WaveStrum Life Sciences

Sharing some of my diligence regarding $PEPG, which helps explain why I remain quite bullish into the 10mg / kg MAD readout. I may share more if I have time to get the rest into a distributable format and think it adds something. The headline takeaway is twofold. One, I think the outlier in the 5mg / kg MAD has little bearing on its chances of EDODM1 continuing to show best in disease efficacy in the higher MAD cohorts like it showed it in the SAD cohorts. Two, I think the EDO51 safety data and how it has tracked with EDODM1 substantially increases the likelihood there will be no SAEs at the 10mg / kg MAD dose for EDODM1, and EDODM1 will deliver a strong and commercially competitive safety profile. $PEPG is a one drug company, early stage, and the most advanced drug in its class. So, efficacy and safety risks will always exist and can never be fully ruled out. If EDODM1 fails, it's over and the stock will be crushed, albeit perhaps some value can still be extracted from the remaining cash balance given the heavy institutional ownership and sway over management. This remains a very risky investment. However, if it's successful, I would say that it is at least a 10x return from current levels, possibly a good bit more, especially with a buyout premium, and I think the probability of a strong 10mg / kg MAD make the company highly compelling at currently trading levels if position is appropriately sized. Thread below:

This is awesome. Legacy prep materials are expensive

Long Aspen Neuroscience (IPO'd October 30th).

This is ugly. $MDGL

This is a fantastically stupid take on $MDGL. Merck characterized Vioxx's launch in its 1999 annual report as: “Vioxx: Our biggest, fastest and best launch ever.” How did that turn out? The speed of a commercial launch says effectively nothing about latent toxicity. I am out of $MDGL as of this morning. Maybe the whistleblower claim proves to be without merit. However, it should be taken extremely seriously until such time as $MDGL provides evidence for that. Biography of the whistleblower below, btw. Anyone attempting to claim the complaint is bullshit a priori has absolutely zero basis for doing so until more information comes out. Lastly, if $IVA hits its Phase III on the heels of this, $MDGL will be pummeled. Whatever you think the fair value of $MDGL is, pure trading dynamics alone will drive it into the ground.

This is a big deal to get this confirmation, even if we could have a pretty high confidence it was the case. Hypomagnesemia and DLT in eGFRcys are the most critical safety events to avoid, as they are most likely to reflect actual pathogenic impact on the kidney. Across EDO51, if a hypomagnesemia case occurred there were usually multiple, even in very small n’s. Hopefully bodes well for the 8th and final patient not included in that update xitter.gq/wavestrumls/status/207…

The man's aura just keeps ascending

$ABOS Further evidence that the beta-amyloid hypothesis as the cause for Alzheimer's Disease is bogus. Statistically significant reduction in plaque burden at weeks 36 and 72, and yet a total failure across all endpoints. Plus, 10% of treated patients developing ARIA-E's. No more beta-amyloid drugs. Waste of time and money. Never going to fundamentally change what it means to have Alzheimer's. It remains very unclear whether donanemab and lecanemab have any benefit at all over the long-term (pubmed.ncbi.nlm.nih.gov/4260…). Remember, the Phase III trial of donanemab simply showed an iADRS decline of -10.2 vs. -13.1 for placebo on the 144 point scale, with the -2.9 delta being far below the 9 point threshold that is considered clinically meaningful in early-stage Alzheimer's Disease. This was masked by the PR's claiming there was a 22% slowing, which might sound like okay at least it's something, until you understand the actual numerical difference. If there is any minuscule benefit to these beta-amyloid therapies, it's likely going to be highly transient, confined to those therapies that can target beta-amyloid aggregates, and merely a function of the fact that neurons rely on very complex spatial-temporal molecular dynamics and if you have a clumps of protein occupying physical space they shouldn't, it's obviously going to interfere with those spatial-temporal molecular dynamics. Contribution to the pathophysiology of AD is extremely small. Time to think big and take moonshots on new ideas.

