Axonics (AXNX) is up 10% today after pre-announcing Q4 results yesterday that beat expectations and issuing initial 2023 guidance that also looks good. While this move in the shares comes a day after we sold a quarter of our position, we still have half of our original stake. We’ll keep a close eye on AXNX to see how shares hold up the rest of the week. As far as results go, management sees Q4 revenue of about $85.8 million (+61%) vs. roughly $74.6 million consensus. It sees full-year 2022 revenue of $273.6 million (+52%) versus $260 million. Initial 2023 revenue guidance is $342 million (+25%) vs. $330 million consensus. A little rough math shows the upside to 2023 guidance is about the same as the Q4 beat so this should be a relatively conservative outlook. We’ll hold our half position and look for more detail from management on the official call. HOLD
Halozyme (HALO) released preliminary results yesterday afternoon that came in below expectations, as did management’s initial outlook for 2023 revenue (a range of $815 - $845 million versus $890 million consensus). Adjusted EPS guidance of $2.50 - $2.65 is also light as compared to $2.80 consensus. The main issue (about two-thirds of the revenue shortfall) is due to a projected shortfall in collaboration revenue that is probably pushed out into 2024 while a shortfall in royalty revenue drives the other third. This isn’t the type of performance we signed up for. We will sell our half stake in HALO today as I don’t see momentum picking up in the near term. SELL
BioAlta (BCAB) released data from its NSCLC program (BA3011, not the BA2021 program I had mentioned earlier in the week), as expected, just ahead of its conference meetings with J.P. Morgan. This program has both combination therapy and monotherapy arms. While response rates didn’t seem particularly high (monotherapy arm was 40%) it’s hugely relevant that the likely bar for approval is just 20% (as we all know lung cancer is not easy to treat). There were only 10 patients in the monotherapy arm, so not a large sample size. The combo arm had mixed data so it looks like BA3011 may work better on its own. Management expects to move ahead with an FDA meeting in the coming months to design, then start a pivotal trial later this year. They see having data on 30 patients prior to the FDA meeting and 100 to 125 patients upon full enrollment. There are other potential shots on goal here too. The following is a recent slide of management’s list of key 2023 milestones:
The bottom line here is BioAlta took a hit on these trial results, but there is certainly more to this early-stage biotech story, not just with BA3011 but the rest of the pipeline too. BioAlta could be selling two or more drugs in 2024 if a few things fall into place. We have a half-sized position which we will put on hold today as we wait to see how the stock handles the aftermath of the drop and determine if we should average down, or not. HOLD HALF
