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Aimmune Still Leads In The Peanut Allergy Race

Apr. 02, 2018 11:49 AM ETAimmune Therapeutics, Inc. (AIMT)ANAB35 Comments
Keith Glanz profile picture
Keith Glanz


  • Aimmune on course to become the treatment of 1st choice for peanut allergy in 4-17-year-olds.
  • The imagined existential threat from AnaptysBio deflates with release of their Phase 2a topline data.
  • Timeline and cost issues add to Aimmune’s advantage.

One of the main recent stumbling blocks to upward movement in Aimmune’s (NASDAQ:AIMT) stock has been concern coming from a perceived existential threat to Aimmune’s prospects from AnaptysBio’s (ANAB) monoclonal antibody approach to treating peanut allergy. Since the release of Aimmune’s stellar PALISADES data, the pending results from ANAB’s Phase 2a peanut allergy trial have been hanging over Aimmune’s stock like the grim reaper.

Now that ANAB’s data is out, how has it changed the prospects for success and big financial gain for Aimmune in treating pediatric peanut allergy?


The case I made in my previous article for Aimmune to get FDA approval, become the best in class treatment for an unmet medical need, and attract the takeover interest of big pharma at a substantially higher stock price, remains intact (How Does Aimmune At $160 Grab You?).

To understand my thesis, one needs to coldly examine the evidence that we have in front of us.

Firstly, it’s difficult to make the case that DBVT and their Viaskin patch will garner significant market share relative to Aimmune. If both products are approved by the FDA, the patch will probably attract those pediatric patients unable to tolerate AR101’s stronger desensitization, and those parents who resolutely prefer a patch over pills. Aimmune’s better efficacy and superb safety profile will likely lead most parents to choose the oral AR101 program.

This will be a personal choice, but in feedback I have received from parents whose children suffer from severe peanut allergy, most want to be assured that their kids will be able to tolerate an accidental exposure to the equivalent of 1.5 peanuts without risking anaphylaxis. Some parents mention that they want to monitor their children’s dosing of AR101 to be assured the kids are correctly following dosage protocol. They worry that a patch could

This article was written by

Keith Glanz profile picture
Keith Glanz was a member of the Pacific Exchange and an Equity Options Market Maker from 1982 -2002.

Analyst’s Disclosure: I am/we are long AIMT. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Position includes stock and options. Keith Glanz was an Options market maker and member of The Pacific Stock Exchange from 1982- 2001.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (35)

Geloo profile picture
These therapies don't provide a "cure" for peanut allergy, but insurance against accidental exposure. Parents are motivated to get the dosing correct and have control of the desensitization process. The patch has too many "ifs" and not the efficacy of AIMT's product. Big pharma sees this as a major product to add to their portfolio, which one and what price are my only questions.
Spot on. Buyout or not, at least $60 within a year; perhaps $80 or more with little downside risk. Seems like a no-brainer if you are patient. Currently my largest holding.
MarineCorps profile picture
There has been a very noticeable increase in shares bought. A reasonable person would assume investors are accumulating speculating a buyout this quarter, Q2.
Hi Keith,

Great article once again!! Really helpful for a novice biotech traders like us. I have some thoughts on my mind which I need to share with you and have your opinion:

1. Until the market gets a stability due to the tariff issue, there will always be a selling pressure every other day or week. This will have its impact on biotech sector as well including AIMT on a short term basis.
2. The black window after insiders purchase still ON until May-June '18, the BO is not possible. So until then there is no catalyst for the stock to shoot up.
3. There are about 80% institutional ownership who definitely know the value of the stock in future w/ or w/o BO. They will definitely try to make use of both the aforementioned points and bring the price down (short term). This will give them a golden opportunity to grab the stock at a cheap price.
Does anyone know the exact date the lockup ends?

2. The black window after insiders purchase still ON until May-June '18, the BO is not possible. So until then there is no catalyst for the stock to shoot up.
MarineCorps profile picture
April 27th.
Keith Glanz profile picture
Hi Ujjwal,

Sorry for the late reply. There is no question that money managers have been rearranging their portfolios to reflect the higher volatility environment that is likely to persist as far into the future as can be perceived. That has caused a large amount of biotech ETF selling that, in turn , has generated selling in issues like AIMT to levels that are ludicrous. The previously outstanding ANAB issue added to the worries and selling.

Yes, institutional ownership of AIMT is around 85% (according to company execs). I, however, would not necessarily lay short term control of the stock in their hands. They are playing the long game and by and large have been quiet. It has been high frequency trading and AI machine momentum trading that has made mince meat of fundamental traders recently. It is very profitable in the short run. But, just like my warnings in KITE and JUNO, it is a fools game if one gets caught short when a buyout comes. In KITE, for example, the shorts lost over 1/4 Billion dollars, and that in just the last leg up, not counting all the short losses until the announcement.

The portfolio managers seem to be done getting their portfolios to their liking. The ANAB issue has been defanged (hopefully, in part, by my article). The DBVT program is factored in for the most part.

