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Yes... and I thik the revs are right around the corner w/ Halo and the 9 plus partners (mostly BP) wanting to use Enhanze to cut down on infusion times (hours vs minutes) and extend the patent life of existing products with a reformulation. Halo biz could fill existing capacity and more in my estimate. And avid can't say a thing about what their clients are doing right now... Janssen's Darzelex SC version could be $2 bil annual sales right out of the gate...
The halo biz is a gateway into the nine BP's that partner w/ halo on dozens of potential products... I would think the big CDMO's would love that biz...
I can also see pressure on Avid from BP to belong to the big CDMO club in order to get the biz...
We should be a takeout candidate right now if someone else has the potential biz but not the capacity... and there are many contacts amongst the bod, analysts covering the company etc with the big two or three CDMO giants...
The BOD knows the landscape... we should get a clearer picture at the mid july cc... and with the annual report, it would be interesting to see how much the tax loss carry forward number is after the ip sale.
Lias was a SK plant to help protect SK. I'm sure he did a good job turning the company around but in a takeout, why give him a piece of the pie? Per other reports, the previous biz dev guy left the same time as roger. The new biz dev guy appears to have a much stronger resume so maybe roger and bod agreed to part ways. And I think the company is sold before they replace the current ceo who sold his company to a major CDMO... he knows the drill and the other members of the bod know the marketplace.... all just a guess...
And the downside? If the BP's are locking up available manuf capacity, what about all the smaller biotechs scrambling to find available manuf...
one way or the other, mgmt needs to pay attention to SP or they run the risk of a hostile takeout and they don't have the old BOD to keep the wolves out.
just a matter of time...
https://dcatvci.org/5987-cdmo-market-forces-re-shape-of-m-a-activity
art on darzalex... sc version will drive sales...
https://www.fiercebiotech.com/biotech/j-j-bags-150m-option-genmab-s-darzalex-successor
Anti-CD38 antibody Darzalex is one of the most successful new drugs of recent years, racking up $2 billion in sales last year. Genmab expects sales to hit $3 billion this year, and analysts at Jefferies think $10 billion is achievable in the long term. The sales targets reflect the potential for Darzalex to treat patients across the multiple myeloma pathway, particularly when a subcutaneous version is available.
listen to the halo presentation at goldman sachs...
https://event.webcasts.com/viewer/event.jsp?ei=1248360&tp_key=7e10ad80a4
4 minute mark
commercial darzelex sc from jnj will be the next inflection point.. for halo
est sales $7 bil... 5 min infusion time vs hours and lower infusion reactions... doctors can't wait to get their hands on it... trials met endpoints...approval and commercialization upcoming... sc version should get big chunk of biz
a whole of other trials going on and expanding... clients are seeing sc formulations as way to extend patent life of drugs... roche very active as well...
lot of other clients looking at sc versions vs IV...
i think the CDMO folks are going to get pretty busy with halo...
as far as announcements, do you think they announce a big manuf contract on a drug not technically approved yet?
I spoke with the tappan guy regarding IP value vs CDMO value when they first appeared on the scene. They did extensive research on the cdmo space.
I argued the value of the IP based on the separation curves of the combo treated pdl patients from the sunrise trial.
They put zero value on the IP and said any value they got would be gravy.
Bring on the gravy...
On a side note, the IP may have been valuable but the BOD and mgmt were "toxic" in the institutional investment world. UTSW and Thorpe hitched their wagon with some bad actors imo.
When the ronin folks along with tappan etc kicked the previous crew out, the focus was on saving what value was left. Bavi needed a lot of money to continue and it was still high risk by nature of drug development and the company was faced with huge dilution and avid needed capital to upgrade. And given the company had one sales guy out of his element in bio-manufacturing sales, both paths could not be pursued at the same time. In essence, the company was terribly mismanaged and given the BOD makeup, there were no institutional investors that would touch the company. The old BOD and mgmt had to be removed.
