StemPoint Capital (Michelle Ross) — Long ABIVAX (NASDAQ: ABVX), 2026 Sohn Montreal
The pitch: Buy the dislocation. The stock fell 40% in one session after a strong trial readout buried “little lines” about cancer cases at the bottom of the release. Ross argues this is a textbook biotech overreaction.
The asset: Obefazimod, an oral pill for IBD (ulcerative colitis + Crohn’s). Stands out as an oral drug in a market dominated by injections/infusions, with matching or better efficacy (long-term remission ~40%). Began as a failed HIV drug, pivoted after animal models showed anti-inflammatory effects. Two Phase 3 trials succeeded in summer 2025 (stock rose 600% that day).
Two macro themes:
• Patent cliff — ~$250B of pharma revenue goes off patent over the next 3 years; >$400B through 2035 (Humira, Keytruda, Stelara, Tremfya, Entyvio). Concentrated in immunology, exactly where obefazimod plays. Big pharma can’t replace this internally → strong M&A tailwind.
• AI in drug development — enables “pipeline in a product,” extending patent life. Humira analogy: stacked 15 indications into a ~$25B blockbuster; obefazimod could follow the same path.
The sell-off: 3 cancer cases, all in one trial arm, none in placebo. Different diseases (prostate, breast, colon polyp), appeared weeks after dosing (too fast to be causal), in a closely monitored 60s population. No signal across ~10 years / 441 patient-years. Her real criticism: management fumbled the communication.
Valuation:
• Last price ~$90; market cap ~$6.2B; $631M cash (3/31); 79.3M shares.
• 12-month PT: $150–$200 (conservative, only 2 indications).
• M&A framework: UC alone = $6–9B; UC + Crohn’s = $18–24B (~3x current market cap).
Risks: Still needs FDA approval; label could carry cancer-related warnings; shaky management communication.