Before we start, let’s give a big round of applause to Immunoprecise Antibodies Ltd and all its staff and its management. They are headed to the big leagues, ladies and gentlemen – a straight path towards listing on the Nasdaq (begin trading on Nasdaq on December 30th, 2020).
I’m not a parent myself (unless you count the quasi-parenting obligatory to all older children), but I’m pretty sure this is what it feels like seeing your baby go to kindergarten, go on their first date, or graduate college. You know – all the major milestones indicating progress that’ll only continue picking up momentum with time.
And yes, I acknowledge that by now I sound like a broken record that keeps repeating the same message but seriously: Canadian companies in health sciences deserve more love and recognition.
Let’s look at companies dealing with COVID-19 for instance (don’t even pretend that you didn’t know I was going here). No, most of these companies didn’t go to market first with a COVID-19 treatment (unless you have Peter Theil as a director and Ely Lilly as a partner), and they didn’t have the lobbying power with FDA to get their drugs controversially approved (looking at you, Gilead).
However, what they do have are products that should be getting at the minimum the same attention and hype, and incredible teams that are making it all happen. They might not beat American conglomerates to the market per se, but Canadian products sure look like they’ll be competing at the highest level once they get there, setting themselves up as some of the most premium products being offered to consumers.
By now you all have heard of the new strain of the virus (and probably panicked before going straight into resignation, if you were anything like my editor). The United Kingdom is being quarantined due to the new strain of the virus that is said to be up to 70 percent more transmissible than the previously dominant strain in the UK.
If we have learned anything from the beginning days of COVID-19, it’s the fact that acting early and aggressively should be the only appropriate response to this pandemic. Whatever we say about Asian governments, we can at least rely on their oft-totalitarian approach to be highly efficient in reducing the spread of the pandemic. North America? Not so much.
Update: Just in from BBC: UK has not just one BUT two cases of variant linked to South Africa.
Wondering what variant means?
RNA viruses mutate frequently, and if these mutations are beneficial to virus replication and/or transmission, there is a strong likelihood they will result in novel variants with increased prevalence in a population. In other words, it’s Darwin’s theory of evolved traits, coming to bite us.
When humans are exposed to new virus variants, selective pressures are imposed on the virus, and the human immune system may select for, or against, certain virus variants. Selective pressures are imposed by human immunity, re-infection, therapeutics, antibodies induced by vaccines, etc.
According to the CDC, “[b]ased on these mutations, this variant strain has been predicted to potentially be more rapidly transmissible than other circulating strains of SARS-CoV-2″. In other words, the spread of the virus could be about 70% faster.
Per the rising concerns, let me tell you about three Canadian companies who have been hard at work coming up with solutions that should help make us feel better:
#1 Immunoprecise Antibodies Ltd
I have been on the IPA bandwagon since the beginning of June 2020, fully strapped in and ready for the whole ride. Example one and two and if that helped anyone get invested in the company, well.. You’re welcome for the gains.
Without sounding too much like a fanboy, I genuinely believe IPA has all the elements required for long term success:
- Rock star team with Dr. Jennifer Bath as the face of the company. She gets it. Science is the foundation of the company but to grow, you need to get out there and let the whole world know what you are working on, and she’s been doing that more than competently.
- Increasing revenues and on its way to profitability.
- Very impressive investor following. The type that will share and gloat about the company any chance they get. You basically get free marketing.
- And now exposure to a lot of health science specific funds. Scroll down to see examples of USA listing exposure’s effects for Canadian companies (end of the article).
Here is a step by step guide as to what Immunoprecise is doing.
IPA’s COVID-19 plan. As the pandemic began to ravage throughout the globe, the team at Immunoprecise began a multi-pronged approach with different partners to help combat the virus. This included working on testing kits, treatments, and vaccination solutions.
In particular we are going to look at the progress the company has made in the treatment front.
