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Two-Stepping To A Cancer Cure

I was at a biotech conference in San Francisco, nursing a cup of black coffee and trying not to fall asleep during yet another startup pitch.

Suddenly, I overhear a conversation that makes me perk up faster than if someone had mentioned a 50% off sale on vintage aircraft parts.

"Did you hear about TwoStep Therapeutics?" someone whispered. "They've got Bertozzi, Cochran, and Levy on board."

Now, I've been following the biotech scene longer than I've been flying planes, and those names made my ears perk up faster than an air traffic controller during a thunderstorm. I nearly choked on my coffee trying to catch every word.

As it turns out, TwoStep Therapeutics isn't just another flash-in-the-pan biotech startup. These folks are diving headfirst into the shark-infested waters of immunotherapy and antibody-drug conjugates (ADCs).

And let me tell you, they're not packing pool noodles – they're armed to the teeth with intellectual firepower.

Now, I've seen more biotech startups than there are hedge funds in Connecticut, but this one's got my attention. Why? They're not here to do the same old cancer-fighting waltz.

Instead, they're attempting to solve a Rubik's Cube of cancer treatment – and they might just have the brainpower to do it.

Let's talk about that brainpower for a moment. TwoStep's advisory board reads like a "Who's Who" of biotech brilliance.

We're talking Nobel laureate Carolyn Bertozzi, Stanford's Jennifer Cochran, and Ronald Levy – the wizard behind rituximab. It's as if they raided the faculty lounge at Stanford and offered stock options instead of tenure.

That means TwoStep's not just another me-too biotech. They're cooking up a platform of peptide conjugates that can bind to five different tumor-associated integrins.

In layman's terms? They're building a cancer-fighting multi-tool that makes current treatments look like plastic sporks.

CEO Caitlyn Miller isn't just another lab coat with a PowerPoint presentation either. She's got skin in the game – or rather, genes.

Her stepfather battled oral cancer for 14 years before passing away. I don’t need to tell you, but that's the kind of motivation you just can't buy.

Now, before you start salivating over potential returns faster than Pavlov's dogs at dinnertime, remember: This is early-stage biotech.

We're talking more risk than a game of Russian roulette with five bullets. But for those of you with iron stomachs and a penchant for moonshots, TwoStep might be worth a spot on your watchlist.

Their $6.5 million seed round is chump change in biotech land, but it's not about the size of the boat, it's the motion of the ocean. And with backers like NFX and Alexandria Venture Investments, they've got some serious propulsion.

TwoStep isn't going after the low-hanging fruit either. They're not interested in well-trodden paths like bladder or breast cancer.

No sir, they're setting their sights on tough customers like head and neck and colon cancer. It's a gutsy move, but in biotech, sometimes you've got to swing for the fences.

It's worth noting, though, that TwoStep isn't alone in this high-stakes game.

Big pharma's been falling over themselves to get a piece of this action. Gilead Sciences (GILD) shelled out big bucks for Immunomedics to get their hands on Trodelvy.

AstraZeneca (AZN) has been playing in this sandbox for a while with Enhertu. Even the Swiss giant Roche (RHHBY) is in on the game, not to mention Pfizer (PFE) and Merck (MRK).

So, there you have it. TwoStep Therapeutics: the new enfant terrible of the biotech world, armed with more brainpower than a MENSA convention and ambitions that could make Elon Musk blush.

Will they revolutionize cancer treatment or become another cautionary tale in biotech textbooks?

The jury's still out, but one thing's for sure – watching this unfold will be more entertaining than a CNBC stock ticker on stimulus check day.

June 20, 2024

Biotech Letter

Mad Hedge Biotech and Healthcare Letter
June 20, 2024
Fiat Lux

Featured Trade:

(VAX TO THE FUTURE)

(AMGN), (RHHBY), (BNTX), (MRNA), (GNCA), (IOVA)

Vax To The Future

Biotech Letter

Let's have a heart-to-heart, you and me – about cancer, jabbers, and snake oil. If you think vaccines have been around for a while, you're on the money, my friend.

Over centuries, they've done a bang-up job wrestling down deadly infectious diseases and picking our collective life expectancy off the floor.

But what if I told you there's a different kind of magic we're still waiting for in the world of vaccines?

God's truth, I kid you not, science has been hammering away at this for years: creating vaccines to kick cancer square in the posterior. Yet, like an ardent investor waiting for the grand payoff, we've seen more flops than a fish outta water.

You can count on your one hand the number of cancer vaccines approved by the FDA since that first green-lit in 1990.

Let's not stammer about the bush, it's three – Provenge by Dendreon Pharmaceuticals, Imlygic by Amgen (AMGN), and Tecentriq by Roche (RHHBY).