For now, if the IP development starts to reveal itself with trials and milestones, AVID hopefully will get payments and manuf contracts that will help grow the CDMO biz. Astronomical? No.... base hits maybe... If the IP shows more promise, analysts might incorporate that into value models.
On the "what if" game, where would we be if the old crew was still ruining the ship? CJ and crew would still be getting $500k per year and with 500 mil shares to play with, that game could have gone on for some time.
Where is SK now? SK is helping CJ over at PTSC which is trading at less than a third of a penny... imo the only asset is cash and imo CJ found a vehicle in SK to drain the cash with a consulting gig for block chain technology. Ronin did us a huge favor in cleaning house.
The annual report has the contract but the milestones are blanked out...
note that merck has two drug trials going on and another planned... one trial enrolled early.... both current trials are open label so they are getting real time info..
just what if merck made a play for bavi as buyout or partner w/ oncologie? ... oncologie would make a deal in a second imo because it gets them off the ground... and then the trickle down to cdmo...
what if...
note the proposed bavi trial is a combo with keytruda...
https://oncologie.international/oncologie-closes-an-80m-series-b-financing-for-clinical-stage-pipeline/
Oncologie will initiate key clinical trials in the coming months, including a global proof of concept gastric cancer study with its lead compound, bavituximab, in combination with pembrolizumab (Keytruda).
https://www.clinicaltrials.gov/ct2/show/NCT03519997?term=Pembrolizumab%2C+Bavituximab&rank=1
bavi is currently in a trial w/ keytruda that started may 2018... it is an open label trial conducted out of UTSW so given UTSW still has a dog in the IP hunt, Oncologie most likely using the interim data to design the trial... along with biomarkers...
as for garnick, he had good intentions but bad judgement... at the time all he had to do was beat avastin... the bleeker job sidetracked everything and the BOD including King and Garnick squandered the IP by not partnering ... they thought they had the holy grail and built avid to go commercial.. until ronin and others smelled value going the cdmo path..
now sk and crew lost all their options and the new employee plan put in place in dec allows them to reissue them...
finally, can some one notify oncologie of their ill advised pursuits in raising $80 mil to advance bavi...
Oncologie closes $80 mil funding...
https://oncologie.international/oncologie-closes-an-80m-series-b-financing-for-clinical-stage-pipeline/
"The funding will be used to advance Oncologie’s three clinical stage programs, as well as its proprietary biomarker platform and in-licensing activities. Oncologie will initiate key clinical trials in the coming months, including a global proof of concept gastric cancer study with its lead compound, bavituximab, in combination with pembrolizumab (Keytruda)."
So it looks like we get a milestone payment in the near term...
We don't know the current status and they are in no hurry to disclose...
Keep in mind Avid is at the mercy of clients as to when to disclose...
Halo could be a big slice with both Roche and Janssen... daratumumab sc is a lock for approval and therefore manuf biz and the sc formulation should take a big part of the $3 to $4 bil in sales... that won't happen until fourth qtr which is Avid's third FY qtr... and we don't know how much if any Avid gets of that biz.... On last cc, Lias said they were doing process valid for halo biz outside of roche...
And mgmt prob gets options between now and before mid july cc...
catalent discussion of paragon buy for $1.2 bil...
https://event.webcasts.com/viewer/event.jsp?ei=1241450&tp_key=12d013b016
analysts questions around minute 22..
many analysts asked questions on capacity...
general response is clients are in a rush to lock in quality manuf right now .... reserve fees ...
and a lot of the capacity being built is already reserved..
just a matter of time...
just a matter of time..
Mark Brammer.... for once we have a BOD that is worth it and one tenth of what the previous crooks were getting.. just imagine having experience and connections in the biz...
Brammer has done deals with janssen and sold his company to Thermo Fisher for $1.7 bil....
https://www.entrepreneurialscotland.com/purpose/people/mark-r-bamforth
"In 2010, Bamforth founded a biologics CDMO, Gallus BioPharmaceuticals, acquiring a world-class facility and team in St. Louis, MO, and a commercial supply agreement with Janssen."
