Research Notes

RLY-2608 has rare blockbuster potential, but a global partnership might be the best path to realizing it. Pipeline guidance suggests the entire breast cancer portfolio could become a packaged deal in 2025.

This is my core long-term position. I'm eager to add more shares ahead of the upcoming safety data readout for the RLY-2608 triplet combination with a CDK inhibitor in late 2024 and lower my cost basis.

The former biosimilar pioneer now owns no biosimilars heading into 2025. Instead, it looks to an early-stage immuno-oncology pipeline.

This is my core long-term position. I'm eager to add more shares ahead of the upcoming safety data readout for the RLY-2608 triplet combination with a CDK inhibitor in late 2024 and lower my cost basis.

This month I reveal my lessons from the last market bubble and correction, which influences my current strategy. I also beat you over the head as a reminder to avoid FOMO, remain disciplined, and keep your emotions separated from your money.

The business delivered its first operating profit since Q2 2023. Strong software revenue is powering the business – and it's about to get even strong thanks to the Chemaxon acquisition.

The business returned to a solid growth trajectory in Q3 and expects to notch its first $20 million quarter in Q4. Investors can thank the swift adoption of ReCell GO.

This is my core long-term position. I'm eager to add more shares ahead of the upcoming safety data readout for the RLY-2608 triplet combination with a CDK inhibitor in late 2024 and lower my cost basis.

The business is objectively healthier than ever based on operating efficiency metrics, but several unexpected headwinds will result in weaker than expected growth for 2024.

The market might be in a "wait-and-see" stance until the supply shortage impact becomes clearer, but the next seven weeks might be the most favorable risk-reward for Coherus BioSciences ever.

Commercial execution remains the surest path to salvation. Although I don't assign a high value to the company's pipeline at this time, the second-most advanced asset could provide a meaningful catalyst in 2025.

This is my core long-term position. I'm eager to add more shares ahead of the upcoming safety data readout for the RLY-2608 triplet combination with a CDK inhibitor in late 2024 and lower my cost basis.

The business is poised for an inflection point in 2024 as it ramps multiple new products and returns to cash-flow positive operations, which has been the primary driver of Wall Street's disinterest in the stock.

This is my core long-term position. I'm eager to add more shares ahead of upcoming data readouts in late 2024 and lower my cost basis.

Sentiment for biotech is historically low right now. Although investors are rightfully eyeing Arrowhead Pharmaceuticals' high cash burn with unease, I think the recent punishment is short-sighted.

The commercial drug developer can't seem to catch a break. The inability of a third-party CMO to fulfill final packaging duties will cause a shortage of Udenyca in October and November.

The company's prized asset delivered a no-doubter data readout that crushed prior-gen comparisons, but Scorpion Therapeutics quickly cemented itself as a next-gen competitor.

This is my core long-term position. I'm eager to add more shares ahead of upcoming data readouts in late 2024 and lower my cost basis. Here I specifically played the weekend data readout from Scorpion Therapeutics and STX-478.

The precommercial drug developer has scheduled the most important data readout in its history for Monday, September 6 before the market opens. Here's how to interpret the results.

This month we dive into the topic of leveraging data readouts to raise money while limiting dilution. Investors may get a real-world demonstration this week following a data readout for RLY-2608.

This is my core long-term position. I'm eager to add more shares ahead of upcoming data readouts in late 2024 and lower my cost basis.

Both Udenyca Onbody and Loqtorzi have captured nearly 10% of their market opportunities just four and six months into launch, respectively. The $159 million cash balance is nearly double expectations.

The two technology-enabled drug developers plan to merge under the Recursion name, stock ticker, and leadership. Things could get messy.

Revenue has more than doubled since the beginning of fiscal 2022. However, the number of customers has only grown by 28% in that span. There are advantages and disadvantages to the trend.

The business is the healthiest it's ever been – and rapidly improving – just as investors begin to worry about the health of the U.S. economy and frothiness of the stock market.