On December 11th 2020, “IMMUNOPRECISE ANTIBODIES LTD. (the “Company” or “IPA”) (TSX VENTURE: IPA) (OTCQB: IPATD) (FSE: TQB2), a leader in full-service, therapeutic antibody discovery and development, today announced that it has entered into a research collaboration with the National Research Council of Canada’s (NRC) Human Health Therapeutics (HHT) Research Centre to develop its neutralizing PolyTope™ antibodies against SARS-CoV-2…The project is also in collaboration with Zymeworks Inc. (NYSE: ZYME) for the design and development of IPA’s lead antibody candidates.”
Previously on June 29th, “IPA confirmed the discovery of fully human, potent, neutralizing antibodies targeting SARS-CoV-2”.
This promising press release confirms IPA as having identified “numerous lead candidate antibodies with highly potent neutralizing activity in vitro (with microorganisms, cells, or biological molecules outside their normal biological context), which are being manufactured for further testing and possible inclusion in company’s PolyTope mAb therapy to combat the COVID-19 pandemic.”
In short, IPA is working with world class organizations to come up with a solution designed to be effective rather than trying to be first to the market.
PolyTope; “The Company’s scientific approach has led to a diverse set of lead antibody candidates, and thus far has generated many potently neutralizing antibodies to multiple epitopes, supporting the Company’s aim of generating a therapeutic that retains efficacy, even as SARS-CoV-2 continues to evolve.”
Imagine a cell in your body as a bank, the virus cells as robbers and the antibodies as the police officers guarding the bank. This means no matter what disguise or weapon the robbers use, officers have the capability to combat it all.
The Difference Maker:
When it comes to current solutions in Canada in particular, Health Canada has provided 2 treatments (Eli Lilly-Bamlanivimab and Gilead-Remdesivir with condition approvals), with another (Dr. Reddy/Appili-Favipiravir) application submitted Dec 18th, 2020. Regeneron’s Casirivimab/imdevimab is not available for use in Canada, but was approved for emergency use by the FDA.
By now you all know exactly what the SARS-CoV-2 virus looks like and half of you can even draw its’ spike protein from memory. The spike protein functions by binding to a receptor protein on our cells, which then triggers uptake of viral particles.
Antibodies attach to the spike protein of the virus to prevent the virus from attaching to the targeted cell, while additionally sending a signal to the immune system to get to work.
The mutations take place within the genetic part of the virus that ends up affecting the spike protein downstream.
The perceived solution:
“The cocktail approach — of combining a few different antibody types — is designed to stop the virus becoming resistant to any particular antibody.
By combining two different types of antibodies, you can stop the escape of viral mutations as well.”
In other words, the efficacy of antibodies against the COVID-19 virus is protected by a diversity of antibodies being used – any mutations that might affect spikes and therefore an antibody’s ability to attach, is more likely to be covered by at least one of the antibodies within the cocktail.
Immunoprecise announced on November 23rd “that it has selected more than ten, unique monoclonal antibodies for further preclinical development.
The Polytope™ antibodies can be combined to create up to twelve unique cocktail therapies containing mixtures of two, three or four antibodies, each of which has been shown to work synergistically to prevent viral entry into cells in vitro.”
“ImmunoPrecise’s PolyTopeTM cocktail therapy was designed to protect against and treat existing strains of SARS-CoV-2, including recently emerged variants currently in circulation, as well as variants that may arise in the future.
IPA’s antibodies have been shown to bind to multiple regions of the SARS-CoV-2 spike protein, not just in the binding domain which is targeted by most vaccines and therapies. We have also demonstrated the binding of our antibodies to novel variants of the virus, caused by mutations, that have been identified and published in scientific literature” said Dr. Jennifer Bath via email.
“Pre-clinical manufacturing of the fully human lead, 4-mAb candidates is underway, with the pre-clinical studies scheduled to launch in early January in the Netherlands. The Company is also producing pre-clinical batches of additional, validated candidates to provide a panel of alternate options to modify the coverage of therapeutic cocktails if ever needed, to continue to combat future and/or seasonal variants of the virus.”
Before we start, here is a cool guide to how antibodies are named! There is a method behind the madness.
Regeneron Pharmaceuticals Inc (NASDAQ: REGN)
Casirivimab and imdeviman:
Casirivimab and imdeviman are investigational therapies that are not approved by FDA for any use. However, they have been authorized for emergency use in treating mild to moderate cases of the coronavirus outbreak. The two antibodies work synergically and therefore must be administered together.
