🧵$BBIO Deep Dive Profile: Here is my latest profile as of 12/26/24.
Biotech2k@Biotech2k1
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Feb 10, 2025
~7 min read
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🧵$BBIO Deep Dive Profile:
Here is my latest profile as of 12/26/24.
Here is my latest profile as of 12/26/24.
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Management:
I haven't been following this company for very long, so I don't know much about Neil Kumar. There are 4 key areas of business that I think a CEO has to demonstrate expertise in to build a long term winning biotech company.
They need expertise at advancing drugs through the clinical development process. This company advanced 1 drug all the way through phase 3 to commercial approval. It has three other drugs in mid to late stage development. They have demonstrated some skill at the clinical development process.
They need expertise at navigating the regulatory process with the FDA. They managed to navigate one program all the way to commercial approval. They have shown they can navigate the FDA process with success. More approvals would help enforce that ability.
They need expertise at managing the balance sheet. They have about $500 million cash and will get another $500 million from their funding deal. That should give them about $1 billion total cash. They have about $1.2 billion in convertible debt. About $475 million is due come 2027. They burn about $500 million per year. That gives them 2 years of cash to drive sales and value.
The final key expertise for a management team is the ability to build a successful commercial sales team. This is one of the areas where many management teams come up short. They either partner away the drugs, or they sell the company because they don't want to take on the task of building out a commercial sales team. This company just launched commercially. We will have to wait and see how well their sales team does.
I haven't been following this company for very long, so I don't know much about Neil Kumar. There are 4 key areas of business that I think a CEO has to demonstrate expertise in to build a long term winning biotech company.
They need expertise at advancing drugs through the clinical development process. This company advanced 1 drug all the way through phase 3 to commercial approval. It has three other drugs in mid to late stage development. They have demonstrated some skill at the clinical development process.
They need expertise at navigating the regulatory process with the FDA. They managed to navigate one program all the way to commercial approval. They have shown they can navigate the FDA process with success. More approvals would help enforce that ability.
They need expertise at managing the balance sheet. They have about $500 million cash and will get another $500 million from their funding deal. That should give them about $1 billion total cash. They have about $1.2 billion in convertible debt. About $475 million is due come 2027. They burn about $500 million per year. That gives them 2 years of cash to drive sales and value.
The final key expertise for a management team is the ability to build a successful commercial sales team. This is one of the areas where many management teams come up short. They either partner away the drugs, or they sell the company because they don't want to take on the task of building out a commercial sales team. This company just launched commercially. We will have to wait and see how well their sales team does.
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Future Potential: Attruby (acoramidis)
This drug falls into a new group of small molecule drugs called TTR stabilizers. They work by stabilizing the TTR proteins so that they don't come apart.
TTR is a protein that occurs naturally in the form of a tetramer, and performs multiple physiologic roles, including the transport of essential hormones and vitamins. In ATTR, the TTR tetramers become destabilized. Destabilized TTR dissociates into monomers, self-aggregates, and assembles into fibrils that are deposited, predominantly in the heart and nervous system, driving disease pathophysiology.
TTR-CM is caused by buildup of the amyloid in the heart which leads to progressive thickening of the heart called cardiomyopathy. Cardiomyopathy from TTR comes from either genetic variation or progressive age-related occurrence. It can lead to heart failure.
The recent phase 3 data showed over 90% TTR stabilization making this the most effective stabilizer now on the market. There was a 40% reduction in all cause mortality and in cardiovascular hepatizations vs placebo at 30 months.
The company estimates there are about 30,000 patients in the US with TTR-CM. They estimated upward of 400,000 patients worldwide.
This drug just got approval and should start seeing commercial sales already in the last quarter of 2024. The commercial drug from Pfizer does well over $3.3 billion a year in sales. This is a best in class stabilizer and should take over a dominant market share. I personally gave them $2 billion in peak sales to be conservative.
This drug falls into a new group of small molecule drugs called TTR stabilizers. They work by stabilizing the TTR proteins so that they don't come apart.
TTR is a protein that occurs naturally in the form of a tetramer, and performs multiple physiologic roles, including the transport of essential hormones and vitamins. In ATTR, the TTR tetramers become destabilized. Destabilized TTR dissociates into monomers, self-aggregates, and assembles into fibrils that are deposited, predominantly in the heart and nervous system, driving disease pathophysiology.
TTR-CM is caused by buildup of the amyloid in the heart which leads to progressive thickening of the heart called cardiomyopathy. Cardiomyopathy from TTR comes from either genetic variation or progressive age-related occurrence. It can lead to heart failure.
The recent phase 3 data showed over 90% TTR stabilization making this the most effective stabilizer now on the market. There was a 40% reduction in all cause mortality and in cardiovascular hepatizations vs placebo at 30 months.
The company estimates there are about 30,000 patients in the US with TTR-CM. They estimated upward of 400,000 patients worldwide.
This drug just got approval and should start seeing commercial sales already in the last quarter of 2024. The commercial drug from Pfizer does well over $3.3 billion a year in sales. This is a best in class stabilizer and should take over a dominant market share. I personally gave them $2 billion in peak sales to be conservative.
