Adam Bio

I invest in Biotechs. I often tweet about Companies I have positions in. My post shouldn’t be considered as investment advice.

[Adam May @A_May_MD]

I won't share in depth pitches like $NKTR often (2/year?). Only with really compelling setups. I've got another one now. The market says PoS is VERY low and that upside could be 10x+. Like with $NKTR, I think the data say success is far more likely than the market thinks.

The name is $ABVX (Abivax).

[Adam May @A_May_MD]

$CAPR

[Adam May @A_May_MD]

Med mal lawyers getting ready for all the class action lawsuits over “licensed physicians” prescribing unstudied peptides through compounding pharmacies.

[Adam May @A_May_MD]

Legitimately, docs should be very worried about writing for these peptides.

Usually, the onus is on the FDA to determine the safety/efficacy balance of drugs, which they APPROVE via trial data.

Well, no such data exists for these peptides, so the FDA isn’t “approving” them. They’re just saying, hey, docs can prescribe them if they want to.

They’re shifting the responsibility onto the “licensed physicians” to determine if the risk/reward benefit makes sense for individual patients.

But, if even the FDA didn’t have studies to base their decisions on….what exactly do we expect physicians to base their peptide prescribing behavior on?

That’s a line of questioning that’ll be hard to respond to in court. Good luck to peptide mass prescribers. You’ll eventually have a few litigious patients with side effects, imagined or not, and there will be no way to disprove that the unstudied peptide that YOU PRESCRIBED caused it.

Prescribe at your own risk.

[Adam May @A_May_MD]

$SNY has now lost amlitelimab in every indication as well as their hyped riliprubart a few weeks ago. Oh and that Dupixent thing has LOE in a few short years.

They need to buy something buzzy with some near term revenue potential. Who should $SNY buy?

[Adam May @A_May_MD]

Finally, $SNY has discontinued their eczema drug, amlitelimab, over these safety concerns. Up until very recently they continued to assure us that it was still going to be a multi-billion dollar peak sales drug! Not happening.

Now it’s official - $NKTR has the chance to be the next new MoA to hit the atopic dermatitis market with Rezpeg. Definitely good news for $NKTR!

[Adam May @A_May_MD]

For sure the current $ABVX stock performance is annoying. Actually I’d say it has been infuriating in light of the data they’ve presented. To be trading BELOW the pre-maintenance data that ultimately exceeded EVERYONE’S expectations is ridiculous, especially in an otherwise strong market.

I’m sure much of the investor base feels the same way - annoyed, even angry (I’ll admit that I’m inching into the “angry” category myself). I’m sure that management is hearing about it from investors.

However, I *do* think that this poor stock performance and resulting investor base displeasure may help bring the M&A timeline forward.

In an alternate universe where we never had that stupid maintenance data hiccup and the stock is trading at $175 right now, investors are likely riding that high and less concerned about an M&A timeline, whether it’s before or after Crohns.

But in reality we have a scenario where investors are furious for having taken a gamble on the data, getting the gamble RIGHT, and still somehow LOSING money on it anyway, PLUS the lost opportunity cost of what we could’ve done with this capital in a frothy market. In this scenario, I suspect the investor base is much more emphatic about a near term deal being done, and certainly the premium paid by big pharma would be much more palatable from these levels (a $210 deal would only be 20% premium on $175, but it would be >60% from here! Much easier sell for $ABVX, while still being easy to digest for big pharma).

I know that at least *I* am supportive of a near term deal, especially from these ridiculous prices. And that’s coming from someone who has now said for over a full YEAR that the company should WAIT to sell itself. Not anymore. IMO it’s time to get moving.

Point being - yes this stupid price action is infuriating. But I do think that it’s another legitimate tip in the scales weighing toward us getting what we want sooner…a near term deal.

[Adam May @A_May_MD]

World class hires by $ABVX. People who launched drugs like Entyvio, Humira, Rinvoq, Skyrizi, etc. They continue to poach absolute top tier talent for the next big drug in I&I.

Side note: I can’t believe we have to constantly reiterate that $ABVX hiring a launch team is a GOOD thing. They can (and should) continue hiring for the potential launch right up until the very day they’ve signed a term sheet for a buyout.

There’s truly only upside potential from building out a star studded team. The ONLY way they can lose leverage on this front is by failing to have launch infrastructure in place. The ROI is blatantly obviously upside skewed…build the team!

