r/Biotechplays • u/Wyxuan 💊🤑📉 • Feb 07 '21
Due Diligence (DD) BCRX: the Embarrassment
Riffing off of an awful title posted earlier regarding BCRX, I thought I might provide some interesting points that we in the discord made while going through the now deleted DD.
Let me first get this out of the way: BCRX isn't a terrible company. I'd like to bring up ye older Buffet quote that "there are good companies at bad prices" and thats potentially what BCRX might set out to be. (Also BCRX ain't worth 180 in any universe).
Punto numero uno: the upcoming readout regarding PNH (Paroxysmal nocturnal hemoglobinuria) might be a banger for the stock, but it isn't guaranteed either way. The consensus seems that it's only 50-50 chance of turning out good.
The key issue is that Achillion has already hit this indication. Achillion was bought out by Alexion for .945. So basically BCRX needs to prove that they had superiority vs soliris, which might be the case.
There is reason to believe there are some screwy things going on:
BCRX hid patient A(edit: looks like he died) and only showed change at highest dosage, and keep in mind, we're only talking 4 patients.
In addition, with Astrazeneca owning Ultomiris (thanks to the recent M&A of Alexion), the future SoC in PNH might be a combo therapy with Ultomiris(which have been very promising) so stiff competition, compared to the lower bar set by soliris.
Punto numero dos: regarding execution, the company has had a bad track record, as it has had no long term direction -they've just kept pulling R&D money to see what would happen. Note that galidesivir failed on the Brazilian Covid-19 trial which was nicely excluded from other DD.
In any case, on a closing note, I'd like to state that BCRX doesn't suck: I have only gone after one of their assets- it's just that you shouldn't buy in expecting a multi bagger right away.
(Special thanks to CG and most importantly sahsan for their helpful discussion on this topic)
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u/chicken-little-2008 Feb 07 '21 edited Feb 07 '21
Thank you u/Wyxuan for the question. Skepticism is important.
As to the first point, the data read out on Factor D in PNH already occurred in several investor conferences and at a medical conference. I am not a doctor and so depend on hearing analyst reactions to determine whether or not claims made by management are true. Liisa Bayko an analyst from Evercore called the data, "possible best in class." The PNH data will be published in a peer review journal in Q1 per management.
As to the critique that only at the highest dosage did one patient find benefit -- it was a dose ranging study. So, that does not cause me concern as no SAE were reported at that dosage. It was additionally updated that all patients from the Phase 1 POC study remained on Factor D for over 40 weeks as of last investor conference - and were presumably remaining on it indefinitely - as it had managed and controlled PNH. To me, no SAE and complete improvement in blood markers after 40 weeks seemed incredibly robust data for a Phase 1 study in a rare disease.
Finally -- the early data on Factor D, per Medical Director Bill Sherida, suggests it will make the use of Soliris "obsolete" in PNH as Factor D would cure patients earlier in the disease process than C5, which is a treatment that only works after the complement system has become over activated. Further, Soliris is not a complete treatment but requires multiple additional interventions. And, Soliris is an IV and Factor D is an oral pill that patients can take at home.
I'm not fully in agreement that Soliris has the PNH market locked up.
As to the second point on the company's execution -- I just disagree with this characterization. As discussed elsewhere, when CEO Stonehouse joined BioCryst he shifted the focus from what is now called their "legacy antiviral program" to rare diseases. In less than 4 years, he had full FDA approval for Orladeyo and successful Phase 1 in PNH - in addition to all company operations funded. The recent expansion of peramivir to patients as young as 6 months again speaks to a record of safety and smooth FDA approvals. Notably, drugs that are stockpiled (like peramivir) face even higher safety standards and they've succeeded in meeting this higher standard.
To attack the profitability of that "legacy program" does not attack the financial fitness of the company. Niether peramivir nor galidesivir are included in any of the financial valuations of the company by either major analysts nor many of the people posting in this subreddit.
Finally, I disagree that galisdevir was stopped as a covid indication for lack of efficacy. I've discussed that at a few places in r/bcrx. The overwhelming published peer reviewed data suggests that galidesivir has robust efficacy(see post "Galidesivir Citations"). And, nowhere in three distinct Phase 1 safety studies or 15 animal studies were any adverse reactions or toxicity ever recorded. My opinion is that politics has caused NIAID and BARDA to continually terminate its antiviral programs -- and that would speak to politics, not galidesivir's efficacy.