The stock's slide is frustrating, but I think my patience will be rewarded with a respectable exit in late 2024. Cash flow and profitability metrics should improve rapidly as Loqtorzi and Udenyca Onbody ramp.

The business has positive operating cash flow. It could begin generating operating income in 2025 or 2026, depending on how aggressive management wants to be – and if its internal analytics are correct.

If I could only buy one stock in the next few years, then it might be Relay Therapeutics. The upcoming data readouts in the second half of 2024 won't represent an inflection point for the stock price, but should reflect a busier pace of announcements going forward.

The drug developer, now solely focused on oncology, sold the rights to its adalimumab biosimilar for $38.85 million in net proceeds.

This month's summary of recent events, upcoming events, and exploring a biotech investing topic. This month we discuss the good, the bad, and the ugly of stock-based compensation.

Like many AI-drug discovery platforms, Exscientia has demonstrated little real-world evidence supporting the expensive approach. That could change by the end of 2024.

Management did the impossible by re-establishing trust with investors virtually overnight. That goodwill is unraveling as the company tries to do too much.

Operating cash outflow in the first half of 2024 exceeded the annual total from 2023. That's the price to pay for an ambitious (and top-tier) pipeline.

The drug developer started 2024 with two important drug launches and notched key commercial milestones, but it desperately needs cash and has limited options.

The cancer diagnostics company reported year-over-year revenue growth of just 6.5% to start 2024 and made heavier investments, which drove key operating metric down.

The new premium offerings, which boast a faster turnaround time than the company's standard synthetic genes, surged the order backlog of the synthetic genes segment to $44.9 million – an increase of 54% from the fiscal first quarter.

This month introduces the Member Digest, our new summary of recent events, upcoming events, and exploring a biotech investing topic. This month we rank the acquisition potential of each company in the coverage ecosystem.

The business is poised for an inflection point in 2024 as it ramps multiple new products and returns to cash-flow positive operations, the deterioration of which has been the primary driver of Wall Street's disinterest in the stock.

Management says slower-than-expected conversions from hospital value analysis committees are to blame, but hopes for achieving the low-end of full-year 2024 revenue guidance seem misplaced.

The base editing pioneer paused development of cardiometabolic candidate VERVE-101 after reporting serious adverse events in a dose escalation study. The side effects were almost certainly related to the drug delivery tool and PCSK9 inhibition, not the base editor itself.

The drug developer declined to provide full-year 2024 revenue guidance until it has more data from the launches of Loqtorzi (January 2) and Udenyca Onbody (February 21).

The number of patients eligible for their second or third Cologuard screening will increase from an estimated 1.4 million in 2023 to 2.0 million in 2024. Revenue from rescreens could grow at least 85% from 2022 to 2025.

A commercially uncompetitive competitive landscape and at-home dosing bodes very well for Vyjuvek, but its efficacy could stall growth from long-term patients – eventually.

The FDA-approved indication likely won't launch until early 2026, but the business expects to achieve cash flow breakeven and profitability by Q3 2025 at the latest.

The RNAi drug developer will effectively place a ceiling on non-core R&D expenses. The decision can help to offset fast-growing expenses in support of core cardiometabolic and lung programs.

The DNA synthesis leader is growing revenue at a solid clip and improving operating efficiency. Although operating income is a distant milestone, Express Genes should accelerate its arrival.

The Emirati Genome Program ended short of its revenue target, while U.S. curbs on NVIDIA chip exports have ensnarled Oxford Nanopore's flagship instruments. The business remains strong.

As RNAi drug candidates target diseases outside the liver, they'll be able to address significantly larger patient populations. That creates a huge problem for scaling manufacturing.

Coherus BioSciences is selling its commercial infrastructure for ophthalmology biosimilars to Sandoz for roughly $190 million. Slimming down and focusing on oncology has pros and cons.

The drug developer will have three significant data readouts for RLY-4008 and RLY-2608. Unfortunately for impatient investors, they're all slated for the second half of the year.

