Last week, Mr. King put thought to paper coming away from the JPMorgan Healthcare conference, where exhuberance for biotechnology equities was palpable. If you missed it, it’s worth a read. (“What Does it Mean When EVERYONE’s Optimistic About Biotech Stocks?”)
With the conference wrapped last Thursday, the highest fliers in the weeks ahead of JPM are seeing some meaningful pressure. Immuno-oncology and gene therapy stocks are taking the brunt of the selling, even as biotech indices (the IBB and XBI) have continued to grind higher in the wake of JPM. The iShares NASDAQ Biotechnology ETF (IBB) and SPDR Nasdaq Biotech ETF (XBI) were already up 7% and 14%, respectively, in the 45 days leading up to JPM. Names like Kite Pharma (KITE), Juno Therapeutics (JUNO), Avalanche Biotechnologies (AAVL), and Bellicum (BLCM) are all off nearly 20% in the last week. It’s names like these, and many more, that investors should keep an eye on for attractive opportunities.
Here’s another great post-JPM datapoint, as pointed out by private investor Brad Loncar on his blog this Friday: in the week since JPM finished up, biotechnology companies have raised almost $2.7 billion cumulatively in 16 seperate secondary offerings. Clearly, interest in the sector hasn’t cooled off.
We published a fresh look at the “new” Tekmira Pharmaceuticals (TKMR) on Friday, which is emerging as a front-runner among hepatitis B drug developers following a merger with OnCore Biopharmaceuticals last week. With hepatitis C now dominated by Gilead’s (GILD) Sovaldi and AbbVie’s (ABBV) Viekira Pak, investors turned in 2014 to the unaddressed Hepatitis B landscape. Arrowhead Research (ARWR) was a crowd favorite last year, but the privately held OnCore Biopharmaceuticals, founded by some of Sovaldi’s inventors, was a much-antitcipated IPO in 2015 and had many investors intrigued.
Last week, Tekmira and OnCore announced a planned merger, creating what we see as the most diverse HBV pipeline in the public realm (and private, for that matter). In SEC filings that emerged this Friday evening, it became apparent that the discussions between Tekmira and OnCore began late in October of 2014, and OnCore had planned to file for an IPO in early January. Merging with Tekmira, rather than an IPO, should be viewed as significant validation for TKMR and its LNP technology. The Tekmira-OnCore HBV pipeline consists of eight seperate mechanisms, all early-stage, but making for a diverse pipeline. You can read Zack Fink’s take on the emerging company and understand why combination regimens will be key to treating HBV, by clicking here.
Also on the topic of HBV, revisit our November report on GlobeImmune (GBIM). Gilead Sciences partnered with GBIM on the development of GS-4774, a product candidate designed to improve the body’s immune response to HBV. Gilead is running two large phase 2 trials, with data due in the first half of the year. GlobeImmune is a tiny company with an intriguing and overlooked approach to treating the virus. Click here to read more, free.
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One or more of PropThink’s contributors are long TKMR, GILD, JUNE, BLUE, KITE, BLCM, or GBIM.