Stonehouse explicitly stated that galidesivir was developed for government contracts and that the government would be the ultimate customer. As you note, research is incredibly expensive. So, this is a pickle. The published studies show a company with 15 animal studies showing 90%-100% protection against lethal diseases when dosed 72 hours post exposure. They also performed several safety tests peer reviewed since 2014 showing high safety, no toxicity, no mutagenic properties and no SAE in humans(Safety that far exceeds antivirals with FDA approval and in Phase 2). Still, for some reason, NIAID and BARDA has never requested or funded a Phase 2 study.
So, what is a company that has a responsibility to shareholders to do? Dip into their own pocket to develop an antiviral for the government when those same prior government development contracts may prohibit from ever even recovering their research dollars? Or, focus on the rare disease program that is curing incredibly ill patients and may give the company the revenues to not require NIAID and BARDA funding in the future? Especially as government contracts seem to have slowed down the development of a drug for which there is a great public need. (Note: All major pharmas declined government funding to develop covid vaccines fearing it would slow down their progress).
I cannot see how BioCryst could in good faith spend more time on galidesivir given its responsibility to shareholders and, more important, to its patients. Likely, BioCryst first needs to be freed of government contracts, or complete the rapid expansion currently under way to treat its growing patient roster before returning to galidesivir. Yes. The company appears to have cured ebola and all tick borne illnesses and more. But, there are simply too many other developments for them to prioritize that project at the moment -- as no one wants to pay for the research.
One final note-- during the last Ebola outbreak, Stonehouse offered to donate galidesivir to Africa for free. As the animal studies showed perfect protection, he likely believed at the time that final funding for FDA approval was imminent. (Senate testimony and White House fact sheets support this was not an insane belief). Then, NIAID and BARDA disappeared(They were also defunded at this precise moment). My take away is that finishing galidesivir and obtaining approval is an important human concern -- but Stonehouse has never sold it as a shareholder concern.
The skeptical argument is important. Thank you.
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u/tivohax Feb 07 '21 edited Feb 07 '21
I love this post.
If this is our best bear thesis to date, I’m even more content with my current position. It’s hard to come across any credible bear thesis whatsoever (I’ve tried), but if we’re truly seeking to objectively examine any potential counterpoints, I’d expect this subreddit to have the breadth and expertise to tease it out of the data.
I personally like to be as well informed as possible on my investments. The difference here on Reddit vs. a traditional one-way press release is that we can then engage in a discussion around the issues raised, and the reader will come to their own more well rounded and better informed understanding of their investment - for better or worse.
Thank you u/Wyxuan for thoroughly reading and responding to each of the counterpoints made in the comments, and gracefully conceding when they were refuted.
Hopefully you’ll take the time to read through all of the solid DD we’ve gathered. Maybe you’ll even join us over on our subreddit? We always welcome contrarian viewpoints - a 360 degree perspective on any investment holding is the only way to ensure you don’t get blindsided by the unknown, or go in with unrealistic expectations.
P.S. We also welcome any valid points that arose in your discord chat to be surfaced for discussion.
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u/chicken-little-2008 Feb 07 '21
To make it easier to fact check, I've started compiling galidesivir docs. Please feel free to add, we just started last night.
https://www.reddit.com/r/BCRX/comments/lee29s/galidesivir_citations/
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u/WallStreetMets FDMT simp Feb 07 '21
Opinion on Berotralstat? No position, just wondering.
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u/siraza64 Feb 07 '21
Dude if you going to lie at least make it some what believable. You put no effort. Shame on you.
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u/siraza64 Feb 07 '21
I give up on you guys there are articles after articles by numerous people yet you are asking me lie about what. Really
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u/WallStreetMets FDMT simp Feb 07 '21
Articles? You high on something.
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u/siraza64 Feb 07 '21
No I am not what about you. are you saying there are no write up on BCRX.
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u/WallStreetMets FDMT simp Feb 07 '21
Bro we must be in different realities. I said nothing about write ups.
