Free Post: January Performance Update
2025 "No Trades" Portfolio so far: +1.56% vs. XBI: -1.49%.
Hi everyone! This is a 100% free post for all subscribers. If you enjoy my writing and have been reading the intro to the paywalled articles every week, may I suggest subscribing so you can receive 1 to 2 full articles weekly in your inbox? What could even one idea be worth to your biotech investing portfolio? The paid tier is only $10/month.
Post Info: Word Count of 2,283 words, Reading Time of 11 minutes
On December 18, 2024 I did a free post called My 2025 “No Trades” Model Portfolio. The goal of this post was to create a long-only portfolio and attempt to smash the benchmark XBI index over the course of 2025 without making one trade.
Now actually it would have been better to publish that post on New Year’s Eve night and publish this one on the last day of January for true monthly performance.
But no one reads posts on NYE night or on the last night of the month so here we are!
It has been 42 days since I hit publish, so, how am I doing? And why?
My performance: +1.56%
XBI performance: -1.49%
Dollar value increased from $999,988 to $1,015,593.
So what worked and what didn’t?
Going in order of best performance to worst performance:
Surprisingly, the best performing stock has been DCTH 0.00%↑ - I say surprising because I considered leaving it off this list at one point…it had run up some into the end of 2024 and I was worried about slow site activation and increasing competition in mUM. But it turns out by reaching profitability and having investors exercise their warrants at the $10 strike price investors are no longer worried about funding or dilution. And I guess that uncertainty had been weighing on the stock. They have a clinical trial catalyst this year with the CHOPIN trial, too. Good data there could potentially move them up the lines of therapy in the mUM guidelines to be used in combination with immunotherapy. The annual cost of this treatment is high but the results in the real world seem even better than the pivotal trial and this is a niche indication with highly informed providers and patients. Delcath is one of the great comeback stories in biotech but you don’t see journalists write much, if anything, about it. I guess negativity sells to some extent! I have no idea how this will perform the rest of the year. I couldn’t have imagined a $500 million market cap valuation when this was a penny stock. But then again this valuation is basically pricing in $100 million/year sales and they are already annualizing at $60 million per year. I would say it’s just slightly undervalued currently but if the CHOPIN trial is extremely positive and pushes providers to use this sooner, then yeah it can go much higher in 2025.
VRNA 0.00%↑ has just been posting monster numbers since starting their launch, albeit, in only two quarters. This is honestly kind of a head scratcher because the company always touted how little innovation there had been in COPD, their label which allowed them to be used no matter the patients’ background therapy, how little penetration they would need to become a blockbuster, how the nebulized formulation could actually be an advantage for reimbursement and launch…but I guess no one listened and were just content to chase it after the first full quarter of good sales? It’s been a monster winner so far for anyone who bought when the great FDA labeling language was released. That said, at a $4.5 billion valuation it’s maybe a little bit stretched? I’m lightening up slightly in my personal portfolio. Then again, with a $10 billion+ addressable market, it’s not that crazy of a valuation? Either way this is the No Trades portfolio so it stays at 10% weight until December 18, 2025! Obviously, an incredibly logical M&A target as well which is surely driving a lot of the buying.
Third is EOLS 0.00%↑ and I’m feeling very vindicated here! I was pretty out on a limb with this one as the only feedback I got was bearish. Recently, they reported not only excellent Q4 2024 results but very nice 2025 guidance AND unexpectedly announced that the filler line should be approved in the next 90 days. I’ve sent a few DMs on this but the filler line is quite literally a game changer for the company. It enables bundling and rebates, gives the sales force another thing to put in their bag at no incremental cost, and the is a truly differentiated product in the 2nd largest segment in aesthetics. (Neurotoxins a.k.a. “Botox” which Jeuveau competes with is the first.) Expect a full-length article when the filler line is approved but I still feel this company is very, very cheap.
Let’s move quicker down the list now.
PODD 0.00%↑ at a 2% weighting isn’t going to get a lot of discussion and frankly maybe I should have just have left it off as the smallest holding but I almost hold it up as a shining example of how big a truly innovative company can grow without needing M&A. They have remarkable technology and aren’t done growing the top line, not even close. Decently full valuation though for the time being.
VYNE 0.00%↑ is up slightly so far but all eyes will be on the mid-2025 readout in nnsegmental vitiligo. JAK-like efficacy or better with a once-daily topical product profile and without the black box warning is the goal. Probably will be in a holding pattern until then but I like the reward/risk ratio. Still I only weighted it at 4% due to the binary nature of the readout and just wanting to avoid binary events in general if possible to focus instead on more safe commercial names. Fingers crossed here!
KNSA 0.00%↑ had very bullish ARCALYST sales guidance for 2025 and it feels like that will almost certaintly be a blockbuster product eventually but between the 50/50 profit split with Regeneron that deters M&A and a light pipeline with only one asset that might not have data until late 2026 or 2027 this stock languishes. I don’t really see a catalyst ahead if the market won’t care about excellent sales numbers. In fact, now they just risk surprising to the downside on future earnings so maybe not the best setup. Honestly, wish I probably would have left this out of the No Trades portfolio with what I know now. It’s cheap…but it could get much cheaper before an incremental buyer like a large hedge fund starts to really care and load up.
