There is some news today so I will do a quick Friday note.
1. ATNX had their data and it showed a statistically significant OS improvement. We are getting a little sell the news for a couple of reasons. First, the stock had a good run into these data. Second, the data are not perfect. It did not hit on PFS and the OS benefit was in a modified ITT population and not the strict ITT. It was a pre-specified mITT (baseline scans and 75% of the first dose) but still not the pure ITT. On the positive side, the ORR benefit was statistically significant in all populations (ITT and mITT) and that was the primary endpoint. I think we need to dig into the data more to really get a grasp but the real question going forward is the FDA and that is an unknown at this point as this is a trial with good results (not perfect) and did not enroll anyone in the US. It is odd for sure and one I need to think through some more and hear what management has to say. In any case, the data are good enough to hold the stock for now and continue with the due diligence.
2. Speaking of the FDA, we got a surprise with SRPT. I do not think anyone knew they appealed already or that a decision was due. This clearly took the market by surprise is good for the company. It puts the exon skipping revenue base back into the stock and takes some of the reliance on the gene therapy programs off the stock. Remember that before the CRL, the story was that the exon skipping programs would bring in solid revenues as they developed the gene therapy for longer term growth. That was threatened by the CRL but now that base case is not only back in play but has to be the assumption at this point.
3. ASMB was up big yesterday on a secondary. I am not sure the explanation but that is certainly the reaction you would want but not expect. There have been a lot of companies raising cash at the end of the year and this is a little unusual. Companies tend to wait until after JPM to raise cash but obviously we have had a really good pre-JPM run so it makes sense to raise now. Does this set up for a stronger post-JPM run in stocks given that there will be fewer secondaries? Perhaps but last time we saw a bunch of raises before JPM so a very negative JPM reaction to the sector (although the raises were done as the sector was selling off so that is not a perfect comparison). In any case, I think these secondaries and the stock action after them tends to bode well for JPM (assuming good news) but this is a pretty unique setup into the conference so it will be interesting to see.
I will end it here and I just wanted to put out a quick note of the news. I hope everyone has a good weekend.
Disclosure: Long ATNX, SRPT, and ASMB.
