I'm getting sick of all the cash burn that some of those biotechs have.

$PRAX is burning $220M a year with $100M in the bank and a $58M market cap.

$AGLE is burning $80M a year with a Market cap of $27M, while dosing a handful of people in their P2 trial. The overfunding/easy money of the last few years has led to bloated cost structures.

A Phase 2a company should be a handful of laser focused people in a shack (or fully remote).

Short thread on $XBI (Public small cap biotech).

Over the past 48 trading days, the $XBI has gained 37%. 48 days is an arbitrary time frame I use - it isn't even counted from the lows.

The historical distribution since 2011 shows how much of a right tail event this rally was. What are the factors that fueled the rally?
1. Prices were artificially depressed in May by liquidations and short selling in a low liquidity tape (some tiger cups started shorting Biotech as it was correlated with their shitco longs)
2. Short squeeze as a reversal of (1)

I normally don’t really believe in chart comparisons like this. But it really feels like owning equities at current levels is very, very dangerous.

Why do I think that?

https://twitter.com/wallstreetsilv/status/1555924154460749825

1) S&P has only declined 13% so far from very inflated levels (record liquidity due to COVID and elevated corporate profits)
2) Fed has to destroy demand. We’re heading into a recession (and geopolitical risk) without a FED put. Daddy is not going to be able to help us.

Are the top 5 S&P holdings cheap or expensive?
AMZN has never been cheaper on a P/S basis since 2016. And sales are much higher quality now, as 50% have become services.

Everybody knows about short-term margin issues. Consensus has been reset. Good time to buy? How expensive is $GOOGL? Ex cash P/E of 18 (this year‘s) and 15x next year‘s. And that includes a portfolio of money losing call options. I also believe there is a $GOOGL put: 20% cost cutting potential if growth were to slow.

I think what many people underestimate is the severity and length of the overall bear market we’re already in.

This chart from Jefferies compares Biotech to Nasdaq 100 during the dotcom crash. $XBI The S&P is only down 14% from its ATH and it hides the magnitude of the correction.

Interestingly, even during the 70s and early 80s during Paul Volcker, the Dow Jones didn’t decline as much as you’d think. The real loss was in purchasing power, not in the nominal value of…

Thread on $BHVN, including today's price action. Why has it sold off recently and what's the controversy/opportunity?

BG: $BHVN has accomplished a very successful Nurtec launch, enabled by very significant investment in the launch. You might have seen the ads... The bear/bull debate has always centered around valuation.

Bull case: Peak sales of over $2.5Bn make the stock worth well over $200 in a M&A model (strips a lot of SG&A due to synergies)
Bear case: If sales peak at $1-$1.5Bn, $BHVN will be worth <$100 on a stand-alone basis

Anyone else thinking $ENTA is a short?

Think the RSV study in adults has a high chance to fail (and probably little upside if it works). I think patients only present 4+days after inoculation and it's probably too late to show an effect at that point.

But what about COVID? I don't think that the P1 data for COVID will de-risk the P2/P3. Here's why:

$ENTA measured potency in the presence of a P-glycoprotein inhibitor.

P-glycoprotein pumps drugs out of cells and it is a concern that Enanta feels the need to include it in their in vitro assays.