Meanwhile, our old reliables – chemo, radiation, and the surgeon's knife – have, like battle-weary soldiers, been holding the fort for decades. But even they face formidable foes: nasty side effects, a bill that'll make a Rockefeller blanch and a diminishing punch against advanced cancer.

And the stats tell a story, but it ain't a happy one. Barely 59% of cancer patients treated with standard chemo make it through the five-year mark.

Until now.

Looking back, it's clear we've been a few beans short of a chili in our understanding of how the immune system and tumors get along — or rather, don't.

Now we know these devious cancers have been hoodwinking us with a starter kit of escape tools, literally tricking the immune system into playing “hide and seek.”

That’s where the likes of BioNTech (BNTX), Moderna (MRNA), Genocea (GNCA), and Iovance (IOVA) come in. To date, there are over 350 clinical trials focused on this field.

And if these new kids on the block deliver, we'll be singing hallelujahs with 83% five-year survival odds instead of the grim 59% chemo gives us.

As for those already in late-stage battles, where chemo only offers a bleak 4% five-year survival, immunotherapy could boost that to 23%.

So, what's the game-changer? Immune-modulating cancer vaccines.

Unlike traditional treatments that attack cancer cells directly, these vaccines train your immune system to recognize and destroy cancer cells like a well-trained bouncer booting out unruly party crashers.

Contrasted to the old brute force methods like chemo, and trust me, I’ve had some friends go through that ordeal, these vaccines are more like a sniper - taking precise aim only at cancer cells.

Plus, side effects? Minimal, my friends. But the cherry on top? These vaccines could potentially be your long-term bodyguards against cancer.

Now, I'm sure you love crunching numbers as much as I do, so here's some food for thought - the global cancer vaccine market was worth a cool $4.06 billion in 2019 and is projected to triple to $12.85 billion by 2027.

I mean, come on, that's a compound annual growth rate of 17.4%. It’s like watching your favorite sports team go on a championship run, season after season.

And the broader cancer immunotherapy market, sitting pretty at $75 billion in 2022, is on track to hit $120 billion by 2030, boasting a 14% CAGR.

These are not just empty promises either. We're seeing real progress - BioNTech and Moderna are developing personalized cancer vaccines that target unique tumor antigens.

Then there’s Genocea and Iovance, busy rolling out “off-the-shelf” cancer vaccines like fresh donuts off a conveyor belt.

This is a critical development, as around 70% of cancer patients develop resistance to chemotherapy.

These new immunotherapy contenders, with an overall survival rate of 50% compared to just 22% for those resistant to chemo, with every single patient potentially scoring against the dreaded C, and not fretting about chemoresistance. Talk about a fighting chance.

Overall, I think the cancer vaccine field is the Wild West of biotech – exciting, unpredictable, and potentially very rewarding. With companies pouring money into R&D, fueled by rising cancer rates and expedited FDA approvals, the race is on.

Immune-modulating cancer vaccines might just be the sheriff that this Wild West of cancer treatment needs, flipping the script on what used to be a death sentence into something we can manage.

Now, I'm not saying you should throw all your eggs in one basket, but keep a close eye on those mavericks like BioNTech, Moderna, Genocea, and Iovance. They could be the dark horses in this race.

Add them to your watchlist, and when the market hiccups and those share prices dip, that could be your chance to get a piece of the action.

June 18, 2024

Biotech Letter

Mad Hedge Biotech and Healthcare Letter
June 18, 2024
Fiat Lux

Featured Trade:

(PHARMAGEDDON AVERTED)

(ILMN), (NVTAQ), (NTRA), (GH), (EXAS), (TMO), (QGEN), (NVS), (RHHBY), (AZN), (CRSP), (EDIT), (FATE)

Pharmageddon Averted

Biotech Letter

For far too long, we've been playing a dangerous game of biotech roulette - throwing our hard-earned dough at stocks solely based on who's peddling the latest drugs and vaccines to the biggest crowds.

We tiptoe around those dreaded "patent cliffs", living in fear of the moment our cash cows turn into generic, discount-bin duds overnight.

As I've loudly proclaimed before, Big Pharma is fundamentally a tightrope act - milking those lucrative exclusives for all they're worth while bracing for the inevitable day those monopolies go kaput.

It's an anxiety-inducing cycle, one that's been running the show for decades.

But enough is enough. It's high time we tossed that musty old playbook straight into the trash. Why? Because the reign of Pharma's legacy model is fading faster than my hairline.

A new revolutionary force is taking over – personalized medicine.

