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Biopharma Investments Trigger Exciting Buy Signals

May 21, 2024

Shares & Indices Need to Crouch to Spring

The chart above of the S&P 500 illustrates the ‘crouch and spring’ phenomenon. On a long-term chart like this one whenever you see a red candlestick you have an index, share, crypto, whatever, which is going into a crouch. There is no telling how big the crouch will be but we will have a strong clue that it is over when a smiley (triggered by a rising shorter-term moving average) coincides, as it invariably will, with a broken downtrend line.

There are not many crouches around at the moment. The picture is more of an early-stage bull market. History suggests that, after a buy signal, shares can rise strongly for a long time. This would be especially the case if the GenAI revolution triggers a productivity revolution which drives a massive acceleration in global growth.

I like the productivity explosion theory. GenAI might even help governments to become more efficient.

Rethinking Biopharma Recommendations (Which I Usually Avoid)

I have always considered smaller biopharmaceutical stocks to have much in common with oil and mining exploration stocks. Most of them fizzle out but if they win they can win big. You would not want to bet your shirt on one of these shares but using my explosive chart breakout strategy I am beginning to think there can be a place for such stocks in a large portfolio, which can afford a few duds.

I also have a growing suspicion that healthcare shares could be heading for an AI moment with a general rerating of the sector. One promising sign is the number of healthcare stocks creeping into my portfolio. GenAI is like an incredible wild card that may change the world in many ways with much of the action still to come.

Below are three examples of fast and furious type biopharma investments. Management typically exudes optimism on prospects because they need to raise money. Like oil and mining exploration early stage biopharma eats cash and taking a drug through stage 3 trials to FDA approval is phenomenally expensive; think $1bn plus.

Avidity Biosciences and Dyne Therapeutics Flex Their Muscles

At Avidity Biosciences, we are driven by our mission: to profoundly improve people’s lives by revolutionising a new class of targeted RNA therapeutics. We are doing this by realizing the broad and disruptive potential of our Antibody Oligonucleotide Conjugates (AOC) platform. Beginning with our muscle disease franchise, our programs tackle the root cause of disease. Our innovative pipeline is set to advance and expand into additional cells and tissues, allowing us to address unmet patient needs across a wide-range of therapeutic areas.

Avidity Biosciences website

What are they up to, these guys? Don’t ask me but it sounds good.

They are claiming to be making great progress.

Years ago in the early stages of my children studying at the Lycee Charles de Gaulle in London we knew a French family whose son was diagnosed with Duchennes Muscular Atrophy. They were devastated. I remember the anguished father asking – why us? This progress will be too late for them but hopefully will change the lives of others.

Partnerships are crucial.

Both chart and fundamentals suggest this share could be a big winner but don’t be surprised if the shares are volatile.

Dyne Therapeutics is a clinical-stage muscle disease company (not dissimilar to Avidity Biosciences) focused on advancing innovative life-transforming therapeutics for people living with genetically driven diseases. With its proprietary FORCE™ platform, Dyne is developing modern oligonucleotide therapeutics that are designed to overcome limitations in delivery to muscle tissue. Dyne has a broad pipeline for serious muscle diseases, including clinical programs for myotonic dystrophy type 1 (DM1) and Duchenne muscular dystrophy (DMD) and a preclinical program for facioscapulohumeral muscular dystrophy (FSHD).

Dyne Therapeutics, website

The two slides below encapsulate what Dyne is up to:

There were another 44 slides in the presentation, all of which I found mysteries wrapped in enigmas. On 20 May the group announced progress in its drug programme which drove a sharp improvement in the share price.

Dyne Therapeutics, Inc. (Nasdaq: DYN), a clinical-stage muscle disease company focused on advancing innovative life-transforming therapeutics for people living with genetically driven diseases, today announced positive clinical data from its ongoing Phase 1/2 ACHIEVE trial of DYNE-101 in patients with myotonic dystrophy type 1 (DM1) and its ongoing Phase 1/2 DELIVER trial of DYNE-251 in patients with Duchenne muscular dystrophy (DMD) who are amenable to exon 51 skipping. New data from both trials demonstrated compelling impact on key disease biomarkers as well as improvement in multiple functional endpoints and favorable safety profiles.

