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Quantum Computing in Biotech

When you think of the pioneering biotech, Moderna (MRNA), artificial intelligence (AI) and quantum computing might not be the first things that come to mind. Instead, you might associate Moderna more with its work in traditional laboratory research and as a leading coronavirus vaccine manufacturer.

However, Moderna has taken significant strides into the realm of AI. In fact, the biotech utilized AI during the early stages of developing its coronavirus vaccine and has also implemented the technology for other business purposes.

Now, Moderna is taking things a step further by partnering with International Business Machines (IBM) to explore the potential of AI and quantum computing in enhancing its messenger RNA research.

Needless to say, this innovative collaboration could potentially revolutionize the biotech industry.

To understand Moderna's recent developments in AI and quantum computing, it's important to first have a grasp of its mRNA technology.

Unlike traditional vaccine production that involves growing viruses in a lab, Moderna produces mRNA that provides the body with instructions to treat or prevent a particular illness. This innovative process is already faster than traditional vaccine production methods. But AI has played a significant role in making the process even faster.

Moderna has been able to leverage AI and automation to scale up mRNA production significantly. In fact, the company's mRNA production for experiments went from about 30 per month to 1,000 per month thanks to AI. Additionally, AI has contributed to the generation of more effective mRNA sequence designs, saving researchers considerable time.

Let's now take a closer look at the implications of Moderna's partnership with IBM.

One of the primary areas of focus is IBM's generative AI for therapeutics, which has the potential to provide Moderna researchers with a deeper understanding of molecular behavior, facilitating the development of new molecules for therapeutics.

Moreover, IBM's expertise in quantum computing could prove invaluable in speeding up the discovery of new treatments, enabling Moderna to push the boundaries of medical research and improve patient outcomes.

Quantum computing differs from traditional computing in its use of a system that allows for states beyond the binary 1s and 0s. Quantum computers can understand information as 1, 0 or something in-between, offering the potential for individual bits to be in multiple states at the same time. This characteristic may be beneficial in modeling the dynamic interactions among drugs, enzymes, cells, and proteins that are continuously changing.

The use of advanced systems in molecular modeling has been challenging for earlier generations of hardware. However, the incorporation of quantum computing could revolutionize the way biotech companies solve these complex problems.

As a starting point, Moderna will be part of IBM's enterprise accelerator program, which provides a platform for "quantum curious" companies to invest in building their expertise in emerging areas. This program gives access to IBM's network of computing systems and specialized training on the use of quantum computing for life sciences research.

As part of this collaboration, Moderna will gain access to MoLFormer, a powerful AI model that can accurately predict a molecule's properties. This tool will prove particularly valuable in Moderna's efforts to improve the lipid nanoparticles that encapsulate its mRNA treatments.

Additionally, the partnership includes investments in generative AI programs that will assist in the design of innovative mRNA-based treatments and vaccines, helping Moderna to further cement its position as a leader in the biotech industry.

IBM had previously attempted to make a name for itself in AI-powered drug discovery, offering services through its Watson platform.

However, these offerings were ultimately discontinued in 2019. Despite once partnering with major names in cancer research such as Pfizer (PFE), Novartis (NVS), Illumina (ILMN), as well as Teva (TEVA) for drug repurposing, IBM has shifted its focus to other areas of the life sciences industry.

As quantum computing technology continues to evolve, however, its potential applications have begun to attract some of the biggest names in biotech.

Companies like Novo Nordisk (NVO), Roche (RHHBY), and Boehringer Ingelheim have partnered with industry giants like Google (GOOGL) to explore the possibilities of this cutting-edge field, which is quickly moving from the realm of science fiction into a scientific reality.

As for the question of whether these moves can be a game-changer for Moderna, the answer is likely yes.

Moderna has already experienced significant benefits from AI in its processes, both in and out of the lab. With access to IBM's platforms, there is potential for further improvements in the company's research and development of new treatments and vaccines.

Efficiency, speed, and precision are crucial factors in drug and vaccine development, and any improvement in these areas could have a significant impact on Moderna's success. Although the results of the IBM partnership may not be immediately visible, Moderna's investments in AI and quantum computing could pay off in the long run.

