Read on Twitter
My 2 cents on Xbrane Biopharma (Not investment advice, DYODD; Disclaimer: I'm long $XBRANE): The central two questions are:
1. Will their lead candidate Xlucane (biosimilar referencing Lucentis) make it to market?
2. If yes, what will Xlucane’s market share be?
1/
1. Will their lead candidate Xlucane (biosimilar referencing Lucentis) make it to market?
2. If yes, what will Xlucane’s market share be?
1/
Xbrane has proven comparability of Xlucane and Lucentis in pre-clinical studies. Historically, once clinical trials for biosimilars start, LoA is high. Notably, Lucentis is injected into the eye, thus phase I was unnecessary and Xbrane was allowed to start phase III directly.
2/
2/
Xplore (Phase III study comparing Xlucane vs Lucentis) is the first clinical study that Xbrane has ever run (afaiu they didn't end up doing one for Spherotide). They have experienced employees and have partnered with a CRO (Syneos $SYNH) and commercialization partners
3/
3/
(STADA and Bausch&Lomb), but still notable. Anyways, afaiu the MoA of Lucentis is purely blocking VEGF-A. Lucentis is not a full-length antibody but a Fab fragment (part of a full-length antibody) and this makes production and reaching biosimilarity easier (High LoA imo).
4/
4/
Mgmt projects ~100 MEUR cashflow accruing to Xbrane 3 years after launch and you could do a DCF with ramp up and fade of sales to get an exact value, but I don’t think this is conceptually necessary here. Even though Xbrane also has a pre-clinical pipeline with 2 additional
5/
5/
biosimilars addressing large TAMs, in the medium term this case is more or less binary:
A. ~95% likelihood: Xplore succeeds, EU and US launch in Q3 2022. Xlucane takes ~15-20% market share. Resulting large cashflows make the stock price go up by multiples and fund pipeline
6/
A. ~95% likelihood: Xplore succeeds, EU and US launch in Q3 2022. Xlucane takes ~15-20% market share. Resulting large cashflows make the stock price go up by multiples and fund pipeline
6/
B. ~5% Something gets messed up and market launch is denied/delayed. Stock crashes. As said Xplore will likely be successful, so let’s look at market share: Patent expiry for Lucentis in the US has passed already, in EU it will be summer 2022.
7/
7/
Two other companies and their commercialization partners (Formycon $FYB +Bioeq + Coherus Biosciences $CHRS and Samsung Bioepis $207940 +Biogen $BIIB ) have already progressed further than Xbrane in development of their respective Lucentis biosimilars.
8/
8/
Samsung Bioepis has recently handed in their application for market approval to FDA and EMA. Their biosimilar (SB11) could launch in US at the end of 2021. Formycon will likely hand in their application for market approval of FYB201 to FDA in the first half of next year.
9/
9/
Xlucane will likely launch last in US. If everything goes to plan all three will launch at about the same time in Europe (Q3/Q4 2022). I don’t think Xbrane mgmt has ever admitted this publically, but I think given that at least one of their competitors should get to market
10/
10/
in the US before them should mean that they may not get anywhere near having an equal market share to their competitors in the US (Many clinics could start using competitors’ biosimilars upon launch and won’t transition to Xlucane later; Correct me if you I’m wrong here).
/11
/11
Let’s say they take equal market share to Samsung Bioepis et al. and Formycon et al. in Europe. That would probably still lead to annual CF of approx. 40-50 MEUR accruing to Xbrane. The stock trades at ~1.6 BSEK/~160 MEUR today.
/12
/12
Not difficult to see an upside even in this more pessimistic scenario. Also, note: If Xbrane doesn’t get sizeable milestone payments and/or payments relating to closing of Xlucane commercialization deals in LatAm and/or Asia, they’ll need to do another share issue towards the
/13
/13
middle of 2021 in order to obtain financing until they get CF-pos. and can fund operations etc. internally (Read: When you look at the stock today, factor in at least some dilution into your analysis of current value).
/14
/14
Regarding pipeline + IP: Like Xlucane, Xcimzane is also a Fab fragment, so production in E-coli using their proprietary platform followed by pegylation should be straight forward. Large market and afaiu no known competitors. However, Xdivane is a full-length antibody.
/15
/15
They have repeatedly stated that they’re working on a eukaryotic cell production platform and associated IP. Xbrane has advertised uniquely low production costs using their E.coli-based platform. No public data exists on whether and to what extent their production technology /16
can be transferred to eukaryotic cells. Additionally, competition is higher in the PD-1/PD-L1 blocker space. Chairman of the board Anders Tullgren worked for BMS during launch of Opdivo (Originator that Xdivane is referencing) so I guess that they know what they’re doing.
/17
/17
Again: This is not investing advice, just my subjective opinion based on select data that I have looked at. Don't trust unidimensional neanderthals when it comes to investments. Do your own due diligence.
18/18
18/18
Bonus: FYI, biosimilars have for the most part had low market share in the US, but this might be changing and provide some tailwind for Xlucane upon launch https://www.iqvia.com/insights/the-iqvia-institute/reports/biosimilars-in-the-united-states-2020-2024
