🌟 Editor's Note
Welcome to something new in the world of investment newsletters; one tailored especially for the medical professional. He who wisely wants to invest in the field in which he already has the edge of expertise; Biotech/Pharma! As a doctor or allied professional, who knows better than you which new developments will have the greatest impact on your patients? The Dilemma is that you have the experience to choose wisely, but lack the time to sort through all the hundreds of possible choices. Or perhaps you are unsure what strategy to employ once you’ve found a stock you favor.
Let this newsletter solve that dilemma for you. We will do the searching and analysis you don’t have the time for. We’ll even spell out a profitable action to take. See for yourself…
Why invest in Biotech? I’ve got 10 reasons that tell you exactly why biotech is the place to be:
1. Downright Outperformance - Over the last 5 years, biotech has drastically outperformed the S&P 500. The biotech index is up over 200%, while the S&P index is up about 90%.
2. Constant Acquisitions - Large cap Biotech companies continue to grow through acquisition of developmental Biotech companies. The large cap companies have a ton of cash that they’ve been putting to work.
3. Data Releases - Biotech companies have binary events that can not only change lives, but make people fortunes. Since these biotech stocks can have such huge gains on a data release, they usually trend higher as the date approaches. As a trader, we can take advantage
of this and capture large gains without taking the risk of holding through data.
4. An Information Arbitrage - Since many of these Biotech companies are so small, a lot of them are still flying below the radar. In other words, you’ll rarely see them being talked about on CNBC and other major media outlets. This gives individual investors like you and me an edge when it comes to research. Additionally, many of these companies are too small for bigger institutions and hedge funds to invest in. This gives parttime and fulltime retail investors an added advantage.
5. The Small Cap Benefit - Most Biotech companies are valued at under $1 billion, which means any positive catalysts or news about the company can be very important. Also, the share structures of these companies, and the relatively low number of outstanding shares, make it possible for traders to take advantage of extended moves and short squeezes.
6. Equity Protection via Partnerships - Big pharmaceutical companies have been partnering with smaller Biotech companies helping them to further develop their pipeline of drugs. Sometimes, these small companies can develop a new drug without using much of their own money. This means a new drug could potentially go through clinical trials with little dilution to shareholders.
7. Profit Opportunity of Drug Exclusivity - When a new drug gets approved by the FDA, the company is protected for a period of
time in which a generic cannot be produced or sold to the general public. That gives the drug exclusivity and if this happens to be a new treatment, the company can sell the drug without any competition. This makes developing a drug a very profitable venture, once it gets approved.
8. Continuous Demand of Breakthrough Technology - There is a continuous stream of new technology being developed by Biotech companies. Some of these new developments are giving us hope that will be able to better treat cancer, and even edit human genes.
9. Supportive Trend of the Sector - Everybody knows the
U.S. population is aging. Baby boomers are by far the largest demographic in our country, and they’ll continue to need quality medical care now, and in the years to come. It’s easy to see how this constant influx of new older patients will be a positive catalyst for healthcare & biotechnology companies.
10. Increasing FDA Approval Rate - Over the last 10 years, the Food & Drug Administration has been quite lenient when approving new drugs. The last 5 years has seen record levels of drug approval, and this leniency has made these small cap biotech companies a lot more valuable.
Pick of the Month
As you have probably heard, the state of mRNA research in the United States has taken a major hit under the administration of RFK Jr. You’ve undoubtedly seen headlines like this:
WASHINGTON, D.C. — The U.S. Department of Health and Human Services (HHS) today announced the beginning of a coordinated wind-down of its mRNA vaccine development activities under the Biomedical Advanced Research and Development Authority (BARDA), including the cancellation and de-scoping of various contracts and solicitations. The decision follows a comprehensive review of mRNA-related investments initiated during the COVID-19 public health emergency.
The wind-down affects a range of programs including:
Termination of contracts with Emory University and Tiba Biotech.
De-scoping of mRNA-related work in existing contracts with Luminary Labs, ModeX, and Seqirus.
Rejection or cancellation of multiple pre-award solicitations, including proposals from Pfizer, Sanofi Pasteur, CSL Seqirus, Gritstone, and others, as part of BARDA’s Rapid Response Partnership Vehicle (RRPV) and VITAL Hub.
Restructuring of collaborations with DoD-JPEO, affecting nucleic acid-based vaccine projects with AAHI, AstraZeneca, HDT Bio, and Moderna/UTMB.
