Ninja Portfolio Update - 12/01/2024
Biotech Recovery in Full Swing
The US elections are over and after a some slight volatility related to the Trump’s FDA pick we seem to be settling into a nice rhythm.
The Ninja portfolio represents my top 10 biotech picks. These are high confidence stocks expected to deliver superior returns over the next few years. The portfolio will change periodically as new data emerges or the market changes.
Arvinas (ARVN)
Bicycle Therapeutics (BCYC)
Blueprint Medicines (BPMC)
Cytokinetics (CYTK)
Day One Biopharma (DAWN)
Emergent Biosciences (EBS)
Madrigal (MDGL)
Nurix (NRIX)
Prime Medicine (PRME)
Schrodinger (SDGR)
Viking Therapeutics (VKTX)
For details on each company become a paid subscriber to my newsletter. A detailed write-up will be posted for each company over the coming weeks and will exclusively be available to paid subscribers. A newsletter with portfolio updates will be sent each month (more detailed than the below, and with more valuation and other metrics).
Subscribers will also get access to a watchlist of interesting companies that I am looking into, but haven’t committed to yet.
Ninja Portfolio Summary:
Arvinas (ARVN): Most advanced protein degradation platform, with multiple clinical assets. The leading asset is Vepdegestrant, being developed in partnership with Pfizer in a phase III trial. Topline data from the phase III is expected in Q4’24 or Q1’25. At a current market cap of $1.8M, and with a cash balance of around a billion, ARVN seems considerably undervalued particularly with a powerful underlying protein degradation platform. More details will follow in a full report shortly.
Bicycle Therapeutics (BCYC): New class of compounds that consist of short linear peptides formed into a stabilized bi-cyclic structure using a central chemical scaffold. The 2 loop structure results in potentially beneficial properties (affinity, low MW etc). Each loop can consist of different peptides leading to varying biological activity. The technology can also be used to make ADCs and other molecules, highlighting its versatility. The lead asset targets Nectin-4 and is in a phase II/III trial. Topline combination data is expected on Dec 10-13 at the San Antonio Breast Cancer Symposium. More details will follow in a full report.
Blueprint Medicines (BPMC): Blueprint is a leading precision medicine Oncology company, with a launched product (AYVAKIT) for various types of cancers that is expected to generate $480M in 2024. Blueprint also has multiple other drugs in mid stage clinical development in the pipeline. At a current market cap of $6B it is not cheap, but could be a potential take off candidate.
Cytokinetics (CYTK): Cardio and neuro muscular company with a drug, aficamten, being prepared for regulatory submission by the end of 2024 (a rolling submission has been initiated). Cytokinetics also just announced a licensing collaboration with Bayer for aficamten in Japan. With a $6B market cap and about $1B of cash, Cytokinetics is not cheap but has a potential blockbuster drug, with BMS the only competition. I’ve written previously about CYTK, and will update the report once the FDA accepts the submission. Unlike many of the other companies in my portfolio, CYTK’s valuation is primarily driven by aficamten.
Day One Biopharma (DAWN): Focused on rare pediatric cancers, Day One operates in a difficult and often neglected area. They recently got approval for tovorafenib in relapsed pLGG (they also got a priority review voucher, which was subsequently sold). Product revenues were only $20M in the latest quarter but are expected to be low given the small market. However, a trial in the frontline setting is ongoing and could significantly expand the market.
Emergent Biosciences (EBS): Unlike the other companies in my portfolio Emergent isn’t a pure biotech company. It’s historically offered contract services, provides government contract work and manufacturers Narcan. The stock was decimated due to heavily publicized manufacturing and quality issues during COVID. Since then the company has launched an OTC version of Narcan, secured more government contracts, closed / divested non-core segments, and instituted management changes. This is a pure valuation play, where I believe the current market cap of $550M is grossly insufficient. It could be worth up to 10X more. A detailed report on Emergent will come out in the following weeks.
Madrigal (MDGL): Madrigal is a one product story, but it is a great product. Rezdiffra is the first and only product approved for NASH, a gigantic market, and could become a multi-blockbuster. Millions of people have NASH globally and with reimbursement and other commercialization concerns seemingly alleviated the launch is progressing well. Madrigal could also be a potential buyout candidate. I’ve written previously about Madrigal and will provide an update next month.
Nurix (NRIX): Nurix is a targeted protein degradation company that has signed multiple pharma partnerships (Pfizer, Gilead and Sanofi). The pipeline is still early with no assets in phase II, but the early data in CLL in a refractory population has been very impressive. Additional positive data, or partnership milestones, could significantly drive up the valuation.
Prime Medicines (PRME): Prime is my foray into the gene editing world. It has a revolutionary gene editing platform developed in David Liu’s lab that could be applicable across many genetic diseases. The Prime platform has potentially better targeting and editing efficiency than first generation technologies. Prime’s pipeline is very early, and they only recently signed a big pharma partnership. The stock has been an under-performer recently but the platform could be very valuable over time.
Schrodinger (SDGR): One of the first generation computational drug discovery company, though mostly using physics based methods vs pure AI/ML. Schrodinger initially licensed its technology to partners, such as Nimbus, and kept equity stakes in the assets or companies. Now they have their own internal pipeline and also sell their software to clients. The mix of business models provides diversity and a valuation floor.
Viking Therapeutics (VKTX): Next generation obesity player with a broad pipeline consisting of subcutaneous and oral GLP1 products, plus a play in NASH. Initial data, though early, has been very promising and may provide benefit over current agents marketed by Lilly and Novo. A detailed report will be generated in the coming weeks.
Ninja Watchlist:
Wave Life Sciences (WVE)
Recursion (RXRX)
Kura Oncology (KURA)
Bridge Bio (BBIO)