Osprey Cap II

Healthcare equities L/S. This is not financial advice. May buy or sell securities without disclosure.

[Osprey Cap II @dsjdirect]

$ABVX a lot has already been said here by such biotwitter luminaries as @Biohazard3737 @A_May_MD and @seedy19tron. I'll just add that this sector is particularly driven by sentiment and things often go too far in both directions. You can take advantage of this or you can be victimized by it. It's helpful for me to think in terms of probabilities. Big emotional selloffs are fertile ground for new asymmetric longs. Of course, you have to do some work to determine what's noise and what is likely to prove to be signal. I am betting the cancer "risk" here turns out in the end to be either unrelated to the drug or just unimportant to the incredible developing story of Obefazimod.

[Osprey Cap II @dsjdirect]

Good to see a common sense guy like Steve Hilton rising and a freak like Tom Steyer dropping. The pendulum in CA may be swinging back towards some sanity.

[Decision Desk HQ @DecisionDeskHQ]

DDHQ Race Update (est. 62% in): California Governor Primary

Steve Hilton (R): 1,386,966 (27.8%)
Xavier Becerra (D): 1,267,070 (25.4%)
Tom Steyer (D): 979,007 (19.6%)
Chad Bianco (R): 566,679 (11.3%)

Follow more results here:
https://t.co/TTzNxNQwoW

[Osprey Cap II @dsjdirect]

@Biohazard3737 Gave me the opportunity to buy call options with asymmetric reward/risk. Personally, I'm thankful for it.

[Osprey Cap II @dsjdirect]

"Jensen will even talk up direct competitors for the benefit of the broader AI industry." He then went out and said Marvell Technology will be the next trillion-dollar company. Marvell shares rallied 33% in response today and have only $750 billion more to go. Nvidia made a token $2 billion investment in Marvell in March, that is now worth nearly $6 billion. Apparently upside stock promotion is acceptable, but activist short selling is not. It's just another sign of the top".-Jones Trading.

[Osprey Cap II @dsjdirect]

$ABVX

[Seedy19 @seedy19tron]

***The Cancer Signal DOES NOT Exist $abvx ***
BREAKING:

Building on what Adam has said, I’ve been able to crack it, and I think in the coming days when mgmt release a PR this is going back to $160. Here is why: (try to read to the end)

When you apply the standard clinical trial counting conventions that every other UC pivotal trial has , you exclude dysplastic lesions (which are by definition not cancer) and separate NMSC from serious malignancies (per FDA convention). So it isn’t what Adam and I are observing it’s a fact. The actual count of adjudicable malignancy cases in the Ph 3 50 mg arm is TWO:
- one prostate cancer
- one breast cancer

Why nothing burger?
- Both occurred in older patients at peak demographic incidence ages
- both were investigator deemed unrelated
- both occurred at exposure windows biologically incompatible with drug causation
- Obe has neither of the two known mechanisms by which a drug can cause cancer.

*The signal is statistical noise made to look like a signal by a self inflicted presentation error.*

Okay so clearly $abvx shot themselves in the foot, a $7B presentation error:

The cleanest single fact in this entire debate…colonic dysplasia is not cancer.

Cervical dysplasia, colonic dysplasia, melanocytic dysplasia… none of these are cancer.

Every other UC pivotal program excludes dysplasia from the malignancy count. Look at the Rinvoq maint safety table, Sotyktu’s , Omvoh Velsipity, all the same.

Dysplastic lesions are tracked separately as GI surveillance findings!!! not as malignancies.
$abvx in a rush or naively included colonic dysplasia in the malignancy row created a non apples to apples comp that the market has been processing as drug driven cancer when it from a clinical pov, not cancer at all.

This was a self inflicted wound. But it will be correct very soon. What they should have done.. (in hindsight gave us a chance to buy so so cheap)

1.Footnoted the dysplasia as a UC surveillance finding, NOT a malignancy
2.Reported “drug related malignancies 0%” prominently
3.Provided case level details for every event with explicit rationale for the unrelatedness adjudication
4.Released the escape/placebo arm 50 mg data simultaneously

They visually organized the data in a way that made a non signal look like a signal. The market reacted to the table layout not the underlying pharmacology!!

NMSC is not in the same category and if anyone wants I can walk them through it.

Lumping NMSC with serious malignancies is a categorical error that no oncology or dermatology specialist would make. (Adam a derm and multiple others I spoke to confirm this)

It is in a meaningfully different clinical category and the FDA knows this… which is why “non NMSC malignancy” is the standard endpoint they evaluate.

Lots of smart onco folk here … there are exactly two established pharmacological pathways by which a drug can cause cancer:

- Direct DNA damage (genotoxicity / mutagenicity)
- Profound immunosuppression

Obe non genotoxic across the full ICH S2 panel and no clin immunosuppression signal.

CLEARED!

if Obe is causing cancer, it must be doing so through a mechanism that has never been described in pharmacology. The drug would have to either be acting as a mini Chernobyl in a small subset of patients… (sorry for this example)

There is no third option.