With continuous innovation and portfolio expansion, Moderna is well-positioned to capitalize on market opportunities presented by mRNA technology and achieve substantial revenue growth in the years ahead.

Therefore, investors should not be overly concerned about short-term stock price fluctuations or declines in revenue from coronavirus vaccines. After all, Moderna has a robust pipeline and has demonstrated significant potential with promising clinical trial results.

Hence, investors should consider Moderna as a long-term investment opportunity, making it a valuable addition to any investment portfolio.

 

moderna ai

 

Mad Hedge Fund Trader

March 28, 2023

Mad Hedge Biotech and Healthcare Letter
March 28, 2023
Fiat Lux

Featured Trade:

(NOWHERE TO GO BUT UP)
(REGN), (SNY), (RHHBY)

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Nowhere To Go But Up

For any biotechnology company, one of the critical elements of success is the capability to create and develop new and innovative treatments.

That is one requirement Regeneron (REGN) has no trouble meeting.

The latest update from this biotech involves its blockbuster asthma medication, Dupixent. The top-selling drug delivered promising results from a study that aims to expand its indication, signifying the potential for additional billions of dollars in revenue.

According to Regeneron and its co-developer, Sanofi (SNY), the Dupixent trial on current or previous smokers displayed a 30% reduction in moderate or severe acute exacerbations of chronic obstructive pulmonary disease (COPD).

COPD is a lung condition that makes it difficult for air to move in and out of the lungs due to the narrowing of the airways. It's is caused by long-term exposure to irritants such as cigarettes, coal, and other pollutants. It can be fatal and life-threatening. There is no cure for COPD, but treatments may help improve symptoms and slow down the progression of the disease.

The market for COPD is estimated to grow significantly over the next five years due to the increasing prevalence of COPD and related comorbidities, such as asthma, cardiovascular diseases, and diabetes.

Additionally, factors such as continuous growth in the elderly population and the introduction of novel therapies are likely to drive the growth of this market during the forecast period. The global COPD market was valued at $27 billion in 2018 and is expected to reach $50 billion by 2025 with a compound annual growth rate of 8.5%.

Considering Dupixent’s positioning in the market and the competitors for this segment, Regeneron is projected to rake in an additional $4 billion in sales from this expanded COPD indication. Taking all its indications together, this blockbuster drug is estimated to contribute a whopping $19.2 billion in the company’s sales.

Aside from Dupixent, Regeneron has also aggressively expanded the indications for another blockbuster drug, Eylea.

In February, the company submitted its application to the Food and Drug Administration to allow them to administer Eylea in 8-milligram doses.

Eylea is a medication used to treat wet age-related macular degeneration (AMD), diabetic retinopathy, and diabetic macular edema. This treatment is typically administered via an injection into the patient’s eye once every two or four weeks, depending on their condition.

In terms of revenue, the wet AMD market is expected to grow significantly over the following years. This growth is driven by the climbing number of cases and the prevalence of associated comorbidities like diabetes and hypertension. In 2018, the global wet AMD market was valued at $17 billion. This number is anticipated to reach $28 billion by 2025.
Going back to Regeneron, the company’s move to increase the formulation of Eylea from 2 mg to 8 mg is critical. This will enable patients to undergo fewer injections of the treatment from 8-week intervals to 12- and even 16-week intervals, which would be a key selling point.

Another excellent reason behind this move is that Eylea’s patent expires in 2023, making it a target for biosimilar competitors. Regeneron’s decision to switch to a higher dosage formulation is a strategic way to sidestep this impending concern.

On top of blockbusters Eylea and Dupixent, Regeneron is also charging headlong on efforts to expand its immune-oncology franchise. Its top treatment in this field, Libtayo, is slated for multiple clinical trials to expand its indication. In addition, Regeneron has seven or so candidates queued in this lucrative but crowded space.

