Bio Sector

This is from Bob Sharma:

•The broad U.S. market and the biotech sector rebounded today after hitting a key support level. Will the rebound sustain?

•Interpreting Array Biopharma's (ARRY) COLUMBUS OS data.

•Interpeting Allergan's oral anti-CGRP phase 3 data.

•More insights are provided.

• This idea was discussed in more depth with members of my private investing community, Vasuda Healthcare Analytics. 

Market and sector outlook:

The broad U.S. market (SPY) and the biotech sector (IBB) rebounded today after hitting 200-DMA, a key support level as we mentioned in the yesterday’s update. VIX reversed course. The volatility is classic for the late stage of an economic cycle. S&P 500 RSI was oversold on daily charts at the open. While we may have a short-term bottom, it is possible for today’s opening lows to be retested or slightly broken to shake out weak hands. Overall, there is a good buying opportunity here for next few months. Watching the 10-year yield closely (the slope).

SPX RSI= 39.09 | IBB RSI= 43.48

Good read here on VIX, treasury yield curve relationship.

Up on >5x volume (excluding penny stocks):

Cyanotech (CYAN): 36.3% (antioxidants, reported earnings today)

Quotient (QTNT): 34.7% (diagnostics, reported earnings yesterday)

Medicinova (MNOV): 13.7% (no clear news today, reported positive MS data last week)

Argos Therapeutics (ARGS): 8.2% (licensed anti-PD1 and reported its preclinical data in combo with its dendritic cell therapy)

Theravance Biopharma (TBPH): 4.6% (no clear news today, NDA for revefanacin was accepted last week)

Upward reversal alert: Ziopharm Oncology (ZIOP)

Downward reversal alert: N/A

Day’s events’ outlook:

Noted Array Biopharma’s (ARRY) COLUMBUS trial data for combo of MEK+BRAF inhibitors (encorafenib + binimetinib) in BRAF+ advanced melanoma, doubling the overall survival to 33.6 months compared to the control, Zelboraf. OS is also higher vs. that shown in phase 3 by Novartis (NVS) BRAF/MEK combination. PDUFA for the combination in this indication is scheduled in June. It is important to note that resistance may develop to this combination as well and this paper discusses how to overcome the resistance. About 20% BRAF melanoma patients do not respond to BRAF/MEK combinations. Mechanisms of this acquired resistance are: reactivation of the MAP kinase pathway, persistent activation of receptor tyrosine kinase (RTKS) receptor, activation of phosphatidyinositol-3OH kinase, overexpression of epidermal growth factor receptor (EGFR), and interactions with the tumor microenvironment. Inhibitors of the PI3K/AKT/mTOR pathway have shown some promise in BRAF resistant melanoma (also check this paper). PQR309 is a pan-PI3K/mTor inhibitor being tested in lymphoma. In some of these resistant cases, EGFR inhibition may be useful. BRAF/MEK combo is also being tested in combination with anti-PD1/PD-L1 in advanced BRAF melanoma. Array Biopharma has also been rumored as an M&A candidate in the past and the case has become even stronger now.


Noted Allergan (AGN) phase 3 data for its oral anti-CGRP antibody, ubrogepant where about 20% patients showed significant pain relief from acute migraine at 2 hours (vs. 11% for placebo). Questions were raised about the liver function test elevation seen in the drug arm in the study and comparisons with the only other oral anti-CGRP Ab rimegepant from Biohaven Pharmaceuticals (BHVN) whose phase 3 data is also expected this quarter. Biohaven reported higher proportion of patients with pain relief at 2 hours (about 30% with higher doses) in phase 2, and also reported significant persistence of the pain-relieving efficacy at 24 hours and 48 hours - something that was not reported by Allergan. In phase 2, Biohaven’s drug also did not show liver function abnormalities. While the proportion of patients with pain relief (at 2 hours and 24 hours both) in phase 2 for Biohaven was similar to that for sumatriptan (currently used commonly in acute migraine), rimegepant does not have the ischemic tendency seen due to vasoconstriction caused by triptans (which may even precipitate myocardial ischemia) and it may be dangerous for those with high blood pressure. Despite the side effects, sumatriptan formulations had peak $1.3 billion global sales.

What took so long for Breakthrough therapy designation to be awarded to Zogenix (ZGNX) ZX008 in Dravet’s syndrome? Don’t forget the upcoming second phase 3 data this year (enrollment completion announced last week).

Every time Akari Therapeutics (AKTX) releases PNH data from another 203 patients, the stock goes down. I doubt anyone takes this company seriously considering it is trying to fight the Goliath Alexion Pharmaceuticals (ALXN), which itself is developing a competing s/q, longer-acting anti-C5, ALXN1210 in PNH. As Synergy (SGYP) has realized, it is hard to battle an established giant with a marginal benefit claim.

Let’s hope Argos Therapeutics (ARGS) can prove this time lucky with anti-PD1+dendritic cell combo in renal cancer! They need to show similar efficacy in clinical studies. Maybe their initial monotherapy approach has been wrong from the start considering the Nobel Prize-winning potential discovery of dendritic cells (phase 3 monotherapy trial in metastatic renal cell cancer). There is going to be significant dilution first of this $8M market cap company stock first before we see any positive clinical data (the company filed an agreement with Cowen for equity raise).


Bitcoin (BTCUSD) rebounded today and could have hit a short-term bottom. First resistance is at $10K.

Disclosures: This post is for educational purpose only and is not investment advice. I/we may have a position in the securities mentioned in this post.

Disclosure: I am/we are long SEE THE POST.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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