The shortest known cancer latency for any human malignancy is approximately 2 years for radiation induced acute leukemia from acute high dose exposure. That is the floor.

Chernobyl level acute radiation exposure does not cause clinically detectable solid tumors in 40 days. It doesn’t cause them in 200 days or 400 days. The biology requires multi year cellular transformation processes. Cancers detected within a 44w trial were growing for years before the pt was randomized.

1/n

[Osprey Cap II @dsjdirect]

@jfais20 @SteveAytch1 Thanks my man!

[Osprey Cap II @dsjdirect]

Incredible.
https://t.co/pc4Xhp96Fe

[Wall Street Apes @WallStreetApes]

Here’s all the items California fraudster Paul Randall purchased with stolen Medi-Cal fraud money

- Over $270 million in fraudulent claims
- Over a dozen Ferraris
- Multiple Lamborghinis
- A Bugatti
- A Lotus
- Kobe Bryant game-worn sneakers
- Jackie Robinson baseball card
- Mickey Mantle baseball card
- 7 real estate properties total
- One mansion in an exclusive area of Orange County with 8 bedrooms and 10 bathrooms

I looked into this and found was able to do all this on under 1 year, May 2022 to April 2023 which is about 11 months

Randall, along with co-conspirators exploited a temporary Medi-Cal rule change during and after COVID that suspended prior authorization requirements for certain medications

- They billed for 19 expensive, non-contracted drugs that contained low-cost generic ingredients.
- Many claims were for drugs that were not medically necessary and often not even provided to patients

They then laundered proceeds, including kickbacks to Anderson, to conceal the fraud

Democrats and California agencies let this happen. They should be the ones held accountable

[Osprey Cap II @dsjdirect]

Shameful

[Nick shirley @nickshirleyy]

🚨 California Passed "The Stop Nick Shirley Act":
This week the California Assembly passed AB 2624. This bill will criminalize investigative journalism involving the immigrant population. It would have made it illegal to expose the Somali "Learing" center if it were in California or the Armenian hospice fraud in LA if they claimed "reasonable fear."

The bill protects "immigration support services providers," which means services provided to immigrants, including health care. It has been proven that millions, potentially billions, of dollars in fraud has taken place in "immigrant support services” which includes nonprofits and NGOs the state funds.

California is trying to make it harder to expose fraud and scare individuals from investigating it as they could be forced and sued to remove the video, forced to pay attorney fees, and ordered to pay a minimum of $4,000 in damages.

This bill was created by Mia Bonta (the attorney general's wife). She has made 4 separate versions of this bill because each version violates the 1st Amendment and is extremely unconstitutional.

Plain and simple, California politicians need the fraud to continue because they depend on the fraud to push their agendas. END ALL THE FRAUD.

[Osprey Cap II @dsjdirect]

Love this

[Rock Photography @Photomusicrock]

Playing AC/DC’s music in retirement facilities is the way!

[Osprey Cap II @dsjdirect]

Love it

[Adam May @A_May_MD]

Always sharp @drug_smolecules making the case here that $ABVX doesn't even get a black box warning by comparing malignancy rates to Sotyktu, which was under a huge microscope for safety because its target (TYK2) is a member of the JAK family. Sotyktu did NOT get a black box warning despite huge regulatory attention that came with technically being a JAK inhibitor only by a different name.

Our friend DRUGS calculates $ABVX's per year malignancy risk as 0.48, versus 0.46 for Sotyktu with its ***CLEAN*** label. So there you go - FDA precedent says no black box, right? 0.48 is basically equivalent to the 0.46 rate of the drug that got zero labeling for malignancy...

But there's more! DRUGS here is actually missing a key, very big nuance - He's including only the *2nd* extension of the phase 2 trial and not the first. So he is missing 2-4 years of EXTRA squeaky clean safety for all 130 patients. This is essentially and entire extra *Phase 3* worth of patient-year safety data...

So let's redo the math with the full P2 dataset (using his initial numbers):

➡️357.5 patient-years from the 2nd P2 extension
➡️310 patient-years from the P3 (80% of 388 patients were completers at 52 weeks -not 44 weeks-)
➡️Now the extra 2-4 years of P2 at 50mg dosing that was inadvertently excluded...let's say the average time on therapy was only 2.25 years to account for dropouts. 2.25x130 = 292.5 more patient-years from the initial 2-4 years of P2 he missed.

Adding that in, the grand total becomes 960 patient years (instead of 619). Much of it at 50mg as well!

That takes the "malignancies excluding NMSC" rate to 3/960 = 0.31 👈👈👈

0.31...Lower than the 0.48 he initially roughly calculated and SIGNIFICANTLY lower than the 0.46 that Sotyktu showed WITOUT getting a black box warning DESPITE hitting one of the 4 JAK-family receptors.

0.46 with no black box versus 0.31...what are we to determine from that? To me, that very clearly reads as..."no black box".

Biotech is absolutely notorious for DRAMATIC and IRRATIONAL price swings after hours on new data. Anyone in this business can tell you a dozen times something opened WAY up or WAY down and ended up going completely the other direction over the next week.