We are talking about a potentially $20B price tag for this company…You’re braindead if you don’t realize that spending a few million dollars on new hires is about the strongest negotiating leverage that that kind of money can possible buy.

[Adam May @A_May_MD]

So, uhhh?
$LLY $NVO

[Adam May @A_May_MD]

$ABVX

[Adam May @A_May_MD]

Today is the 1 year anniversary of my $ABVX pitch. At $134 currently, that’s a 1,247% return from $9.95.

It was my biggest position then, and it’s my biggest position now.

I’d hazard a guess that an ending to the story is in sight. Let’s see!

[Adam May @A_May_MD]

This has definitely been the missing ingredient for new ATHs. Let’s see if it’s enough.

$XBI

[Adam May @A_May_MD]

Another >100% premium deal in biotech land!

Congrats $CRNX longs!

$VRTX

BULL MARKET! $XBI

[Adam May @A_May_MD]

Should I just close my entire short book until we print new ATHs? $XBI $BBC

[Adam May @A_May_MD]

We are now not even 10% away from $XBI setting a new all-time-high. Prior was $174.60 over 5 years ago in early 2021...biotech went >5 years without even sniffing prior highs while the rest of the market seemed to print new records every week 😅

Should we start preparing for the celebration, or is this just a tease?

[Adam May @A_May_MD]

American markets may have been closed Friday, but The Euronext was open, and $ABVX continued its run in Europe, closing at the US equivalent of ~$154.50.

That'd be another 7% rally and an all time high for $ABVX tomorrow should the US markets reflect what Europe showed (on reasonable volume, for the Euronext) on Friday.

I still feel that this $ABVX rally should continue, and I strongly believe that people have made the mistake to anchoring to the prices we saw on this recent dip.

The reason for the dip has now been entirely debunked. Not only were the cancer cases well within background rates, but several of them other occurred so early or had such strong evidence suggesting that they were pre-existing that the FDA isn't even going to look at them twice. The cancer BS is over, end of story.

Meanwhile, nobody debated that the efficacy data that $ABVX showed, both in part 1 and part 2, blew away every single expectation anyone had going in - even the very most bullish.

So what we have now is $ABVX significantly underperforming the $XBI over the last month despite releasing what is arguably the greatest IBD readout of all time.

Since the $ABVX data release:
↪️$ABVX +9%
↪️$XBI +20%
🙄Oh, and don't even get me started on the YTD performance...$XBI +32% vs $ABVX +8%!

$ABVX is underperforming the index by ~11% during the period where it released 2 absolutely blue sky scenario readouts.

Sure, $ABVX looks like it is up a lot over the last couple weeks if you want to start your analysis at the nadir of a stock crash that was driven by some mass delusion about cancer rates. But we can rather objectively see now...that entire escapade was just absolute bullshit 🤷‍♂️

There never was any legitimate cancer signal, and the prices at which the stock traded during that period of insanity are equally as illegitimate. I think it's quite easy to argue that these numbers can be entirely ignored.

In that case, shouldn't $ABVX be outperforming the index since its data were released? It certainly stands to reason.

It's hard to stress how far beyond the bullish expectations the efficacy data resulted, and there wasn't a SINGLE safety issue to discuss AT ALL once we were able to talk sense into people about the cancer nonsense.

The clinical remission rates were at the absolute top end of the bullish range for BOTH dose levels, and the endoscopic remission rates (often GI docs' preferred endpoint) were well above what most people even thought POSSIBLE to achieve with a monotherapy...DOUBLING the delta of the next highest ER rate from the 2nd best drug...completely unprecedented efficacy.

It does not seem controversial to me to think that these incredible beats on expectations should lead to market outperformance. I've never seen an I&I readout come so far above consensus results, ever.

How far should the rally go? IDK. I don't really "do" price targets, but:
↪️Just "market perform" (+20%) since the data brings $ABVX to $159
↪️Just outperforming the market by 10% (+30%) brings $ABVX to $174

I personally don't see $170s as unreasonable at all. In fact, I thought the $170s range was where the stock was headed on the original part 1 dataset, but part 2 seems to have upped the ante again by showing incredibly high rates of maintenance responses achieved in induction non-responders (a very big deal for time on therapy and market uptake, and thus for the revenue bottom line).

