– Today I look at Madrigal’s Phase 2 results and talk about competitors in the NASH space.
– I also talk about Tandem and how we can use competitors to compare value
– Follow me on twitter @matthewlepoire
*This is not investment advice. I am not liable for any trading decisions you have made.*
The bad: DBVT failed to achieve their primary endpoint. They saw a 21.7% improved response rate with a p-value < 0.00001 but their 95% confidence interval (CI) was 12.4%-29.8%. They needed to reach 15% on the lower bound of the confidence interval, and they were just below that. CIs provide information about the population mean at a specified time. So if repeated samples were taken and the 95% confidence interval was computed for each sample, 95% of the intervals would contain the population mean. The important takeaway for us is that they technically failed, but saw a significant improvement in their Viaskin EPIT product compared to controls.
Following initial conversations with the FDA on these topline efficacy and safety results, DBV will continue ongoing discussions with the agency, and plans to proceed with the BLA preparation process.
Suggesting they are hoping the FDA will still let them submit a Biologics License Application (BLA) despite this CI miss. It will all be up to the agency, but at the point, the market is currently not impressed with this announcement.
The good: In my AIMT post, I wrote that I expected this PEPITES trial to be a success and that both DBVT and AIMT would react positively to the news. The rationale being that if this EPIT product succeeds with only 250μg of peanut protein being exposed to patients, it is more likely that children exposed to 300mg of peanut protein daily will succeed in the DBPCFC.
This failure has led to a ~60% drop in DBVT and ~50% gain in AIMT in anticipation of AIMT getting all the peanut allergic patient market share, if PALISADE is a success.
We’re left with some decisions to make and the next few months WILL be volatile.
For the conservative trader: Sell your AIMT and enjoy the gains. I have a feeling that between now and Jan, 2018 there will be opportunities to buy back in. Any news from the FDA that they are considering approval of the Viaskin Peanut product will send AIMT back to the $25 price level.
For the aggressive trader: Sell a portion of your AIMT and keep some to enjoy any upside regarding announcement of the PALISADE results. The next couple months will be volatile, so I don’t think it’s prudent to leave all your money in the game when a jump this big has just happened.
I’m going to reduce my position and keep a comfortable number of AIMT shares. I plan on buying any dips that are near the $25 price because I am still confident that PALISADE will report positive results We will have to wait and see how regular hours trading goes this upcoming Monday to see how much upside is left in AIMT.