Don't kid yourselves, this tectonic shift is the real deal. We're witnessing a paradigm upheaval in how drugs are developed and treatments are administered.

Advanced, genetically-tailored therapies are muscling their way to the frontlines, employing each patient's unique DNA blueprint to craft bespoke care strategies like never before.

Leading this charge are gene sequencing pioneers like Illumina (ILMN), equipping healthcare with bleeding-edge tech for genetic profiling and research.

Companies like Invitae (NVTAQ) and Natera (NTRA) are making genetic intel accessible and actionable for diagnosing and treating inherited nightmares like cancer and heart disease. This isn't a drill, people. It’s the new reality.

But the innovation train doesn't stop there. Guardant Health (GH) is upping the ante with its non-invasive blood tests that capture tumor genetic data, allowing physicians to map treatment plans without those pesky, invasive procedures.

And let's hear it for Exact Sciences (EXAS), championing molecular diagnostics to laser-focus cancer regimens based on each person's biological fingerprint.

Speaking of cancer, we'd be remiss not to spotlight the game-changing progress happening on the personalized medicine front.

At the latest American Society of Clinical Oncology shindig, the best oncology minds showcased their latest advancements in tailored treatments.

Get this – over the last four years, over a third of the FDA's new drug approvals were personalized meds. With the White House doubling down, those numbers are only going up.

Obviously, personalized medicine is this century's gold rush. In fact, a global biopharma race is already underway, and everyone’s practically frothing at the mouth.

After all, this half-trillion-dollar market is barreling towards the $1 trillion mark by 2031.

And in this blossoming field, outfits like Thermo Fisher (TMO) and Qiagen (QGEN) are indispensable, provisioning crucial tools and services.

Thermo covers the full genetic research and diagnostics gamut, while Qiagen specializes in sample prep and molecular testing – two linchpins for delivering personalized therapies.

But it's not just the upstart trailblazers making waves. Biotech titans like Novartis (NVS), Roche (RHHBY), and AstraZeneca (AZN) are going knees-deep into advanced, commercially-viable personalized treatments – especially in oncology, where understanding Individual genetic mutations can literally mean life or death.

Let's pour one out for the real pioneers here, too – groundbreakers like CRISPR Therapeutics (CRSP), Editas Medicine (EDIT), and Fate Therapeutics (FATE).

These mavericks are lighting up the gene editing and cell therapy arenas, hand-crafting hyper-personalized treatments that smite genetic diseases at the source.

Now, for those of you eagerly wondering where to splash your investment cash, I suggest you don't fall into the trap of banking solely on the next patented "winner" therapy.

Those old-school patent monopolies that once ruled the roost? Their significance is waning rapidly.

With the flurry of personalization tech out there, it's a Wild West – one company churns out a new treatment, another can swiftly follow suit.

Patent feuds and skyrocketing costs loom on the horizon like storm clouds. The gravy train of eternal patent profits is running out of steam.

But make no mistake, this arms race isn't cooling off anytime soon. The battleground's scope is simply shifting. It's no longer just about formulating the latest miracle drug – it's about delivering unbeatable services and customer experiences.

Because here's the cold hard truth – the biggest roadblock to getting these revolutionary therapies to patients is obtaining all the genetic data and personal insights needed to make it happen.

Healthcare providers are going to need to invest heavily in new data management systems, training, and education just to keep pace with these rapidly evolving personalized meds.

The pharma players that thrive? They're the ones going beyond prioritizing drug development to obsessing over best-in-class customer service and care delivery.

They'll cement customer loyalty, forge lasting partnerships – and in doing so, actualize personalized medicine's boundary-shattering promise. Those are the winners I'm betting big on.

So wake up and smell the coff-gene. The personalized biotech goldrush is kicking into high gear.

And those wise enough to stake an early claim? Well, let's just say they'll be dishing out more than genetics-guided therapy – they'll be minting a new generation of biotech fortunes.

June 11, 2024

Biotech Letter

Mad Hedge Biotech and Healthcare Letter
June 11, 2024
Fiat Lux

Featured Trade:

(THE CAPITAL CURE)

(ABBV), (MRK), (PFE), (RHHBY), (JNJ), (AZN), (GSK), (MRNA), (BNTX), (CRSP), (NTLA), (BEAM), (TPTX), (ZNTL), (MRTX), (BPMC), (MGNX), (TYRA), (SPRT), (VRTX), (FOLD), (RARE), (CRBU)

The Capital Cure

Biotech Letter

Imagine you're the CEO of a major pharmaceutical company. You've got blockbuster drugs that are raking in billions, a cushy corner office, and a corporate jet at your disposal. Life is good.