“We are excited to report new clinical data from both our ACHIEVE and DELIVER trials demonstrating meaningful impact on key biomarkers and functional improvement in multiple clinical endpoints that matter to patients. We believe these data reflect the best-in-class potential for these product candidates and reinforce the opportunity to transform the treatment of DM1 and DMD as well as the potential of the FORCE platform to address other rare muscle diseases,” said John Cox, Dyne’s president and chief executive officer.

“We believe the breadth and depth of these data are truly differentiating. Our robust preclinical work is translating into clinical benefit along with favorable safety profiles for both DYNE-101 and DYNE-251. In ACHIEVE, treatment with DYNE-101 demonstrated consistent, dose-dependent splicing correction, which led to an improvement in muscle strength, function, and patient reported outcomes. In DELIVER, treatment with DYNE-251 resulted in dystrophin expression that exceeded levels that have been reported for the standard of care for DMD as well as trends in functional improvement earlier than expected,” said Wildon Farwell, M.D., MPH, Dyne’s chief medical officer. “The DM1 and Duchenne communities have waited too long for new and better therapeutic options. Building on the strength of these encouraging data and recent regulatory interactions, we look forward to continuing to engage with global regulatory authorities throughout this year to pursue expedited approval pathways and address the urgent unmet medical needs in these communities. 

Dyne Therapetics, Virtual Investor Event, 20 May 2024

Dyne Taps Shareholders for $300m (+$45m)

The next day, surprise, surprise, the group announced a $300m share placing with a 30-day option to raise another $45m. Below the company goes into more detail about what it is up to:

About ACHIEVE

ACHIEVE is a Phase 1/2 global clinical trial evaluating DYNE-101, consisting of a 24-week multiple ascending dose (MAD) randomized placebo-controlled period, a 24-week open-label extension and a 96-week long-term extension. The trial, which is designed to be registrational, is enrolling adult patients with myotonic dystrophy type 1 (DM1) who are 18 to 49 years of age. The primary endpoints are safety and tolerability, with secondary endpoints of pharmacokinetics and pharmacodynamics, including change from baseline in splicing, as well as measures of muscle strength and function. For more information on the ACHIEVE trial, visit https://www.clinicaltrials.gov/ (NCT05481879).

About DYNE-101

DYNE-101 is an investigational therapeutic being evaluated in the Phase 1/2 global ACHIEVE clinical trial for people living with DM1. DYNE-101 consists of an antisense oligonucleotide (ASO) conjugated to a fragment antibody (Fab) that binds to the transferrin receptor 1 (TfR1) which is highly expressed on muscle. It is designed to enable targeted muscle tissue delivery with the goal of reducing toxic DMPK RNA in the nucleus, releasing splicing proteins, allowing normal mRNA processing and translation of normal proteins, and potentially stopping or reversing the disease progression. DYNE-101 has been granted orphan drug designation by the U.S. Food and Drug Administration and the European Medicines Agency for the treatment of DM1.

About Myotonic Dystrophy Type 1 (DM1)

DM1 is a rare, progressive, genetic disease that affects skeletal, cardiac and smooth muscle. It is a monogenic, autosomal dominant disease caused by an abnormal trinucleotide expansion in a region of the DMPK gene. This expansion of CTG repeats causes toxic RNA to cluster in the nucleus, forming nuclear foci and altering the splicing of multiple proteins essential for normal cellular function. This altered splicing, or spliceopathy, results in a wide range of symptoms. People living with DM1 typically experience myotonia and progressive weakness of major muscle groups, which can affect mobility, breathing, heart function, speech, digestion and vision as well as cognition. DM1 is estimated to affect more than 40,000 people in the United States and over 74,000 people in Europe, but there are currently no approved disease-modifying therapies.

About the DELIVER Trial

DELIVER is a Phase 1/2 global clinical trial evaluating DYNE-251, consisting of a 24-week multiple ascending dose (MAD) randomized placebo-controlled period, a 24-week open-label extension and a 96-week long-term extension. The trial, which is designed to be registrational, is enrolling ambulant and non-ambulant males with Duchenne muscular dystrophy (DMD) who are ages 4 to 16 and have mutations amenable to exon 51 skipping. The primary endpoints are safety, tolerability and change from baseline in dystrophin levels as measured by Western blot. Secondary endpoints include measures of muscle function, exon skipping and pharmacokinetics. For more information on the DELIVER trial, visit https://www.clinicaltrials.gov/ (NCT05524883).

