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  • Jonathan Poyer

XBI Testing Covid-19 Lows - The End Has to Be in Sight...Right?

It is downright spooky that the S&P Select Biotechnology Index is testing the COVID-19 lockdown lows and is essentially flat since 2014.

Biotech investors hoping for a Halloween treat were disappointed that the highly anticipated EMBARK study data from Sarepta's (SRPT) ELEVIDYS in Duchenne Muscular Dystrophy (DMD) did not meet the primary endpoint. SRPT thinks it still has a few tricks up its sleeve since several of the secondary endpoints suggested clinical benefit and they disclosed 'productive' talks with FDA about submitting the data for review.

In the meantime, FDA apparently passed out a few treats; specifically, Coherus Biosciences (CHRS) received approval for closely watched PD-1 antibody Loqtorzi in nasopharyngeal carcinoma (NPC). Some have been skeptical of approval given issues inspecting the manufacturing and clinical trial sites in China.

Day One Biopharmaceuticals (DAWN) was treated to receiving priority review upon FDA acceptance of the New Drug Application (NDA) for tovorafenib monotherapy in relapsed or progressive pediatric low-grade glioma (pLGG). The FDA is not currently expecting to hold an advisory committee meeting to discuss the application suggesting bear concerns over the plGG clinical trial data may be overblown.

Phathom Pharmaceuticals (PHAT) announced FDA approval of reformulated Vonoprazan tablets for VOQUEZNA TRIPLE PAK and VOQUEZNA DUAL PAK for the treatment of H. pylori Infection in adults that bodes well for the pending November approval decision in the more important erosive GERD indication.

Decipheria Pharmaceuticals (DCPH) treated investors to what appears to be the best in class treatment option for patients with Tenosynovial Giant Cell Tumor (TGCT). DCPH's Phase 3 pivotal MOTION trial met its primary endpoint with objective response rate (ORR) of 40% compared to 0% for placebo (p<0.0001) with an acceptable safety profile and only a treatment discontinuation rate of 6%.

Sanofi (SNY) decided to change up the typical un-eventful big pharma reporting experience by playing the trick of forecasting a FY24 revenue drop 9% below the street, reporting a Q3 miss and projecting a ramp in R&D spend. SNY shares traded down ~18%, wiping out over $20 billion in market capitalization.

In contrast, Novartis (NVS) offered the treat of foretasting profit growth and a $15 billion share buyback to be completed by the end of 2025 that helped buoy shares.

There is certainly a correlation between cost of capital and scrutiny of pharma business operations that is magnified with inverse scale. Case in point was Vyne Therapeutics (VYNE) that was trading at a ~$7 million market cap before announcing positive data from its Phase 1B trial evaluating once-daily dosing of VYN201 in patients with nonsegmental vitiligo, a private placement of $88 million and new preclinical data showing the positive effect of its oral small molecule BD2-selective BET inhibitor, VYN202, in preclinical models of psoriasis and rheumatoid arthritis.

The writing is on the wall for the legions of high-priced private companies to take off those valuation costumes as the party is officially over.

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