1- Price action relative to the biotech sector and signs of accumulation. The stock made a nearly 5% move yesterday on good volume, despite the XBI closing negative.
2. I reviewed the company's updated presentation. The last time I'd looked, they'd been guiding for Fragile X readout in Q4 or close to year end (perhaps the riskiest but least impactful of the 4 expected readouts over the next year). However, now they are guiding for it in early 2020 and I remind members that the ARCADE readout for soticlestat in CDKL5 Deficiency Disorder / Dup15q Syndrome is expected in Q1. I have higher conviction for this second readout, considering promising results we reviewed previously for the ENDYMION open label extension trial.
Given this change, to my eyes it makes it less feasible to wait for the Fragile X readout to get in prior to ARCADE. As preclinical rationale for OV101 appears intriguing and data in FXS mice has shown normalization of certain aspects of Fragile X (anxiety, irritability, repetitive behaviors, hyperactivity), I don't mind being exposed to both readouts (with Angelman to follow midyear).
Market capitalization of around $125 million seems quite reasonable relative to substantial market opportunities being targeted and multi-faceted neurology pipeline (cash position boosted by secondary as well). This is primarily a catalyst idea, as several data events loom in the near to medium term (OV101 in Fragile X and Angelman, soticlestat in phase 2 ARCADE study and phase 2 ELEKTRA trial). OV101 is the only drug in development for Angelman Syndrome, and management appears to have much confidence in achieving the same CGI-I endpoint as the prior mid-stage study (FDA gave them green light to file for registration if they can do so). Soticlestat, 50-50 partnered with Takeda, has a unique mechanism of action that not only crushes seizures but also potentially heals the brain. The asset is both first-in-class and only-in-class, is targeting a large opportunity in rare epilepsies, and has shown impressive seizure reduction in prior trials (caveat for low N). ENDYMION extension data provided another element of derisking as a group of incredibly difficult to treat patients experienced increased seizure reduction with prolonged treatment. See my September article. Time Frame For Upside = 6 to 12 months as multiple data readouts come to pass (Catalyst Idea).
