Chaotropy

Nothing ever posted is financial advice | Do your own due diligence | Only innovation prevents chaos.

[Chaotropy @chaotropy]

$VSTM reported that VS-7375, an oral non-covalent KRAS G12D ON/OFF inhibitor, reached a confirmed ORR of 9 of 22 (41%) at 900 mg in 2L+ mPDAC. How might this ORR translate into survival, and how does VS-7375 compare with $RVMD's daraxonrasib and zoldonrasib?

Link in comments (free, as always).

Disclosure: I am long $VSTM. No position in $RVMD. This is not financial advice. Do your own research.

[Chaotropy @chaotropy]

@ElMonoGran42994 G12C is not relevant in PDAC from a commercial perspective. I like the idea that G12D inhibitors like VS-7375 are superior in G12D PDAC but we don’t know this yet. And daraxonrasib performed impressive in G12D and even G12R…

[Chaotropy @chaotropy]

Maybe my best take this year. Just started a position in $RVMD again.

I am long $RVMD. This is not financial advice. Do your own research.

[Chaotropy @chaotropy]

I might die on this hill, but I am convinced $RVMD remaining independent creates the most value in the long term. I am adding more.

[Chaotropy @chaotropy]

@ElMonoGran42994 Yes, but I doubt that there is a far superior Pan-Ras candidate out there…

[Chaotropy @chaotropy]

@BubuFiend Looks interesting! Will look into it, thank you!

[Chaotropy @chaotropy]

@VirgilsQuill ♥️

[Chaotropy @chaotropy]

Thank you for reading! Actually I did not pitch anything in my Substack articles. I just explore some arguments, e.g. by simulation. In the case of TENX for example I focused on the PK difference between IV and oral. These were not pitches, while I was long the stocks (which I disclosed). In the case of ZURA I looked into one single bear argument. I do not try to convince anybody and do not want to sell anything (my Substack is free). Besides that CUE is still open and VSTM performed quite well.

[Chaotropy @chaotropy]

This is also my first impulse when I look at the current market cap. I’m long $VSTM myself, so I wouldn’t bet on a complete monopoly either.

That said, I think there is a real first-mover advantage in the PDAC space. How do you even run Phase 3 trials if daraxonrasib succeeds in 1L mPDAC and becomes SOC? How well will fast follower trials enroll once daraxonrasib is the standard? $RVMD is just far ahead.

This is not financial advice. Do your own research.

[Chaotropy @chaotropy]

@ElMonoGran42994 No, I don’t. I’d actually love to hear your opinion. You’ve been pretty right recently…

[Chaotropy @chaotropy]

@ElMonoGran42994 Could you explain why?

[Chaotropy @chaotropy]

Yes, the placebo rate in HS trials has risen in recent years (better SOC?). But a high placebo rate lifts the tibulizumab arms just as much as the placebo arm.

Randomization should give every arm the same background rate. With no relevant delta at either dose and no dose response, I do not see a “beast” in the placebo arm. Tibulizumab just does not work in HS.

Disclosure: I hold no position, long or short, in $ZURA. This is not financial advice. Do your own research.

[Adam May @A_May_MD]

That’s a miss for $ZURA! HS placebo has grown into a real beast. Onto SSc soon then PMR after that. No need to dive into the SSc setup here, because I already wrote about that catalyst in the original document - check there for my takes on that.

That’s 2/3 on pitches! Bummer and of course a big money loser for me, but that’s part of the game. Finding setups with huge potential upside skew means you have to go for stuff that the market thinks is very unlikely to work, thus pricing it cheaply. This time the market was right!

As discussed before, win or lose, the next stop is X hiatus. I’ll stick around for a few days so the “I told you so’s” can take their shots, but a nice break from the noise and distractions is certainly in store.

[Chaotropy @chaotropy]

$ZURA. All endpoints clearly missed. Tibulizumab was more or less inert in HS.

Blaming high placebo rates is pointless when there is no relevant delta. The drug just does not work.

What did I learn? No matter how good a chain of PK/PD arguments and cross-trial comparisons looks, I will never again touch anything without existing clinical data in the indication of interest. Actually no surprise, but drugs do not work like cards in a board game where you add up stats.

Didn't expect such a disastrous result. But that's biotech, sometimes you lose, sometimes others win.

Disclosure: I just sold my total position in $ZURA. This is not financial advice. Do your own research.

[Chaotropy @chaotropy]

Did not want to miss a different perspective, so I bought a monthly subscription to @hannibalspeaks' Substack to read his paywalled article on $ZURA.

The article asks an interesting question. What placebo-adjusted HiSCR75 delta would TibuSHIELD need to report to prove that the BAFF arm of tibulizumab adds anything to IL-17A blockade? I come back to whether that is the right frame at the end, but let's first follow the argument.