$PRME is volatile. There is no guarantee it will hold current levels. However, as I have said for awhile, I believe $PRME represents a paradigmatic VC-style investment with a long-term upside that dwarfs any other opportunity in biotech history. It is far more of a $PLTR or $LLY (or more) in terms of prospective upside, than even an $ALNY or $VRTX or $REGN. (1) $PRME has the most versatile gene editor, with the demonstrated capability of being able to correct the gene mutations that are the fundamental root cause of monogenic diseases. In fact, it can address 89%+ of the known pathogenic gene variants, if delivery to cells beyond the liver and HSCs can be solved. (2) Its current primary in-clinic liver targets (AATD, Wilson's Disease) are massive indications in their own right. Success in those alone would justify a valuation north of $10Bn, and we already know that LNPs effectively get gene editors to the liver (see $BEAM). (3) Successful development of $PRME's primary pre-clinical editor for Cystic Fibrosis (which requires solving delivery to the lungs) would justify a valuation north of $100Bn. $VRTX’s market cap, largely due to Trikafta (CF drug), is evidence of that that. (4) $PRME has already delivered a functional cure to two patients with the ultra-rare disease Chronic Granulomatous Disease (CGD). (5) Importantly, the FDA has now both cleared the way for $PRME to economically develop therapeutics for ultra-rare diseases like CGD by requiring far less clinical data before approval (removing a key drug development bottleneck), as well as cleared the way for far more rapid approval of editors for different mutations that underlie the same genetic disease (again removing a critical drug development bottleneck). This alone is tremendously unique in the biotechnology space. A library of editors for ultra-rare disease enabled by this regulatory framework is also a substantial source of revenue in its own right. (6) Finally, David Liu and his lab at the Broad Institute continues to drive substantial innovation in prime editing. The value of a Nobel Prize level scientific talent leading an ongoing innovation engine for a biotechnology company should not be undersold. The value of this work can be seen in things like the OptiPrime AI they developed to optimize the selection of pegRNAs for a given disease. ______ A lot of biotech investors are scared off of a company like this. A few of the reasons include: (i) the devastation CRISPR stocks wreaked on portfolios in earlier days (ii) a lack of precedent for a biotechnology that addresses the known underlying cause of this many diseases with this level of demonstrated efficacy (iii) the reality that biotech’s graveyard is riddled with promising and much hyped therapeutics that have failed, and an understandable resultant disdain for grand forward looking projections However, I do think unless a black swan safety event occurs, $PRME holds fundamentally different prospects than other biotechnologies. We have simply never had a biotechnology that can fix the underlying cause of this many serious diseases with a swap of an RNA strand, much less have those diseases be ones for which we KNOW precisely what the underlying cause is (in $PRME's case the genetic mutations underlying genetic diseases) AND for which the therapeutic appears capable to the degree of $PRME's editor of actually fixing that underlying cause (in $PRME’s case efficiently writing in new nucleotides in place of genetic mutations in cells it reaches). The truth is a lot of the classic biotech frameworks don’t really apply here (so long as a platform level safety event doesn't occur, which is its biggest risk, IP protection probably its second), and even the smartest people struggle with context switching and thinking in the exponential. In fact, I would say that often times biotech's and pharma's culture biases against these types of grand visions, because they (rightly) understand biology is really, really hard. Far harder than many people in tech seem to appreciate. At the same time, most generalist investors don’t know enough to understand why $PRME is different than $CRSP, $EDIT, $NTLA etc. To them, it’s just another gene editing company, and haven’t those things done terribly? That's probably true even for people like Paul Graham who have publicly commented on the fact that gene editing will yield enormous companies. I think therein lies the current opportunity. And, it's an opportunity that exists even though a vastly less versatile and capable competitor was bought out by $LLY for 1.0 - $1.3Bn at the worst of the biotech bear market for more than $PRME's current market cap (<$800M). So, aside from a platform level black swan safety event...the downside for $PRME would appear substantially capped over the long-term. Finally, Anthropic saying it might have found something that looks like CRISPR (read a gene editor) when it was in full IPO pump mode is a key tell. Biology is in many ways the Holy Grail for the frontier AI companies, especially Anthropic. They may spew a lot of BS about their capabilities...all human disease is not being cured in the next few years. However, Anthropic IS very good at determining what objective would drive the most value if it were to be achieved. A gene editor capable of curing 89% of the genetic variants that underlie genetic disease is precisely that Holy Grail. And, that's even before we start talking about risk factors like APOE4, etc. $PRME quite literally ALREADY HAS that editor Anthropic intimated they might someday be able to develop when in full IPO pump mode. I have no idea what $PRME’s price does in the short-term. However, I continue to believe it has the potential to transform the face of medicine in unprecedented fashion, and the degree to which it is underpriced is enormous.

