I wrote a book on biotech investing! Here are two free chapters for you to sample.
Hi everyone! I haven’t sent an email out in over a year so allow me to reintroduce myself…this is Matthew Gamber from Matt’s Biotech Newsletter.
I know it is a little disorienting to get an email from a list if you don’t remember signing up so feel free to unsubscribe if you wish.
I have always tried to be judicious in sending my list emails and, since I haven’t done any write-ups in a long time, you haven’t heard from me. Now that changes.
Over the last four months I have been working on a book about biotech investing where I basically tried to download every thought I had in my head on the companies I follow closely. The book contains 14 detailed write-ups on companies I think are interesting plus 26 “capsule” sections with a shorter brief thoughts on where the companies stand right now and why I didn’t write more on them
I call the book “Biotech Investing For Massive Growth” because even though I know all 14 companies won’t work out I feel the ones that do have massive growth potential from where they sit now in this bear market.
The book is only $10 and is available from Amazon here.
(I also plan on releasing a paperback version before the holidays if you wish to give as a gift!)
I think the book is a great value for the money but I wanted to give you the opportunity to judge for yourself. At first, I was going to send out one sample chapter to my subscribers, the chapter on Point Biopharma (PNT).
But with Milestone Pharmaceuticals (MIST) releasing data yesterday and them being one of the chapters in the book I decided I might as well send that sample chapter out, too, especially because it has writing on the commercial possibilities for the drug. So with two chapters to read, I feel you can make a really fair assessment if you’ll like the book or not.
If you don’t like these two chapters, don’t buy the book! But if you enjoy them, I am quite confident you will like the book and be happy with your $10 purchase.
If you REALLY like the book, I would ask that you leave an honest verified review on Amazon and tell a friend. Those two things are the best ways to help me spread the word if you’d like to help. Thank you in advance!
Without further ado, here are two free chapters:
Point Biopharma (PNT)
Current Share Price as of 9/23/22: 8.26
Shares Outstanding: 108,024,962 (94,124,962 as of 8/8/22 plus shares sold in the 9/16/22 offering)
Market Cap as of 9/23/22: $892,286,186
Book Value as of 9/16/22: $340,382,303
Market Cap minus Book Value: $551,903,883
POINT Biopharma is a precision oncology company focused on therapeutic radiopharmaceuticals. The company is built on a platform of using peptides or small molecules to target biomarkers expressed within tumors and attacking those targets with highly specific radiopharmaceuticals which cause DNA strand breakage and cell death. The company not only has an expansive pipeline of late-stage and early-stage radiopharmaceuticals but has made an extensive commitment to supply chain and manufacturing which leaves it as one of the few companies which can service this complex modality and limit potential competition.
Their lead radiopharmaceutical compound is PNT2002 (177Lu-PSMA I&T) currently in a Phase 3 program across the U.S. and Europe. The targeted population is patients with Metastatic Castration-Resistant Prostate Cancer “mCRPC” who have already had an androgen receptor-axis-targeted “ARAT” therapy but before they progress to chemotherapy. Only 50% of patients usually progress to chemotherapy due to the quality of life challenges that intensive chemotherapy presents.
POINT’s Phase 3 program began when they approached regulatory agencies about using existing institutional-sponsored trial data on a ligand (PSMA I&T) which was found to be safe and efficacious and asked the FDA to proceed directly to a Phase 3 program. The FDA granted the study shall proceed letter and now they have a program which in terms of timeline is roughly equal to their competitor PSMA-617 from Novartis.
Normally, the thought of competing with Novartis would somewhat scare me off investing in a clinical-stage biotech. But I feel POINT has some specific advantages over Novartis. And even if they simply play Novartis to a draw in terms of clinical data, the mCRPC market is large enough that splitting it with Novartis would be a monumental win and that is not even touching on the fact that supply chain considerations make it unlikely either company will be able to service >75% of the mCRPC patients that would be candidates for this therapy. In fact, even with an existing approval in a smaller subset of patients, I have heard from physicians that it is a real challenge right now to get radiopharmaceuticals from Novartis in a timely manner with good customer service.
