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Biotech Analysis Central Preview Series: Codiak Biosciences

Dec. 27, 2020 10:59 PM ETQ
Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

This is a preview blog series on what you can expect when subscribing to my "Biotech Analysis Central" service marketplace. For the full article you must subscribe to my service. This is just an intro of two snippets on the research articles that are written. Thus far, there are about 300+ research reports on both both small-cap and mid-cap biotech stocks with full analysis of the pipeline, catalysts, financials, and clinical trial analysis. If you want to read more then please subscribe to my marketplace service. As always I offer a 2-week free trial just to show you how helpful my service is. You can cancel anytime before the 2-week free trial is up and never be charged a dime.

First Section Of Marketplace Article (This article piece was originally written on December 22, 2020)

The next article I wanted to discuss for the "Biotech Analysis Central Stock Insight Series" is a biotech by the name of Codiak Biosciences (CDAK). The reason why I want to go over this biotech next is because it has safety data from its phase 1 study, using exoIL-12 treating patients with cutaneous T-cell Lymphoma (CTCL) expected by the end of 2020. This is only safety data but it will shed light on whether or not exoIL-12 can be safe enough to use in CTCL and other types of cancers. The preliminary biomarker and efficacy data from there is not expected until mid-2021. The good thing about this biotech is that it uses a new type of science known as exosomes. Having said that, IL-12 is a target that you might already have heard of from other biotechs and already be familiar with. IL-12 has the function of stimulating the immune system to fight off various types of cancer. Codiak has engineered exosomes to carry IL-12 to the necessary target. What makes this biotech risky is that it is early in development in terms of proving exosomes. However, compared to others in its field it is on the top at the moment in terms of advancement. Besides using exoIL-12, the company is also attempting the STING pathway. This is using another drug product in the pipeline known as exoSTING. Lastly, there is exoASO-STAT6, which is attempting to be up taken by M2 polarized tumor associated macrophages. I believe it has several shots on goal which partially reduces risk. Ultimately, the exosome platform will have to be proven to work. However, the company has split up its pipeline into oncology, neurology and vaccines. The neurology and vaccine programs are earlier programs but are noted nonetheless.

Conclusion Of Marketplace Article

The Final Verdict is that Codiak Biosciences is a good speculative biotech to buy. I still view it as such because it is important to first see the upcoming safety data in healthy volunteers in the phase 1 study using exoIL-12. This is expected any day now in Q4 of 2020. This will be an early indication on the safety front for the biotech's engEx technology platform. That is, it will be known if exosomes being engineered really do improve safety of certain proteins. The safety of exoIL-12 and the other products in the pipeline is only half of the battle. That's because then it will be crucial to see the effectiveness of these drugs as well. Investors won't have to wait long to see clinical data from exoIL-12 or exoSTING, because both sets of results will be released by mid-2021. I want to point out that exoIL-12 is a good stepping stone into potentially advancing to other indications with big markets. That's because the CTCL market was roughly about $353.5 million in 2016. It is a bid more, but consider that this specific indication likely won't reach blockbuster status. Only if Codiak moves to Triple negative breast cancer or the melanoma indications could it obtain blockbuster status. Especially the melanoma indication, as that market is expected to reach $12.4 billion by 2025. Therefore, I would view the CTCL indication as proof of concept of the engEx technology. What would be more crucial to the future of Codiak would be the use of exoSTING for solid tumors. As I noted above, the global solid tumor cancer treatment market size is expected to reach US$ 424.6 Bn by 2027. Not only that, but it would be a breakthrough for STING agonists if safety is proven. A lot of biotechs are looking at STING but a major issue is safety of cytokines and inflammatory cells causing issues. Checkpoint inhibitors work well to activate T-cells that are next tumors in the microtumor environment, however, T-cells that aren't next to tumors don't do anything. This is where a STING agonists might be able to use the innate immune system to get the immune response going. Lastly, based on valuation the company is cheap. It only holds a market cap of $358 million. This kind of makes sense since it hasn't proven safety of its engEx platform yet. If positive safety data is noted in the next few days before the end of 2020, along with positive efficacy data in mid-2021 (both exoIL-12 and exoSTING, then I could see the market cap increasing at that point.

Analyst's Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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