BioBoyScoutBioBoyScout4 hours ago
Wanted to pass along some notes from my call with Vince this afternoon. It was a while since we last spoke, and I wanted to cover some questions with him. I compiled our conversation the best I could from memory.
First off, I asked Vince about the HIF2 tissue biopsy issue and why they had a difficult time getting biopsies from some patients. He explained that in some of the patients, the cancerous areas were only metastatic lesions and that those areas are difficult to biopsy.
Next, I asked him about the JNJ-3989 presentation at EASL and his interpretation on the language "no correlate was identified ..." Vince was very excited about the presentation and explained that this means that the response wasn't variable based on starting levels of s antigens, and that there was uniform activity across all populations. This basically confirms what Coldlander, VR, Marc, Pitstainer, and others have been saying. Vince did go out of his way to state that JNJ is moving the drug forward about as fast as they can, across all the various different populations, with numerous trials, and that they're extremely excited about it.
Another issue I covered with Vince was getting his opinion on how to value the TRiM platform, especially if proof of concept is shown in treating the lung and tumors. Since they would be able to expand franchises in these wholly-owned areas, the ability to create a long-lasting portfolio of drugs would clearly have significant value that can't be captured by typical valuation models. My goal was to try to identify any unbiased methods of valuation that one could apply to such a portfolio as TRiM, as the typical rNPV model would not be able to properly capture the true valuation. Vince, who is a CFA and is well versed in valuation models, talked at length on this issue with me only to come to the conclusion that there is no decent way to develop an unbiased valuation model to value the platform. He did point out that in these situations, analysts tend to come up with a number on their own and just value the platform the way they believe best makes sense (a biased approach). For example, Baird's latest $85 price target includes a $1.5 billion valuation for the TRiM platform on top of the portfolio valuation. For those that follow my valuation on Arrowhead, you'll know that I do not value the platform, but only the pipeline if it's at least in phase 1 (which is why I believe my valuation is very conservative).
We briefly discussed Arrowhead's strategy for APOC3 and the FCS indication (ph 3), as that has the very strong potential of being Arrowhead's first approved wholly-owned drug. I believe he mentioned that the IND was filed, and since this is an ultra-orphan indication, signing up enough participants can be challenging (I believe it took Ionis 2 years to get 200 patients). Vince stated that they intent to have 80 centers around the world that are believed to average approximately 0.4 patients per month. So if my math is correct, it would take a little over 6 months to sign up 200 FCS patients, and the study is designed to last 1 year (so keep you fingers crossed for 2023). While this indication would not be very profitable, it does pave the way for the larger indications that would follow and hopefully get approved in the years after FCS. This allows for Arrowhead to develop the expertise they need to roll-out their own drugs when the patient population size greatly increases.
We then discussed partnership deals, and the AAT/Takeda deal in particular. Vince is convinced that they truly have the "right" partner for this drug. He stated that Takeda has been incredibly professional, and that they're following through on all the things they wanted to do (particularly as it concerns moving the drug forward in the clinic) when they signed the deal. Vince indicated that he speaks with people from Takeda on a regular basis and that he's very impressed on how things are moving forward.