strike, even if there’s nothing outstanding on that strike, algorithms will arbitrage against that strike—where your order is—against all the other strikes on the whole options chain. So, don’t worry if you have limited open interest or no open interest on our trade alerts. They will get done, and it may get done by some algorithm or some market maker taking more of another strike, that’s how these things get done. It’s all thanks to the magic of computers.

Q: Do you have thoughts about Freeport-McMoRan (FCX)? I have some profitable LEAP positions open.

A: It’ll go higher, keep them. And I like the whole commodity space, which means iron ore (BHP), copper, steel (X), etc.

Q: Would you trade Barclays iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX) at this point?

A: No, because we’re dead in the middle of the recent range. That’s a horrible place to enter—you only enter (VXX) on extremes on the upsides and the downside.

Q: What should I do about Airbnb (ABNB) at this price? They’ve been profitable for 2-3 years, with revenues rising.

A: I think Airbnb is one of the best run companies in the world, and I expect their earnings to keep growing like crazy, especially once we get out of the pandemic. I am also a very frequent Airbnb user, having stayed in Airbnb’s in at least 10 countries, so I’m a big fan of them. The stock just got dragged down by the small tech bust but it will come back. This is a “throwing the baby out with the bathwater” situation.

Q: Are there any good LEAPS candidates now?

A: I’m not doing any LEAPS until we reach the final cataclysmic selloff of the correction. Otherwise, the time value will run against you enormously; I’d rather wait for better prices.

Q: Do you see a cataclysmic selloff?

A: Yes, I do. Maybe in a few more weeks, and maybe next week if we get a really hot 8%+ inflation rate—that would really kill the market.

Q: What will tell you if inflation is ending or slowing labor?

A: Labor is 70% of the inflation calculation. So, when these huge pay awards slow down, that's when inflation slows down. By the way, a lot of pay increases that are happening now are catch-up from the last 40 years of no pay increases for American workers in real inflation adjusted terms. So, a lot of this is catch-up—once that’s done, you can forget about inflation. Also, the long-term pressure of technology on prices is downwards, so allow that to reignite deflation, and that will be your bigger issue over the long term.

Q: What should I do about Editas Medicine Inc (EDIT) or CRSPR Therapeutics AG (CRSP)?

A: Don’t touch the sector, it’s out of favor. Let this thing die a slow death. When they come up with profitable products, that’s when the sector recovers. So far, everything they have works in labs but there are no mass-produced Crispr products, they’re trying for mass production on sickle cell anemia and a couple of other things, but still very early days in CRSPR technology.

Q: When will this recording be posted?

A: In two hours, it will be posted on the website. Go to “My Account” and you’ll find the last 13 years of recorded webinars.

Q: What do you mean by “stand aside from Foreign Exchange”?

A: The volatility in the foreign exchange market is just so low compared to equities and bonds, it’s not worth trading right now. When you can trade everything in the world—foreign exchange is at the bottom of the list. If I see a good entry point, I’ll do a trade; but do I trade Tesla (TSLA) with a volatility of 100%, or foreign exchange with a volatility of 5%? Those are the choices.

Q: Should I do any short plays in oil (USO)?

A: Generally, you don’t want to short any commodity unless you're a professional; I say that having been short beef futures when Mad Cow Disease hit in 2003 and you had three limit-up days in a row in the futures market. That happens in the commodity areas—liquidity is so poor compared to stocks and bonds that if you get caught in one of these one-way moves, you can’t get out. So that is the risk; and I’ve known people who have gone bust trading oil both long and short, so this is for professionals only. With stocks you get vastly more data and information than you do in the commodity markets where industry insiders have a much bigger advantage.

To watch a replay of this webinar with all the charts, bells, whistles, and classic rock music, just log in to www.madhedgefundtrader.com, go to MY ACCOUNT, click on GLOBAL TRADING DISPATCH, then WEBINARS, and all the webinars from the last ten years are there in all their glory.

Good Luck and Stay Healthy!

John Thomas
CEO & Publisher
The Diary of a Mad Hedge Fund Trader

The Aga Sophia Mosque in Istanbul

January 13, 2022

Biotech Letter

Mad Hedge Biotech and Healthcare Letter
January 13, 2022
Fiat Lux

Featured Trade:

(NO REST FOR THIS PANDEMIC SUPERSTAR)
(PFE), (MRK), (RHHBY), (DNAY), (JNJ), (LLY), (BNTX), (EDIT)

No Rest for This Pandemic Superstar

Biotech Letter

Amid the pandemic fatigue hounding everyone these days, one name continues to attack the situation with consistent vigor: Pfizer (PFE).