The first part estimates what tibulizumab's IL-17A arm alone would do. Ixekizumab has never been tested in a placebo-controlled trial in HS, so Hannibal extrapolates its HS delta from a linear regression of HiSCR75 against PASI-90 over four data points, checked with a second linear regression against ACR50 in psoriatic arthritis (which counts bimekizumab twice). The two regressions give an oddly precise corridor for the delta of 13 to 14.6 points.

In principle I kind of like this approach, but it rests on a wrong assumption in my opinion. Tibulizumab is not simply ixekizumab plus tabalumab. The IL-17A arm is an scFv on a larger bispecific with its own dosing, PK and tissue penetration, and it has not been shown that it blocks IL-17A in HS lesions the way ixekizumab does at its label dose. So ixekizumab may be a weaker proxy than was assumed for these regressions.

The second part of the argument is based on phase 2 inflation, a well-documented phenomenon in drug development. In the five HS phase 2/3 pairs Hannibal tabulates, phase 2 deltas ran about twice the phase 3 deltas. He feeds this into a Monte Carlo simulation (good idea, MC is often very useful) and gets a very optimistic result, a most likely phase 2 delta in the twenties assuming that only IL-17A works. From this he concludes that an additional BAFF effect would only become statistically separable above a delta of 35 from a frequentist standpoint.

By the way, I do not get the 35. By my reading of his histogram, about 15% of his IL-17A-only runs land above 35, which would be p = 0.15 on the right tail rather than 0.05.

Another problem is that Hannibal correctly stresses how noisy results of trials in HS are and then anchors his simulation on a point estimate regressed from four of exactly those noisy readouts. The simulation treats this estimate as exact, and it ignores the spread of the inflation factor (1.59 to 2.62). So his conclusions rest on far shakier ground than his quite confident tone suggests.

Now back to the main argument. Does it matter whether we ever get clean statistical evidence that the BAFF arm contributes on its own? Probably not, and I very much doubt this trial could deliver such evidence anyway.

Sabat et al. reported that lesional BAFF in HS comes mainly from neutrophils, and IL-17 drives neutrophil recruitment in HS. If that holds, IL-17A blockade alone should already lower lesional BAFF, so the two arms would overlap rather than act independently and no realistic delta could cleanly credit the BAFF half.

Tibulizumab will be judged on its total delta against placebo anyway. If it hypothetically ends phase 3 at >20 points, will anyone care which arm of the antibody did the work?

While disclosing that he is long, Hannibal assigns BAFF at best a 10% chance of adding anything. So his trade is a bet that the market will misread a potentially inflated phase 2 result. Personally, I would not bet on a setting like this while not believing in the drug tested.

Did I update my priors after reading? Not really. Nobody knows from the available data how TibuSHIELD will read out and no simulation can decrease the inherently high risk here.

The main risk remains a surprisingly high placebo rate in my opinion, with or without a BAFF effect. It was still an interesting read with an original analysis, resting on a model far less solid than its confident tone suggests.

Disclosure: I am long $ZURA. This is not financial advice. Do your own research.

[Specialsituationz @hannibalspeaks]

An essential read if you're following $ZURA HS readout! (Link below)

[Chaotropy @chaotropy]

@oliviarodrigo Why do so many people have this urge to insult a young woman online? How pathetic must their lives be? @oliviarodrigo keep going. Great song. Bit early, but Merry Christmas. 🎄

[Chaotropy @chaotropy]

Recurring bearish sentiment, like right now, is the reason why I doubt a dot-com-style bubble can form. There are certainly forces pushing toward an excessive AI bubble, and yes, we have seen some craziness. But at least once a year, the AI trade sells off for changing reasons, so far mostly unjustified ones in hindsight.

How long did $AMZN, a rising star of the dot-com bubble, need to reach the revenue of $ANT? The dot-com pipe dreams were built on anticipated demand, while AI demand is right here, right now and growing. Back in 2002, an estimated 90% of the fiber laid was dark. Today, every major AI company lists not getting enough compute as a risk.

I hold no position in $AMZN or $ANT. This is not financial advice.

[Chaotropy @chaotropy]

@A_May_MD You are right. As I wrote, I just wanted to simulate BAFF release and accumulation in HS lesions. But yes, it probably does not really add to the thesis. Nevertheless, I learned a lot and it was fun!

[Chaotropy @chaotropy]

Just published my new article: Could Lesional BAFF Act As A “Sink” For $ZURA's Tibulizumab In Hidradenitis Suppurativa?

Link in comments (free, as always).

Disclosure: I am long $ZURA. No position in $LLY or any other company mentioned. This is not financial advice. Do your own research.

[Chaotropy @chaotropy]

https://t.co/XmcUHYr5E5

[Chaotropy @chaotropy]

https://t.co/tmbROKdS09

[Chaotropy @chaotropy]

Just published my new article: “How CUE-221’s Phase 2 Results In CSU Could Translate To Food Allergy” $CUE

Link in comments (free, as always).