(TheNewswire)
Prescient Reports Edition 01-21V192
https://www.prescientreports.com/2020-saw-the-emergence-of-significant-medical-advancements/
Biotech Section
Author: R. Hutchison
The POINT
2020 -- The Emergence of Significant ScientificMedical Advances
Where to Watch Next – RegenerativeMedicine
2020 is a year that many would like toforget, but amidst a pandemic, the world sawsome amazing scientific medical advances. A case in point, Messenger Ribonucleic Acid ( mRNA), a well-studied technology that wasthought of as a dismissed idea is now a leadingtechnology in the COVID-19 vaccine race 1 . It was due to the pandemic that a little-known GermanBiotech working in the mRNA space called BioNTech burst onto themarket. Though there had been a first FDAapproval of an RNA drug granted to AlnylamPharmaceuticals as recently as August 2018 itwas for an ultra-rare disease and didn’t get much attention.
The real news in this space came whenBioNTech and Pfizer announced they had a vaccine forCOVID-19 that promises an amazing 95% efficacyagainst the devastating disease. Achieving this rate ofeffectiveness is unheard of in the vaccine space, but using thisalmost forgotten technology, coming out of a little-known mRNAcompany, not only achieved it, but did so in under a year! It shouldbe noted that BioNTech has been around since 2008, so although theyaccomplished the development of a COVID-19 vaccine in under a year,the company has 12 plus years of research behind it, not to mentionthe years of research performed by the scientists who formed BioNTech.
In 2018 there were only a handful ofcompanies in the RNA space, essentially knownonly to those of us who have studied the field. It is remarkablethat in just 2 years this technology has come so far so quickly. Thereis no question that commercialization of a mRNA drug was significantlyadvanced due to the pandemic. The proverb,“ Necessity is the mother ofinvention ” seems appropriate. As one who hasstudied this market, worked in and headed biotech companies for 20years, I can confidently say that this scientific event istransformational for the biotech sector. And for companies that havebeen working for years on new technologies, this market transmutationwill advance medicine dramatically in the years ahead. One suchtechnology, very much like RNA that has had many failures, is in myopinion poised to see these types of results is that of Regenerative Medicine .
Regenerative Medicine (“RM”) is the branch ofmedicine that develops methods to regrow, repair or replace damagedcells, organs or tissues. Regenerative Medicine includes thegeneration and use of therapeutic stem cells, tissue engineering andproduction of artificial organs – so rather than simply treating thedisease, it proposes a cure . There are a number of big players in this sector and Jr.biotech’s that are focused on very specific diseases. As well,there has been some newcomers to RM that have entered this sector at agreat time, and in doing so realized corporate evaluations thatexceeded the norm. One notable new entry in the RM space that “timedit right” is Sigilon Therapeutics. Sigilon was recently takenpublic on NASDAQ in December 2020, by three notable firms; MorganStanley, Jefferies and Barclays. These top tier firms ralliedSigilon to an astonishing $1.4bln market cap in one month on noclinical data.
My discussions with biotech funds andanalysts, has revealed that there is a very solid reason forthis. You simply need to look at the example Iprovided above with respect to BioNTech; a fringe once-dismissedtechnology that albeit underwent years of research, went in under ayear from unknown to what some might call “Rockstar Status”. This sent not a ripple, but a tsunami through the biotech financialmarket and the regulatory bodies with “ a call to embrace new scientific medicaladvancements. ” Financial institutions and investment bankswho may have been hesitant to reach out to sectors that don’t fitthe traditional model, are now rethinking their approach. RM fits right into this rethinking or what I will call“mental space” that is gaining attention, and Sigilon is a primeexample. Although there are a number of notable names who have RMprograms that are for the most part internally funded, there are anumber of smaller, lesser-known biotech’s that are very focused onspecific diseases where RM can make a huge difference to largepopulation segments. Some of these biotech’s could very well bethe BioNTech of the future.
One I found is Sernova Corp . They date back tothe mid 2000’s, so as a team they have arguably well over 15 plusyears focused on RM technology. As a very focused biotech that knewthey had a long path to follow, they have stuck with it and theresults they have attained so far are not fairly represented in theircurrent market cap. They have a high value lead program on Diabetes,that has shown tremendous results all the way through and into to aPhase I/II study currently occurring at the University of Chicago forwhich positive interim safety and efficacy data has recently beenreleased as presented by the principal investigator at the 2021 ASTS(American Society for Transplant Surgeons) Winter Symposium on January15, 2021. In this disease indication and using RM, Sernova is on thelow end of the scale with respect to its’ market cap verses theirmain competitors whom sport far less results and little to no clinicaldata. So, one would ask why the huge spread on market cap? (SigilonUS$1.4bln vs. Sernova US$307M). The reason is that Sernova’smarket cap is based on a share price on the Canadian TSX Ventureexchange. Traditionally this exchange was, and remains, largelyresource based with some technology companies, but very fewbiotech’s, and attracting a sophisticated biotech investor base isvery difficult.
The ability to attract US based individual investors islimited on this exchange and US institutional groups often cannotparticipate due to their firms’ charters. Not to mention that theUS has a plethora of biotech’s to invest in. So, one might askwhy am I and Prescient Reports are so bullish on this company? Consider these three very strong markers; 1)Sernova’s data is solid and on track. 2) FDA guidance along theway has been very positive. 3) They have executed an ongoingsuccessful Phase I/II safety/efficacy study of their cell pouchtechnology with therapeutic cells which is demonstrating clinicalbenefit in patients, a critical step in making RM for this disease areality. In looking at comparables in this space, again, I sightSigilon. This US based RM player just recently hit the NASDAQ publicmarket in December 2020. They’ve yet to start a clinical study andhave only recently started to enroll patients in a Phase 1 on oneindication. Yet the team gained the interest of some US biotechbankers, led by Morgan Stanley, that propelled this new entry to amarket cap of US$1.42bln 2 inless than a month! Sernova tracks very well with Sigilon, but comesin at a market cap of CDN$149M. Sernova is clearly a clinical stage biotechwith very positive data that I believe willposition them as a leader in the RM space.
With the likes of Morgan Stanley, Jefferies, Barclaysand other top banking firms, backing a RM biotech who has yet to haveclinical data and to drive them to a US$1.4bln market cap, indicatesthat those firms’ analysts are looking to the RM space to make majormoves thru 2021 and beyond. One ponders, that if a relatively unknownGerman biotech such as BioNTech can achieve the kind of recognitionthey did, does the data on Canada’s Sernova suggest that they may bepoised to do the same within the RM space?
Disclaimer: At the time this was written and posted,the author held no securities in Sernova. Nor did Sernova pay anyconsideration for this Op-Ed. This article is the solely the opinionof the writer and are not intended to malign any religion, ethnicgroup, club, organization, company, individual or anyone or anything.
1 STAT @damiangarde and JONATHAN SALTZMAN — BOSTON GLOBE NOVEMBER 10, 2020
2 Stockwatch as at January4 th 2021
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