The company set a very high bar for revenue growth in 2024 with a whopping 63% leap from last year. Although it matches our model, falling short could be painful for investors.

INOVIO Pharmaceuticals will evaluate a combination of Loqtorzi (toripalimab) with INO-3112 as a treatment for throat cancer in a phase 3 study.

Selecta Biosciences, now Cartesian Therapeutics, is a completely different company with a messy share structure. We've decided to replace it with a larger, more investable biotech stock.

The finch is getting rid of the Flyers category and replacing two companies in the biotech stocks we cover.

Solt DB Invest's base case assumes Amgen will use its sweeping patent estate to stall Udenyca Onbody. We don't expect revenue until at least 2025.

The acquisition gives Certara the leading biosimulation platform for biologics, but is unlikely to stave off headwinds on the horizon in 2024.

The synthetic biology CRO looks certain to boast at least $900 million in cash at the end of 2023. The path to profitability is a little foggier.

Full-year 2023 revenue guidance was reduced to $50 million, down from $52 million but in line with initial guidance. The market is disappointed by the timing – just 11 days after the last conference call.

Shares of the commercial drug developer have tumbled by at least 20% for three consecutive days on heavy trading volumes. It's important to focus on business fundamentals.

Cimerli notched the best-ever start for a second-to-market biosimilar product, but that was overshadowed by a relatively steep price drop for Udenyca.

The gene therapy developer received 284 patient start forms by the end of September 2023. Of those, 88% requested at-home dosing.

Coherus BioSciences earned approval for its fourth drug product and first immuno-oncology asset. Approval triggers various financial considerations, licensing opportunities, and value multipliers for in-house assets.

The immune tolerance pioneer hopes to transition from a drug developer into a lean, mean, royalty-paying machine. What happens until then?

The multi-omics diagnostics leader is trending in the right direction on nearly every important metric. It'll need to keep the momentum going ahead of multiple important launches.

The medical device company missed an opportunity to raise capital by issuing shares this summer. OrbiMed has come to the rescue – for a small fee.

The pre-commercial drug developer previously expected to commercialize its lead drug candidate in a rare bile duct cancer ahead of other tumor types, but will now pursue a broader tumor-agnostic approval.

The single-cell analysis and spatial biology leader had racked up an impressive string of legal wins protecting its patent estate. The latest decision has relatively little impact.

The regulatory delay essentially reverses any timing advantage provided by the Breakthrough Device designation. If AVITA Medical is forced to conduct an additional clinical trial, then it could negatively impact the launch of stable vitiligo in 2025.

The biosimilars and immuno-oncology company announced two separate FDA developments. Udenyca OBI will be delayed into at least 2024, while toripalimab remains on track for approval in 2023.

I have sold my position in Krystal Biotech. Former CCO Andy Orth is quickly vesting awarded options and liquidating his position, although that only represents the latest red flag for the company.

The company plans to focus on SEL-212, which it estimates could reach peak annual sales of over $700 million. It has paused most other development activity in the meantime.

The company issued new full-year 2023 revenue guidance in a range of $51 million to $53 million, or a midpoint of $52 million. The most recent 2023 model from Solt DB Invest expected $51.68 million.

Krystal Biotech disclosed today in a regulatory filing that Andy Orth stepped down as Chief Commercial Officer (CCO). This is terrible news (with even worse optics) at a terrible time.

The business crushed our model for second-quarter 2023 performance, delivering revenue 32% higher and operating expenses 9% lower than Solt DB Invest estimates. Both Udenyca and Cimerli contributed to the outperformance.

The Cologuard leader raised guidance for full-year 2023 revenue and adjusted EBITDA. This is a high-quality growth stock and we believe investors can feel comfortable paying up now for future growth, but shares are likely overvalued based on expected 2023 or 2024 financial performance.

