ARVN - Clinical-Stage Idea & Q's for Cancer

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1

Hi all,

In some recent conversations and subsequent research, I’ve come across a clinical-stage company called Arvinas (ARVN): http://arvinas.com/

Important disclaimer: I am not a medical / cancer expert at all.

Essentially, Craig Crews from Yale is the grandfather of a therapeutic approach called PROTACs, or proteolysis-targeting chimaeras. “The drug strategy, called targeted protein degradation, capitalizes on the cell’s natural system for clearing unwanted or damaged proteins.”

So I don’t butcher the explanation any further, see the linked article. It explains the therapy and state of the market better than I can articulate. And even if you are not interested in ARVN, PROTACs may impact many other biotech investments, and more importantly, its potential to medicine is enormous: https://www.nature.com/articles/d41586-019-00879-3

The company is a small cap, with a market cap of $675m and EV of $500m. ARVN has $188m in cash, which is enough to last them until 1H of 2021. In terms of partnerships, they have two large deals: 1) a discovery deal with Genentech worth potentially $650 in milestone payments, and 2) a discovery deal with Phizer worth potentially $830 in milestone payments. The company has a few trial results coming up in 2H of 2019, but is still a LONG way from commercialization. However, I believe if their trials are successful, ARVN could explode onto the scene (however it’s almost entirely speculative at this point, in this case, betting on Craig Crews and PROTACs). Said another way, this is probably best as a wait-and-see company at this point.

Check out their April presentation for additional information: http://ir.arvinas.com/static-files/a81094d3-1daf-4859-b87c-3…

Net net, over the last few weeks I’ve built a speculative position in ARVN around $14.50-16.50. I do this for several reasons, but mostly to track the development of the company and its research. And to be clear, I am still early on (as is the company), in my research. But I wanted to bring it to the boards for two reasons: 1) as always, to use this as a public journal to improve as an investor and 2) to pressure test the idea.

That being said, there are many oncology / biotech / research experts on this forum. Have you come across ARVN before? Or PROTACs in general? Any thoughts would be much appreciated.

Thankful as always for Saul’s time and this board’s existence. It’s truly an oasis…

Stephen

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2

While I love a good company from New Haven, I have a hard time believing in Arvinas for the following reasons:

  1. its essentially still pre-clinical. They are in Phase 1 studies.
  2. I dislike that they are spread amongst 3 programs (taupathies, parkinsons, and oncology) this early in their life as a company.
  3. “new technology” (PROTAC) often gets approved at lower rates than drugs in similar classes. (ie, PARPs, PD1s, etc)
  4. new technology without an accompanying screening test / some way to measure treatment response - like, say, quantitatively following expression levels of abnormal oncologic proteins (like PSA levels*)
  5. youre several years away from meaningful phase 2 data, and likely will be diluted away by then.

Run away.

*PSA levels are the ones most people can identify with, though PSA levels do not necessarily correlate to presence or extent of disease.

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