Maybe the stock goes there soon, maybe it doesn't, but it certainly wouldn't be unreasonable from my perspective. I now believe we are looking at a high probability of nearer term M&A that should land somewhere in the $200s. Would the M&A premium on $170 be 100%? Of course not. But the relatively high probability of near term M&A should be reflected in the open market price here, because there is already no secret that talks are ongoing.

IMO the stock should be pricing in:
1⃣Absolutely unprecedented maintenance data
2⃣Newfound M&A speculation (due to the Reuters article and the greenshoe breadcrumb that all but confirm talks have heated up)
3⃣A massive 20% rally in the $XBI

Even at the $154 level that the stock hit on the Euronext Friday...$ABVX still isn't fully pricing in any of those factors from my (BIASED) perspective.

Let's see where it goes! Speaking for myself, I'll be disappointed if it doesn't at least see the $160s this week. There has just been too much exceptionally positive news for this stock to underperform the $XBI like this, and I simply do not buy the idea that anyone should anchor themselves to prices that resulted from a "cancer scare" delusion that has been completely debunked. The "cancer signal" wasn't real, and neither were the temporary stock prices it generated.

Here's to hoping we finally see some OUTPERFORMANCE with $ABVX from here on out!

[Adam May @A_May_MD]

Reuters tonight reporting that $ABVX was indeed holding buyout these last weeks, according to 2 anonymous sources.

This M&A “rumor” I completely believe. There was no reason for $ABVX to wait until the absolute end of June before releasing the part 2 data they already had *besides* them leveraging that interlude to talk with buyers.

Unsurprisingly, 3-4 weeks is too short a time to get a deal done with a brand new ~1,000 patient dataset for multiple pharmas to review and submit bids over. I think we can confidently say dozens of 14D-9s confirm 3-4 weeks would be far too fast for a deal of this size.

Also unsurprisingly, $ABVX couldn’t sit on that data forever and the June deadline was self-imposed. They knew the stock would go up with the new data and that they’d be able to raise cash for negotiation leverage while giving (likely multiple) bidder(s) more time to complete their diligence. Recall that raising cash post data was their publicly stated plan all along.

So, Reuters is (per sources) confirming what I suspected…while the market was freaking out about the (now debunked) cancer scare, $ABVX was full steam into BD discussions knowing the stock would soon rerate with the part 2 update.

Now, there’s some more interesting details to parse through….

https://t.co/XitEcYSqjR

[Adam May @A_May_MD]

The question automatically becomes “when does $ABVX resume discussions now that the offering is done?”

We actually have a bread crumb telling us that they are jumping back into buyout discussions right away…

There has been much chatter about French regulations preventing $ABVX from simultaneously holding buyout discussions while running a share offering. France says you cannot do both at once. $ABVX CEO confirmed this with @bradloncar on @BiotechTV this week.

That means that as soon as this current offering is closed, discussions can resume.

Interestingly, we have a breadcrumb showing us that $ABVX is making absolutely certain that the current offering closes ASAP…

In the current offering press release we can see that the “greenshoe” (the extra shares that are sold to the underwriters of the deal) MUST be exercised CONCURRENTLY with the offering’s closing on Monday…

This is a significant deviation from the norm, which is to give 30 days for the greenshoe to close. This is also a deviation from ABIVAX’S OWN PRIOR PRACTICE IN PREVIOUS OFFERINGS. As we can see in the screenshots below:

-$ABVX’s 2025 offering granted the standard 30 days for the greenshoe

-$ABVX’s current offering only gives them until Monday, when the rest of the shares close

…now why would they do that?

This is, to me, very clearly an intentional move by $ABVX done to ensure that they can *immediately* go back into buyout discussions, without worrying about being held up by French law.

Very interesting breadcrumb here, and it supports my (confirmation bias warning) strong belief that active buyout conversations have already been underway with resumption of buyout discussions planned ASAP.

With 3-4 weeks of big pharma diligence on the maintenance dataset already likely completed, I see no reason that this deal process *couldn’t* move very quickly from here.

Of course there’s still the chance they want to wait for Crohn’s, but I increasingly see the nearer term move making more sense to me. The breadcrumbs we have very clearly suggest this is all well underway, not to mention the new Reuters article from tonight saying the very same thing.

[Adam May @A_May_MD]

$920M final deal size for $ABVX 😅

Now watch what happens on a heavily oversubscribed offering with an undervalued company developing a once-in-a-generation drug in the middle of a raging bull market 📈

[Adam May @A_May_MD]

$ABVX longs hearing the offering is 7x oversubscribed