Scott Matusow

About the Author Scott Matusow

StockMatusow.com is Scott Matusow; Team Leader, co-owner and founder of StockMatusow.com and Dan Cohen, co-owner, and independent investor/scientist/inventor/trader and lead contributor at stockmatusow.com. Scott is an independent investor/writer/trader and team leader of StockMatusow.com. He has have about 20 years of stock market experience which include trading, investing, and managing his family’s trust as well as his personal account. Scott has had the most success in trading/investing in smaller cap growth companies. Because Scott is not 'officially trained' in the markets, he see things outside the box, using his experience to provide clarity and alpha. Scott uses his ability to read situations, emotion, charts, times and sales, historical data, and macroeconomic and other market forces to predict stock price movements, in both short and longer terms situations. Using these acquired allowed for him to completely divest his own and family's money near the top of the market before the 2008 financial crisis. Dan Cohen is an entrepreneur in the fields of biotech, nanotechnology, medical diagnostics, and energy storage - Dan is also a Scientist and inventor. He has 7 years of experience investing and trading biotechnology focused equities with a specialty in identifying under-appreciated value in small caps. Dan utilizes his experience reading and reviewing scientific literature to evaluate prospects for success. His work with diagnostics development give him a strong background in immunology which is leveraged in evaluating immunology focused approaches. As well Dan has 5 years trading futures, specializing in E-minis and Treasury products. He utilizes a combination of technical analysis, deep scientific research, and macro views to generate alpha for the team. Places you can follow Scott are: www.stockmatusow.com http://www.twitter.com/StockMatusow @StockMatusow http://www.facebook.com/TheScottMatusowShow Places to follow Dan are: https://twitter.com/biosleuth and www.stockmatusow.com

3 Small Cap Biotechs with Upcoming Catalysts


Written by Danny Cohen of stockmatusow.com

BiolineRx (BLRX) is slated to report on complete data at the European Society for Medical Oncology (ESMO) from the KEYNOTE-202 study. This study evaluates the company’s peptide CXCR4 antagonist (BL-8040) in combination with Merck’s (MRK) Pembrolizumab (Keytruda). The study is targeted to enroll 30 patients with metastatic pancreatic cancer who have taken at least one prior therapy, but naive to PD-1. Patients are given a loading dose of BL-8040 daily for five days, followed by three week cycles of weekly Keytruda and three times weekly Bl-8040 until discontinuation. So far, the company has presented data at ASCO-GI in January of this year in seven patients willing to provide biopsies following the initial loading dose. Three of these individuals showed an increase in immune infiltrate into the tumor of CD3+ T-cells. Later the company has reported that T-cell infiltration has increased in 75% of patients in the mono-therapy lead-in

The company’s hypothesis behind the combination is to turn an immunologically cold tumor such as pancreatic warmer through this means and hopefully elicit responses. Further it is hypothesized that CXCR4 blockade reduces the migration of myeloid derived suppressor cells (MDSCs)  into the tumour. The bar here is set pretty low for an immuno-oncology (IO) combination, given that outside of cancers with mismatch repair deficiency, overall response rates (ORR) are next to nil. A rate above 15% would be of significant interest, given that Five Prime (FPRX) showed a 13% response rate in this setting, but had significant doubts about its safety profile. The safety on BL-8040 has been mostly clean by comparison in the setting of transplantation where the company is running a registration trial.

This tolerability advantage allows Bioline to explore a triplet combination with an immunologically stimulating agent. Along these lines, the company has expanded its collaboration with Merck to include a triple combination with chemotherapy. The biomarkers that can be drawn from the doublet will help inform the design of future studies including a broader basket trial being run in collaboration with Roche. The study isn’t without some due skepticism, however. Bristol-Myers Squibb (BMY) abandoned a CXCR4 antibody in combination with Nivolumab due to lack of efficacy. Bioline is hoping for better fortunes with its smaller, high affinity peptide antagonist which should get improved bio-distribution. This peptide occupies the CXCR4 domain for over two days, which can potentially improve outcomes over the BMY study. If Bioline presents a respectable ORR for this setting, we could see shares trade in the 2s, potentially higher if data is seen a stellar, whereas downside is limited given that there is still many other shots on goal over the next 2 years with the company’s pipeline profile. Over the mid-term shares could continue to appreciate into the triplet study data due at the second half of next year.

Syndax Pharmaceuticals (SNDX) is due to report on PFS data in the 4th quarter of this year from its E2112 study evaluating the company’s Entinostat in combination with Exemestane vs Exemestane with placebo in hormone receptor positive advanced breast cancer patients. The E2112 study intends to enrol those who have progressed following non-steroidal aromatase inhibition (NSAI) treatment, building on the findings of the phase 2 ENCORE301 study evaluating the same combination in a broader setting. Entinostat is a highly potent histone deacetylase (HDAC) inhibitor which represents HDAC inhibition. HDAC is a class of therapies that has been explored and approved in haematologic malignancies, yet unable to penetrate into solid tumours. Entinostat acts by binding and selectively blocking class I and IV HDACs. Histone acetylation is largely implicated in epigenetic modification in cancer cells. Much of a cancer cell’s ability to adapt to treatment is via the silencing or alteration of the transcription for the protein being targeted. Acetylation can also impact non-histone proteins and can alter the localization of proteins such as hormone receptors. In short the hypothesis for Entinostat here is to reverse resistance to hormone therapy in breast cancer.

There is scepticism into this event given the lack of statistical significance in ENCORE301 for PFS, 4.28 months for combination vs 2.27 months for single agent NSAI, but underneath the surface there may be more to this story. If we examine the patients who were enrolled in phase 2 design, we see that this included many patients who were sensitive to NSAI therapy. Only 30% of patients enrolled in the Entinostat arm were defined as NSAI resistant. Based on the proposed mechanism of action for Entinostat, the deck was largely stacked against Syndax’s favor in the phase 2. As a result the hazard ratio, also known as the measure of relative risk only showed a 0.73 reading, or in other words Entinostat only reduced risk of progression by 27%.

Running an analysis on just the NSAI resistant patients we see a hazard ratio of 0.47, or a reduction in risk by 53% which is far more significant and more representative of the patients in the phase 3. The company also baked in an additional hedge by measuring for hyperactetylation (HA), which offers the possibility of approval in a subset of highly epigenetically modified patients — PFS in HA+ patients was 8.55 months vs 2.76months in HA- in the ENCORE301 study.

The company has guided for a November update for data which is based upon the un-blinding which occurs at full enrolment. This interim look here may be enough to stop the trial for efficacy and possible approval, given that most approvals in this setting have been on PFS.

Also, there will be another ‘shot-on-goal’ so-to-speak with OS next year. Notably, OS in the broad phase 2 design showed a much more significant outcome of 28.13 months vs. 19.84 months in a single agent setting. Based upon the shots on goal, the tailoring of the trial to match the hypothesis, as well as the relatively low valuation in the sub $200M range, we find the risk reward favourable here heading into pending data.

Affimed (AFMD) has a rather important upcoming data sets in Q4. Our main focus is on the company’s Tcell engager, AFM 11. Our report is very in-depth, so it would take up way too many pages here to delve into. To read our free report on AFM 11, please use this link to access the PDF.

Disclaimer: This article/video is intended for informational and entertainment use only, and should not be construed as professional investment advice. They are our opinions only. Trading stocks is risky — always be sure to know and understand your risk tolerance. You can incur substantial financial losses in any trade or investment. Always do your own due diligence before buying and selling any stock, and/or consult with a licensed financial adviser.

 

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