A couple of thoughts on $BMYRT

From a 10’000 ft perspective it’s quite surprising that an approval of both products by their PDUFA dates isn’t the base case or overwhelming consensus, which 70-80% implied POS or a share price between $6.30 and $7.20.

Why is that?

One factor has always probably been the difficulty to own a security with high binary risk, get it through risk management and justify the position despite the limited transparency of the regulatory process (how do you gain a perceived edge beyond trust in historical odds?)

However, the I believe that the delta between where it trades today and where it should trade absent other events, is due to
1) COVID
and
2) the 3 month extension for lisocel and the idecel RTF.

A useful mental exercise is to try to estimate how much of the delta is attributable to either factor and whether that’s reasonable.

First, let’s discuss COVID. There’s a worry that the approvals would be delayed or riskier due to an increased workload at the FDA and travel restrictions that could impact inspections. I believe that people have discounted the CVR by about 30% due to COVID.

However, there’s no empiral real evidence of that risk being real. The FDA has been meeting its action dates and issued a reassuring guidance last week that’s supposed to address the inspection issue. Most importantly, the FDA even has the capability to approve without inspection

Next, I’d like to discuss the 3 mo delay/RTF. I think investor have discounted the CVR by about 40% due to those events. I think that’s partially due to behavioral factors - it highlighted both the risk and lack of transparency in the security - nobody predicted thise events.

But does it actually increase the risk of the final payout? I think the only negative is that the ide-cel deadline doesn’t have enough room left for a 3 month extension. On the other hand, I believe that the RTF allowed for $BMY to file a stronger and more complete...

application. For liso-cel it‘s probably a net positive - it means FDA intends to approve and gives more time for CMC review and inspection.

Bottomline: I continue to believe that the CVR is drastically undervalued.