While Roche (RHHBY) has more candidates than the biotech in the immuno-oncology field, Regeneron’s speed in capitalizing on opportunities in this fast-advancing sector is nothing short of breathtaking. Given that immuno-oncology is a relatively new segment, the company’s ability to deliver promising results enables it to stand out in the biotech world.

Regeneron is a beacon of stability in an otherwise unpredictable industry, steadily ascending since its inception. But the stock’s continued success isn't just luck. Their past successes with their treatments and medicines have placed them on solid ground to continue advancing, while further wins through the widening use of approved drugs have only reinforced that position - setting up Regeneron for continued growth into the future.

 

Mad Hedge Fund Trader

March 21, 2023

Mad Hedge Biotech and Healthcare Letter
March 21, 2023
Fiat Lux

Featured Trade:

(A BUMP IN THE ROAD)
(SRPT), (BIIB), (VRTEX), (RHHBY)

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A Bump In The Road

Little Orphan Annie had already predicted it: “The sun will come out tomorrow.” While it is disheartening that we’re still in a bear market, stocks will bounce back eventually.

It looks like Wall Street overreacted once again following the change in leadership in the Food and Drug Administration earlier this month. Dr. Billy Dunn, the public face of the highly controversial accelerated approval granted to Biogen’s (BIIB) Alzheimer’s disease drug and the standard bearer of the organization’s push for more flexibility on drug approvals, retired.

Biotech investors have expressed anxiety over the possibility of facing more stringent rules in the drug approval process. The fear is that Dunn’s departure would signify a step toward a more conservative handling of applications.

While the FDA assured the public that the approval process would likely remain the same, some notable decisions are proving otherwise.

One of them involves Sarepta Therapeutics (SRPT).

Sarepta Therapeutics is a biopharmaceutical company that focuses on developing and commercializing RNA-targeted therapies for rare neuromuscular diseases. Founded in 1980, this Cambridge-based company’s most notable drug is Exondys 51 (eteplirsen), used to treat Duchenne muscular dystrophy (DMD), a rare genetic disorder affecting muscle function.

Exondys 51 is designed to skip over a faulty section of the dystrophin gene, which helps to produce a functional protein that can slow the progression of the disease. Sarepta is also developing RNA-targeted therapies for rare diseases, such as limb-girdle muscular dystrophy and myotonic dystrophy. Since then, the company has earned additional approvals for Vyondys 53 and Amondys 45.

Basically, Sarepta is to DMD as Vertex Pharmaceuticals (VRTX) is to cystic fibrosis—both have virtual monopolies in their target markets.

Recently, though, Sarepta stock has started to fall. This came after the FDA announced its plan to seek additional input from a panel of independent experts regarding the company’s new DMD gene-therapy candidate: SRP-9001.

The move came as a surprise since Sarepta disclosed only a week or so ago that the FDA had no intention to convene an advisory board to evaluate the candidate. However, since SRP-9001 is one of the first-ever gene therapies biologics license applications built on a surrogate perspective, meaning it’s an alternative to clinical results, the FDA felt the need to add a layer of review.

Still, the fall in Sarepta’s share prices appeared to be yet another overreaction. Besides, the move was not triggered by any issue with the candidate or data from the trials. It was simply a precautionary measure. Despite the slight detour, Sarepta remains optimistic that it will receive the go signal for SRP-9001 by May 2023.

Prior to this, Sarepta shares have been beating the market since 2023 started and have recorded more than double increases in the last five years. Although the company does not enjoy the same name recall as several of its peers, Sarepta’s platform of promising and innovative treatments has delivered critical wins in the past, especially in the DMD market.

On top of its DMD-centered products, Sarepta has over 40 clinical programs. That’s impressive for a biotech with an $11 billion market capitalization.

More importantly, the latest catalyst for Sarepta, SRP-9001, is projected to become another blockbuster. This Roche-partnered (RHHBY) treatment is estimated to generate more than $4 billion in peak sales.

Notably, this particular DMD indication has been shown to exhibit an extremely high barrier to entry, with practically all experimental treatments falling apart in clinical trials. Needless to say, SRP-9001 would have an exceedingly high commercial ceiling plus a built-in competitive moat.