It’s not a stretch to say that its COVID franchise is the most popular line in Pfizer’s portfolio today.

Needless to say, this is highly lucrative from a shareholder’s point of view. The company’s vaccination business has recorded over 3 billion doses to generate roughly $36 billion in sales from Comirnaty alone in 2021.

Riding the momentum of its successful 2021, the company anticipates an even more successful 2022.

So far, Pfizer is targeting an increase in its Comirnaty production to hit at least 4 billion doses this year.

Aside from being one of the first companies to develop a vaccine, the company has also created a highly effective antiviral COVID treatment that can be taken orally: Paxlovid.

While Merck (MRK) has earlier announced its move to come up with a similar oral treatment, Pfizer’s pill proved to be more effective.

Actually, customers are starting to take note of the difference and are switching brands. France already canceled their agreement with Merck and decided to order Pfizer’s Paxlovid instead.

This once again underscored the dominance of Pfizer’s brilliant R&D segment and the company’s capacity to rapidly come up with highly effective solutions for issues involving COVID.

The way Pfizer has been handling the COVID situation can be compared to Roche’s (RHHBY) approach and eventual blockbuster success with Tamiflu over 20 years ago.

Although the flu is obviously not as deadly as the coronavirus, it still caused widespread economic breakdown and health problems.

When Tamiflu eventually entered the market, the world was finally granted a simple medical answer for what was initially thought to be an unsolvable health problem.

Pfizer’s Paxlovid could very well be the Tamiflu for COVID.

Looking at Paxlovid’s effect in terms of revenue, it’s safe to say that this oral treatment can drive medium-term growth for Pfizer.

To date, Pfizer disclosed that Paxlovid would be sold for roughly $700 for each treatment course.

Let’s use the US numbers as an example to help put things in perspective. So far, the country has recorded approximately 170,000 cases per day.

If we assume that this will be the average for 2022, then there will be about 62 million COVID patients this year.

Let’s say that only 40% of these patients qualify for Pfizer’s treatment; then this would reach 24 million people at $700 each to rake in roughly $17 billion in total revenue in the US alone.

The number would definitely be significantly higher considering that Paxlovid will be offered as a global COVID treatment.

It’s evident that Pfizer’s efforts are paying off, as the sheer earnings power of the company’s COVID-19 pandemic franchise could provide a medium-term boon for its investors.

In 2021, Pfizer recorded a 130% growth in its revenue, with the numbers still climbing.

While its pandemic response has become its primary growth driver, Pfizer’s other key segments also posted promising revenues.

To sustain its climb, the company has continued to invest in R&D heavily.

A notable investment it made recently is an $8 million upfront payment to Codex DNA (DNAY) for the smaller biotechnology company to “produce certain materials of interest to Pfizer.”

According to the deal involving the exclusive product, Codex expects $10 million in technical milestone payments, up to $60 million in clinical development milestones, and $180 million in sales milestones.

Codex DNA is a small biotechnology company with a market capitalization of $267 million. It’s a spinoff from a California company called Synthetic Genomics.

While Pfizer and Codex have yet to share their plans publicly, we can hypothesize that it has something to do with the large biopharma using the small biotech’s technology to accelerate its mRNA vaccine development process.

After all, Codex’s distinct value proposition lies in its rare ability to automate various elements of the entire process. Its push-button, end-to-end solutions promise to build functional grade synthetic mRNA and DNA.

In effect, this will save cost and time for its clients.

Aside from Pfizer, this small biotech has been collaborating with other organizations like Duke University and MIT.

It has also been working with large biopharmas, including Johnson & Johnson (JNJ), Eli Lilly (LLY), BioNTech (BNTX), Merck, and even gene therapy expert Editas (EDIT).

For 2022, Pfizer is anticipated to generate at least $96 billion in sales, showing off a jaw-dropping 17.2% jump from its 2021 revenue and a 229% increase from 2020.

As we slowly accept that COVID will become a staple in our lives in the coming years, I think investors would be wise to add proven “experts” in their portfolio to take advantage of the ever-present and increasing demand.