SRRK 0.00%↑ upgraded their SMA peak sales guidance from $1 billion to $2 billion at JPM and the market…didn’t care at all? To be fair, it’s not the absolute bargain it was post-data but it is kind of curious how little reaction there has been. I guess the market was already pricing that in? If that were the case then that would mean there is very little priced in for the upcoming obesity trial readout. But I am pretty sure that’s NOT the case. So a curious situation here. Probably won’t do much until that Q2 obesity readout.
SWTX 0.00%↑ had an excellent presentation at JPM but another case where the market completely shrugged off what was said. Luckily, this is a company that DOES have lots of catalysts in 2025 starting with their second drug (hopefully) being approved in February. If they execute like they guided at the conference, no reason this shouldn’t be much higher by the end of the year. Dare I say: much, much higher.
ARQT 0.00%↑ reported another great quarter for Q4 2024 but no breakdown of where in the product line the sales are coming from. So that will be interesting to see on the earnings call. This went on a monster run at the end of 2024 so even with the pullback in 2025 it’s not super cheap but they could have real operating leverage if they get four indications approved for the ZORYVE line and reach profitability within the next few quarters. Heck, they could even look at doing dermatology M&A and they have a pipeline readout coming, too. But the stock has almost doubled since I started writing about it so I have to preach some caution. It’s not the slam dunk no-brainer it was when the Seborrheic Dermatitis launch showed outright signs of being a hit. But there could be further upside depending on what peak sales projections are looking possible by the end of the year.
NRIX 0.00%↑ is a frustrating case because their data is unquestionably good but I don’t know what will differentiate them from the competitor Beigene drug and vice versa. The market seems just as confused and content to put Nurix in a holding pattern until further data from both companies. Even then I expect the efficacy and tolerability will look very, very close across datasets. So what moves it higher? Honestly no idea. Another one that probably could have been left off, in hindsight.
EWTX 0.00%↑ will have a very important cardiovascular data update soon. Based on my analysis of JPM Q&A this is what is really moving the stock up and down. In addition, the Becker Muscular Dystrophy Phase 2 data will go to the FDA to determine if they will allow Accelerated Approval. I can’t say I have a strong read on that, it feels like a 50/50 proposition but hopefully EWTX continues to provide excellent hypertrophic cardiomyopathy data and clarity on the broadening cardiovascular pipeline. If they do that it will provide a floor under the stock and BMD can provide pure upside from that base. FWIW, I think the FDA *should* give them Accelerated Approval in BMD based on their history of regulation in rare disease, the totality of the data (including the natural history and open label trial data), and their own draft guidance - but I admit I’m completely biased so we will see what actually does happen in the next 5 months. Good cardiovascular data in March could do a lot to easing my worry about what happens on the muscular dystrophy side.
CGEM 0.00%↑ - I’m just waiting and waiting here. There is really nothing to move the stock ahead of the major, major Systemic Lupus Erythematosus data in Q4 2025. But it’s trading at or slightly below cash. So as far as binary setups, that’s relatively “safe”…and I guess between now and Q4 some of their oncology assets could have incrementally positive data. But really not a lot to say here for the next 9 months otherwise. And that’s why owning this is an exercise in frustration. ☺️
CELC 0.00%↑ - Speaking of waiting on a binary readout, this just drifts down heading into two monstrous binary Phase 3 readouts. There are other bear theses around the administration of the product and competitive landscape but I’m going to wait to write an article only if/when Celcuity reports a positive Phase 3 readout. I still have faith here but the stock action is not particularly encouraging. It was sized at 4% due to the enormous risk here but would love to add in my personal portfolio if they had home run data and the market didn’t react much. This company gets absolutely no respect from specialists so, hey, maybe I’m the stupid one here. We’ll see!
APLS 0.00%↑ - Apellis is absolutely the biggest headscratcher on here. I’m close to literally banging on the table to advocate for it. Down 13% despite nothing but positives for the stock recently. I think I kind of love it here…? They have done a great job keeping expenses flat, can take a real leadership position in Geographic Atrophy, the C3G & IC-MPGN launches could potentially be huge, and they are starting to develop pipeline beyond those products even. I know hedge funds were in this name pretty large already and are down on their position but this seems like a great time to double down. I wouldn’t be surprised to see all-time highs in the next few years.
Yeah, I said it!
AVDL 0.00%↑ - Nothing to say but I was wrong here and I gotta own it! They are leaking patients with unexpectedly high discontinuations and flattening starts…the departure of their CCO should have been a warning that I heeded. I hope they can turn it around but since they haven’t given a reasoning why this is happening it’s hard to have faith they will. The guidance was really, really disappointing. Prove me wrong!
So that’s the 2025 “No Trades” portfolio so far.
If you made it this far you also probably know that I did a post on a mystery stock on January 10. The stock is -11.4% since then. I’m including it here to be open and honest…it’s only been 18 days since publication and I’m still a believer despite some minor frustrations with the company! Eventually I’ll reveal the name for the free subscribers but I want to keep incentives for you to subscribe to the paid tier so I can make this a sustainable and lasting venture. I strive to have an open and honest track record and hope you consider subscribing to the paywalled posts, which happen weekly! It’s only $10 per month!!! You know the spiel, two cups of coffee, etc…
I will be writing up a few near-term catalysts in the next month that I think are really promising along with some newer ideas and adding further color to some concepts I alluded to above…never a better time to hop on board! Okay, that’s my hard sell.
Thanks for reading,
Matt