美国中小盘生物制药

US Biotech: Initiating an investment relationship with Biotech?It’s complicated… Investing in biotech is complicated. We hope to simplify the process of predicting thewinners and the losers. We have experience developing and conducting registrationalPh3 clinical trials for large cap pharma companies. Our differentiated analytical approachleverages a drug developer’s toolkit for equity research: Event forecasting to enableoutside-in clinical trial analysis and industry standard calculation of probability of technicalsuccess (PTS), just to name a few. Our theses is simple: the winners objectively followrobust science and clinical data to transform the lives of patients. Jeffrey Walch+1 917 344 8613jeffrey.walch@bernsteinsg.com Yi Zhao+1 917 344 8324yi.zhao@bernsteinsg.com We initiate with an Underperform rating onSMMTand recommend investors exit positionsor, if possible, initiate short positions. There is an expansive history of failed registrationaltrials investigating the combination of anti-PD-1+ anti-VEGF across tumor types. Wediscount the narrative that “this time it’s different” for anti-PD-1+VEGF as lacking insupportive clinical data. We project that history will repeat itself: encouraging PFS HR thatdegrades to negative OS and failed clinical trials. NUVLis our best idea and top pick for investors. We think that the market isunderestimating the potential for both neladalkib (ALK+ NSCLC) and zidesamtinib(ROS1+ NSCLC). Nuvalent’s two lead medicines offer a unique opportunity amongbiopharmaceutical stocks: potential best-in-class efficacy profile with high probability ofsuccess that is under-appreciated by the market. We considerNBIXto be one of the more promising investments within our initial coveragegroup. We think that the market is underestimating the potential of Crenessity’s launchtrajectory in CAH. Crenessity has an approximately four-year first-mover advantage as theonly FDA approved adjunctive treatment for CAH. We think investors should pass onBNTXat this time because of their aggressive pumitamig(PD-L1/VEGF) development. We believe the consensus view of PTS and market share forclass is overly optimistic. Our rating for BNTX diverges from SMMT because of the lifelineoffered by COVID vaccine revenue, a diversified pipeline, BMS cash and a strong balancesheet to fund development of higher PTS drugs. We think investors should pass onRVMDat this time. Daraxonrasib looks like a winner. Weagree with sentiment that RASolute-303 will most likely be positive. However, based on ouranalysis we believe that further share price appreciation would leave little room accountingfor downside risk (e.g., our estimated ~25% chance of negative trial). We think investors should pass onJAZZbecause the current share price gives full credit tobullish outcomes for (1) Ziihera launch in Biliary Tract Cancer & Gastroesophageal cancer,(2) positive read-out for high-risk EmpowHER-BC-303 Ph3 trial and (3) head-to-headcompetition vs Enhertu (HER2 antibody drug conjugate). We think investors should pass onINCYat this time because there is no clear pathway forrevenue growth to return after Jakafi LOE in 2028. BERNSTEIN TICKER TABLE INVESTMENT IMPLICATIONS Nuvalent: We rate NUVL Outperform with PT $189(+85% upside)based on our DCF valuation. Nuvalent is our best idea and top pick for investors. We rate NUVL Outperform with a $189PT and think that the market isunderestimating the potential for both neladalkib (ALK+ NSCLC) and zidesamtinib (ROS1+ NSCLC). Nuvalent’s two leadmedicines offer a unique opportunity among biopharmaceutical stocks: potential best-in-class efficacy profile with highprobability of success that is under-appreciated by the market. Our projected risk-adjusted total portfolio peak revenue of$9.4B is currently 49% higher than consensus estimates. Specifically, we think the growth trajectory and total addressablemarket for zidesamtinib (ROS1+ NSCLC) remains under-appreciated. We calculate that ~37% of newly diagnosed ROS1+NSCLC patients are currently receiving targeted treatment. This treatment rate is signficantly lower than the mature EGFRmNSCLC market benchmark of 85% established by AZN’s (covered by Justin Smith) Tagrisso. Neladalkib and zidesamtinib offer aTagrisso-like market, making upside that has yet to be fully appreciated based on the current stock price. Neurocrine: We rate NBIX Outperform with PT $221 (+43% upside) based on our DCF valuation We consider NBIX to be one of the more promising investments within our initial coverage group of mid-cap biopharmaceuticalcompanies. Neurocrine’s two key medicines are both approved and have a long runway until loss-of-exclusivity: Crenessity(2035) and Ingrezza (2038). We think that the market is underestimating the potential of both Crenessity (Congenital AdrenalHyperplasia, CAH) and osavampator (Major Depressive Disorder). Crenessity has an approximately four-year first-moveradvantage as the only FDA approved adjunctive treatment for Congenita