August 24, 2021

Biotech Letter

Mad Hedge Biotech & Healthcare Letter
August 24, 2021
Fiat Lux

FEATURED TRADE:

A GENE EDITING PURE PLAY UP FOR GRABS
(MRNA), (EDIT), (CRSP), (NTLA), (VRTX), (REGN), (BMY),
(BLUE), (NVO), (GRTS), (INBX), (BEAM), (VERV), (SGMO)

A Gene Editing Pure Play Up for Grabs

Biotech Letter

Moderna (MRNA) is faced with a dilemma. And it’s a pretty good problem to face at this point.

The biotechnology company has a flourishing cash stockpile courtesy of the increasing demand for its COVID-19 vaccine, and it needs to find something to do with its overflowing cash.

As of the end of the second quarter, the company has already reported a cash position of over $12 billion—a figure that offers Moderna the flexibility to go on a bit of a shopping spree.

So far, Moderna has set its sights on expanding its internal R&D programs on top of the $1 billion share repurchase program approved by its board of directors.

However, the most exciting news is the company’s plans to potentially make acquisitions soon.

This is where Editas Medicine (EDIT) enters the picture.

Moderna has not been shy in declaring that it wants to add gene editing therapies to its growing pipeline along with nucleic acid technologies and mRNA.

While Moderna did not specifically mention Editas in its plans, the smaller biotechnology company looks to be the most promising candidate for acquisition, especially if the COVID-19 vaccine leader plans to jump right into the action in the gene editing space.

After all, there are only three companies in this segment with therapies under clinical testing: CRISPR Therapeutics (CRSP), Intellia Therapeutics (NTLA), and Editas.

CRISPR Therapeutics is practically joined at the hip with Vertex Pharmaceuticals (VRTX). Meanwhile, Intellia has a strong ongoing partnership with Regeneron (REGN).

That leaves Editas, which currently has no partner for its lead program, making it a prime buyout candidate for Moderna.

Editas is also the cheapest by far among all three clinical-stage biotech with $4.12 billion in market capitalization.

In comparison, CRISPR Therapeutics has a market cap of $8.93 billion, while Intellia has a market cap of $10.97 billion.

Moderna could find Editas’ lower market capitalization as an add-on, as it would allow the bigger biotech to not spend all its cash on the acquisition.

Moreover, Editas has another advantage.

While both CRISPR Therapeutics and Intellia only focus on CRISPR-Cas9, which is a way to locate and bind targeted genes, Editas has developed another option platform to do that.

Its alternative option, called Cas12, could boost the company’s capacity to develop gene editing treatments.

Simply put, its rivals only have one weapon in their arsenal, while Editas has come up with a dual-option CRISPR platform to double its chances of succeeding in gene therapy development.

If, for instance, Moderna does not acquire Editas, there are still a lot of options available for the bigger company.

One possibility is with Juno Therapeutics, which is part of Bristol-Myers Squibb (BMY), as the company is already collaborating with Editas on the development of genetically modified T-cells to come up with a powerful cancer therapy.

Meanwhile, if Editas’ pipeline and portfolio do not quite cut it with Moderna, another potential buyout candidate for this biotechnology giant is bluebird bio (BLUE).

While it’s not as advanced as CRISPR Therapeutics, Intellia, and Editas, bluebird bio has ongoing work with the likes of Bristol-Myers Squibb, Regeneron, Novo Nordisk (NVO), Gritstone Oncology (GRTS), and Inhibrx (INBX).

Other candidates that Moderna could take into consideration include Beam Therapeutics (BEAM), Verve Therapeutics (VERV), and Sangamo Therapeutics (SGMO).

Regardless of Moderna’s future decisions, its announcements that it plans to expand on the gene editing space could potentially spur other huge biopharmaceutical companies to explore their own business development agreements with up-and-coming biotechnology firms.

In fact, even if Moderna ends up not calling, there’s a big possibility that Editas could easily find others who will be interested in acquiring this pure play gene editing frontrunner.

editas

August 19, 2021

Biotech Letter

Mad Hedge Biotech & Healthcare Letter
August 19, 2021
Fiat Lux

FEATURED TRADE:

A LOW-PROFILE BIOTECH WINNER
(VRTX), (ACAD), (SRPT), (FGEN), (MRK), (MRNA), (NVS), (XLRN), (PTGX), (IONS), (BLUE), (EDIT), (ABBV)

A Low-Profile Biotech Winner

Biotech Letter

Choosing winners among biotechnology and healthcare stocks these days isn’t easy.