POINT’s supply chain and radiopharmaceuticals expertise is one of the main reasons to consider investing in the company. They are building out a full stack “neutron to patient” Indianapolis in-house manufacturing facility capable of servicing their entire internal pipeline with land and air travel possibilities to the entire U.S. or international. In addition their products use no carrier added Lutetium which is preferred by administration sites due to an easier time with hazardous materials handling and no need to store waste off-site. Finally, they have done Phase 1 work and stability testing showing their products are stable at room temperature and have a stability window suitable for shipping and a 2-day administration window helping with the logistical challenges of getting radiopharmaceuticals to patients.
Total Addressable Patients: 51,000 patients across US + “EU5”
Modeled Market Penetration If Successful: 50%, assuming a market split with Novartis
Pricing Comparables: $255,000, Pluvicto
I believe POINT has a very good probability of success in the mCRPC, pre-chemo population. Recently their 27 patient run-in cohort preceding the Phase 3 “SPLASH” trial was the first true dataset in this population of chemo adverse patients. The comparator for the run-in cohort is historical controls for patients doing the “ARAT switch” of switching from abiraterone to enzalutamide or vice versa. The historical controls for this population is a radiographic Progression Free Survival “rPFS” of 3 to 5 months, most likely settling around 4 months of rPFS. POINT was looking for a rPFS of greater than 7 months for a good readthrough to the full Phase 3 dataset to hit their statistical powering based on a .66 Hazard Ratio. Incredibly the run-in cohort showed a rPFS greater than 11 months which energized the stock, only for the stock price to fall after the company did a rather large offering. But I do feel this great data has been ignored due to the pressure all the new shares trading have put on the stock.
The full Phase 3 trial will be a 415 patient trial, randomized 2:1 for PNT2002 compared to the ARAT switch; patients in the active arm will receive PNT2002 6.8 GigaBecquerels “Gbq” every 8 weeks for 4 cycles. I wasn’t really up to speed with measuring Gbq for radiopharmaceuticals so I watched a company webinar on dosimetry which is a way of measuring how the dosage of PNT2002 is being distributed through the body. Dosimetry is important both for the tissues you want the drug to go to but also the tissues you would like to avoid due to toxicity like the salivary gland and bone marrow.
6.8Gbq seemed to me a rather high dosage compared to some historical analogs so I was eagerly anticipating safety data from the dosimetry studies and the run-in cohort. I’m happy to say the safety looks really good. Dosimetry showed drug levels in the salivary gland that were only 1/3rd the amounts compared to competitor data and doses in the bone marrow at roughly half of what competitor data has shown. And the adverse effect profile in the run-in cohort was also better than what was previously seen with Novartis’ Pluvicto, although that trial was in a sicker population so it’s hard to make cross-trial comparisons. But I am very comfortable with the safety profile for PNT2002 as of now.
One other aspect of the trial that I haven’t mentioned is that POINT is allowing both “68Ga” and “18F” for imaging of the biomarker in this trial. Apparently imaging is one of the bottlenecks in getting these patients treatment and they have made sure to allow both commonly used imaging agents in their inclusion criteria. Again, speaking with a physician this is a real pain point because often patients are being asked to re-do imaging or needed a specialized more expensive imaging test before they can be put on treatment with the competing product. POINT’s flexible protocol could bode well for both enrollment and commercial potential if successful because their label and clinical data would be provider friendly in regards to site practices.
Clinical Sites Enrolling: 30
Planned Clinical Sites: 30
Planned Patient Enrollment and Ratio: 415 patients total, 27 patients in lead-in phase, and 390 patients in the randomization expansion randomized 2:1 to PNT2002 vs. abiraterone or enzalutamide
Weeks From Last Patient Enrolled Until Data Release: 40 (32 weeks of treatment + 8 weeks of data analysis)
Intellectual Property And/Or Exclusivity: Until 2041, plus significant barriers to entry in manufacturing and supply chain
With the other companies I have spent less time on their pipeline but with POINT I will spend more time because the company has the richest valuation of all those I cover in the book and also because if PNT2002 works it’s easy to see how their manufacturing and clinical capabilities could be expanded to other radioligands that could treat many other tumor types.
PNT2003 (Lu-DOTA-TATE) tackles a smaller opportunity of Neuroendocrine tumors “NETs” which is still a great unmet need. The DOTA-TATE ligand, which targets somatostatin receptors “SSTR”, is off patent but POINT has licensed formulation, process IP, and clinical data from a Toronto institution which conducted a multi-center study. They are currently looking at a regulatory strategy targeting all SSTR+ Neuroendocrine tumors in a tissue agnostic regulatory strategy possibly using a 505b2 or biosimilar pathway.
