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Expert Financial Analysis and Reporting

New Approach to SmithOnStocks Reports Starts with Aimmune Therapeutics (AIMT, $18.73)

My coverage strategy has been to identify stocks that I believed to be buys and initiate coverage with an in-depth report to be followed by updates. This is the classic Wall Street approach that was drilled into my psyche for nearly 35 years. The downside is that it takes a long time to research a new company. You have to consider and try to understand so many issues including the technology, clinical data, regulatory situation, addressable market, competition, financial position and on and on. From the time of starting research to publishing a report can take several months and putting this all together in a report is arduous. This limits the number of companies that can be covered.

Some subscribers have pointed out the shortcomings of this approach. The first is that the reports are so extensive that it is difficult and time consuming to read them. They would prefer a number of shorter reports on specific issues that are easier to digest. The second observation is that by only focusing on ideas that I think are buys at the time of writing, I am limiting my coverage universe. Things change or more likely perceptions of fundamentals or the price of the stock changes, sometimes dramatically. A stock that may look unattractive can quickly reverse and vice versa. It has been suggested that a better approach might be to cast a wide net and cover as many interesting companies as possible. New coverage would not necessarily result in a buy recommendation.

This has persuaded me to take a new approach to covering companies. Instead of putting out one huge report, I will write a series of smaller reports as my research progresses. Subscribers can follow along as I go through my due diligence on a company. The first company for which I have decided to try this approach is Aimmune Therapeutics, a company which is developing AR 101 to desensitize patients to allergic reactions to peanuts. At this time, I don’t know if I will recommend the stock, but I could. Peanut allergy affects an estimated 1.1 million patients (mostly younger) in the US and parents are desperate for something to help prevent allergic attacks due to peanut exposure. This is potentially a huge market with no effective, approved therapy. Only Aimmune and DBV Technologies (Viaskin Peanut) are anywhere close to gaining product approval.

The FDA granted ARA 101 Fast Track Designation in September 2014 and Breakthrough Therapy Designation in June 2015 for peanut-allergic children and adolescents ages 4 to 17. The PALISADES pivotal phase 3 trial of AR 101 hit its primary endpoint with a p value <0.001. Results of this trial were published in the November 18, 2018 edition of the prestigious New England Journal of Medicine, a strong validation. The BLA was filed in the US in December 2018 and management is hoping for approval in January 2020. The European MAA was filed in June 2019. Still, clinical trials were for six months and used a widely accepted, but surrogate endpoint to assess efficacy. Judging actual desensitization in clinical practice, will take much longer, probably years. Because of the large patient population, the impact on healthcare spending if AR 101 is widely used could be significant. Payors could bulk given that cost effectiveness has not been well defined as yet and may not be for some time. There are a lot of uncertainties in gauging if and when AR 101 will be commercially successful.

My initial impression is that parents are desperate for anything that will reduce the risk of allergic reactions to peanuts. While AR 101 has some real shortcomings, it at least gives some hope. I think that AR 101 will be approved in 1H, 2020 and has the potential to be a commercial success. However, I also think that it will take time to work with payors to gain reimbursement and I don’t see meaningful US sales until 2021 or even 2022 with Europe lagging this time frame. I think that it is a better product than Viaskin Peanut although there is room for both products to achieve commercial success. While, I anticipate that I could become a buyer of AIMT, I am not at that point right now.

There is a very important catalyst for Aimmune on the horizon.  The FDA’s Allergenic Products Advisory Committee (APAC) will review the Biologics License Application (BLA) for AR101 at a meeting scheduled for September 13, 2019. This should provide some valuable insights on how key opinion leaders and the FDA view the product.

This report will be followed by a number of reports dealing with specific issues. The next one (in progress) will address the cause of peanut allergy and how it is diagnosed and treated.












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  1. I like the new approach. Looking forward to more reports of this kind. Thanks.

  2. George Yancopoulos, Founding Scientist, President & Chief Scientific Officer, Regeneron, 8/6/2019:

    “As a reminder, we are also exploring the effectiveness of DUPIXENT in allergy desensitization settings such as for grass and peanut allergy.

    While allergy immunotherapy can be effective in the long-term, many patients can’t complete the prolonged time course required for success because of allergic reactions which can be severe. We recently completed a small Phase IIa trial with about 25 patients per treatment arm, testing whether DUPIXENT could improve the safety, tolerability, and efficacy of subcutaneous immunotherapy or SCIT therapy for grass allergy. The preliminary results of this study showed that about 30 patients discontinued therapy in the SCIT group, mostly due to clinically meaningful allergic reactions compared to only a single patient who discontinued SCIT when combined with DUPIXENT and not due to an allergic reaction.

    And in the primary efficacy analysis, there was no difference in terms of reduction of the allergic symptoms with SCIT or in the combination. Thus we are encouraged by the potential of DUPIXENT to increase the tolerability of SCIT therapy and we’re looking forward to presenting the results at a future medical meeting.”


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