Investors can expect remarkable progress from Sarepta as a company and its programs in the next five years. Given the company’s track record and history, it won’t be farfetched for it to come up with more blockbusters soon.

 

sarepta company

Mad Hedge Fund Trader

January 26, 2023

Mad Hedge Biotech and Healthcare Letter
January 26, 2023
Fiat Lux

Featured Trade:

(SLOW AND STEADY WINS THE RACE)
(REGN), (SNY), (RHHBY), (BAYN)

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Slow and Steady Wins the Race

If you are on the lookout for stocks that have the potential to deliver dramatic gains right away, you’d be hard-pressed to find a better place than the biotechnology industry.

Hardly a month passes without at least one or two biotech names skyrocketing or tumbling thanks to updates about clinical studies. And this year won’t be any different for this group.

A particular biotech to keep on an eye on is Regeneron Pharmaceuticals (REGN).

This 2023, Regeneron has several upcoming trial readouts that could potentially push its stock price to an all-time high. The earliest update to watch out for involves its anti-inflammatory drug Dupixent, which is already a leading treatment for asthma and eczema.

Gaining its first approval back in 2017, Dupixent has been generating over $7 billion in sales every year for both Regeneron and its co-developer, Sanofi (SNY).

Riding this momentum, Regeneron stock could climb higher courtesy of the upcoming results of experimental studies with Dupixent and patients suffering from chronic obstructive pulmonary disease or COPD.

Based on data from the World Health Organization, COPD is the third leading cause of death across the globe. Despite this, there remains a shortage of effective and accessible treatment options for patients. Needless to say, this represents an untapped potential market and a promising fresh revenue stream for Regeneron.

Meanwhile, another product in Regeneron’s portfolio could soon get a shot in the arm. After struggling with unimpressive results in the earlier months of 2022, the company’s shares soared around September. As expected when it comes to biotechs, this type of double-digit percentage is triggered by positive clinical updates.

For Regeneron, the trigger was Eylea.

Aside from its blockbuster drug Dupixent, Eylea is another top-selling product of Regeneron. It is a rare eye disorder treatment that it developed with Bayer (BAYN). Recently, Regeneron disclosed that Eylea proved to be effective in a Phase 3 clinical study that justified a higher dosage of the treatment.

For years, Eylea has been a generous cash cow for the companies. Now, it could become an even more lucrative source. However, this development is even more critical for Regeneron because Eylea’s patent exclusivity is set to expire in 2024.
With the recent development, the company could easily apply for an extension of patent protection, which is obviously excellent news for Regeneron and its shareholders.

This news could not have come at a more timely period since Regeneron stock started tumbling following the biotech’s report of lower sales for Eylea in the fourth quarter of 2022.

In a preliminary report on its fourth-quarter earnings, Regeneron shared that the sales for Eylea during this period only reached $1.5 billion, which fell short of the $1.64 billion expectation from analysts.

The disappointing update scared off some shareholders and caused interested investors to think twice before putting their money in this company. However, these results were justifiable since they coincided with the launch of a rival drug treatment, Vabysmo from Roche (RHHBY).

Nonetheless, Regeneron remains a good investment in these turbulent times. Despite the challenges, its products, especially Eylea and Dupixent, continue to deliver solid financial results.

More importantly, the company has several promising pipeline candidates. To date, Regeneron has roughly 40 clinical trials ongoing, with a quarter of these queued for Phase 3 studies. This indicates the company’s capacity and plans to extend its lineup to launch brand-new treatments.

Meanwhile, it has also been working on label extensions for its already successful products, as seen in its efforts with Dupixent and Eylea.

With these solid products in its portfolio and other promising candidates for regulatory approval this 2023 and early 2024, Regeneron looks ready to deliver solid results in 2023 and beyond. Even if it doesn’t, the company is equipped with the tools to keep churning out strong returns in the long run. I suggest you buy the dip.