Since the year started, the sector has been marred with several unexpected disappointments like the 50% decline of crowd favorites Acadia Pharmaceuticals (ACAD) and Sarepta Therapeutics as well as the 33% fall of the ever-dependable FibroGen (FGEN).

So, how can investors pick a winner?

One tactic is taking a peek at what Wall Street analysts are doing, noting which among the companies they’re following are trading the farthest below the estimated price points.

Among the names on the list, a particular stock stands out as a strong contender these days: Vertex Pharmaceuticals (VRTX).

Although it’s one of the most widely known biotechnology companies today, Vertex actually started in a garage of a Harvard-trained chemist, Joshua Bogner, who left his cushy job at one of the most illustrious big pharma companies at that time, Merck (MRK), to pursue his vision.

The company’s raison d’être was a major selling point for a lot of talented and idealistic scientists in that era.

That is, Vertex wanted to find cures for the most challenging diseases and do this in an unbureaucratic setting.

Since then, Vertex’s goal has been straightforward: tackle the most complex and toughest diseases and deliver breakthrough treatments that offer tangible benefits to patients.

Over the years, the company has managed to keep this goal at the forefront of its efforts, starting with its work on the devastating genetic disorder called cystic fibrosis (CF).

Vertex’s work on CF took over a decade, but it eventually led to an impressive franchise that helped with the treatment of patients.

In the first quarter of 2021 alone, sales in this segment reached $1.7 billion.

Expanding on its work, Vertex has explored genetic therapies and set up a collaboration with Moderna (MRNA) in 2016.

Using the latter’s well-established expertise in messenger RNA technology, the companies are expected to come up with more aggressive and advanced CF treatments in the coming years.

Given these developments, Vertex reiterated its 2021 sales guidance to be somewhere in the range of $6.7 and $6.9 billion. Meanwhile, sales of its CF franchise are estimated to peak at $9 to $10 billion—if not higher—by 2024.

Aside from its work on CF, Vertex has also been pouring resources on developing treatments for severe sickle cell anemia and beta thalassemia, a rare blood disorder.

In fact, the company has been looking into these developments as the next major revenue stream, as seen in its bolstered collaboration deal with CRISPR Therapeutics (CRSP).

In this deal, Vertex paid the smaller biotechnology company $900 million upfront plus a potential addition of $200 million following the first regulatory approval of their therapy, CTX001.

While this may sound like a hefty deal to some, Vertex actually values CTX001 at roughly $11 billion.

CTX001, which is a one-time therapy, is priced at roughly $1 million per patient. At this point, the market for beta thalassemia is valued at $32 billion.

Needless to say, this would make CTX001 a massive income generator in the next few years.

Considering the lucrative market for beta thalassemia, though, it’s no surprise that several competitors have emerged to grab their share as well.

Some companies, such as Novartis (NVS) and Acceleron (XLRN), offer maintenance drugs for the disease.

Meanwhile, others like Protagonist Therapeutics (PTGX) and Ionis Pharmaceuticals (IONS) are attempting to develop treatments that would become direct competitors of CTX001.

However, the closest rivals of the Vertex-CRISPR candidate are from Bluebird Bio (BLUE) and Editas Medicine (EDIT).

While this has become a crowded space, Vertex and CRISPR remain the leaders in this segment, as most of the other candidates are still in the investigation phase.

Since it was founded in the 1980s, Vertex has remained true to its vision of tackling some of the toughest diseases out there.

While big pharmaceutical companies, such as AbbVie (ABBV), decided to expand their portfolio through acquisitions, Vertex leveraged its talent pool and maximized its funds by establishing strategic collaborations instead.

This tactic provided the company with enough elbow room that eventually led to its dominance in the CF space, where it now enjoys a virtual monopoly until at least the next decade.

Meanwhile, it has forged strong relationships with promising biotechnology companies and can very well be on its way to becoming the most dominant force in the rare blood disorder segment.

Overall, Vertex Pharmaceuticals is an attractive stock with an impressive portfolio and an even more impressive pipeline.

August 12, 2021

Biotech Letter

Mad Hedge Biotech & Healthcare Letter
August 12, 2021
Fiat Lux

FEATURED TRADE:

(THE FUTURE OF REGENERATIVE MEDICINE)
(CRSP), (EDIT), (BLUE), (PFE), (AZN), (GSK), (TAK), (REGN)

The Future of Regenerative Medicine

Biotech Letter

As our bodies begin to show signs of aging and fatigue, exploring ways to regenerate our organs has become crucial in ensuring a hale and hearty lifespan.