Their compound will compete with another Novartis agent, Lutathera, in this indication but they believe there is a need for a second player in these indications. (It feels like all indications where radiopharmaceuticals are used need at least two players if not more.) Lutathera’s current approval is in NETs with a gastrointestinal or pancreatic origin. POINT is attempting to gain approval for all SSTR+ NET patients (10,000 patients) with 70% or less being serviced by the Lutathera approval currently. Another advantage POINT again has here is they use no-carrier-added Lutetium in this product as well. They will report a clinical update from the University Health Network-sponsored trial in late 2022 and maybe a regulatory update to see where this program goes in the near term.
A much larger and more exciting opportunity is PNT2004 which targets fibroblast activation protein and is a pan-cancer opportunity. Their radioligand is designed to be highly targeted to FAP-a with a clean elimination profile for safety purposes. Fibroblast activation protein is an exciting target because while expressed in fetal development it is rarely present in adult tissues except in would repair or fibrosis. It is highly upregulated in cancers because new tissue is being formed and expressed on the cancer-associated fibroblasts. It’s also an exciting target for radiopharmaceuticals because while it is expressed in the tumor stroma (extracellular matrix) and not on the cancer cells, a radiopharmaceutical is so strong that it can irradiate and kill the whole tumor microenvironment. So this is a target perhaps uniquely suited for radiopharmaceuticals compared to other modalities such as antibody-drug-conjugates.
Specificity is very important when wielding such a powerful weapon and POINT partnered with Bach Biosciences, a designer of inhibitors of “Dipeptidyl peptidase activity and/or structure homologues” otherwise known as “DASH” family proteases such as FAP-a to design a product very selective to FAP that has little accumulation in normal tissues. In addition, the “warhead” was designed to not have cross-reactivity to other members of the DPP family like DPP4.
FAP-a is expressed in almost every common solid tumor so it’s hard to know where the company should even start but the company has hinted they will look at cancers with an extremely high unmet need and that also have a lot of stroma which makes them difficult to treat. Possible areas of study could include sarcomas, colorectal cancer, esophageal cancer, and pancreatic cancer.
The PNT2004 FAP-a program is now in the clinic in a Phase 1 dose trial and will test three dose levels of 4 GbQ, 8 Gbq, and 12 Gbq. Look for dosimetry data and imaging data first followed by some Phase 1 response data in very sick patients who have failed almost all other options. The company has hinted they could move through the dose levels quickly depending on enrollment and if the imaging data can find clean expression in patients combined with safe and efficacious levels of dosimetry.
Finally, PNT2001 is a next generation PSMA targeting radiopharmaceutical designed to be more precise and more targeted to build upon the possible success of PNT2002. Compared to PNT2002, PNT2001 has approximately a 3x specificity improvement and because of that can use a lower dose. That lower dose and specificity is important because PNT2001 will eventually use Actinum instead of Lutetium which is a much more potent radioisotope. So potent, in fact, it basically destroys any tissue it hits so off-target effects can be permanently damaging. On-target hits from the ligand (part of POINT’s broader “CANSeek” platform) and proper dosing are a must and make this a sensible gamble and follow-on to PNT2002 that can either go earlier or later in the lines of therapy. PNT2002 is a starting point to advance the pre-chemo standard of care of mCRPC, PNT2001 is a home run swing with a technology and radioligand that has never before been effectively and safely used in a radiopharmaceutical.
Key Dates: Mid-2023, PNT2002 Phase 3 data
Liquidity Guidance: "Into the first quarter of 2024" per the company before their recent offering which extended their timeline further
Other Indications: Other lines of therapy or combination approaches in mCRPC, investigator sponsored trials
Other Pipeline Assets Of Note: PNT2003 for Neuroendocrine Tumors, PNT2004 for solid tumors expressing FAP, PNT2001 for Prostate Cancer
Milestone Pharmaceuticals (MIST)
Current Share Price as of 9/23/22: $7.91
Shares Outstanding as of 8/10/22: 30,010,873
Market Cap as of 9/23/22: $237,386,005
Book Value as of 6/30/22: $86,659,000
Market Cap minus Book Value: $150,727,005
Milestone Pharmaceuticals is a single-product clinical-stage biotech with an imminent Phase 3 readout in Paroxysmal supraventricular tachycardia (PSVT). Their product is etripimil, a novel calcium channel blocker delivered via nasal spray with rapid absorption and clearance from the body. The goal of etripimil is to quickly stop a PSVT “attack” which causes rapid heart rate and anxiety. PSVT causes 150,000 emergency department visits per year and has no acute drug therapies. Patients can either
(1) do nothing if the attacks are infrequent enough (or use a “vagal manuever” pressure technique when they get an attack which is less than 5% effective),
(2) go on background therapy like a daily beta blocker or calcium channel blocker to try and decrease the frequency and severity of attacks, or
(3) get a cardiac ablation which is expensive, invasive and has roughly a 1% chance of complication.