About DYNE-251

DYNE-251 is an investigational therapeutic being evaluated in the Phase 1/2 global DELIVER clinical trial for people living with DMD who are amenable to exon 51 skipping. DYNE-251 consists of a phosphorodiamidate morpholino oligomer (PMO) conjugated to a fragment antibody (Fab) that binds to the transferrin receptor 1 (TfR1) which is highly expressed on muscle. It is designed to enable targeted muscle tissue delivery and promote exon skipping in the nucleus, allowing muscle cells to create a truncated, functional dystrophin protein, with the goal of stopping or reversing disease progression. DYNE-251 has been granted fast track, orphan drug and rare pediatric disease designations by the U.S. Food and Drug Administration for the treatment of DMD mutations amenable to exon 51 skipping.

In addition to DYNE-251, Dyne is building a global DMD franchise and has preclinical programs targeting other exons, including 53, 45 and 44.  

About Duchenne Muscular Dystrophy (DMD)

DMD is a rare disease caused by mutations in the gene that encodes for dystrophin, a protein critical for the normal function of muscle cells. These mutations, the majority of which are deletions, result in the lack of dystrophin protein and progressive loss of muscle function. DMD occurs primarily in males and affects an estimated 12,000 to 15,000 individuals in the U.S. and 25,000 in Europe. Loss of strength and function typically first appears in pre-school age boys and worsens as they age. As the disease progresses, the severity of damage to skeletal and cardiac muscle often results in patients experiencing total loss of ambulation by their early teenage years and includes worsening cardiac and respiratory symptoms and loss of upper body function by the later teens. There is no cure for DMD and currently approved therapies provide limited benefit.

About Dyne Therapeutics

Dyne Therapeutics is a clinical-stage muscle disease company focused on advancing innovative life-transforming therapeutics for people living with genetically driven diseases. With its proprietary FORCE™ platform, Dyne is developing modern oligonucleotide therapeutics that are designed to overcome limitations in delivery to muscle tissue. Dyne has a broad pipeline for serious muscle diseases, including clinical programs for myotonic dystrophy type 1 (DM1) and Duchenne muscular dystrophy (DMD) and a preclinical program for facioscapulohumeral muscular dystrophy (FSHD). For more information, please visit https://www.dyne-tx.com, and follow us on XLinkedIn and Facebook.

Dyne Therapeutics, Virtual Investor Event, 20 May 2024

Success in its drug programme would be wonderful news for sufferers of these conditions and would drive dramatic appreciation in the Dyne Therapeutics share price. The chart looks positive but charts cannot predict the future, only set the conditions for an extended share price rise.

Candel Therapeutics Rides Shifting Cancer Treatment Paradigm

The cancer treatment paradigm has shifted dramatically, providing evidence that the immune system can be educated to recognize and eliminate the patient’s tumor cells. At Candel Therapeutics, we are developing viral immunotherapies that induce immunogenic cell death in cancer cells at the site of injection, unmasking tumor antigens and neo-antigens within an activated microenvironment. This process leads to a systemic, durable immune response against the tumor through in situ vaccination, with the potential to change disease outcomes across a variety of indications. Candel’s product candidates are designed to improve survival while maintaining quality of life in patients with early- to late-stage disease.

Candel Therapeutics website

Small biopharmaceutical/ gene therapy shares are all about newsflow.

NEEDHAM, Mass., May 14, 2024 (GLOBE NEWSWIRE) — Candel Therapeutics, Inc. (Candel or the Company) (Nasdaq: CADL), a clinical stage biopharmaceutical company focused on developing multimodal biological immunotherapies to help patients fight cancer, today reported financial results for the first quarter ended March 31, 2024, and provided a corporate update.