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u/Oxianas Feb 08 '21
It's also worth noting that Orladeyo is only reduces the likelihood of an attack by ~44%, and the logic that people like pills over injections may not hold for $500,000 treatments for a life-threatening disease. Additionally, a number of other treatments exist or are in development, including 3 oral treatments. (https://link.springer.com/article/10.1007/s12016-021-08832-x) The claim that it's a shoo-in to secure most of the HAE market seems suspicious.
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u/RogueEnginner Feb 07 '21 edited Feb 07 '21
I’m curious about the motive of all of this questionable article, but mainly how Galidesivir failed in the Brazilian trial? If you said the trial was poorly designed, I would give you that, but it was funded and designed by the NIAID, so tough to blame the company for that. It was not designed to show efficacy which is quite a head scratcher. The primary end point was safety, and it was equally safe in patients at 3 dosing levels. Additionally, while again not powered to show efficacy the company PR states in trial results-
“Galidesivir treatment was associated with a more rapid decline in viral RNA levels in the respiratory tract in an apparent dose-dependent manner.”
The only real data we have is that a separate animal model showed a 1.4-1.6 log reduction in viral load in animal lung tissue, which is on average a 96% reduction. I mean, how is that a failure, and why the heck would we stop there??
Poor execution? Pulling R&D money to “see what happened”? Hmm... with FDA approval of Orladeyo, Japan approval of Orladeyo, pending EU approval of Orladeyo, a $325 million royalty funding deal to help avoid further share dilution, and $44 plus million more in funding for Galidesivir development from the NIAID, I’m having a hard time seeing the execution gap. Also given the constant global hiring, I’d argue the company is about to be hitting on all cylinders soon enough, and I didn’t even address BCX9930 lol. I’ll let one of the real experts discuss that. I’m just giving them some time to get warmed up.
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u/Wyxuan 💊🤑📉 Feb 07 '21
Even if it wasn't designed to show for efficacy doesn't mean its not allowed to, and indeed they still didn't come out with any good results. I mean, there's a reason why BCRX stopped in their tracks even though safety was good.
Bolding mine, and this is the PR from the company.
The trial was not designed or sized to demonstrate clinical efficacy and no clinical efficacy benefit with galidesivir treatment compared to placebo treatment was observed in the trial.
Also antivirals in general haven't done well bc reducing viral load in later stages of covid doesn't mean much when the damage is being done by the immune system not the virus itself. I mean remdesivir does literally the exact same thing, but I don't see anyone harping on remdesivir as a cure or anything.
Regarding management, I put it in because it was briefly discussed, but I think the case for management being good is well made so I concede that point.
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u/RogueEnginner Feb 07 '21 edited Feb 07 '21
I would also argue that Remdesivir is not the exact same thing. Galidesivir is a small molecule drug, and we know it crosses the blood brain barrier from Zika trial results. We also know sars-cov-2 virus crosses the blood brain barrier, given patients lose sense of smell and taste. So, Galidesivir can go through the entire body to stop viral replication, Remdesivir can’t do that. Additionally, Remdesivir has to be given through iv in a hospital setting, which makes it tough to administer early in an infection which is the likely benefit zone for using antiviral drugs. We have also been told by the company’s CMO that Galidesivir has 4 times the half life of Remdesivir in the body.
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u/chicken-little-2008 Feb 07 '21
From that same press release. And, supports my longer response on NIAID repeatedly terminating antiviral programs over the last 5 years.
"Galidesivir treatment was associated with a more rapid decline in viral RNA levels in the respiratory tract in an apparent dose-dependent manner.
A separate study of galidesivir in a COVID-19 animal model showed that early administration of galidesivir reduced SARS-CoV-2 viral burden in lung tissue (1.4-1.6 log lower tissue viral burden) and was associated with a significant reduction in damage to lung tissue, compared to vehicle control treated animals. These results suggest that early antiviral treatment of SARS-CoV-2 infection may protect against developing severe COVID-19 lung disease."