HHS has also instructed its partner, Global Health Investment Corporation (GHIC), which manages BARDA Ventures, to cease all mRNA-based equity investments.
In June, Secretary Kennedy replaced the entire Advisory Committee for Immunization Practices, a panel of experts that recommends vaccines to CDC, with new members with strong ties to the anti-vaccine movement. These changes represent a dangerous shift away from rigorous, evidence-based policymaking.
Shock and disbelief does not even begin to describe the reaction from mRNA and public-health researchers. The Alliance for mRNA Medicines, which represents companies and universities, said in a statement: “Secretary Kennedy’s unscientific and misguided vilification of mRNA technology and cancellation of grants is the epitome of cutting off your nose to spite your face.”
True words. Yet this announcement is not unexpected. Kennedy’s views on vaccination are well known, and outside the research consensus. The Trump administration is busy removing independent specialists and replacing them with political appointments in many cases.
Often, where the world’s one-time science superpower has led, others have keenly followed. But not in this instance. There is no queue of countries lining up to adopt the Kennedy doctrine. One reason is that most countries appreciate that the mRNA manufacturing platform can be repurposed for different uses. Predicting how many vaccines to stockpile for an emergency has always been a huge headache for governments, as has been the cost of keeping manufacturing facilities open when they are not in use. With mRNA, when a platform isn’t being used to make vaccines, it will not just sit idle, racking up costs, but instead has the potential to be used to manufacture other therapeutics.
Until now, it has been impossible to imagine mRNA research without the United States. Seminal work on the technology has been the product of US laboratories, including Paul Krieg and Douglas Melton’s efforts to synthesize mRNA in the lab in the 1980s, and Katalin Karikó and Drew Weissman’s Nobel-prizewinning work on how cells recognize and respond to different forms of mRNA. And when it comes to funding, so far, the United States has been the only government that can match pharmaceutical companies for mRNA investments. This is why the enormity of the US decision cannot be overstated.
Countries outside the United States are right to choose a different course. They must now increase their investments in mRNA studies, including boosting funding for the WHO’s work on mRNA technology transfer. The pandemic might seem like a distant memory to some, but we must never, ever, forget that millions are alive today, or in better health, because of this life-saving technology.
Why BioNTech looks like one of the best bets for who will run with the mRNA ball that the USA has dropped.
BioNTech co-developed a major mRNA vaccine for COVID-19 (with Pfizer Inc.) and so has deep experience in mRNA modality.
It has announced a £1 billion (~US$1.3 billion) investment over the next 10 years in the UK, including building two new R&D centres and a UK headquarters in London.
It has a formal collaboration with the UK Government: a grant of up to £129 million over 10 years to support its UK R&D activities.
It intends to employ hundreds of skilled staff in the UK, deepen its UK footprint (Cambridge + London) and exploit the UK’s strong research base and life sciences ecosystem.
Its pipeline is broader than just infectious disease: it has mRNA-based cancer immunotherapies in development, personalized treatments, etc.
BioNTech plans to invest in a UK Research and Development (“R&D”) hub in Cambridge with an expected capacity of more than 70 highly skilled scientists, the first to commence R&D by the end of the first quarter 2023. In addition, the Company will strengthen its UK footprint by setting up a regional headquarter in London to accommodate employees in global and regional supporting functions including Regulatory, Medical, Intellectual Property and Legal. As part of the MoU, BioNTech will remain the local sponsor of current and upcoming new clinical trials of its programs in the UK and will design the clinical trial protocols.
As of today, several hundred patients have been treated with mRNA-based cancer immunotherapies as part of BioNTech’s trials for product candidates from the Company’s FixVac and iNeST1 platforms.
About BioNTech
Biopharmaceutical New Technologies is a next generation immunotherapy company pioneering novel therapies for cancer and other serious diseases. The Company exploits a wide array of computational discovery and therapeutic drug platforms for the rapid development of novel biopharmaceuticals. Its broad portfolio of oncology product candidates includes individualized and off-the-shelf mRNA-based therapies, innovative chimeric antigen receptor T cells, bispecific immune checkpoint modulators, targeted cancer antibodies and small molecules. Based on its deep expertise in mRNA vaccine development and in-house manufacturing capabilities, BioNTech and its collaborators are developing multiple mRNA vaccine candidates for a range of infectious diseases alongside its diverse oncology pipeline. BioNTech has established a broad set of relationships with multiple global pharmaceutical collaborators, including Genmab, Sanofi, Genentech, a member of the Roche Group, Regeneron, Genevant, Fosun Pharma, and Pfizer.
