1. I’m embarking on a tweet storm explaining why I think $GBT is significantly undervalued relative to analyst estimates (>10 with PTs of $60-$80 / share). I will cover 1) Efficacy, 2) Safety and 3) Market Potential. First efficacy.
2. $GBT MOA has some similarity to Hydroxyurea (which increases Fetal Hb) and $BLUE (creates % of Hb that doesn’t sickle). High % of occupied Hb (or fetal, or unsickling Hb) reduces sickling.
3. But sickling reaction is exponential. At 30% Hb occupancy sickling SHOULD grind to a halt. $GBT
4. $GBT 1500 mg dose is modeled to achieve near constant 30% occupancy. Unless my understanding of SCD is wrong, this SHOULD alleviate most symptoms (wouldn't address existing organ damage).
5. We already know compassionate use patients had 67% reduction in VOC from baseline. Would have been 80% if non-adherent patient excluded. These patients were at death’s door before being given $GBT ’s voxelotor.
6. In extracorporeal carbamylation study, which $GBT MOA attempts to mimic, pts had 80% red in VOCs. Pain / SCD exacerbation days should be similar red IMO. Plus pts with >20% Fetal hb (similar MOA) are known to have few symptoms.
7. Some analysts project ~40-50% red in VOC / other symptoms (or shy away from projecting). This is on the order of the best comp treatments (which have limiting side effects). Why not higher? Seems quite conservative given the MOA. $GBT
8. Another reason why I think P3A has a high prob of success is because P2 data are not fuzzy, subjective assessments like you would get in pain or neurological diseases. Bilirubin, % irreversibly sickled cells, Hb can’t be “faked” $GBT
9. On $GBT safety, we’ve seen only infrequent rash and diarrhea. Big safety issue would prob have been seen already (i.e. clinical hold); prob of severe issue seems quite low given pre-clin profile (i.e. 75:1 partitioning into RBC).
10. Concerns about hypoxia caused by the $GBT MOA seem to have been overblown. All data suggests it actually has the opposite effect (albeit only slight). The journal paper on this was highly speculative, IMO.
11. Concerns about $GBT exhibiting the immune reaction of prior Hb modifiers don’t make sense to me. $GBT is in a whole different league in terms of half-life, stoichiometry, selectivity to Hb and degree of clinical validation.
12. My biggest concern for $GBT is clearance (liver and kidneys) given the huge amount of daily drug. But even if there’s an issue, it will probably be manageable with monitoring and dose adjustments.
13. Other potential concerns are unknown unknowns; gaps in due diligence, not understanding SCD well enough, management failure / dishonesty (although seen no signs of the latter). $GBT
14. Analysts have slow ramps up to ~25% MS for $GBT (4-8 yrs). Yet this is not a “me too” drug; could be first ever life changing BTD therapy in SCD, with minimal side effects. It could be a SOC soon after launch. What’s going to compete?
15. Why can’t $GBT take > 50% MS? Insurers shouldn’t balk given huge direct costs of SCD ($200k/yr) assuming a 60-80% disease burden reduction. Answer: It CAN + it will be easy to market as a daily pill with concentrated SCD geographies.
16. Gene rx /CrispR is going to take a long time, especially if $GBT can achieve 60-80% red in pain / VOC. With lower disease burden, reg hurdles will be raised + pts harder to find for trials. I can’t see GeneRx with > 5% MS midterm.
17. If I’m right, $GBT has a good chance of achieving $5B in sales (equates to ~ 50% MS) within 3-5 years. They have exclusivity until 2032 so that could translate into > 4x multiple on future sales, or $20B MC, not long after launch.
18. There are > 10 analysts who follow $GBT. All bullish except MS. I only disagree w them on their PT / conservatism. You may not believe them (or me), but consider Joe Edelmen ($GBT a top holding). Track record isn’t bad (130x since 99)
19. Why aren’t analysts more bullish? Great analysts follow $GBT, but they can’t give PT > 100% above current PT. It just isn’t done for co with this MC. So they goal-seek a lower PT w more conservative assumptions and keep their jobs.
20. In summary, I think $GBT is grossly undervalued because of 1) conservative expectations around efficacy, 2) legacy unfounded fears of safety, and 3) overestimation of competition.
21. BE AWARE you could lose almost all your capital on $GBT if a safety issues comes up. It’s my favorite pony, but it only has one trick, as they say.
22/22. I’m very excited about how $GBT could impact the lives of people with SCD. Not sure if Part A data will prove me right, be inconclusive, or prove me wrong, but I don’t want to miss out. Invest at your own risk.
