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Interview with Dr Vlad Sandler on HemoGenyx

Optiva’s Comments:

We think the two complementary technologies are exciting and potentially ground-breaking. If the Hu-PHEC is successful – it could potentially eliminate the need for allogeneic transplants from unrelated donors. The market for patients receiving transplants is worth $4bn in the US and $5bn in Europe – huge market opportunity. The CDX bi-specific antibodies is also exciting as the immunotherapy product will aim to condition patients in a non-toxic way by redirecting the patient’s own immune cells to eliminate their hematopoietic blood cells, thus potentially eliminating the need for chemotherapy.

HemoGenyx Admission & First Day of Dealings: In our opinion, we saw yesterday’s price as a knee jerk reaction. The shares have recovered from their lows of 2.2p yesterday to 3.25p today. With upcoming news flow over the next quarter we feel the shares will recover to its placing price of 3.5p and could move significantly higher as the company moves into Phase 1 trials.    



Biotech Sector: Bullish Momentum  

The iShares Nasdaq Biotech ETF (IBB US) has increased by 38% since November 16 – See chart below.

The IBB ETF aims to track investment results of NASDAQ biotech index. The ETF concentrates on companies primarily engaged in using biomedical research for the discovery or development of new treatments. The chart below from Bloomberg may suggest that biotech still has plenty of room to run.

Drivers for the biotech rally:

  • Political focus shifts to tax reform and away from the drug pricing and healthcare reform. Focus on US corporate taxes will push drug pricing down the political debate order, which in turn will support the biotech sector
  • Goldman Sachs believes small and mid-cap biotech may continue to outperform fuelled by; emerging and novel therapeutic platforms, fading risk from drug re-pricing, and increase in M&A appetite if new tax reforms are passed. Innovative therapeutic companies will likely outperform that demonstrate news flow in development
  • Generalist investors were underweight biotech and now seek more exposure – which may add another 15% to the rally


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