Bamforth serves on the board of Avid Bioservices, a public CDMO company, MassBio Board, Wentworth Institute of Technology board, Entrepreneurial Scotland’s board and is a founding-trustee of the Saltire Programs. He has a BS in Chemical Engineering from Strathclyde University and an MBA from Henley Management College.
https://www.marketwatch.com/story/thermo-fisher-to-acquire-brammer-bio-in-17-billion-gene-therapy-deal-2019-03-24
art on Subcutaneous vs Intravenous Daratumumab
https://www.cancernetwork.com/article/subcutaneous-vs-intravenous-daratumumab-which-better-rr-myeloma
“One of the main problems for daratumumab is the median duration of infusion because you know the first infusion lasts 7 hours, the median duration of the second is 4.3 hours, and the third and subsequent is 3.4 hours,” said presenter Maria-Victoria Mateos, MD, PhD, of University Hospital of Salamanca, Spain.
vs 5 minutes SC (Halo version)...
tough decision for a patient or dr.... no SC will win..
how much biz will CDMO get? that is the big question..
good article on cdmo industry.... consolidation still happening...
AVID mentioned as one of "other important players" on page 8
After talking with the Tappan folks back when Ronin was making his move, I got the impression Tappan was on the ball with what was going on in the CDMO market. Given their overall investment in Avid, my guess is they have their nose to the ground and know which way the winds are blowing. Same with the Ronin folks...
just a matter of time and execution...
https://bourne-partners.com/wp-content/uploads/2019/02/2019-Biopharmaceutical-CDMOs-Market-Insight.pdf
read the recent cc transcripts for the two most logical buyers... catalent and thermol fisher via pantheon
https://finance.yahoo.com/news/edited-transcript-ctlt-earnings-conference-201654013.html
https://finance.yahoo.com/news/thermo-fisher-scientific-inc-tmo-174220813.html
cliff notes.... strong demand for biologics manuf... tight capacity for now... some manuf getting reserve fees for capacity...
both expanding capacity and both looking for m&a additions if they make sense numbers and culture fit etc...
Avid has a short window to take advantage of capacity and m&a climate within the next 18 months or less... my guess is the BOD is on the ball this time around..... maybe they don't have to replace lias...
yes.... infusion reactions much lower and treatment in 5 minutes vs 4 plus hours....
this should get significant market share...
press release w/ janssen drug and enhanze....
approval and sales soon....
https://www.apnews.com/Business%20Wire/05cbfd19c43a4b5aa5bdb16bc252292f
right now it's not about receiving approval.... it's all about getting milestones for trials etc... bavi in two trials now w/ merck drugs per oncologie website... the brain cancer trial is fully enrolled and from what i understand is ahead of schedule w/ enrollment... the other trial is with keytruda...
oncologie's focus is also in china.... a very hot area with lots of money pouring into biotech...
so bavi is not dead yet... as for impact on CDMO? ... not needle moving imo but a potential source for capital if milestones are reached...
Halo presents at asco
http://abstracts.asco.org/239/AbstView_239_265165.html
this is the darvalex drug for MM.... $3 to 4 bil sales est 2019-2020 and SC delivery approval 2nd half 2019 followed by sales of SC formulation (Enhanze)... SC market per CEO and others will be significant given 3-5 minute delivery vs 4 plus hours via IV and less adverse reactions... on last cc Lias mentioned getting commercial validation runs for halo for other clients besides roche... janssen is only one close to commercial approval so cdmo could benefit w darvalex sc approval...
just waiting for clarity on future halo biz if any for cdmo...
Chaney was biz dev director for Pantheon in Greenville, NC in 2013.... CDMO is prime candidate for Pantheon take out.... the access to the clients like halo and all the enhanze spinouts..... are these guys playing three moves out? no need for a long term ceo when all you need is basically a division head if someone like Pantheon acquires CDMO...
