Redeye Tesearch just published new research note on Biovica. The research is available on Biovica website:
Biovica: Fundamental support and an administrative delay
When Biovica announced that the FDA was not yet ready to accept Biovica’s updated application, this triggered a severe negative overreaction despite no impact on fundamental support. Biovica announced the Novartis independent large study (BioItaLEE) indicated prognostic support for DiviTum in combination with Novartis CDK 4/6 inhibitor Kisqali (ribociclib), this triggered no positive reaction despite the, in our view, obvious fundamental support. If anything, this study gives more support for our Bull case. Our value proposition remains a base case value of SEK 95 (Bull SEK 325 and Bear SEK 20).
Fundamental support
Biovica can point to the CDK 4/6 inhibitor potential already from several studies, including the Pythia study (Pfizer’s market-leading Ibrance or Palbociclib) for patients with HR-positive/HER2 negative metastatic breast cancer. The BioItaLEE study that will feature at ESMO (16-21 September) is important for several reasons in our view.
The study is a larger independent study where Novartis has bought Divitum and used it for this study that is a large 287 patients study. The follow-up time is a respectable >26 months, and perhaps more importantly, it is a prognostic study. In our view, additional prognostic study support will be important for clinical use once the approval is in place, and prognostic studies will also support private and public pay in the future. Additional study support in the same class support the robustness of DiviTum and expanded future use. Either Ibrance or Kisqali or both are also in a good position to extend the label and clinical use earlier in the treatment of advanced breast cancer.
The actual results are also strong in the BioItaLEE study indicating that DivTum is a promising prognostic biomarker with reassuring p-values (statistical strength), and the results (TKa activity) indicates if the patient is likely to progress despite the CDK 4/6 inhibitor therapy or if they respond well. This support is indicated already after the first and the second cycle of treatment.
Fundamental irrelevance
The fact that FDA is not ready to accept the updated application has nothing to do with Biovica, and slippage of 1-3 months is irrelevant in our view. As a listed company, Biovica has to provide a guide regarding the timelines despite the challenge of second-guessing FDA’s workload and priorities. FDA is not yet running as normal, and delays are still rather frequent. Once approved, Bivica’s DiviTum is likely to be both first and best in class. In addition, FDA delays are likely to be more severe for candidates earlier in the approval process.
Value
Our value proposition remains a base case value of SEK 95 (Bull SEK 325 and Bear SEK 20).
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