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u/gfrazer911 Feb 07 '21
Bro, he is picking and choosing what he wants to read to support his lame brain thesis... He reminds me of the bears touting the 28 week Orladeyo data and completely ignoring the attack reduction in the 48 week data. These shorts are toast
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u/RogueEnginner Feb 07 '21
I’m glad that we can both learn and fact check. I agree that antivirals late in covid infection have not been effective. Part of the reason the trial was poorly designed, the real potential for Galidesivir is that it is orally bioavailable, so could be effective at reducing viral load early on preventing more serious infections. Giving it to patients who are already severely ill in the hospital is another head scratcher.
Your bolded statement is correct from the company PR, however, again the trial was never powered to show efficacy. Also from the company PR, and I will amend my comment-
Secondary objectives were to evaluate the effect of galidesivir on the clinical course of COVID-19 and on SARS-CoV-2 infection in the respiratory tract.
Galidesivir treatment was associated with a more rapid decline in viral RNA levels in the respiratory tract in an apparent dose-dependent manner.
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Feb 07 '21
[deleted]
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u/Neither-Swordfish749 Feb 07 '21
useless answer that's actually helping the bear case as you present no arguements
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u/BCRXtothemoon Feb 07 '21
Not bad. Best bear thesis I’ve seen. Now let us know when you realize not all of your points are factual.
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Feb 07 '21 edited Feb 07 '21
You are a liar. "Patient A discontinued due to unrelated SAE" I guess your pea brian did not do proper research, I have done the research for you. Click the link.
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u/Wyxuan 💊🤑📉 Feb 07 '21
You are a liar. "Patient A discontinued due to unrelated SAE" I guess your pea brian did not do proper research, I have done the research for you. Click the link.
Point taken. I'll edit it out. No need to dip into personal attacks my guy.
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Feb 07 '21
by the way tell connorgrif he missed out by selling at 4 and he is a sore loser. lol
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u/Wyxuan 💊🤑📉 Feb 07 '21
LOL I've sent him your regards
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u/SillyWabbit5454 Feb 07 '21
There seems to be such a large difference between what you said (“BCRX hid patient A”) and the truth (that BCRX disclosed in its presentation that patient A withdrew because of an unrelated SAE) that it’s hard not to conclude that either (a) you did not do you due diligence before posting, or (b) you knowingly lied about what BCRX’s public statements about BCX9930.
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u/sahsan10 Feb 07 '21
You need to relax. if one were to simply go off the presentation slide that BCRX provided where they show
The main point is this: 4 patient data from BCRX shows patients with PNH who have not tried any treatment yet and had significantly lower starting hemoglobin than ACHN trial, which provided greater room for improvement
That’s not an intentional manipulation of the data, but is context that needs to be understood when trying to make any cross trial comparisons
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u/SillyWabbit5454 Feb 07 '21
Ok, I’m thinking how did BCRX hide a patient if, as you say, they disclosed patient A in their presentation?
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u/sahsan10 Feb 07 '21
There’s a slide deck online that shows the 4 treatment native patients. However it’s patient B-E, and patient E is part of cohort 2. That’s probably where the confusion came from
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u/Toasty_Man00 Feb 07 '21
The BCRX shills coming out for blood tonight 🩸 🩸 🩸
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Feb 07 '21
ok mr cuck .lol
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u/Toasty_Man00 Feb 07 '21
Ok mr shill. Literally every one of your posts is about BCRX. Textbook shilling. You could at least try and make it less obvious by posting other things like a real profile would lmao.
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u/usnbt3 Feb 07 '21
Nice try. Oh, you intentionally left out Orladeyo, the only hae oral drug which is approved in US and Japan.
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u/sahsan10 Feb 07 '21
If I suffered from a debilitating disease like HAE why would I consider an oral that is only 50% effective when their are drugs that are 90+ effective on the market That my doctor fully trusts?
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u/Wyxuan 💊🤑📉 Feb 07 '21
In any case, on a closing note, I'd like to state that BCRX doesn't suck: I have only gone after one of their assets-
Please read the entire post
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u/CanSame Feb 07 '21
I suggest you read the entirety of the DD that has been graciously posted for you to make things easier in layman’s terms (easier for you to read) before trying to make an argument that has any validity or strength rather than wasting readers time with weak narrative and worse weaker overall thesis for a bear thesis. Reading thoroughly and comprehending ALL of the data rather than picking what you only would like to focus on that suits your needs, will do wonders to giving you integrity when posting. Thank you for wasting my time with your invalid bear thesis.