Technical Analysis of BNTX Stock Chart
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Note that since September 30, the stock has demonstrated the Bullish character of both higher highs and higher lows. The ADX graphic shows that more money is pouring in to it than has been going out. The MACD graphic has switched to the positive, and the 20-day moving average (the blue line) has crossed over the 50- day moving average (the green line).
Companies in the News
British biotech Elevara Medicines has emerged to try to revolutionize the treatment of rheumatoid arthritis.
The company plans to launch a phase 2 rheumatoid arthritis (RA) trial by the end of the year. The trial is set to enroll about 180 RA patients whose disease has not responded to prior treatment with standard-of-care methotrexate and tumor necrosis factor (TNF) inhibitors, Elevara said.
The newly commissioned company’s lead asset is oral CDK4/6 inhibitor ELV001, and it comes to the U.K. by way of Japanese outfit Teijin Pharma. Elevara has licensed the exclusive global rights to develop, commercialize and manufacture ELV001 from Teijin, the company said.
“This $70 million financing provides us with the resources to rapidly advance ELV001 through phase 2 and to expand into other chronic inflammatory indications,” Elevara CEO Emma Tinsley said in the release. “We are grateful for the support of our investors and are excited to take this molecule forward with Teijin Pharma.”
Genenta Science (NASDAQ:GNTA), a pioneer Company in immuno-oncology, and ANEMOCYTE, a leading provider of advanced therapy and nucleic acids solutions, today announced a strategic collaboration with a focus on off-the-shelf lentiviral vector ("LVV") Plasmid DNA technology platform. This new agreement builds and expands on the existing successful partnership between the two companies, which has focused on the production of Plasmid DNA.
Genenta Science is a clinical-stage immuno-oncology company developing a proprietary hematopoietic stem cell therapy for the treatment of a variety of solid tumor cancers. Genenta's first-in-class product candidate is Temferon™.
Inhibrx Biosciences Inc. (INBX) - This is a small-cap stock with a market capitalization of $410.8 million. I bring it to your attention because it has experienced a substantial increase in darkpool activity , with a 2460% rise, indicating strong institutional interest. Its trading volume has jumped from an average of 5.3 million to 131 million! Something is going on here!
INBX is based in La Jolla, California and has a proprietary modular protein engineering platform employing quantum computing AI in its protein design. It makes INBRX-109, an agonist of death-receptor 5, designed to drive cancer-selective programmed cell death.
The Catalyst Calendar
Get to know the Players
Prof. Ugur Sahin, M.D., Co-Founder and CEO of BioNTech, is a physician, immunologist and leader in the development of novel approaches to fight cancer and infectious diseases. Sahin is one of the world’s foremost experts on messenger ribonucleic acid (mRNA) medicines. He has pioneered several fundamental breakthroughs enabling the development of mRNA vaccines and other types of immunotherapies. Sahin initiated and oversaw “Project Lightspeed,” the historic development of the first mRNA vaccine for COVID-19, moving from lab and clinical testing to conditional approval within an unprecedented 11-month period. He also leads BioNTech’s research and development of neoantigen specific as well as non- neoantigen specific mRNA cancer vaccines which can be individually tailored and produced on demand according to the profile of non-synonymous mutations identified by next-generation sequencing in patients’ tumors.
Ugur Sahin is co-inventor of more than 500 filed patents applications and patents. Sahin’s academic credentials include serving as a Full Professor in Translational Oncology & Immunology at Johannes Gutenberg University in Mainz, Germany, where he was the supervisor of more than 50 PhD students. He also holds the role of Chairman of the Scientific Management Board of the Helmholtz Institute for Translational Oncology (HI-TRON). Based on his contributions to scientific discovery, Sahin has received numerous awards and recognitions, including the German Sustainability Award, the Mustafa Prize, and the German Cancer Award.
Pull the Trigger
This is the part of the Newsletter in which I spell out in detail an action or particular strategy to apply to this issue’s Pick of the Month.
I have recommended BNTX as my Pick of the Month. My recommended short-term move is to buy a call option with an expiration 3 weeks out, and exit when the stock price reaches the resistance level of 107.5. Then allow for a pullback closer to the support level, and repeat. For those who like longer-term positions, this is a prime candidate for a LEAP position 12 to 18 months out. A deep-in-the-money Call option with a Delta around 90 will allow you to control 100 shares per contract for half the money it would take to buy the shares outright.
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Till next month,