Biotech Values

[ghmm]

GLPG / FGEN / IPF:

Just to clarify some of the questions raised with the GLPG call/presentation and some personal observations.
1. The varying n's is because no strategy was implemented for missing data they just reported what was available.
2. The FVC was NOT stat sig at the 12 week time point. However clearly this study was not powered for that.
3. This was a very small exploratory study cherry picking data (to show good or bad) is going to lead people to believe what they want. The best way (IMO) to analyze is to look at the totality which IMO is very encouraging while clearly early and not definitive proof.
4. GLPG (in the past) has not been the type of company to string along mediocre datasets/programs. They have a very robust discovery engine as well as a descent/growing pipeline. They've been quick to to axe programs that have failed acknowledging they take a higher risk approach with novel targets and many in the past have not worked and were quickly scrapped.
5. The drug hit the target and did what was expected (significantly lowered LPA:18:2). The effect seems to impact the disease which warrants advancing the program.
6. Its noteworthy that they had already talked with regulators on preliminary 2B design and have given investors an inkling of what that will look like (2 doses, 52 weeks, Could be 1 of 2 pivotal).

Comparisons/impact on FGEN
1. It appears inhibiting autotaxin effects CTGF level. But I am not sure if this would mean the two agents would have no/little synergy or not.
2. As a GLPG shareholder I am impressed how quickly they are prepared to advance the program. Conversely as an FGEN shareholder I've been frustrated at how slowly they've advanced and enrolled 3019 (all indications).
3. As an investor in both I have no intention of selling either based on their most recent data. I think both programs have promise and FGEN has more robust data. But I am by no means ready to dismiss GLPG1690 as an inferior product or one without a potential market opportunity.
4. 3019 is very likely to be partnered. I highly doubt GLPG is going to partner 1690 anytime soon. 3019 data is robust enough to attract a partner and Neff has indicated an interest. GLPG has shown a proof of concept but still very early. One of many concerns is the durability of the treatment which needs a larger trial.

Over the past few years I've been trying to change my investment approach rather then buying company X and thinking its treatment for disease Y is the best and rationalizing it as competitors come I TRY to continually look at my investment in company X as it pertains to disease Y and being open to adjusting my positions to add another company if one comes along and/or reduce/sell company X if the landscape warrants. Here we have a different situation as both have other products in GLPG's case 1690 is still a fraction of the valuation. Still I would not dismiss one IPF program over the other. I guess I have a different position then most being long both (FGEN is actually a slightly larger position but both are very large holdings). I just don't see it as one or the other at this point. Both programs merit going forward and its unclear yet the positions they could have in the marketplace but certainly both still have potential to be best in class.