Today's memo is an international collaboration done with my friend Ambrose, a particularly bright young gentlemen out in Singapore. You should definitely follow him: @zebo
. You can check out his take on Adaptimmune Therapeutics here.
Biopharmaceutical Companies are Scary, But Don't Let That Stop You From Learning About Them
You can always choose to pass on an investment, but give yourself a chance at understanding the basics. You might surprise yourself. Investing is all about learning. "Stick to what you know" is a death sentence if you don't continuously expand what you know.
What Does Adaptimmune Therapeutics Do?
Adaptimmune, is a leader in T-cell therapy, and has clinical trials ongoing for three wholly owned T-cells. (Important: the trials are going very well)
What the Heck is a T-Cell?
T-Cells are a type of white blood cell that is an essential part of the immune system. T-Cells determine the specificity of immune response to foreign substances in the body. Rather than generically attack any antigens, T cells circulate until they encounter their specific antigen.
Why Is This Important?
Cancer is menacing mainly because of how good it is at evading the immune system. $ADAP
has engineered special T-Cells such that they can recognize and bind to cancer cells and as a result, can stimulate the immune system to target and destroy cancer cells.
How Good Is Adaptimmune's T-Cell Therapy?
Clinical trials are judged on a set of factors
- one of which is called Disease Control Rate which is the percentage of patients whose disease shrinks or remains stable over a certain time period. Adaptimmune's ADP-A2M4 T-Cell had a disease control rate of 94% in a recent Phase 1 trial
Phase 1 trials went so well that Adaptimmune is now looking to target more diseases. Investing in $ADAP
is a bet on continued success in Phase 2 trials, and and expanded list of potential diseases that could be treated with Adaptimmune's T-Cell therapies. Definitely check out Ambrose's memo
, which goes further into the efficacy of the trials, the response from institutional investors, and $ADAP
's revenue growth.
Investing in early-stage biotech companies is risky because if a trial ends in failure, it can end the company's life. They are also prone to huge swings, as everyone tries to pile in the moment a trial is going well, and everyone runs for the exits the moment there's a rumor that a trial is not going well.
Adaptimmune is a good company to pick to exploit this dynamic, in my opinion, because of the longer-term potential of engineered T-Cells. More-so than normal, I feel like a single failed trial would not negate the promise of this approach. I expect there to be a lot of bumps along the way, and while it is less typical to see a buy-and-hold approach with biotech stocks- that's the approach I'm taking. I will be buying in at tomorrow's open.