Notice that the stock is finally rising without catalysts.

I think many of us now feel comfortable that should the stock sell off again for reasons not specific to AIMT's prospects, we would step in and provide a floor.

Eyes on the prize,
MarineCorps profile picture
Keith, look how well the stock is holding up today. Marvelous! Volume is insanely high also! Great day!
Keith Glanz profile picture
Finally! Some buyers. Yesterday's action confirms for me that computers are and have been doing most of the selling for weeks. The rally that we saw develop was a classic short squeeze (and true throughout the market). But as you know it has been very pronounced in AIMT. Aimt has been underperforming the market and the Biotech indices. The question I have is how long it will last. There have been a lot of short shares added to the float in the last 2 months. If those folks determine that it is time to get out the stock could go a lot higher. It's so interesting to me to see ANAB and AIMT still trade in lockstep even though the fundamentals, at least for peanut allergy, so much favor AIMT. ANAB, of course, has a future in atopic dermatitis.

Even if the short squeeze ends today, I am confident now that the selling is not because "they know something that I don't." It's just dumb momentum trading. So selling is not liable to scare as many people, and a floor at 27 should have been established. Hope we don't go down there again, but if we do I'm buying more.
Its starting to slowly increase! hopefully no more big dips except for external factors not related to AIMT.
Keith Glanz profile picture
Hi MC,
Today's stock action is a bit baffling. Although ANAB and AIMT are still both being sold, and ANAB is now underperforming AIMT, you wonder who the heck is selling either of them. They continued to be under pressure today even when the XBI and IBB were rallying. The AI idiots are in control again.
MarineCorps profile picture
Keith, it’s AI and it’s annoying at times But for those of us investors who have cash in hand it’s a perfect opportunity to buy cheap shares and to average down.

I’m speculating a buyout in May-June 2018.

I believe Nestle is a prime candidate for buyout.

Also take a peek at Aimmune’s Board of Directors. Someone pointed out the deep connections they have in Big Pharma..
MarineCorps profile picture
Keith, notice Alkermes (ALKS) didn’t do so well in trials but they believed with their data alone it would lead to FDA approval for a drug. They had talks with the FDA which management said was going well.

Yesterday they announced they received a RTF Refusal to File letter.

It’s quite possible DBVT is dealt the same in the future. AIMT did great in trials. ANAB and DBVT didn’t.

I wouldn’t be surprised if AIMT is the only company FDA approved for peanuts.

I know some worry about day to day prices but it’s just the overall market, I agree. The latest prices are just opportunities to buy.
Germain Garand profile picture
"AIMT did great in trials. ANAB and DBVT didn’t."
Well, DBVT is a special case...
If you did your DD, you might have noticed the only problem with their trial, is that the placebo arm did much better than expected. Otherwise, it just worked nicely.
Hardly a bummer!
It rather indicates how powerful having an all time visible, touchable "patch" on your skin actually is from a placebo stand point.
For this very reason, this Talisman effect if you will, my opinion is it is going to sell like hot cakes.
It might not be fully rationnal, it might not even be the most effective, but it is going to win a much larger market share than is reckoned in this article.
Disclosure: I have been long AIMT for a month or so and recently gave up at 14% loss for the reasons I just mentioned. I just realized it won't work commercially. I might go long DBVT sometime in the future though I'm happy standing in the sideline for now.
Even though I respect your opinion, I would have to disagree. Patches would be perfect for a different population (adults). But for kids, parents cannot be around them every single time. They need to make sure they take the right amount of "dosage". You can't do that with a patch. A patch might fall off (sweat, kid might take it off) or it has to be taken off for showers, pool, etc. Parents cannot be around their kids every time. Having the dose at breakfast or dinner is perfect for the parents since it becomes a habit.
MarineCorps profile picture
Keep thinking those words “Talks with the FDA are going great!” by DBVT Executives. Let’s see if that makes you a bagholder or winner in DBVT. I’m betting it’ll make you a bagholder.

Disclosure: Long AIMT, Short DBVT, Short DBVT
Erik Neelsen profile picture
Don’t be surprised if Nestle buys AIMT next year...
It makes a lot of sense. Given the price action the last few weeks, it seems they would be buying up shares in advance of an offer. I was early to this stock (avg $32) but agree with many that this is a $60+ stock within a year. This article is interesting regarding nestle strategic move into pharma: http://bit.ly/2q0twtm
Keith Glanz profile picture
Hi Charles,

Thank you for this article. I recommend that everyone read it. I believe it was written 2 years ago, before Nestle took a 15 % stake in Aimmune. I've been wondering whether Nestle thinks of themselves as a passive investor or not. This article makes clear they will be a force in M&A, competing with big pharma. So far though, they have been quiet. They certainly have the resources to buy Aimmune if they want. And AIMT is a good fit for them, as it relates to foods they sell, and the fact that they are interested in targeting gut diseases.

I always thought a company like Sanofi would be interested, given their interest in combining their Dupixent with AR101. There are many companies that might find this company compelling: A huge market, an unmet need, a relatively simple manufacturing process and low input costs, little competition, and few payer issues.