But then, you look at the calendar and realize that your patents are about to expire. Suddenly, that jet feels more like a crop duster, and your corner office starts to feel like a broom closet.

That's the reality facing Big Pharma right now. These pharma big shots are sweating bullets over losing their golden geese like AbbVie's (ABBV) Humira and Merck's (MRK) Keytruda.

That’s roughly $300 billion in products about to get kicked to the curb.

But these guys didn't get to the top by sitting on their hands. They've got a war chest of $1 trillion, and they're not afraid to use it.

Major pharmaceutical giants like Pfizer (PFE), Roche (RHHBY), Johnson & Johnson (JNJ), AstraZeneca (AZN), and GlaxoSmithKline (GSK) are about to go on the mother of all shopping sprees.

Why the rush? Because they're staring down the barrel of a patent cliff that's going to make the Grand Canyon look like a pothole.

We're talking $198 billion worth of branded drugs going off the patent cliff between 2021 and 2025. That's a gut-wrenching 56% jump from the last five years.

But don't think for a second that they're just going to sit back and watch their profits go up in smoke. No sir, they're on the hunt for the next big thing, and they've got their sights set on some juicy targets – and biotech is at the top of their list.

Leading the biotech charge are mRNA pioneers Moderna (MRNA) and BioNTech (BNTX), each sitting on a gold mine of potential blockbusters taking on everything from flu to cancer vaccines.

Underdogs like CRISPR (CRSP) biotech stars Intellia (NTLA) and Beam Therapeutics (BEAM) are also squarely in Big Pharma's acquisition crosshairs for their cutting-edge work in genetic disease treatments.

But beyond the headliners, don't overlook the sleeper hits that could catalyze the next big boom.

Oncology, in particular, is a prime hunting ground, accounting for 37% of pharma M&A deal value in 2023 as the $392 billion global cancer drug market continues to boom.

Companies like Turning Point Therapeutics (TPTX) and Zentalis Pharmaceuticals (ZNTL), with their promising targeted therapies for various solid tumors, are particularly attractive prospects.

Mirati Therapeutics (MRTX), focused on KRAS inhibitors, and Blueprint Medicines (BPMC), specializing in precision therapies, have also caught the eye of big pharma with their innovative approaches.

Additionally, companies with late-stage assets like MacroGenics (MGNX), Mereo BioPharma (MREO), and Tyra Biosciences (TYRA) could offer promising near-term revenue opportunities for acquiring companies looking to bolster their oncology portfolios.

Close behind are rare disease treatments, snagging 16% of new drug approvals and 9 of the top 100 deals last year in this $262 billion market ripe for more growth.

This lucrative sector has captivated pharma giants, who see potential in companies like Sarepta Therapeutics (SRPT) and Vertex Pharmaceuticals (VRTX), leaders in rare disease therapies with strong financial performance and consistent growth.

Aside from these, smaller biotechs like Amicus Therapeutics (FOLD) and Ultragenyx Pharmaceutical (RARE), focused on developing innovative therapies for a range of rare diseases, are attracting attention for their potential to address unmet medical needs and deliver substantial returns on investment.

But the real wild card everyone wants a piece of is cell and gene therapies. This medical Wild West is projected to explode to $66.8 billion by 2030, with the FDA already greenlighting 6 cutting-edge therapies like next-gen CAR-T treatments from Caribou Biosciences (CRBU) in 2023 alone.

Notably, the buying frenzy is very much already underway. In fact, 2023 saw the biggest biotech M&A spree in a decade, with a staggering $122.2 billion changing hands as the FDA approved 50% more new therapies.

Pharma mega-mergers also hit $135.5 billion as firms raced to reload pipelines.

Interestingly, these deals are only the tip of the iceberg. As Wall Street predicts, with record-smashing deals, sky-high demand, and new approvals surging, "biotech's got plenty of reasons to be cautiously optimistic."

Especially if interest rates finally cooperate, throwing gasoline on the M&A bonfire and making biotech the belle of the ball as soon as late 2024.

So keep your eyes peeled and your powder dry. I suggest you add these innovative biotech names to your watchlist, and you might just discover the next blockbuster drug or breakthrough therapy that could reshape medicine – and deliver explosive returns in the process.

May 21, 2024

Biotech Letter

Mad Hedge Biotech and Healthcare Letter
May 21, 2024
Fiat Lux

Featured Trade:

(THE FAT’S IN THE FIRE)

(RHHBY), (LLY), (NVO), (AMGN), (VKTX), (PFE), (MRK), (SNY), (ABT)

The Fat's In The Fire

Biotech Letter

Well, well, well, look who's decided to crash the obesity-drug party. Roche (RHHBY), the Swiss pharmaceutical giant, has just unveiled some pretty impressive early-stage results for its weight-loss drug, CT-388. And let me tell you, this could be the start of something big.