 

biotech

Mad Hedge Fund Trader

September 27, 2022

Mad Hedge Biotech and Healthcare Letter
September 27, 2022
Fiat Lux

Featured Trade:

(LAST CHANCE AT SALVATION)
(BIIB), (ESALY), (RHHBY), (LLY), (NVS), (AMGN), (REGN), (BMY), (ABBV), (MRK), (PFE)

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Last Chance at Salvation

Biogen (BIIB) is taking another crack at Alzheimer’s. This is a crucial moment for the biotech following its move to abandon its plans to market Aduhelm, another Alzheimer’s treatment after healthcare insurers refused to pay for it despite gaining FDA approval.

The moment of truth will come this fall when Biogen and Eisai (ESALY) are anticipated to share the results of their massive trial created to determine whether lecanemab, their latest candidate for Alzheimer’s, can deliver its promise to decelerate the progression of the neurodegenerative condition in early-stage patients.

Needless to say, an effective Alzheimer’s drug would not only bring incredible development and hope for patients and their loved ones but also offer a much-needed reprieve for Biogen.

Success would push the biotech to pursue a quick turnabout, with Biogen and Eisai already planning to request an accelerated approval. If the Phase 3 data turns out promising, then the next move would be to clear the way to get Medicare coverage, ensuring that the Aduhelm debacle won’t happen again.

In terms of market opportunity, treatments like lecanemab can rake in over $20 billion in sales in the United States alone.

Still, investors remain cautious. After all, betting on a positive result of an Alzheimer’s trial has proven to be a wrong move in the past—a sentiment that’s apparent in Biogen’s beaten-down price these days.

When Aduhelm gained approval in June 2021, Biogen’s shares climbed almost 40%. Unfortunately, the price steadily fell as the biotech encountered roadblock after roadblock since the drug’s approval and commercialization.

Last year, Biogen shares rose from $270 to hit $400 following Aduhelm’s approval. These days, the biotech has been trading at roughly $205. That’s about 40% below its price in 2018.

By April 2022, Biogen threw in the towel when Medicare flat-out rejected any request to pay for Aduhelm.

More than that, though, Biogen’s results for its lecanemab trial could spell the difference for other Alzheimer’s drugs in late-stage development, including the candidates from Roche (RHHBY) and Eli Lilly (LLY).

What would happen if Biogen fails again?

A failure would make the beginning of a new period for the biotech. Looking at Biogen’s pipeline and portfolio, it’s clear that the next move would either be to sell off pieces of the company or become more aggressive in pursuing mergers.

With the primary business unable to deliver, the expectations shift to the pipeline to pick up some slack. Unfortunately, Biogen’s lineup looks underwhelming. Its disastrous Aduhelm project caused too much damage to the biotech’s finances, restricting its clinical trials.

While Biogen remains the biggest pure neurology biotech thus far, this position is under attack, and its pipeline seems too slow to react in the wake of back-to-back failures.

Reviewing Biogen’s pipeline in Phase 3 trials does not show any candidates that stand out as groundbreaking or transformative. None has the capacity to anchor the company anytime soon.

Apart from that, Biogen is facing fierce competition in its other treatments, including its MS portfolio from the likes of Novartis (NVS), Amgen (AMGN), and Regeneron (REGN).

Meanwhile, more and more pharma names are challenging its neurology drugs like Bristol Myers Squibb (BMY), AbbVie (ABBV), and Merck (MRK). Even Pfizer (PFE) is making a play in this sector with its plan to acquire neurology biotech pure-play Biohaven.

Given Biogen’s track record, the best thing to do right now is to sit and wait until the data are out. If the data turns out positive, then the opportunity would be massive enough for investors to buy in later.

Besides, Eli Lilly and Roche will also release their results in the following months. Those will offer a clearer path and better flesh out the picture of the future of this segment. Most importantly, these will provide investors with safer options to make their bets.

 

biogen alzheimers

Mad Hedge Fund Trader

September 13, 2022

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

Featured Trade:

(A CROWN JEWEL SCORES A GOAL)
(REGN), (BAYRY), (RHHBY), (SNY), (ALNY), (NTLA)

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