This will inspire me to dig deeper into Nestle's motives. If you have any further insight please let me know

Thanks again,
Keith Glanz profile picture
Hi Eric,
Charles' article below certainly backs up your thought. For 2 years, however, Nestle seems to have been a passive investor in various companies. What are they waiting for?!! The stock will never be much cheaper than it is now. Perhaps they need to see FDA approval. But they'll have to pay up if they wait that long.
As always, great insight Keith. The only thing weighing down the stock now is the market. AIMT has a great future ahead.
Keith Glanz profile picture
Hi Y D,
I know how cautious you have been because of the hidden trap relative to ANAB. Hopefully now, given the time frame to Aimmune's filing, there should be relatively smooth sailing, without awful surprises getting in the way.

The recent crappy price action in the stock has more to do with the general market selloff, and nothing specific to AIMT. For a few weeks both AIMT and ANAB have been trading in relative lockstep. Of course when the ANAB data came out, the smart traders out there realized that ANAB did not directly threaten AIMT, and the data did not suggest an immediate clear advantage over desensitization from AIMT. And since then ANAB has been underperforming AIMT. Both have been coming under selling pressure from biotech ETF selling. To me this is just a buying opportunity and not anything to be concerned about relative to AIMT's ultimate trajectory.

Keith, I agree. I think AIMT 's future is quite bright now because 1) the drug is life saving with 2) a large ready and waiting market, and 3) thousands of allergists ready and willing to add this indication to their existing allergy treatments. Aside from training allergists, I don't think it will require much selling efforts and cost by AIMT to get their drug quickly adopted and insurers to cover the treatment cost. I know if one of my kids have peanut allergy, I would do everything I can to make sure they are never in danger. I am sure all parents feel this way, so the drug will sell itself.

Since the market is large with basically little to no competition in sight, I think there is a good chance that AIMT will be bought out by one of the big pharma before the drug hit market. But either way, AIMT has a golden goose on its hand.
I agree with your conclusions now that ANAB data is out and doesn't look too impressive at first try. I think AIMT would have sold off badly if ANAB data were overwhelmingly positive, because no big pharma will touch it so the buyout scenario is out. Now that option is still in.

I bought AIMT after seeing the ANAB data. Look like AIMT is a safe investment at least until ANAB or some other companies can show a much better drug and approach.
Keith Glanz profile picture
Hi MC,
Yes, you may be right about the timing of FDA action. BLA should be filed by the end of the year. I'm giving the FDA at least 8 months to act. But Aimmune does have FDA Fast Track Designation, as well as FDA Breakthrough Therapy Designation for peanut-allergic patients ages 4–17. So the FDA may act sooner, as you say. I'm just trying to be conservative in my analysis of the two companies. Also, it is possible that the timeline for ANAB in their future trials leading to an FDA submission may be a bit shorter, depending on if they follow typical trial timelines or not. It is not cut in stone.
Best wishes,
MarineCorps profile picture
Great article Keith!

There’s one thing I’m in slight disagreement with. I don’t believe it’ll be 1 3/4th years before FDA approval. I’m in belief FDA approval will come much earlier in 2019. I believe we’ll be FDA approved before summer time next year.

As far as near term I believe we have 1-2 minor catalysts prior to BLA submission. Then we also have other allergy trials starting up near the end of the year into next.

I agree share price is undervalued, which isn’t a bad thing for Longs who need the extra time to buy more shares at a cheap price.

Most analysts have the average 1 year price target at $64. Credit Suisse which is a very big fan of Aimmune has it at $47. I believe we’ll be above $55 within a year.

As I said before Great article and thank you for continuing to keep us up to date.

I’ll continue to hold long!
jeffkad profile picture
I haven't paid close attention to this space but I thought the threat was from DBVT? Are they no longer a threat?
MarineCorps profile picture
No they don’t appear to be a threat in the market space. Perhaps 20-25% market share at most with Aimmune at 75-80%.
Keith Glanz profile picture

DBVT gets a lot of attention and commentary. The point of my article was to highlight a handwringing worry that doesn't get a lot of airing. But, in part, the poor trading action of AIMT since the release of the PALISADES data had to do with the pending data from ANAB and their 2a peanut trial. I wanted to put this issue into its proper perspective so that investors could think more clearly about the relatively clear path that Aimmune has to success.

DBVT has two hurdles: First, their path to FDA approval is more uncertain than for AIMT. Secondly, should they get approval (and I think ultimately they will) their poorer efficacy relative to Aimmune will govern the inroads they can expect to make against AIMT. One sees many comments that the Viaskin patch has a better safety profile than AR101, and that will be enough to carve out a large slice of the business. I believe that many people have either missed or misinterpreted the really excellent safety data that AR101 exhibits. Very few patients experienced significant gastro intestinal issues with AR101. Given this reality, I think that Aimmune will take the lion share of pediatric business. What that number will be, is debatable. But I'm trying to get people to bring their expectations in line with the real world.
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