Etripimil has produced some clinical data which at the time was perceived to be mixed but is now positive in light of their regulatory guidance from the FDA. Originally etripimil was looking at the percentage of episodes resolved at the five hour mark vs. placebo but earlier clinical data showed almost no separation of the curves at that time. Thankfully, the company received favorable regulatory guidance from the FDA allowing that timeframe to be moved up to just 30 minutes where there was much greater separation. Additionally, the FDA allowed the previous study to be used as part of the future registrational package as a study that shows efficacy with a post-hoc p value of 0.02.
In the “NODE-301” study, the first pivotal study for etripimil, “results [...] show that 54% of etripamil patients vs. 35% of placebo patients converted within 30 minutes (HR 1.87, p=0.02)” Also in the study “32% of etripamil patients and 14% of placebo patients converted to sinus rhythm within 10 minutes.” (This will become important later.)
Etripimil was only given at a dose of 70mg in the NODE-301 study because it wasn’t clear what the safety profile of a rapidly absorbed calcium channel blocker would be…but the safety profile of the drug came back super clean throughout the 100 usages of the drug. (150 events, randomized at a 2:1 enrollment towards active drug) Etripimil in Phase 1, however, showed a dose-dependent increase in efficacy up to 140mg so clearly efficacy was left on the table in the ‘301 study.
The NODE-302 study, renamed “RAPID”, aims to rectify that with a new dosing option that was encouraged by the FDA. In the ‘302 study patients will have the option to re-dose with 70mg after 10 minutes if the patient hasn’t had symptom relief by then. This will allow the company to explore the upper limit of efficacy and hopefully get closer to the 70-80% conversion rates seen in electrophysiology labs during the Phase 1 work.
The company also has a NODE-303 study going on which is primarily for safety purposes. If the RAPID study has a similar safety profile to ‘301 even with the repeat dosing then safety should be easy to demonstrate in their NDA submission.
The pharmacoeconomic burden of PSVT is larger than I expected which gives the company some pricing power when marketing their drug, if approved. At their recent Key Opinion Leader “KOL” day webinar, Milestone presented some interesting data on PSVT burden to the healthcare system presented by one of the study’s co-authors Sean Pokorney, MD, MBA from Duke University. If their KOL slide-deck is still available at publishing, the information is on slides 33 and 34 and published at “Healthcare Resource Use and Expenditures in Patients Newly Diagnosed With Paroxysmal Supraventricular Tachycardia. Am J Cardiol. 2020 Jan 15;125(2):215-221”.
For patients under 65, PSVT patients showed a $3,000 greater total cost to healthcare system compared to matched controls in the year *prior* to their diagnosis. In the year *following* their diagnosis their cost to the healthcare system was $23,000 greater than matched controls! For patients over 65, there was a $4,000 increase over matched controls in the year prior to diagnosis and a $13,000 cost over matched controls in the year after diagnosis.
This data was surprising not just because the under 65 patients actually cost the healthcare system more than the over 65 patients but just how much PSVT spending cost the healthcare system in general. Even in the year prior to official diagnosis these patients were already incurring total costs thousands of dollars more than a similar patient without PSVT.
I believe a portion of the Under 65 spending was due to those patients being more willing to undergo ablation (cost: $30,424 to $40,656 per another paper) but only 14% of those patients chose ablation compared to 3% of the Over 65 cohort. The full text article actually states that “spending for PSVT services accounted for 43% [under 65 patients] and 33% [over 65] of the increase in expenditures in these patient-groups, respectively” so a majority of the spending is due to other factors whether it is emergency department visits, inpatient admissions, ambulance rides, complications from IV adenosine use or other factors.
Clearly these numbers show PSVT is a larger burden to the healthcare system and at least a portion of that spending could be saved with an efficient pharmacotherapy to speed up rhythm conversion, even if that therapy was priced at a relative premium compared to maintenance beta blockers or calcium channel blockers.