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Future Potential: Encaleret
This is a small molecule antagonist of the calcium sensing receptor (CaSR). This receptor is expressed mainly on the parathyroid gland, the renal tubule of the Kidneys and the Brain. It plays a key role in sensing levels of calcium in the blood and urine. It is currently in development for Autosomal Dominant Hypocalcemia Type 1 (ADH1) and post surgical hypoparathyroidism (PSH).
Autosomal Dominant Hypocalcemia Type 1 stems from mutations in the gene that encodes for the Calcium Sensing Receptor. This leaves these receptors hypersensitive to the extra cellular levels of calcium at normal levels. In response to high calcium stimulation, the parathyroid reduces secretion of its the parathyroid hormone (PTH). The most common features of autosomal dominant hypocalcemia include muscle spasms in the hands and feet, muscle cramping, tingling sensations, or twitching of the nerves and muscles in various parts of the body. More severely affected individuals develop seizures, usually in infancy or childhood.
The Phase 2 data showed that patients with 9 unique variants of CaSR showed normalized levels of blood calcium, urinary calcium and parathyroid hormone. At week 24, the data showed 92% of patients were able to reach normalized calcium levels without any supportive calcium or vitamin D supplements.
The company estimates that about 25,000 patients in the US and EU suffer from ADH1. They estimate the commercial opportunity is worth over $1 billion in revenues. Based on this data, I set my estimates at $750 million for ADH1 and I gave no estimates for the post surgical setting yet.
This is a small molecule antagonist of the calcium sensing receptor (CaSR). This receptor is expressed mainly on the parathyroid gland, the renal tubule of the Kidneys and the Brain. It plays a key role in sensing levels of calcium in the blood and urine. It is currently in development for Autosomal Dominant Hypocalcemia Type 1 (ADH1) and post surgical hypoparathyroidism (PSH).
Autosomal Dominant Hypocalcemia Type 1 stems from mutations in the gene that encodes for the Calcium Sensing Receptor. This leaves these receptors hypersensitive to the extra cellular levels of calcium at normal levels. In response to high calcium stimulation, the parathyroid reduces secretion of its the parathyroid hormone (PTH). The most common features of autosomal dominant hypocalcemia include muscle spasms in the hands and feet, muscle cramping, tingling sensations, or twitching of the nerves and muscles in various parts of the body. More severely affected individuals develop seizures, usually in infancy or childhood.
The Phase 2 data showed that patients with 9 unique variants of CaSR showed normalized levels of blood calcium, urinary calcium and parathyroid hormone. At week 24, the data showed 92% of patients were able to reach normalized calcium levels without any supportive calcium or vitamin D supplements.
The company estimates that about 25,000 patients in the US and EU suffer from ADH1. They estimate the commercial opportunity is worth over $1 billion in revenues. Based on this data, I set my estimates at $750 million for ADH1 and I gave no estimates for the post surgical setting yet.
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Future Potential: Infigratinib (low dose)
This is a drug that targets the Fibroblast Growth Factor Receptors (FGFR) 1, 2 and 3. It targets the receptor that is a driver of cell growth. It was originally developed in oncology indications like Cholangiocarcinoma. It is now being developed in a low dose formulation for patients with Achondroplasia and Hypochondroplasia.
Achondroplasia is the most frequent cause dwarfism, and mutations in the FGFR3 gene have been shown to be the molecular source of the condition. It has a prevalence of greater than 55,000 in the US and EU. The condition leads to dwarfism with anomalies in bone development. Achondroplasia is an autosomal dominant condition caused by a gain-of-function point mutation in the FGFR3 gene. FGFR3 is expressed in osteoblasts and chondrocytes where it plays a critical role in regulating bone growth.
The Phase 2 data showed that in children with Achondroplasia had a 3.38 centimeters growth improvement at 6 months. It showed a clear dose dependent response and was well tolerated. They are working through the phase 3 study now.
It's also being developed in Hypochondroplasia. This is a rare condition which affects about 55,000 patients in the US and EU. This is another form of Dwarfism called short arm Dwarfism. This disease affects the conversion of cartilage to bone. Because it is similar to Achondroplasia, it makes sense to try to develop this drug in this indication. This is currently in a phase 2 trail.
The company expects that each of these 2 indications could $2 billion or more in revenues. That would be well over $4 billion in total revenues if both indications work out well.
This is a drug that targets the Fibroblast Growth Factor Receptors (FGFR) 1, 2 and 3. It targets the receptor that is a driver of cell growth. It was originally developed in oncology indications like Cholangiocarcinoma. It is now being developed in a low dose formulation for patients with Achondroplasia and Hypochondroplasia.
Achondroplasia is the most frequent cause dwarfism, and mutations in the FGFR3 gene have been shown to be the molecular source of the condition. It has a prevalence of greater than 55,000 in the US and EU. The condition leads to dwarfism with anomalies in bone development. Achondroplasia is an autosomal dominant condition caused by a gain-of-function point mutation in the FGFR3 gene. FGFR3 is expressed in osteoblasts and chondrocytes where it plays a critical role in regulating bone growth.