As I posted earlier, this move had to be planned ie Lias leaving and supposedly "his sales guy" with him right at FY beginning 2020. You don't find this talent this soon in a very competitive industry and the more safe choice in sales (ala a big company like Pantheon vs an Avid), the easier the sale and thus more money for the sales person. IMO CDMO improved the roster. And Hancock seems to be holding his own in running the ship.
As far as filling up the capacity, I found this on the halo board but could not find dannish newspapers for the actual quotes. The quote is three months old. IMO The Darzalex sc formulation (halo) could be a good chunk of expansion capacity... CDMO is in a good position to get that biz.
Genmab CEO Jan Van De Winkle tells Danish financial newspapers that he expects the SC version of Darzalex to take 80% marketshare of all darzalex sales from the minut it is approved and on the market. With positive top line result today, we could expect approval and sales in Q4 2109. Genmab Darzalex sales in 2020 estimated to be 5 BN USD x 80%=4BN USD. Do the math on HALO's royalty. My guess is 200 MUSD just in 2020. Darzalex is estimated to bring in 7-8 BN in MM alone in 2024. Blue sky scenario just in MM might be 0,5 BN royalty for HALO. .
one bavi clinical study on oncologie website updated..
https://www.oncologie.international/ongoing-trials
https://clinicaltrials.gov/ct2/history/NCT03139916?A=1&B=7&C=Side-by-Side#StudyPageTop
looks fully enrolled....
Drug: Temozolomide
Temozolomide causes cell death and radiation shrinks and kills the cancer cells
Other Names:
Temodar
Drug: Bavituximab
Bavituximab also may activate (cause) the immune system to attack the cancer cells
Radiation: Radiation
Radiation causes cell death and shrinks and kills the cancer cells.
both studies w/ merck... the other w/ keytruda...
I think for once we have an informed BOD (and not collect $500k per person in BOD fees) about the cdmo market and clear objectives from active investors (and a respectable institutional ownership) to max risk adjusted value in share price ..... and an asset that should demand attention from more than one player..... combine that with the forthcoming ability to estimate and value future potential income streams and we have the makings for a deal...
This assumes consolidation in the industry continues as the big dogs want fewer suppliers with bigger capabilities and financial strength.
What does the Halo biz look like moving forward over the next two to three years... Roche and Janssen commercial sales plus trials?
Any new biz from other customers?
When will expansion capacity happen and at what cost and for which clients?
And value of IP via Oncologie updates? milestones etc
This picture should come into focus over the next six months imo
Will there be some dancing with some of the players as to when value/risk is acceptable for both sides?
Great info. I've been saying for over a year to get the shell done because that takes time and is most disruptive. So hopefully they are well on the way. Just a hypothetical, what if Janssen commercial deal takes off. Pantheon does fill/finish as subcontractor for halo for the rHuPH20 program which is part of enhanze technology. Most likely the old cook facility now Catalent. Could some of the space be used as finish/fill? It would be nice to have Pantheon's finger in the pie given Catalent and Pantheon are two of the most likely buyers. And is it a benefit to do fill/finish at the Tustin location?
Good catch. His resume looks pretty strong. If you look at the previous guy and his resume, he worked at several of the places Lias had worked. Coincidence? Doubt it. And Tracy worked for Hancock's company so part of the Ronin clan. My guess is FY start and the BOD made some decisions or ultimatums (or both).... so a Roger guy leaving when Roger is leaving at beginning of FY is probably not a coincidence as well. There is a pretty active BOD that is still active in the industry along with some pretty active value investment guys who have their ears to the ground. If changes were needed, so be it.
Not looking for anything of substance until the July CC. We know what FY 2019 will look like w/ recent guidance. The key will be impact of halo biz moving forward.... one can get a reasonable est on ENHANZE demand for clinical trials because it is a predetermined number. Commercial sales on Janssen's drug expected to be $3 to $4 bil this year and next is another thing altogether. And when a leading Dr. says SC treatment (ENHANZE) can't come fastest enough over IV treatment, demand could come pretty fast. Impact on CDMO? Hopefully we have some more visibility on the July CC. The last cc mentioned getting process valid approvals for other clients besides Roche.
