Welcome to our July 2018 Amp-Up
Amp Launches Tracking Fund
Our first Amp tracking fund with real investments launched July 1, 2018 after we set up Amp Biotech Research, LP in Delaware earlier this year. The tracking fund is currently closed to outside investors. We are excited to update our returns in future Amp-Ups editions. Our initial Amp 1.0 hypothetical tracking fund launched in late 2016 and is up around 48% since January 1, 2017 as of the writing of this Amp-Up.
Q2 Cancer Meetings
Overall, the cancer meetings (AACR in April and ASCO in June) in our view seemed to have more small/mid-cap biopharma stock losers than winners in terms of stock market reaction/price. Certainly, Nektar was a huge example, losing about 1/2 its value from its ASCO presentation/data. However, let's not forget that NKTR is still up over 100% in a 1 year time frame, and active investors, like Amp (and hopefully you too), took a lot of profits early in the year when the stock ran up to over twice its current value. Overall, the good thing for society, is that we are making excellent strides in cancer therapies, and for patient investors, those will translate into nice returns. It will be interesting to see if NKTR can regain some of its lost value as it updates its clinical trial data in Q4 2018.
Q2 Success
CARA has had some good developments over the past few months almost doubling its value since its announcement at the end of May of a major licensing deal for its drug Korsuva to treat itching (pruritis) in patients with kidney disease. Then its data for post-operative pain/nausea for the same drug, although mixed, was surprisingly positive overall. The stock pulled back some recently when it diluted shares with a secondary offering, but with a $631M market cap and a drug that seems very approvable in several major indications, CARA should still have room to run over the next year as it presents additional pruritis data, although it seems to have some time before its next readout. Of course, at this valuation, a possible M&A deal is possible, as is another major licensing deal, but this time for post-opp pain/nausea.
Q3 Opportunities
We recently updated the Q3 catalyst calendar on ampbiotechresearch.com. Check out some of the events happening this quarter and our comments about the events at http://www.ampbioresearch.com/biotech-catalyst-scorecard.
One company that reported data that is setting up very nicely for Q3 is SELB. SELB's updated 3 month data for a phase 2 of its gout drug SEL-212 (SVP-Rapamycin + pegsiticase) looked encouraging as a possible superior product profile over current FDA-approved chronic severe gout therapies. The market seemed to under-react to the data, which appears to prove that SELB's therapy is effective at inducing immune tolerance at least out to 3 months. A key readout is coming in Q3, with the 5 month gout study timepoint, which the FDA has indicated to SELB would be the timing that could support approval in a future Phase 3 trial. SELB's technology is widely applicable and has a lot of future potential with other drugs/indications, including gene therapy. With a market cap of only $283M and with a promising technology in a first major indication, SELB looks attractive and still trades about 25% lower than 1 year ago. We are very excited about SELB's upcoming 5 month data readout in Q3.
FOMX is another interesting Q3 play. It's upcoming Phase 3 data for its Minocycline Foam (FMX101) is an unpredictable event. We say that from our experience with companies who had previous negative phase 3 data and have not proven that they can bring a drug candidate over the FDA finish line. However, if FOMX has indeed fixed the issues with the prior FMX101 phase 3 trials (more patients in a larger combined trial and better consistency with its patient questionnaire), then FOMX could surprise. It trades at almost 50% of its value before the prior mixed phase 3 results. Either way, the market could see this readout as a good risk/reward and run FOMX up ahead of the readout. We would likely trim some of our FOMX investment before the readout if this happens, due to the uncertainty in the readout.
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