Time for a portfolio update. TL;DR $ABVX and $NKTR seriously tanked the portfolio since the last one ($TENX was also an L but that was a small position so was quite a small contribution). $PEPG, $QURE, and $IVA are really critical readouts coming up in the next few weeks that are likely to move the portfolio substantially, one way or another. Wanted to put out where things sit ahead of then for accountability As noted previously, majority of capital was committed many months after each portfolio's start date, so start dates are somewhat misleading in that regard (e.g. for WSLS II about 40% of capital...a lot of it $ABVX post-cancer freakout... committed from May 2026 onwards). Probably going to combine them into one and have a better display layout when I have time, don't really want to do a more classic time weighted approach here bc I think that would paint a rosier view of performance than is warranted. _______________________ Re $ABVX, my brilliant strategy of loading up time and again since Fall 2025 with more and more non-biotech allocated capital because hey the market will totally figure it out this time and you know I think I'll be able to flip that into other positions with readouts further out, plus its really derisked and probably getting bought anyways, and where else can you find an opportunity like that in the market has all worked out about as well as you would think...pretty terribly. WSLS II in particular is really living or dying by the VAX at the moment. However, I have continued to hold basically my full position, with the exception of selling a small silver to get a little tax loss harvesting motion going (cope) and free up a little capital for some diversification in an ugly market and to play a few nearer term binaries. I made a judgment call on $NKTR pricing dynamics that there was a reasonable probability there would be little buying support after it nose dived following off treatment data based on the broader market conditions, the apparent lack of confidence in management across the Street and the lack of near-term catalysts, and closed out a big part of the position. I took that capital and did the following: I took a position in $ZURA on the basis of Adam's really thoughtful work. All of the arguments made sense to me for why IL-17A was the critical driver of Bimzelx's superior efficacy. However, I became concerned about tibulizumab's IL-17A target engagement in vivo. Briefly, my concern arises from the fact that a) tibulizumab's binding affinity is 14pM to ixekizumab's 1.8pm in vitro b) I think there is a risk that the very high concentrations of BAFF in vivo relative to IL-17A further interfere with target engagement w/ IL-17A, perhaps as may have happened with sonelokimab and IL17-F, recognizing $ZURA's bispecific has two ends so this view is predicated on things like aggregation dynamics, membrane bound BAFF etc and c) the only in vivo metric of target engagement w/ IL-17A I have been able to find across the IL-17A antibodies / small molecules is an increase in Total - IL17A and cosentyx and tibulizumab show a similar ~50x ish increase (see 2020 article in Dermatology) (investors.zurabio.com/static…, onlinelibrary.wiley.com/doi/…). Increase in Total IL17-A is a really imperfect metric, and is highly susceptible to measurement error at baseline, differing clearance rates, etc. which could all seriously mess with results. However, collectively that represented too much risk for me to want to take on, especially given the important upcoming binaries with 10mg / kg MAD for $PEPG, $QURE's BLA filing decision, and $IVA (more on that later). So, I sold the position for a tiny gain. Depending on how $ZURA reads out, might be back in for SSc. I went back into $MAZE in reasonable size. I opened a position in $IVA (some brief commentary here: xitter.gq/WaveStrumLS/status/211…) I went back into $PCVX after it dumped into the 60s following data. I opened a position in $MDGL. The thought process with $PCVX and $MDGL was basically these late stage companies got torched from their highs in a manner somewhat akin to $ABVX. If you believe this reflects short term pricing dynamics that don't reflect underlying value (degrossing, etc.) but have hit quality names really hard, at some point that will turn around and so you’ll get more of a return than you should for a company at this stage, while not exposed to drug failure / trial risks the same way. For $MDGL, I also used it as somewhat of a hedge against $IVA. If $IVA fails and sentiment swings back in favor, I expect $MDGL will rise and hopefully offset some of the $IVA loss. If $IVA succeeds, my hope is that it will have relatively minimal impact next to the $IVA gains. I further increased my $QURE position after the 4 year data. I have written about this elsewhere but the likelihood that this is having disease modifying effect is near certain in my opinion based on the totality of data. If that's true, I think it should be approved. As mentioned, if $PEPG, $IVA and $QURE do what I hope they do in the next few weeks, we hopefully will be back on a good growth path with the port. If not, that will suck. I do continue to believe for all the many reasons previously discussed that $PRME has the kind of upside potential to be a true marquee VC style investment wherein everything else could get crushed and, if it reaches its full potential, the portfolio still delivers beats the market over the long-term. (And as always, I think its very derisked at this price sans a black swan safety event given the $VERV acquisition at the depths of the bear market for 1 - $1.3Bn, the actual platform nature of the technology, the evolving FDA approval environment that favors said platform, etc.) I was in and then out of $DFTX, decided I liked other opportunities better

To be fair, Dean Kamen dropped out of WPI and is one of the most prolific medical inventors / entrepreneurs in US history first.global/dean-kamen/

Yet ANOTHER datapoint indicating $QURE 's AMT-130 has disease modifying effect. Look at the drop off in cUHDRS in those who did not complete Week 101. Data point after data point after data point all point in the same direction. And, the most notable data point of them all remains the updated 3-year data showing highly stat sig 80% slowing on cUHDRS and the stat sig TFC on both 3 AND 4 year, DESPITE the presence of dropouts in the control arm even at 3 year which of course will bias towards being the worst progressors.

Okay boys who is the asshole that went levered long $MRNA into ESMO and now has to sling their long book to cover? That’s what’s happening right? Right!?!?!? Hashtag always be coverin' $ABVX

I think $PRAX is fairly likely to end up in the news in future years. The Phase III studies were 8 weeks and 12 weeks respectively. That’s very short. The drug is a once daily oral drug. Easy to take. Nevertheless, 35% and 38% of patients dropped out of the Phase III study vs. 5% on placebo. The most notable complaint was brain fog. I cannot tell you how poorly set up these studies are to detect “brain fog” in a quantitative way beyond self-report. Same holds true for cognitive impacts or really any other deleterious brain insults in the short-term, and they of course can say nothing about the long-term. However, “brain fog” and a 35-38% drop out rate w/ a 30%+ delta over placebo is a MAJOR red flag that there’s something going on here that patients really don’t like, and it comes on quickly. This delta is particularly concerning because there are a lot of mechanistic reasons to worry about what this type of inhibition in the brain does long-term. One warning sign I would look for is elevated conversion rates to PD. Long-term follow up studies really should be run. Actually pretty concerned about this given how prevalent ET is. Though, beta-blockers are bad news for the brain too.