Subcutaneous delivery of daratumumab
ENHANZE® drug delivery technology, Halozyme, Inc
yes for right now.... but things should ramp up imo.. perhaps second half 2019
look at page 9
https://s21.q4cdn.com/250105458/files/doc_presentations/2019/05/Halozyme-Corporate-Presentation-May-2019-FINAL.pdf
darzalex (janssen) is approved w expected sales in 2019 of $3 bil, $4 bil in 2020 up to $7 bil in 2025...
Here's where Enhaze fits in:
Potential Benefits of Subcutaneous Formulation(1)
• Faster infusion time being tested (3-5 minutes)(2) compared with 4-6 hour IV
infusion, initially weekly
• Well tolerated with fewer infusion related reactions (IRRs) than with IV(3)
BLA/MAA Submission Timeline
• COLUMBA study in Relapsed and Refractory Multiple Myeloma
• Achieved 2 primary endpoints: non-inferiority in Response Rate and C trough (reported
2/25)
• Janssen anticipates filing regulatory submissions in H2 2019(4)
Asco abstract shows benefits...
of three phase III's w/ enhaze, page 8 says Janssen is completing, Roche is another "ongoing" and we already have roche as client and the other phase III undisclosed is starting. So I pick door number 1. Janssen
https://s21.q4cdn.com/250105458/files/doc_presentations/2019/05/Halozyme-Corporate-Presentation-May-2019-FINAL.pdf
so who buys avid? catalent or patheon?
from last cc regarding enhaze... how many enhaze partners are close to approval other than roche?
"On the topic of commercialization, we’re pleased to report that we’ve recently completed a process validation campaign for a new scaled up mfg. process on behalf of Halozyme in anticipation of future commercial manufacturing. And we are also currently completing process validation campaigns for other clients. As a reminder, these process validation campaigns are required prior to the manufacture, launch, and marketing of commercial biopharmaceutical products and the details all and specifications resulting from the process validation are included as part of our customers’ biologics license applications to the FDA and in other global registry filings."
... this is enhaze and looks like it will be approved w Janssen and huge sales are projected for the drug and enhaze makes the drug easier to deliver...
http://abstracts.asco.org/239/AbstView_239_265165.html
https://s21.q4cdn.com/250105458/files/doc_presentations/2019/05/Halozyme-Corporate-Presentation-May-2019-FINAL.pdf
look at halo's recent annual report and all the activity... catalent and avid... pantheon entered to do fill and finish... pages 8-12... enhaze can get big fast... i wonder if we are doing the Janssen stuff
so two of the three major CDMO players are in the mix w/ Avid...
http://d18rn0p25nwr6d.cloudfront.net/CIK-0001159036/a2028285-248c-434b-aa33-1de82aa3c2b1.pdf
could it be that roger is no longer needed and they forced him out by putting pressure on him to move?
perhaps cj found a way to drain the cash out of ptsc.... if so, wonder what his cut is... so glad ronin cleaned house..
looks like SK and CJ reconnect
https://www.sec.gov/Archives/edgar/data/836564/000168316819001027/patriotscientific_ex1001.htm
https://finance.yahoo.com/news/patriot-scientific-corporation-provides-business-220000389.html
ptsc sp $00.0028 almost a third of a penny...
read pages 11-13
note "such targets are "rare" on page 13
https://www.kurmannpartners.com/fileadmin/user_upload/import2015/MR-Pharma_Biotech/KP_Pharma_M_A_report_2019.pdf
consolidation going to the top..
https://www.kurmannpartners.com/cdmo/
Patheon, Lonza and Catalent in the top
Here are their biomanuf sites
Patheon: St Louis MO single use and stainless steel
Catalent: Bloomington IN (former Cook which is other Halo supplier) and Madison WI (state of the art like Avid)
Lonza: Houston TX (viral) and Portsmouth NH (large scale 5kL and 20kL)
Looks to me that Avid assets including the expertise are rare and the SP is well below "rare"... if you look at the proximity to all the drug companies on the west coast, CDMO is rare plus... all three of the top CDMO's should be players...
who will rescue the shareholders?