“It was a catalyst-rich first quarter for Candel, marked by significant advances across both our clinical and preclinical programs,” said Paul Peter Tak, MD, PhD, FMedSci, President and Chief Executive Officer of Candel. “Notably, as our clinical data mature with long-term follow up, we are beginning to observe highly differentiated results in long-term survival of patients treated with our viral immunotherapies. An example of these clinical results was recently shared in an update of the phase 2 randomized clinical trial of CAN-2409 in patients with borderline resectable pancreatic cancer, where a notable improvement in overall survival, in patients treated with CAN-2409 plus standard of care chemoradiation, was demonstrated compared to chemoradiation alone. The FDA granted CAN-2409 both Fast Track Designation and Orphan Drug Designation for treatment of patients with pancreatic ductal adenocarcinoma to improve median overall survival and treatment of pancreatic cancer, respectively, providing steady momentum to advance this promising investigational treatment for patients with significant unmet medical need.”

Dr. Tak continued, “We are also excited to announce that topline overall survival data from our phase 2 clinical trial of CAN-2409 in patients with stage III/IV non-small cell lung cancer and an inadequate response to immune checkpoint inhibitors will be presented at the upcoming ASCO meeting in Chicago on Monday, June 3, 2024.”

“In addition to our advances in the clinic, we have made great progress with our enLIGHTENTM Discovery Platform. In April 2024, we presented our second drug candidate from this platform, a first-in-class multimodal immunotherapy candidate for induction of tertiary lymphoid structures, in a late-breaking presentation at the American Association for Cancer Research (AACR) Annual Meeting. We believe this preclinical candidate offers groundbreaking potential in the treatment of cancer,” continued Dr. Tak. “We expect to release additional preclinical and clinical data in the coming year, consistent with our commitment to innovation and patient care.”

Candel Therapeutics, Q1 2024, 14 May 2024

These companies are playing for high stakes.

Candel is a clinical stage biopharmaceutical company focused on developing off-the-shelf multimodal biological immunotherapies that elicit an individualized, systemic anti-tumor immune response to help patients fight cancer. Candel has established two clinical stage multimodal biological immunotherapy platforms based on novel, genetically modified adenovirus and herpes simplex virus (HSV) gene constructs, respectively. CAN-2409 is the lead product candidate from the adenovirus platform and is currently in ongoing clinical trials in non-small cell lung cancer (NSCLC) (phase 2), borderline resectable Pancreatic Ductal Adenocarcinoma PDAC (phase 2), and localized, non-metastatic prostate cancer (phase 2 and phase 3). CAN-3110 is the lead product candidate from the HSV platform and is currently in an ongoing investigator-sponsored phase 1b clinical trial in recurrent high-grade glioma (rHGG). Finally, Candel’s enLIGHTEN™ Discovery Platform is a systematic, iterative HSV-based discovery platform leveraging human biology and advanced analytics to create new viral immunotherapies for solid tumors.

Candel Therapeutics, Q1 2024, 14 May 2024

Strategy – 3 Speculative Gene Therapy Stocks Worth a Punt

I don’t pretend to have the skill to appraise these stocks on fundamentals. I trust their comments that they are making significant progress and can see that success would be both rewarding and rewarded. The charts are encouraging and they have the funds and the partners to make progress. These are bets which could go wrong or could be wildly successful.

Long ago, in the dawn of pre-history, I was working for a UK stockbroker, Laing & Cruikshank, while a boom was raging in shares in mining exploration companies prospecting in south and west Australia where every drill bit hits some kind of metal values. The whole phenomenon came to be known as the Poseidon boom and it is the most spectacular share price boom I have ever experienced as buyers fed off each other in the London and Australian stock markets.

One of the L&C partners, a man called Stormonth-Darling, attracted my attention. He didn’t know which company was going to strike it rich so he bought all of them. When the whole market boomed and a rising tide lifted all the boats he made a fortune. I have the impression that something similar may be starting to occur in the gene therapy field. If one of these companies wins big the whole sector will explode and we could get a buying frenzy. Just saying!

Gene therapy has much in common with mineral exploration. Once the excitement starts nobody knows what these companies might be worth.

Share Recommendations

Avidity Biosciences. RNA. Buy @ $28.96

Dyne Therapeutics. DYNE. Buy @ $32.91

Candel Therapeutics. CADL. Buy @ $12.45

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