Molecular Therapeutics Hopes to Reshape Gene Therapy

Breaking Biotech


So the first rail on a touch on today is from arena pharmaceuticals. The ticker symbol is a u. p. h. And they're sitting in a market cap. Now veron two two point one billion dollars and what we heard about a week ago is that they received fda approval for luke kindness for adult patients with active lupus nephritis and for those who haven't been following the company too long. They showed really really powerful phase three data. The stock shot up really well and then it's been kind of slowly selling off into you know around the thirteen fourteen dollar area and what we heard with this. Fda approval is the stock shot up to around twenty bucks and since then it's trading at around sixteen dollars now. I took a position around thirteen bucks and then sold most of it at around eighteen. And now i'm just sitting at around ten shares in anticipation of the future. And so we'll talk about that right now. But basically what the fda approval there are few details and one was that there was a black box warning but it was pretty much in line with cyclosporine. So it's not really anything to be concerned about. The other real benefit is that the patent protection is likely until the year twenty thirty seven so there were some concerns that the patent protection for arena in this drug was not gonna last that long and that could cut into the profits given the fact that they would lose exclusivity after a while so the other thing we heard is that arrhenius set the pricing and they said it at a price of three thousand nine hundred and fifty dollars for sixty capsules and then they estimate that the net revenue per patient per year is gonna sit at around sixty five thousand dollars so i did some quick math. Here to look at the prevalence of lupus and in general has around twenty to one hundred fifty cases per one hundred thousand people so in the united states that works out to around sixty six thousand two four hundred ninety thousand in the usa. And i know that's a pretty broad range but these are the These the publicly available stats. The corporate presentation of iranian says. That around forty percent of lupus patients have lupus nephritis so the actual problems in the kidneys that would benefit from this therapy so that brings us down to around twenty six thousand one hundred ninety eight thousand total addressable patients in the usa. So we have. Here's an estimated total potential revenue between one point seven billion to twelve point eight billion now again. That's a. It's a huge range. When there's an order of magnitude in there but at least there we get a sense of the kind of revenue. The company is going to be able to bring in sitting at around a two billion dollar market cap. It's definitely on the lower end. Even though this is the total addressable market and we know that arena isn't gonna be able to penetrate the whole thing. But i think the reason why the stock is of depressed is because of the bear narrative in regards to launch concerns so often with these smaller companies. Because they don't have an established salesforce they don't have necessarily those established relationships with either. Kol's or doctors space. It's difficult for companies that are small to really ramp up and deliver when it comes to the sales numbers so the bare narrative is saying that well they're going to really struggle with the launch therefore the company should only be expected to do the lower end of their expectation. Now on the both side. They're saying that well arena could be an emanate contender. And there's reasons to suggest that given that the risk is so low with this drug now. The data looks good and it's already fda approved so they could be being looked at by larger pharmaceutical companies. Who already have those established sales and marketing pipelines to just include this into their portfolio products. And start selling it so. I'm not sure what's going to happen. I'm going to relatively small position. I don't know how much i feel like diving in here. Given the the launch is going to be complicated. But i could miss out on a a merger acquisition deal. That could come as well. So that's really i think. Obviously it's very positive for the company and very positive for patients that are suffering with lupus nephritis but for me. I'm happy with my small position and just seeing what happens with the start with that. Let's move onto rhythm pharmaceuticals ticker symbol are ytm and they're sitting at a market cap of around one point three billion dollars and what they announced. It was positive data from semolina tied in additional emcee for our pathway deficient related. obesity 's so semolina tied was recently approved for hamas egas recessive mutant obese conditions related to pompey pcs k. One and leptin receptor so what that means. Is that patients that for this need to have a knockout in or a mutation in both copies of the gene whether it's policy pcs k. One or leptin receptor. Now what we weren't sure of is whether or not similan tide had an effect in hetero zayas patients and what this is is patients that have one functional copy of this gene so if their drugs sent. Milan could have an effect. In hetero zygote significantly expand the patient population that would qualify for treatment with this drug and with an expanded patient population. Obviously the revenues could be substantially higher than what we expect if it was only the home. Zygote

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