Biotech Values

[DewDiligence]

Re: ENTA /possible HCC risk of FXR agonists

I saw on twitter that RVNC is your current biggest position in biotech values. Does that mean you have trimmed your ENTA position?

During 2016, I trimmed some ENTA and steadily built my position in RVNC; however, ENTA is still my second-largest biotech position due to a large buy on 10/22/15—the day of the FDA warning letter for V-Pak (#msg-117918952). My remaining ENTA shares have a low cost basis, so the tax hit would be substantial if I were to sell some of them.

what do you think of recent published findings about possible cancer development with fxr agonist? enta's [EDP-305] compound is an fxr agonist...

The paper you're referring to is about mouse models of FXR agonists. Although there could be an increased HCC risk in humans from chronic treatment with an FXR agonist, there is not yet any evidence of this that I'm aware of. The fact that GILD and NVS (in addition to ICPT and ENTA) are developing FXR agonists provides some confidence that a show-stopping class effect is unlikely.

Moreover, bear in mind that ICPT's Ocaliva comes with some known safety issues, such as raising LDL levels by about 20%. Compared to that, a slight increase in the risk of HCC might not be an unacceptable side effect for drugs that treat NASH. All told, as an ENTA investor, I'm not unduly concerned about this.