IMO this is going to be one of those cases. I understand the market's knee jerk reaction, as this was a highly watched catalyst with a lot on the line, and any time you hear CANCER RISK you freak out.

But the market does not appreciate the nuances of such safety risks right away, and it certainly doesn't make calculations like what I laid out above on a dime. The market freaked out. It saw the "C word" and sold. IMO the market got this totally wrong and cooler heads will prevail tomorrow...the math says so.

Will some people stay freaked out despite the objective math above...sure...I mean, a rate of 0.31/year for $ABVX vs 0.46/year for a drug with no black box warning...come on. I can't tell you why people will look at that and still freak out but lets assume they do:

How much does that wash out with the fact that ABVX just showed the most unbelievably strong efficacy that has ever been seen with any drug for UC EVER (by a WIDE margin on endoscopic remission - like, it actually even crushed the *JAKs* on that)?

Objective MATH says no black box warning. And if that's what the market actually believed, with this efficacy, $ABVX would currently be $200+.

Back to $98 AH. The smart money will do the same math I just did above overnight, and in my opinion most will come to the same conclusion. Tomorrow, the "truth" -i.e. the price- will (in my opinion) end up somewhere in between.

Would I be shocked to see $ABVX green tomorrow? Far less shocked than I am at the absolutely INSANE efficacy they just showed. It would be neither the first nor last time the market got the initial reaction completely wrong.

[Gad Saad @GadSaad]

The only thing that stops violent men from raping you and your society are other men who are equally willing to be violent in stopping the rapists. The West has decided that the highest virtue is to quietly comply with the destruction of your civilization because to do otherwise is bigoted toward the rapists. It really is that simple.

[Osprey Cap II @dsjdirect]

Agree with Adam "this is noise". A speed bump along the way in the development of what is very likely to be a hugely successful drug.

[Adam May @A_May_MD]

$ABVX P2 extended trial (5-7 years duration and n>100) produced well over *double* the patient years of safety data than any of P3 arms did and there were ZERO cases of any malignancy (as confirmed on the call).

The P2 dataset has to have well over 500 patient years of safety data versus <200 for the high dose P3 arm.

Literally a more robust safety dataset comes from the P2 and the signal is literally zero.

The low dose arm echoed that - zero signal vs placebo.

2 cases of the most common cancers in the ~200 patients in the high dose arm. This is noise.

Coupling this with efficacy that absolutely crushed all expectations…the selloff is insane.

Again, what’s to even stop them from just submitting the 25 mg dose which was totally 100% clean in BOTH the larger P2 safety database and the P3 25 mg arm…that dose had a 39% delta, the same as Rinvoq with 5 different black box warnings!

If they just had the 25mg data alone $ABVX would be $200 right now.

[Adam May @A_May_MD]

@SharkAlertsBio Actually I’m pretty shocked 😅

My prediction was 25% for $ABVX. Would’ve been pumped at 30%,

40.3% is literally the best efficacy number of all time…and in a once daily oral with no safety baggage whatsoever…shocking

[Osprey Cap II @dsjdirect]

@Biohazard3737 Just doubled my position. Never in my wildest dreams did I think I'd get another shot like this.

[Yair Einhorn @yaireinhorn]

The Baker Brothers - or under its official name “Baker Bros. Advisors LP”, is by far the biggest “Healthcare only” investment firm in the BioTech and Pharma ecosystem - managing $28.1B of Assets Under Management (AUM) 🧵👇. Just for comparison - the second biggest investment firm - orbimed - is far behind with “only” $20.6B of assets under its management. The story of the “Baker Brothers” is a story of both patience and persistence that played a huge rule in their biggest investment ever - Seagen (formally known as Seattle Genetics). Julian and Felix Baker began investing in Seagen in 2003 when they made their initial investment while the company had no drugs on the market and was barely breaking even. In order to strengthen the company’s leadership Felix Baker joined Seagen's board of directors and played a leading role in its long-term strategy. Up until 2023 the investment firm maintained its high conviction and substantial stake and took part in the company’s strategic plans and operations. In March of 2023 $PFE announced an all-cash acquisition of Seagen for $43 billion or $229 per share - one of the biggest M&A deals ever made in the BioTech and Pharma ecosystem. In December of that year the deal was officially closed and the Baker Brothers received $10 billion in cash for their stake in the company. This was and still is one of the largest single Return on Investment (ROI) in BioTech history. A truly remarkable story!

[Rod Wong, MD @docrodwong]

a standing ovation for daraxonrasib at asco. over 40k oncologists, entrepreneurs, investors, and patient advocates together celebrating revmed's breakthru in the fight against pancreatic cancer. u never forget these moments. it's what innovation is all about.

[dough @semodough]

$COGT Jeff Upside Scenario,
$94, +189%
• Bezu ISM: unadj peak $1.5B w/ POS 100% on
approval
• Bezu ASM: unadj peak $0.4B w/ POS 100% on
approval
• Bezu GIST: unadj peak $2.0B w/ POS 100% on
approval
• 8% DR, 0% TGR: Funded to profitability, IP to late
2030's
• DCF PT $94