Profiling $SDGR:

It took me a long time to warm up to $SDGR. For a long time, I just dismissed it as a tech company. I could care less about a tech company. Then I found out they were developing their own pipeline.
1/ Then again, I dismissed them as a tech company pretending to be a biotech. What would a tech company know about developing drugs? I listened to a few of their presentations from their science guru. That is when I thought they had potential.
2/ They have a lot of partnerships for companies using their software developing drugs. I am not going to cover any of those as they all have different terms and levels of profit sharing. They do offer potential should they work out.
3/ For valuing the software I just take the company estimates on revenues and put 10x on them for a reasonable P/S for a tech company. That allows me to look at and value just the biotech part of this company.
4/ They have 3 wholly owned program around MALT1, WEE1 and CDC7. The MALT1 is part of the linker pathway between B cell receptor activation and the NF-kappa-B pathway which is all the proinflammatory cytokines.
5/ Its an interesting target for B cell driven cancers like Lymphoma and Multiple Myeloma.
6/ Their WEE1 and CDC7 are all about cell cycle pathways. For many years, the only drugs for targeting the pathways that drive the cell cycle was only CDK4/6 inhibitors. There are many of them and that is really played out.
7/ The push by companies into developing new drugs that target mutations in the cell growth cycle has just begun recently. Some of these pathways even fall into Synthetic Lethality which puts $SDGR into my SL category.
8/ The cell cycle is a new frontier beyond the fist CDK4/6 drugs on the market. Many companies are starting to do discovery in this space.
9/ WEE1 plays a role in the Cyclin B pathway which regulates the cell through the mitosis phase of the cell cycle. The CDC7 is a control protein in the activation of DNA replication in early S phase. Both of these have good potential.
10/ I think all 3 drugs could easily do $2 billion or more sales if all went well. That is the potential. Right now they have zero data to validate any of these programs. It will all come down to data.
11/ I do know one thing. If they mess up these drugs in development, no one will want their software. It will be deemed useless. They really have to get these right if they want to succeed on the software side.
12/ Based on the software sales and the potential of the pipeline, I think fair value sits about $45 to $50. Its not terribly expensive now that the stock has come down from its bubbly highs.

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More from @Biotech2k1

2 Oct
Profiling $RPTX:

My last pathway company to profile for today. They are unique as they are focused on the DNA damage repair pathways. This is a new frontier of discovery. There are not a lot of companies in this space yet.
1/ They are my first and only pure Synthetic Lethality play. Their first drug is around the ATM/ATR pathway that regulates double stranded breaks. This concept looks for pathways that cancer depends on to drive growth. It targets them to kill the cancer cells.
2/ The ATM/ATR pathway has been attempted before. It has concerns with toxicity. There is a level of concern and caution about trying new things in this same area that failed before.
Read 6 tweets
2 Oct
Profiling $RLAY:

I got into this company about 6 months ago. They are an early stage company with no data yet. They have a big risk/reward profile with using AI to attempt to take on some of the most toxic targets in pathways.
1/ I spoke before about how the SPH2 and PI3K kinases are at the top of the MAPK and mTOR pathways. Being at the top of the pathway gives them strong suppression effects, but a lot of toxicity. $RLAY is taking on these targets using its AI platform to develop inhibitors.
2/ Their fist program is around SHP2 which they already partnered out. This helps mitigate any failure if the technology doesn't help improve this target more then other companies. We have no data yet on this program. This has been turned over to the partner so data is waiting.
Read 11 tweets
2 Oct
Profiling $ERAS:

This is a new IPO, but I jumped on it because of its management. This management was from the old Ignyta which was very successful for me in the past. I go into Ignyta early and held it until the day it was bought out. I know this is a winning management team.
1/ They remind me very much like $RVMD with a big focus on the MAPK pathway. They have no data yet, but they did dose their first patient. I would expect some early data in the Spring of next year.
2/ Their first targets are all about MAPK and using combinations of target to lock down this pathway in cancer. Many drugs will suppress the pathway, but it rebounds over time.
Read 10 tweets
2 Oct
Profiling $RVMD:

I got into this company early this year. I love the pathways they are targeting, but they have little data or success yet to show they have great science yet.
1/ Their management is still new to me as they haven't had much data yet. Their first program was for SHP2 which had lack luster data. At least they were wise enough to partner that away for some cash. They are highly focused on the internal cell growth pathways.
2/ These are the MAPK and mTOR pathways. These are some of the hottest pathways in all oncology. The problem is the closer to the receptor you go for the pathways, the broader the suppression and the higher the toxicity.
Read 8 tweets
2 Oct
Profiling $MRTX:

I got interested in $MRTX about 3 years ago while I was an Array Bio investor. They licensed some of the KRAS technology from Array. That got me interested.
1/ $MRTX just replaced their CEO. Chuck moved up to Chairman and they hired David Meek to groom into the new CEO role. He has a history with commercial experience. That is good for taking the company to the next level with approval and sales.
2/ Their original drug is Sitravatinib which hits multiple kinases. This is designed to alter the tumor microenvironment to shift things back toward cellular killing. It had some decent data for patients who developed resistance to PD-1 inhibitors.
Read 16 tweets
2 Oct
Profiling $TPTX:

I have been in this company just over a year now. I am pretty sure the management is strong, but it hasn't had the chance to navigate the entire process yet. They still need to show they can get a drug approved and execute on selling it.
1/ This company is working on the growth receptors pathways. They are a 2nd generation of kinase company. They are developing much smaller inhibitors that can get in there and still inhibit the kinase even with mutation. That is their big tech development.
2/ Their drugs are designed to get around and overcome resistance. Will they develop resistances of their own? My money would be on yes as cancer always mutates to find a way around most drugs.
Read 15 tweets

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