Investors should be aware of sub-sectors that fall in and out of favor amongst venture capital investors Cell and gene therapies have seen a marked decline in funding since last year. So have nucleic acid therapies, to a lesser extent However, these are areas that continue to be active in the M&A sphere #learnbiotechinvesting #biotech #investing #BiotechPrometheus

Investors will often see ORR quoted or displayed for oncology clinical trial results for solid tumors Here's what the CRs/PRs/SDs mean at a high level These are assessed on scans I'm using RECIST v1.1 definitions #learnbiotechinvesting #biotech #investing #BiotechPrometheus

Investors should know WHAT will move a stock and WHEN, especially in biotech with the outsized moves. Build your catalyst calendar ahead of time. You won't have time to thoughtfully analyze the data when it hits #learnbiotechinvesting #biotech #investing #BiotechPrometheus

Investors should understand the #FDA regulatory process well. Here is a quick summary At each step investors should ask themselves if the company is developing things in a way that will satisfy the FDA Until a drug is approved the FDA is the most important decision maker #BiotechPrometheus

Incorporating Probability of Success (PoS) is a unique aspect of #biotech valuation investors must be aware of. It tries to factor development risk into revenue and cost assumptions. Here is a table of PoS values: #learnbiotechinvesting #investing #BiotechPrometheus

Investors should look at fully diluted shares outstanding #FDSO when looking at the market cap of a company. Dilutive securities, including options, warrants, converts, etc, can have a meaningful impact on the actual market cap of a company #learnbiotechinvesting #biotech #investing #BiotechPrometheus

A key variable for investors is management reputation A lot that happens inside a company that is critical for success is outside of public view Investors must ask themselves if they believe management is giving an accurate assessment, both good & bad #learnbiotechinvesting #biotech #investing #BiotechPrometheus

When thinking about valuing #biotechs, especially those which are not yet profitable, a probability adjusted discounted cash flow model is perhaps the most important methodology Though it too has drawbacks #DCF #PoS #learnbiotechinvesting #investing #BiotechPrometheus

Approved drugs can have a "black box" (aka boxed) warning, the highest safety-related warning that FDA can put on an approved drug Usually applied to multiple drugs in the same class it can hamper revenue potential if alternatives exist Investors should be aware #learnbiotechinvesting #biotech #investing #BiotechPrometheus

Pharma has varying levels of success developing drugs. That's a boon for biotech Here are the biopharma companies ranked by likelihood of first approval (LoA%) from 2006-2022 $AMGN, $NVO, #Eisai top the list $GSK, #Astellas, $ABBV are at the bottom #learnbiotechinvesting #BiotechPrometheus

Biotech investors should understand how contingent value rights #CVR work They're more common in biopharma than other industries due to the binary nature of drug development From May 2022-April 2023 CVRs were more common across all industries, including life sciences However, in life sciences 29% of deals had a CVR component In life sciences, CVRs are more common the smaller the deal value. Almost half (45%) of CVRs were for transactions under $500m Over 2/3rds of CVR triggers are for approvals (37%) or sales milestones (32%) #learnbiotechinvesting #biotech #investing #BiotechPrometheus

Do #biotech stocks over-react to bad news? A study found that on average, a biotech stock returns 72% after reporting negative clinical data after 12 months An interesting find but likely a dataset quirk What do you think? #learnbiotechinvesting #investing #BiotechPrometheus

Investors should be aware of "p-hacking" strategies used in data analysis: For biotech, I have come across #s 3, 6, 8-11 too often Hard to know without raw data but be prepared to ask & investigate where possible! #learnbiotechinvesting #biotechinvesting #BiotechPrometheus

Will orphan drugs become less important to large pharma growth in the future? Orphan drugs (which target patient populations in the US under 200,000) are still key drivers for pharma top-lines #orphandrug It's interesting to see that for some companies, the share of revenue from orphan drugs is declining. LOEs are also driving absolute declines for $BMY and $PFE The largest orphan company $VRTX is diversifying away from orphan only revenue #learnbiotechinvesting #biotech #investing #BiotechPrometheus

Pharma has varying levels of success developing drugs. That's a boon for biotech Here are the biopharma companies ranked by likelihood of first approval (LoA%) from 2006-2022 $AMGN, $NVO, #Eisai top the list $GSK, #Astellas, $ABBV are at the bottom #learnbiotechinvesting #BiotechPrometheus

The #HazardRatio measures the effect of an intervention on an outcome of interest OVER TIME Its an important metric for patients since it gives them a better understanding of the risk they face over time rather than when the median patient will progress or die #learnbiotechinvesting #biotech #investing #BiotechPrometheus

Investors should beware of drug revenue forecasts. They're often wildly off, either too high or too low That will impact your analysis This is from 2013. If there's more recent data, please cite the source below #learnbiotechinvesting #biotech #investing #BiotechPrometheus

Investors should take an unbiased view of data and not only listen to management. Ask yourself: Is the drug doing what it's supposed to do? Look for: getting to right tissue, target engagement, proof of mechanism, and proof of concept #learnbiotechinvesting #biotech #investing #BiotechPrometheus

Investors will often see ORR quoted or displayed for oncology clinical trial results for solid tumors Here's what the CRs/PRs/SDs mean at a high level These are assessed on scans I'm using RECIST v1.1 definitions #learnbiotechinvesting #biotech #investing #BiotechPrometheus

How much time do FDA expedited designations save? Accelerated approval and Breakthrough status save a statistically significant amount of time. But Fast track does not Investors should keep this in mind #learnbiotechinvesting #biotech #investing #BiotechPrometheus