October 19th Biotech Update

The market has not done too bad this week.  If I take a step back I would almost be tempted to say that the sector is holding support around these levels.  Obviously we can still break down if the market restarts its move lower but given at least a benign broader market, I think the sector might be able to get some little momentum to the upside but that remains to be seen.


  1. MGNX signed an interesting partnership with GILD. This is not a massive needle mover but there have been concerns about the cash level of MGNX and its ability to get to the major catalyst of the Phase II/III interim readout of the Tamarack trial of MGC018 in mCRPC.  The deal with GILD is for MGD024 as well as two unnamed targets/drugs (preclinical).  GILD did not buy the rights but the right to opt into these programs in the future.  What is nice is that the deal does have $60M upfront, which helps assuage the cash concerns of MGNX.  I do not think that enough would be able to get to the interim without concern but there are $1.7B in development, regulatory, and commercial milestones.  Depending on the opt-in payments and when they occur, this deal could be enough but I think people would be more confident if they monetize at least one more of their non-core assets.  So it is a good deal that helps and hopefully a couple more are on the way.


  1. The SRPT SRP-9001 updates at the World Muscle Society were good. These are from the phase I/IIa trial with a 4-year follow up.  While it is only four patients, they all maintained their functional improvements from the baseline.  The trial was not placebo controlled but a external control group of 21 patients showed a statistically significant separation.  So the caveat of small numbers and match controlled studies all apply but this is the longest term follow up and to see the improvements maintain is encouraging.  This is not going to turn any bears into bulls but this is what the bulls want to see from SRP-9001.  A long follow up that maintains efficacy and no new safety concerns.  Good data but not thesis changing.



  1. JNJ reported a strong earnings but what is interesting is the change the in the other oncology revenue. This increased to $92M from $57M (an increase of $35M).  This gave us a hint of the potential Carvykti (LEGN/JNJ BCMA CART) revenues.  Last quarter Carvykti was 42% of other oncology revenues, which implies $38.6M this quarter.  LEGN release an 6-K and reported $55M in net sales.  That is well above the consensus of $41M.  I still think we are in the growing the market phase of the BCMA CART as opposed to the competition phase.  Eventually, the market will be grown out and then the two will begin competing but I suspect we see another strong print by BMY later for their BCMA CART (although one could modestly increase the chance of a surprise to the downside as we get to the competition part earlier than expected but that is not my base case).

I will end it here as we hope to continue the recent momentum for the sector.  I hope everyone has been having a good week.


Disclosure: Long MGNX and BMY

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