SAN FRANCISCO, CA--(Marketwired - April 06, 2017) - Biotech may be the last great bastion of stock picking, posits Eden Rahim, who manages the Toronto-based Next Edge Bio-Tech Plus Fund. The fund is up 40% in the last 12 months. In this interview with The Life Sciences Report, Rahim provides his view of the sector and profiles four companies he believes may have great upside.
Included in this interview is: ProMIS Neurosciences Inc. (TSX: PMN)
The Life Sciences Report: Eden, you manage the Next Edge Bio-Tech Plus Fund, which has seen gains of about 40% over the last 12 months. Will you talk about some of the factors that make biotech attractive right now?
Eden Rahim: The No. 1 thing that makes biotech attractive is that we endured a 40% bear market between mid-2015 and mid-2016. That's the sixth such decline in the brief history of biotech, going back to 1980. It has restored good value to the sector.
This year we probably have the best selection of late-stage companies at the cusp of commercialization that I've seen in my career. Many of these companies are available at valuations below what they were a year ago.
Another thing that makes the sector attractive is that last year we saw a sharp plunge in the number of FDA drug approvals. The prior year, the FDA approved about 45 drugs, and last year it plunged to 22. This year it will probably normalize up toward the high 30s, which means we'll have a much better backdrop of good news for the sector.
TLSR: What company would you like to discuss?
ER: One company I like is one where I deviate from my discipline a bit. It's a little Canadian company, ProMIS Neurosciences Inc.. It's a preclinical company, but it will be going in the clinic over the next year or so.
I'm in it because of some of the really important insights it has discovered into the mechanism of action of Alzheimer's disease. Drugs being developed for Alzheimer's have been an absolute graveyard. Virtually everything has failed. There has been no approved drug for Alzheimer's in 13 years, and virtually every clinical trial has failed since that time. But what ProMIS has discovered is that the ideal thing to target for Alzheimer's is soluble amyloid beta oligomers. It believes that they are the root cause of Alzheimer's, not the plaque that ultimately settles on the brain.
ProMIS predicted some of the failures that we've seen, such as solanezumab from Eli Lilly and Co. ProMIS was pretty comfortable that that trial was going to fail because Eli Lilly's drug, solanezumab, tended to find monomers. It believes that monomers are not the culprit and that monomers would use up a lot of the monoclonal antibody and wouldn't target the plaque. And it was correct in actually predicting that.
ProMIS has discovered that by focusing on IgG 4 isotype, you can circumvent the inflammation that often comes with monoclonal antibodies. ProMIS has identified six epitopes on protein strains of misfolded amyloid precursor proteins (APPs). APPs are the misfolded proteins that eventually lead to something called fibrils, which eventually clot and form plaques in the brain.
ProMIS has discovered that the prion strains of those misfolded proteins carry a marker, called an epitope. It's like a police car with a light on top. ProMIS has developed five murine antibodies that select for those epitopes so antibodies can find them on those misfolded proteins and bind to them. It is actually a pretty profound breakthrough at this level.
Again, it's very early stage and preclinical. But ProMIS has selected one of those five antibodies. The drug that it's going to advance, PMN-310, will be its first candidate in clinic.
Continue reading this interview: Four Biotech Mid-Caps Fund Manager Eden Rahim Believes Have Favorable Catalysts
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The following companies mentioned in this interview are billboard sponsors of Streetwise Reports: ProMIS Neurosciences Inc. Streetwise Reports does not accept stock in exchange for its services. Click here for important disclosures about sponsor's fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
Eden Rahim: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: None. I, or members of my immediate household or family, are paid by the following companies mentioned in this article: No. My company has a financial relationship with the following companies mentioned in this interview: No. Funds controlled by Next Edge Capital hold shares of the following companies mentioned in this article: Synergy Pharmaceuticals Inc., Intra-Cellular Therapies Inc., Inotek Pharmaceuticals Corp. and ProMIS Neurosciences Inc. I determined which companies would be included in this article based on my research and understanding of the sector. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
Please see the end of the interview for the complete disclosure: Four Biotech Mid-Caps Fund Manager Eden Rahim Believes Have Favorable Catalysts