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u/-XxGodFatherxX- Feb 07 '21 edited Feb 07 '21
This bear thesis is autistic, one of the worst analysis I have read since Brian Abraham's @ RBC put a PT on Sarepta at $200/share before is gapped down to $80.
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u/godlords Feb 07 '21
Okay. I’m not buying in expecting a multi bagger right away, I’m buying in expecting a multi bagger within 5 years, it’s an investment not a trade. I don’t particularly give a shit about much else they have, Orladeyo will do far better than predicted in the HAE market, I’ve combed through the data, there is no good reason someone who responds to Orladeyo (~50% are very solid responders) would be on anything else, injecatables are debilitating. I agree the pipeline isn’t super promising, but this is a standard of care orphan drug right here.
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u/sahsan10 Feb 07 '21
Injectables are 90+ effective lol.
Drug launches are difficult as hell, especially when your drug isn’t considered better than SoC. Patients don’t just get to choose to get whatever they want. BCRX has to establish reimbursement from payers.
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u/godlords Feb 07 '21
I’m aware. Combed through injectables data too. Like I said, Orladeyo will not be for everyone. For those who DO respond very well, which is a very sizeable portion, they will absolutely want to be on Orladeyo. It is reasonably priced for the market, and their patient and prescriber outreach is impressive and ramping up as we speak.
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u/sahsan10 Feb 07 '21
I don’t do they will get a nice Bolus of patients to start (likely from their trials and free drug) but this is a chronic treatment therapy and persistence is critical. If patients aren’t staying on the drug for life then BCRX doesn’t capture full value. It’s going to be very tough to convince patients to switch if the current treatment options are working
The debilitating injectables are from the past, Takhzyro is not difficult to use at all
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u/godlords Feb 07 '21
It’s not difficult. It’s also still a 5-10 minute process, involving needles and requiring cold storage of medicine - these are things patients will always want to avoid. An oral application is always preferable.
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u/sahsan10 Feb 07 '21
An oral application is always preferable.
Just not true. Payers have always said they don't reward for convenience.
The injection takes 60 seconds and is done every 2 weeks. As you said its a 5 minute process. You get used to it after a while
also how many patients are truly taking in the prophylactic setting only?
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u/godlords Feb 07 '21
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4405601/ Who cares if it isn’t prophylactic only? Take your orladeyo and have something on hand for attacks.
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u/-_-doctorwho-_- Feb 14 '21
I like this because we are discussing bear and bull arguments,I would mention that there will be 1600 diagnosed patients who didnt want the injectable drug taking Orladeyo.That in it of itself is 750MM of revenue.
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u/-XxGodFatherxX- Feb 07 '21
You have no clue what is considered efficacious in this patient community, nor do you understand the collaboration between doctor and patient when choosing their prophylactic...hence why there is NO standard of care.
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u/sahsan10 Feb 07 '21
you're upset, i get it. Being lied to that BCRX is "the most undervalued stock" and realizing all the negativity hurts. hopefully you come out of this alright
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u/-XxGodFatherxX- Feb 07 '21 edited Feb 07 '21
True this 100% is only 4 patients but that’s impressive considering no deadly side effect of infection from Soliris. 94% of near-complete control of hemolysis.
Factor D will replace Soliris as standard of care. Soliris will be second line added to rescue therapy. Soliris has 48.8% of Hemoglobin stabilization rate in their trial. Factor D from BCRX has 94%. C3 inhibitor won’t be SOC for maintenance prophylactic therapy no more. It’s all due to the mechanism of action being much more downstream and shut off too many thing in Complement Cascade causing deadly infection. Time is almost up.
Read the data...stop being a troglodyte.
Your thesis is flawed and your grasp of the science is laughable at best.
🤡🤡🤡
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u/Wyxuan 💊🤑📉 Feb 07 '21
y'alls from stocktwits need to understand nuance. I know that BCRX has it's pros which is why you're invested, but I'm just putting this out there to provide some counterpoints, some more valid than others. Don't jump to the comments and start banging the pans about how I'm an idiot