This demand has given rise to a branch of biotechnology and healthcare, which could very well be on the brink of becoming the next big thing in the mainstream biopharmaceutical industry: regenerative medicine.

For example, experts at Gladstone Institutes is applying gene therapy to repair heart damage. Basically, their goal is to reprogram scar tissue and transform it into a new heart cell.

What they do is inject the genes into the damaged heart caused by a heart attack. Then, these “new” genes alter the scar cells, converting them into beating hearts.

This approach no longer demands any cloning to obtain an extra set of organs. The Gladstone Institutes’ use of gene therapy allows us to regrow our own set of organs right inside our bodies.

And in case you’re wondering whether this type of work actually has a future or just another trend that would quietly disappear in the future, I’m telling you that this industry has incredibly potential.

Just look at the $12 billion valuation of a biotechnology unicorn called Samumed in San Diego.

Founded in 2008, this company has spent most of its lifetime operating under the radar. It impressively came out of the shadows last 2016 and was quickly dubbed as an “anti-aging” company.

To them, though, they’re a “de-aging” company. That is, they believe that people should be brought back to their peak health conditions before they can even begin to restore youth.

This ideology is exhibited by the company’s lead program: a knee osteoarthritis cure called Lorecivivint.

As we know, osteoarthritis has no known treatment that works to reverse the damage to the joint.

That’s why the doctors focus on handling or managing the symptoms. They tell their patients to exercise and lose weight to boost muscle strength and decrease the burden on their joints.

They also prescribe various drugs like painkillers, some anti-inflammatory pills, and even cortisone shots. Other patients would eventually need to go through replacement surgery.

This is where Samumed comes in.

The company created Lorecivivint to repair the joint damage. That way, patients will no longer need to go through all the burden of managing the symptoms of knee osteoarthritis.

In their proof-of-concept report, Samumed shared that one year after getting injected with Lorecivivint, the X-rays of the knees of the patients showed that there was an increase in “medial compartment joint space width.”

In simpler terms, the knees grew cartilage after a single shot of Lorecivivint.

Other than working on a cure for knee osteoarthritis, Samumed is also looking into treating male pattern baldness.

Another impressive biotechnology company focused on regenerative medicine is Humacyte, which recently shifted from being a clinical-stage firm to a commercial one.

Humacyte’s core work is on Human Acellular Vessels (HAVs) or “implantable regenerative human tissue.”

A use case for this is when a patient has damaged blood vessels. Typically, there are three options to treat this: take a vessel from another part of the body, try to implant a donated vessel, or utilize a plastic tube.

The first one requires at least two surgeries and, of course, losing a vessel in another part of your body.

Meanwhile, the second and third options expose the patient to the possibility of an infection or the body rejecting the vessel or plastic tube.

Humacyte’s HAVs offer a fourth option.

Since the HAVs carry similar properties as the native tissues of the patient’s body, they significantly lower the risk of rejection.

Basically, they’re “growing” HAVs that won’t be rejected by the body.

More importantly, the company is creating engineered off-the-shelf replacement tissue that can be implanted to anyone without using immunosuppressive drugs.

This is impressive because immunosuppressants are staples in ensuring that the body does not reject the organs. However, the use of this can be dangerous because it increases the risk of infections.

So far, Humacyte has been working on coming up with safer and more effective treatments for hemodialysis patients since the current methods tend to expose them to higher risks of infections.

If everything goes according to plan, then the company will be able to file for FDA approval by 2022.

While the technologies offered in the regenerative medicine space have been discussed and even praised for years, it’s only recently that these became commercially viable.

For all the noise and hype surrounding these breakthrough and next-generation treatments, only a handful of patients have actually benefited from them.

However, 2021 might just mark the year that all these will change.

Other than the private firms and smaller biotechnology companies like CRISPR Therapeutics (CRSP), Editas Medicine (EDIT), and bluebird Bio (BLUE), bigger names in the biopharmaceutical space, including Pfizer (PFE), AstraZeneca (AZN), GlaxoSmithKline (GSK), Takeda Pharmaceuticals (TAK), and Regeneron (REGN), are also starting to invest more aggressively into it.