Now, I know what you're thinking: "Another weight-loss drug? Yawn." But trust me, this is no ordinary contender.

In a small trial, patients who received CT-388 saw an average placebo-adjusted weight loss of 18.8% after just 24 weeks. That's right, 18.8%.

While it's hard to compare trials, experts are saying these numbers might even give Eli Lilly's (LLY) Zepbound, the current king of the market, a run for its money.

Let's take a step back and look at the bigger picture. The obesity drug market has been on fire lately, with everyone going gaga over these miracle pills.

Lilly and Novo Nordisk (NVO) have been dominating the scene with their drugs, Zepbound and Wegovy, but that hasn't stopped a whole host of other companies from trying to get a piece of the pie.

Merck (MRK), Sanofi (SNY), Abbott Labs (ABT), and Eisai have all tried their hand at weight-loss drugs and ultimately thrown in the towel.

More recently, Pfizer's (PFE) daily oral pill, danuglipron, has faced hurdles due to side effects. Amgen's (AMGN) drug, MariTide, is in Phase 2 studies and showing promise. And let's not forget Viking Therapeutics' (VKTX) VK2735, which has earned the nickname "twincretin" for its dual targeting of GLP-1 and GIP receptors.

So, what makes Roche's CT-388 so special?

Well, for starters, it's a GLP-1/GIP receptor agonist, which is similar to Lilly's Zepbound. In the Phase 1 trial, all participants achieved more than 5% weight loss, with 85% losing more than 10%, 70% shedding more than 15%, and a whopping 45% dropping more than 20% of their body weight. That's some serious weight loss.

Of course, there were some side effects, mainly mild to moderate gastrointestinal issues, but hey, that's the price you pay for looking fabulous, right? Roche is also testing CT-388 in patients with Type 2 diabetes, so stay tuned for updates on that front.

Now, I know you're all dying to know how CT-388 stacks up against the competition.

Notably, the drug's data looks strong compared to earlier studies of Zepbound. In fact, CT-388's efficacy results appeared "numerically higher" than Zepbound's.

But let's not get ahead of ourselves. Lilly still has a multi-year lead on Roche, so CT-388 isn't an immediate threat. However, it does suggest that the future of this rapidly growing market is up for grabs.

Now, let's talk about Roche. It’s the world's seventh-largest pharma company by market cap, sitting at around $205 billion. They pulled in $65 billion in revenue in 2023, second only to Johnson & Johnson (JNJ).

But here's the kicker—they've been struggling with growth, and their share price has taken a hit, down more than 25% over the past three years.

Contrast that with Eli Lilly and Novo Nordisk. Lilly's share price shot up 290% in three years, and Novo's climbed 226%.

Even though their revenues were less than half of Roche's in 2023, their market caps are sky-high. Why? Because of their blockbuster GLP-1 agonist drugs, Zepbound and Wegovy, which have shown jaw-dropping weight-loss results.

But could CT-388 be the underdog story Roche needs?

With the obesity market estimated to reach a staggering $100 billion by 2030, and over 1 billion people worldwide suffering from obesity, the potential is enormous.

Of course, there's still a long way to go for CT-388. Cross-trial comparisons can be tricky, and Roche's Phase 1 trial was much smaller than Lilly's pivotal study of Zepbound.

Plus, we don't have all the juicy details on patient characteristics, dose titration, and long-term weight loss just yet.

But here's the thing: Roche has scale and infrastructure on its side. It could potentially outmuscle smaller players like Viking and Boehringer Ingelheim.

And if CT-388 can match or even surpass the performance of current and future GLP-1 agonists? Well, let's just say those peak revenue forecasts might be in for a surprise.

So, is Roche the dark horse you should bet on in the obesity-drug race? If you're looking to get in on the action without paying the premium commanded by Lilly and Novo, or taking on the higher risk of smaller players, Roche might just be the ticket.

With promising mid-single-digit revenue growth on the horizon and a strong position in other areas like oncology and autoimmune disorders, Roche could be a smart play for anyone keen on the obesity drug market.

As for me? Well, you know I love an underdog story. And CT-388 might just be the Cinderella story of the year. I suggest you buy the dip.

April 11, 2024

Biotech Letter

Mad Hedge Biotech and Healthcare Letter
April 11, 2024
Fiat Lux

Featured Trade:

(BELLY BUSTERS)

(NVO), (LLY), (JNJ), (AMGN), (RHHBY), (GSK), (VKTX)

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