I am as frustrated as everyone else. But fixing a biz takes time. Lias took over Sept 2017... When he took over they were in no position to compete or even go after new biz and it took a while to get the ship in order including upgrades and deferred maintenance issues. And they had a one man marketing team that imo was out of his element in cdmo sales as his background was drug dev biz....
Also keep in mind Lias first six months plus was a power struggle w/ Ronin crew and King crew as to the direction of the company... bavi or Avid...
So hopefully they have a much better platform to compete.
IMO Lias put them in a position to be able to get contracts. The previous crew was inept at running a cdmo and developing drugs. Contracts will come...
yes agree... 90% of that 200 mil is signed contracts looking forward vs previous yr which is what is typically stated.... note they are looking forward to rapidly expanding rev over the next two years...
per last cc they have $43 mil backlog for FY 20 which started two weeks ago... some of that is halo but since the last cc, halo is supposedly expanding orders.... we should be getting a better picture soon as to how close we are to $100 mil with all the "contracts" being negotiated... throw in the expansion possibility to double revs for $30 mil cost which almost doubles rev and value of entire company.... and any contribution from oncologie...
if roger was such a hit to "value", sell the company where you don't need roger... we should be a takeover candidate right now...
follow up... take note... value is based on near term "potential" basically two years out... familiar story?
getting avid would get a west coast manuf facility to add to midwest and east coast manuf facility...
catalent in process of buying paragon bioservices for $1.2 bil... location in MD... similar building as avid in industrial park ... leased space..
https://www.catalent.com/index.php/news-events/news/Catalent-to-acquire-gene-therapy-leader-Paragon-Bioservices-Inc.-for-1.2-billion
Financial Impact and Value Creation
The transaction will deliver highly compelling value to Catalent’s shareholders. Although Paragon will represent a small percentage of Catalent’s business in the near term, it will transform the company’s business profile and meaningfully accelerate its revenue and EBITDA growth over time. Paragon is expected to achieve more than $200 million in revenue in calendar year 2019, with nearly 90% of this revenue target already reflected in signed contracts. The gene therapy market is expected to have sustained growth of 25% in the medium term, and, as a leader in the industry, Paragon is expected to outpace this market growth for the foreseeable future. Catalent expects the transaction to be accretive to its Adjusted Net Income per share in the second full fiscal year after closing, and significantly accretive thereafter.
Catalent has a ton of locations across the world... 14 in North America and of those, only 5 locations work with biologics. Only one has commercial manuf capabilities. The rest are clinical trial size operations. The only other biologics site outside of US is a sales office in Japan.
https://www.catalent.com/index.php/about-us/Our-Locations
mgmt either gets CDMO's SP where it needs to be or put the company up for sale. Catalent is a lay up which should be triple current price. Hopefully the Tappan and Ronin groups are turning up the heat.
from linked in... https://www.linkedin.com/in/roger-lias/
Lias has been around Raleigh at least since 2002 .... one can get a great house in research triangle area for $500k whereas that will get you a 1200 sf fixer upper in socal... if one likes raleigh which is laid back and nice, it would be a terrible move to socal... particularly at his age where he prob has all the money he needs...
per linkedin, this guy endorsed roger... andrew sandford at catalent pharma.... catalent bought cook which was the other supplier for halo.... catalent would be a logical buyer given the halo connections... if you look at cc transcripts, biologics is one of their fastest growing segments
and catalent would know all about halo ramp up.... i would want the halo biz with the 8 to 10 big pharma partners and all the possibilities w/ enhaze.. gets your foot in the door... 10 to 20 shots on goal w/ trials and commercialization...
could a deal be in the works and roger leaving was a way to tube the share price for the short term? ... mgmt sure has not done anything to stop the bleeding.... why? and if a deal was in the works, roger is no longer needed.... me thinks mgmt wants someone else besides retail to own shares