Regeneron was granted the emergency authorization after positive results (a randomized, double-blind, placebo-controlled clinical trial in 799 non-hospitalized adults with mild to moderate COVID-19 symptoms.Of these participants, 266 received a single intravenous infusion of 2,400 milligrams casirivimab and imdevimab (1,200 mg of each), 267 received 8,000 mg casirivimab and imdevimab (4,000 mg of each), and 266 received a placebo, within three days of obtaining a positive SARS-CoV-2 viral test, reduced viral loads. For participants at high risk for disease progression, hospitalizations and emergency room visits occurred in 3% of casirivimab and imdevimab-treated participants on average compared to 9% in placebo-treated participants.) achieved in a trial as well as a massive endorsement by the President of The United States after he was treated with the drug.
In July 2020, under Operation Warp Speed (this is legitimately the name – I’m not joking), Regeneron was awarded a $450 million government contract to manufacture and supply its experimental treatment REGN-COV2 – an artificial “antibody cocktail” which was then undergoing clinical trials for its potential both to treat people with COVID-19 and to prevent SARS-CoV-2 coronavirus infection.
Eli Lilly And Co (NYSE: LLY)
Bamlanivimab (LY-CoV555) is a neutralizing IgG1 monoclonal antibody manufactured by Eli Lilly that works against the SARS-CoV-2 spike protein to reduce viral replication. An FDA Emergency Use Authorization (EUA) for bamlanivimab was released on 9 November 2020. Bamlanivimab is not currently FDA-approved for any indication.
The BLAZE-1 trial investigated 3 different doses of bamlanivimab versus placebo in outpatients with recently diagnosed mild or moderate COVID-19.The Fact Sheet For Healthcare Providers reports that in the intervention group 2% (5 of 309) progressed to COVID-19-related hospitalization or emergency room visits compared to 6% (9 of 156) in the placebo group. Drilling down within the same endpoint to subjects at higher risk for hospitalization, the intervention group had only 3% (4 of 136) of cases progress to COVID-19-related hospitalization or emergency room visits compared to the 10% (7 of 69) in the placebo-treated subjects.
On October 8th, Eli Lilly announced that it has an initial agreement with the U.S. government to supply 300,000 vials of bamlanivimab (LY-CoV555) 700 mg, an investigational neutralizing antibody, for $375 million USD.
Efficacy with the mutated virus:
More data is needed to determine whether the two current antibody treatments will be effective in combating the new strains of Coronavirus. However, there are studies that map how mutations to SARS-CoV-2’s receptor-binding domain affect the attachment capabilities of the antibodies in Regeneron’s REGN-COV2 cocktail and Eli Lilly’s LY-CoV016.
Immunoprecise was never planning to be first to the market. Instead, they are taking all the necessary steps to ensure that once they get there, their therapy will be able to handle most mutations that occur within the virus.
Part 2 of this series will be released tomorrow, featuring potential antiviral and antiparasitic treatments for COVID-19 which will feature Appili Therapeutics as well as Mountain Valley MD.
Meanwhile to showcase what lies ahead for Immunoprecise in the Nasdaq, here is an excerpt from Paul Andreola’s Small Cap discoveries that went out a few weeks ago:
Here are some examples to showcase the difference between Canadian-listed life science companies and the ones listed in the US.
Example 1: Trillium therapeutics (TRIL.S)
Biologics are products with ‘biological’ origin. These include monoclonal antibodies, therapeutic proteins and peptides, and etc… (Biological products with medical applications for you, the consumer!!) “Biologics” is a buzzword you hear often when it comes to the future of therapeutics.
According to research released in February of 2020, “therapeutic antibodies have become the predominant class of new drugs developed in recent years. Over the past five years, antibodies have become the best-selling drugs in the pharmaceutical market, and in 2018, eight of the top ten best selling drugs worldwide were biologics”.
The global therapeutic monoclonal antibody market was valued at approximately US$115.2 billion in 2018, and is expected to generate revenue of $150 billion by the end of 2019 and $300 billion by 2025.