Total Addressable Patients: 2,600,000 patients in the U.S., with 1,000,000 in U.S. would likely interested based upon multiple moderate/severe attacks of 10+ minutes per year with average duration greater than 30 minutes per episode
Modeled Market Penetration If Successful: Up to 65% of patients with multiple moderate/severe attacks per year
Pricing Comparables: ~ $2,400 annually (best guess), no pricing comparison available, this pricing may be on the high end based on emergency room data or on the low end based on total healthcare cost data.
Repeating the results of the NODE-301 study in the RAPID study should be rather straightforward as the studies are designed rather identically. The only differences are RAPID allows re-dosing at the 10 minute mark if no symptom relief and the RAPID study will run through 180 PSVT events instead of 150 with the randomization in RAPID being 1:1 instead of 2:1 in ‘301.
I do worry a bit about the redosing…it should raise the active arm from 54% conversion at the 30 minute mark to the 70 to 80% range seen in the EP lab Phase 1 work. But it also could raise the placebo arm response! Patients getting two doses of a placebo instead of one might have shorter attacks because the duration of an attack is in some way intertwined with anxiety about the attack and the unpleasantness of the experience. The placebo and being able to re-dose might give the patient more feeling of control which somehow ends the attack earlier. But overall this change should be positive for the odds of this study working because it’s pretty clear the medication was being underdosed in NODE-301.
Having more events in general will also increase the likelihood that the RAPID study hits the primary endpoint and the 1:1 randomization instead of 2:1 creates more doubt in the patients mind that they are in the active arm since the chances are only 50% as opposed to 66.6% which might lower the placebo effect and counteract what I wrote above.
Safety-wise, the redosing also introduces the variable that a new unforeseen safety issue could pop up but I feel pretty comfortable based on the Phase 1 work that giving two 70mg doses within 10 minutes should be safe. The company has said they have flexibility in the NODE-303 safety study to make it larger or smaller based on FDA feedback from RAPID. Here’s hoping everything is clear in the RAPID trial and 303 is just a matter of checking a box by exposing a large enough patient sample to the new dosing.
A key secondary endpoint for insurance coverage will be emergency department usage and decreasing that. In the ‘301 study the placebo arm had 27% of patients sought medical intervention as opposed to 15% in the etripamil group. This is a nice effect size but did not hit statistical significance based on the powering of the study. I find it hard to believe in RAPID this endpoint will hit statistical significance as well because the number of events has only been increased to 180 but showing a numerical reduction by almost half when it comes to medical visits across two studies would be notable for payers when it comes to insurance coverage decisions.
Clinical Sites Enrolling: 85
Planned Clinical Sites: 85
Planned Patient Enrollment and Ratio: 500, 1:1
Weeks From Last Patient Enrolled Until Data Release: 8 (Same-day endpoint + 8 weeks for data analysis)
Intellectual Property And/Or Exclusivity: 2036
Milestone is pretty much an all-in bet on the RAPID study. The company would be an attractive acquisition candidate if the study works and the medication were approved and there is reason to think Big Pharma could help get maximum value of this asset. 60% of the market is serviced by specialty prescribers which Milestone could handle on its own but the other 40% are general practitioners which would require a much larger and more expensive salesforce.
Furthermore, even though the economics of etripamil already make sense for payers due to the high total cost of PSVT, the leverage and pipeline of a Big Pharma company would bring more bargaining power to the table when it comes to negotiating net price and reduced rebates. Finally, the company has an expansion indication in Atrial Fibrillation but that development program has a way to go including possibly two Phase 3 studies needed for approval. Funding that would be an easy decision for a Big Pharma company but a tougher pull for a small independent biotech who needs to be cognizant of cash runway and diluting shareholders.
It makes a lot of sense for Milestone to seek an acquisition if their drug is approved and received an offer approaching fair value. But I also believe that if need be they could start their launch alone and prove a market exists for etripamil which would increase the value of the asset and subsequent offers.
Key Dates: Late 2022 or Early 2023
Liquidity Guidance: "Into 2nd half of 2023" per company
Other Indications: Atrial Fibrillation
Other Pipeline Assets Of Note: None
Okay, that’s it for today. Thanks for reading and if you were intrigued by what you read, I’ll say once more:
The book is only $10 and is available from Amazon here. :-)
Have a great day!
Matt