Codexis isn't perfect, but the valuation doesn't quite match up with the near-term potential of the technology platform – or, perhaps more accurately, the value potential as part of a large drug manufacturer's toolkit.

The BLUE-C study of a next-generation version of Cologuard met all primary endpoints and reduced false positives by 30% compared to the existing product. However, there was no meaningful improvement on precancerous lesion detection.

Investors might read that the Surface Oncology acquisition is about doubling down on immuno-oncology. That's the high-level takeaway. The reality is more nuanced – and more valuable.

Several quick thoughts on the planned acquisition of Surface Oncology.

The FDA approved the ReCell System for use in soft tissue repair. The formal label, for full-thickness skin defects, is advantageously broad and significantly expands the market opportunity.

The FDA successfully completed an inspection of the Chinese manufacturing facility where toripalimab was produced. Separately, two announcements provide glimpses of the commercial strategy for Yusimry.

The company's first drug approval signals its transition to commercial operations. Vyjuvek is now a drug product and not a drug candidate.

The company is seeking to raise up to $57.5 million (gross) from an offering of up to 13.5 million shares of common stock at $4.25 per share.

The new leadership team has committed to an unusual level of transparency, which signals confidence and competence in the new commercial strategy. New metrics provided for ReCell Go have improved our modeling, for instance.

The genetic diagnostics leader raised full-year 2023 revenue guidance, now expects to achieve positive free cash flow in 2023 instead of 2024, and is on pace to achieve positive full-year 2024 operating income according to our modeling.

The first-quarter 2023 performance wasn't pretty, but it should mark the lowest quarterly revenue total of this decade.

The shifting timelines for clinical programs not named Vyjuvek / B-VEC is beginning to hamper the company's long-term ability to create value and live up to its true potential.

The precommercial drug developer has finally deprioritized wholly-owned gene therapy programs. Unfortunately, so have several other drug developers throughout the global landscape.

The gene therapy developer has an aesthetics subsidiary named Jeune Aesthetics. It recently dosed the first patient in the final cohort of an ongoing phase 1 clinical trial for KB301 in lateral canthal lines, or wrinkles on the upper cheek below the eyes, commonly called Crow's feet.

The business will hit an inflection point on revenue growth, mix, and quality this year. Coherus BioSciences expects to return to profitability in 2024.

The ReDiscover study evaluating RLY-2608 demonstrated industry-leading safety and tolerability, but initial efficacy data spooked investors. Wall Street is assuming the asset risks lagging the competitive landscape when combined with the chemotherapy drug fulvestrant.

The medical device company replenished its shelf registration with the SEC. Separately, AVITA Medical announced its third-generation automated ReCell device has earned FDA Breakthrough Device designation for acute wounds.

Solt DB Invest previously assigned a significantly higher probability of success (POS) to the pipeline at Relay Therapeutics than the industry average. We're increasing that metric in our modeling, which results in a higher Margin of Safety range

Initial data from two late-stage studies suggest SEL-212 can be commercially competitive with Krystexxa and its combination formulation. That increases the value of the royalty stream for Selecta Biosciences – or a financing partner

A quick update here before the company announces full-year 2022 operating results and gives the latest glimpse into its roadmap for 2023 and beyond.

The medical device company issued full-year 2023 commercial revenue guidance expecting 47% growth at the midpoint. It expects to end the year with a year-over-year growth exit rate of at least 50%.

The business grew Screening revenue 30% in 2022 from the year-ago period, but initial full-year 2023 revenue guidance expects the segment to grow "only" 18% at the midpoint. This is likely an underestimate.

The single-cell analysis pioneer ended a frustrating 2022 by launching a new instrument. Although the new Visium platform could re-accelerate growth in 2023, it might mask a bigger problem facing the business stemming from slowing consumables revenue growth.

Solt DB Invest initiates coverage of Centessa Pharmaceuticals, which is the 15th company to receive written coverage.

Solt DB Invest initiates coverage of Exscientia, which is the 14th company to receive written coverage.