The Phase 2 data showed that in children with Achondroplasia had a 3.38 centimeters growth improvement at 6 months. It showed a clear dose dependent response and was well tolerated. They are working through the phase 3 study now.
It's also being developed in Hypochondroplasia. This is a rare condition which affects about 55,000 patients in the US and EU. This is another form of Dwarfism called short arm Dwarfism. This disease affects the conversion of cartilage to bone. Because it is similar to Achondroplasia, it makes sense to try to develop this drug in this indication. This is currently in a phase 2 trail.
The company expects that each of these 2 indications could $2 billion or more in revenues. That would be well over $4 billion in total revenues if both indications work out well.
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Future Potential: BBP-418
This is a small molecule substrate replacement therapy. The drug replaces a key missing substrate that is used by the fukutin‑related protein (FKRP). This is being developed in Limb Girdle Muscular Dystrophy Type 21.
Limb Girdle Muscular Dystrophy (LGMD) is a group of disorders that share similar clinical characteristics. They are often characterized by muscle wasting which affects mostly the hip and shoulders. LGMD2I is an inherited neuromuscular disorder characterized by lower-limb weakness and loss of ambulation, and possible pulmonary and cardiac dysfunction. There are estimated about 7,000 patients with this disease in US and EU.
The phase 2 data showed some signs of disease stabilization. They are progressing with a phase 3 trail.
The company believes it could do well over $1 billion in revenues from this indication. I marked mine to half that amount just to be safe.
This is a small molecule substrate replacement therapy. The drug replaces a key missing substrate that is used by the fukutin‑related protein (FKRP). This is being developed in Limb Girdle Muscular Dystrophy Type 21.
Limb Girdle Muscular Dystrophy (LGMD) is a group of disorders that share similar clinical characteristics. They are often characterized by muscle wasting which affects mostly the hip and shoulders. LGMD2I is an inherited neuromuscular disorder characterized by lower-limb weakness and loss of ambulation, and possible pulmonary and cardiac dysfunction. There are estimated about 7,000 patients with this disease in US and EU.
The phase 2 data showed some signs of disease stabilization. They are progressing with a phase 3 trail.
The company believes it could do well over $1 billion in revenues from this indication. I marked mine to half that amount just to be safe.
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Competitive Advantage:
The biggest competitive advantage for biotech companies is the patent protection for their drugs.
Their lead indication for TTR is a very competitive space. There are many other drugs competing in this space. Their biggest advantage is their best in class data so far for a stabilizer.
They have Breakthrough therapy designation for Infigratinib for Achondroplasia. This is a designation from the FDA reserved for drugs that demonstrate clear improvements over current standard of care.
They also have Orphan designation in Achrondroplasia, ADH1 and Limb Girdle. This would give them 7 years of exclusivity in these indications which is a good competitive advantage.
Overall, they have a number of designations that would help afford them some competitive advantages.
The biggest competitive advantage for biotech companies is the patent protection for their drugs.
Their lead indication for TTR is a very competitive space. There are many other drugs competing in this space. Their biggest advantage is their best in class data so far for a stabilizer.
They have Breakthrough therapy designation for Infigratinib for Achondroplasia. This is a designation from the FDA reserved for drugs that demonstrate clear improvements over current standard of care.
They also have Orphan designation in Achrondroplasia, ADH1 and Limb Girdle. This would give them 7 years of exclusivity in these indications which is a good competitive advantage.
Overall, they have a number of designations that would help afford them some competitive advantages.
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Balance Sheet:
They have about $500 million cash and will get another $500 million from their funding deal. That should give them about $1 billion total cash. They have about $1.2 billion in convertible debt. About $475 million is due come 2027. They burn about $500 million per year. That gives them 2 years of cash to drive sales and value.
They have about $500 million cash and will get another $500 million from their funding deal. That should give them about $1 billion total cash. They have about $1.2 billion in convertible debt. About $475 million is due come 2027. They burn about $500 million per year. That gives them 2 years of cash to drive sales and value.
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Pipeline Valuation:
These are my numbers for the pipeline valuation. The management gave their numbers, but I used a reduced conservative amount. I used the more conservative numbers to be safe. The stock is clearly trading at a discount to the pipeline valuation alone.
These are my numbers for the pipeline valuation. The management gave their numbers, but I used a reduced conservative amount. I used the more conservative numbers to be safe. The stock is clearly trading at a discount to the pipeline valuation alone.
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Intrinsic Value:
They have $1 billion in cash and $1.2 billion in debt. That leaves them with a net debt of $200 million. That reduces the valuation by $200 million.
The pipeline has $11.5 billion in value based on my valuation from the pipeline.
All in, that comes to $11.3 billion valuation. They have about 189 million shares outstanding. That comes out to about $59.78.
They have $1 billion in cash and $1.2 billion in debt. That leaves them with a net debt of $200 million. That reduces the valuation by $200 million.
The pipeline has $11.5 billion in value based on my valuation from the pipeline.
All in, that comes to $11.3 billion valuation. They have about 189 million shares outstanding. That comes out to about $59.78.