Now about Trillium.
“Trillium Therapeutics is an immuno-oncology company developing innovative therapies for the treatment of cancer. The Company’s two clinical programs, TTI-621 and TTI-622, target CD47, a “don’t eat me” signal that cancer cells frequently use to evade the immune system.”
Their science is great and intriguing, but is that what propelled their stock price to a 1152% growth year-to-date?
Or was it the fact that by virtue of being listed on the NASDAQ, Trillium’s advanced therapies developments were given exposure to specialized hedge funds and financial institutions, both groups with a particular understanding of the science behind Trillium’s works.
Would Trillium experience the same success with their share price if they were listed on the Canadian market only?
The answer is most likely no. Being listed on the NASDAQ most certainly provided them with exposure to a plethora of hedge funds who specialize in life sciences investments.
This becomes a lot more clear when looking at this handy chart provide by Insider Monkey:
Furthermore, “according to Insider Monkey’s hedge fund database, Peter Kolchinsky’s RA Capital Management has the most valuable position in Trillium Therapeutics Inc. (NASDAQ:TRIL), worth close to $49.9 million, amounting to 1% of its total 13F portfolio. The second largest stake is held by Avoro Capital Advisors (venBio Select Advisor), managed by Behzad Aghazadeh, which holds a $38.4 million position; the fund has 0.8% of its 13F portfolio invested in the stock”.
Peter Kolchinsky’s education:
And Behzad Aghazadeh’s education:
The two hedge funds with the largest positions in Trillium are both led by individuals with an actual, credible, extensive science education – the kind that an Asian mother would kill to have as a son-in-law.
If that isn’t enough of an indicator of success, I don’t know what possibly could be. (but seriously, genuinely solid research backgrounds from indisputably reputable schools)
Let’s take a look at another Canadian company listed down south:
Example 2: Zymeworks Inc (NYSE: ZYME)
“Zymeworks Inc. is a publicly listed (NYSE: ZYME), clinical-stage, biopharmaceutical company dedicated to the discovery, development, and commercialization of next-generation multifunctional biotherapeutics, initially focused on the treatment of cancer.”
In May 2017, Zymeworks raised $58.5 million in a dual listing that started company shares on trading on the TSX and NYSE simultaneously. It then went on to delist from TSX on October 1st, 2019. At the time of this delisting from TSX, Zymeworks had a market cap of $1.423 billion CAD, which made Zymeworks the largest biotech company on the TSX. At the time, the health care sector made up only 1.7% of TSX index.
Zymeworks, still operating out of Vancouver, BC, has continued to grow and now boasts a market cap of $2.225B USD (approx $2.93B CAD). That is thanks to massive hedge fund investments such as these:
These are the top 5 of of many hedge funds invested in Zymeworks (image grabbed form Insider Monkey)
It should be kept in mind that the increase in market cap and investments are the result of Zymeworks’ growth as a company and their increasing revenues.
The examples above are just 2 of many Canadian-based companies who have opted to primarily list in the US markets, to their great financial gain. Canadian-listed companies will be hard-pressed to receive attention like this from the same above hedge funds.
This is not a confirmation that you, as an investor, should only invest in US-listed biotech companies, or that you need a PhD in science to safely invest in life science companies.
The point is this:
- Investing in life science companies could be extremely profitable.
- It requires you to do your due diligence, or find yourself trusted individuals to follow, whose work provides you with a basic technical understanding of the scientific components.
- There are a ton of Canadian companies accomplishing tremendous scientific feats. (take that, Trump, and your America is the only and the best mentality. Hurry up and get out!!!!)
- There are some great Canadian-listed investment opportunities out there. These companies would be attracting all kinds of institutional money if they were listed in the US, and you (yes you!) can get in while the stock price is still low.
A quick positive note,
“We The North’ are on the right path however,
According to shortsdata.ca, the short positions in the health sector have decreased by 56% (TSX INDEX 2015 vs. 2020). That is a significantly larger change than in any other sector. As always, take that with a grain of salt because there are of course various other factors to which this change could be attributed, but nonetheless, it gives us hope for the continued growth of Canadian health sector markets.