Expert Financial Analysis and Reporting

For personal reasons, I am going to be unavailable until October 29. During this interval of silence, there may be some stock moving events on some, but not all, of the companies I am recommending. Let me make a few comments on things that could happen.

Northwest Biotherapeutics

The two key lead investigators in the DCVax-L phase 3 trial have said that they have concluded that patients are living much longer in the trial than they would have expected. See this link. Indeed, the blinded data from the trial strongly supports this as was discussed at ASCO this year. See this link.

This is an unusual trial because it has been ongoing for around 12 years and the last patient enrolled in the trial was treated about three years ago. This is meaningful because historical data suggests that 85% of patients initially diagnosed with glioblastoma die within three years. Here is the important thing to understand about the trial. The key data point that we want to know with any cancer drug is the length of survival that the new treatment can bring as compared to standard of care. Most clinical trials don’t run long enough to determine how long most patients actually live so that end points such as objective response rate, median progression free survival and median overall survival are used as surrogates to gain an insight into what true survival could be. With the DCVax-L trial we will know what happened at three years or later to all of the patients in the trial and will also be able to see the actual length of survival for most patients of whom some are still alive.  Put succinctly, this trial will come very close to showing actual survival on a patient by patient basis.

We have all been frustrated by the long running nature of the trial. It was originally designed to have median progression free survival and median overall survival as independent endpoint s. However, during the course of the trial, experience with the new immunotherapy drugs Opdivo and Keytruda showed something not seen with chemotherapy drugs. About 10% to 15% of patients treated (in aggressive cancers comparable to glioblastoma) experienced very long survival that has come to be known as the survival tail. This has led to a new way of thinking about what constitutes success in immunotherapy drug trials.

I surmise that Northwest might have ended the trial some time ago if they had chosen to use mPFS or mOS as the key measures of success. However, they have elected to let the trial remain blinded and ongoing in order to define the survival tail, which will be extremely important in the regulatory consideration and if approved, how the drug will be employed in clinical practice. What key opinion leaders have seen from observing the blinded data is that DCVax-L seems to have a clinically meaningful survival tail. If so, it could become part of standard of care in newly diagnosed glioblastoma and could be a commercial blockbuster.

New data on the phase 3 trial will likely come in the form of another look at the blinded data as was done before. I think that this will be a dramatic event and it could come in the time that I am not around. The Company has been working on this for some time and in the process is scrubbing the data from the various sites, which will be necessary for the regulatory submission. There is more than a fair chance that the trial could be unblinded and a BLA could be filed this year if the data is as good as I think it will be.

AMAG Pharmaceuticals

In the near term, the stock will be driven by the rate of conversion of Makena patients from the older intramuscular injection to the new subcutaneous injector. Data from the 2Q, conference call suggested that as many as 60% of patients were being switched. However, this was before the approval of a generic to the IM (not the subcu) dosage form. The 3Q conference call will probably take place while I am not around. It is my view that more than 60% of the Makena usage will be with the subcu form even with the generic in the market. The 3Q call should shed some brighter light on this developing situation.

Aside from Makena, I like what I am seeing at AMAG. The sale of Cord Blood Registry makes AMAG a more focused and faster growing company. Feraheme is experiencing dramatic growth and the potential for Intrarosa remains promising. Also, proceeds from the CBR sale have greatly deleveraged the balance sheet and provided funds for acquisitions. The March 23, 2019 PDUFA date for bremalanotide is a potential wildcard event.

Antares Pharma

The recent approval of Xyosted was a major positive for the Company and follows on the approval of the AB rated generic to EpiPen and the subcu dosage form of Makena. I am enthusiastic about the stock potential for Antares both near and long term. See this report. The conversion rate to the Makena subcu as reported by AMAG could be an important near term factor in the stock.

Cryoport

The third quarter conference call will be closely watched to see the sales curve for logistics support of the Yescarta and Kymriah. See this report. I am expecting continued rapid growth and would like to see a step up on the sales curve.

Cytokinetics

The key to my recommendation of Cytokinetics is omecamtiv mecarbil, but we are unlikely to see meaningful phase 3 data until 2020. Hence, the only meaningful clinical news in the interim could be on reldesemtiv, its second drug in development. Recent data in SMA was not clear cut and investors are uncertain about what the clinical development plan will be. Slower than expected enrollment has pushed the data release for the phase 2 trial in ALS into 2019. In the nearer term, there could be data on reldesemtiv in COPD and also in elderly adults with limited mobility or frailty. The Company will be hosting an R&D day in New York on October 16, 2018 that could provide some meaningful news.

Portola

The critical near term news event for Portola is whether the FDA approves the Post Approval Supplement for Andexxa that will allow using Gen 2 manufactured product for US commercial use. Currently, the launch of Andexxa is constrained by the limited supply of the drug. The same data has been submitted to the EMA and could lead to approval of Andexxa with the Gen 2 process in Europe in early 2019. The PDUFA date is December 31, 2018.Until then, I am not expecting any meaningful news.

Agenus

I think that Agenus has a pipeline in immunotherapy drugs that would be coveted by any number of large biopharma companies and I think that it will eventually be acquired at much higher prices. Its two lead drugs targeting CTLA-4 and PDL-1 are in clinical trials that could lead to a BLA filing in 2020. Its other drugs are in earlier stage clinical or pre-clinical development. I am not expecting any meaningful near term data.

Unfortunately, Agenus management tried to avert the issuance of new equity citing a desire to not dilute shareholders. They had thought that partnering deals could being in cash obviating the need for more stock issuance. This has backfired as the partnering deals have been slow to materialize and the Company is in a strained cash position that may require a new stock offering at this depressed stock price.

Repligen

As I have said on many occasions, I love the business model of this Company. It has also been successful in a roll-up strategy that has led to much greater growth than I expected when I picked up coverage. The downside of this is that it is so complicated that I can’t analyze what is going on at the micro level in its several important businesses. I have thought about pulling my recommendation because of this, but have refrained because of what I consider to be the exceptional macro factors driving the Company. Unfortunately, this leaves me and I think most other analysts largely dependent on management guidance in analyzing the stock. This is not unusual for many small companies as they emerge to be bigger, but it is uncomfortable. Hence the 3Q conference call and the guidance given could be important to my view on the stock.