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The Best CD47 Paired Trade In Biotech Is Here, Right Now

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EXPstocktrader's Blog
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  • CD47 the "don't eat me" in biotech is hot.
  • Each company mentioned has its own path.
  • These two companies mentioned are Long Term buy and Hold opportunities, especially on fades.

Followers looking for a twofer or paired trade opportunity should look at two leading biotech companies covered in my stock universe. These companies are ALX Oncology Holdings (ALXO) and Trillium Therapeutics (TRIL) and I rate these companies as a Buy and Hold opportunity for the long term.

There has been a lot written about each company, and instead of me rehashing all the details for more due diligence, it's best to see each company's data as reported at the 2020 ASH Annual Conference held this past few days.

Click for the most recent news for ALXO.

Click for the most recent news for TRIL.

More on CD47 as quoted by ALX Oncology:

"Cancer cells employ CD47, a cell surface protein, as a “don’t eat me” signal to evade detection by the immune system. ALX is developing a next-generation checkpoint inhibitor designed to have a high affinity for CD47 and to avoid the limitations caused by hematologic toxicities inherent in other CD47 blocking approaches. We believe our lead product candidate, ALX148, will have a wide therapeutic window to block the “don’t eat me” signal on cancer cells, and to leverage the immune activation of broadly used anti-cancer agents through combination strategies. Based on our clinical results to date in multiple oncology indications showing encouraging anti-tumor activity and tolerability, our strategy is to pursue ALX148 as a potentially critical component for future combination treatments in oncology."

Wall Street and Big Pharma should be looking closely at these companies as their pipeline offers the potential for unique and somewhat compelling combination properties. Also, forget about which company is better than the other as both companies have great management and the potential to save lives. Remember, as an investor, you are buying a pipeline of untapped opportunity and the management teams of each company."

More on Trillium from its website

"Trillium Therapeutics is an immuno-oncology company targeting CD47, a molecule that tumors frequently use to evade the immune system. CD47 is a “don’t eat me” signal that blocks the ability of macrophages to phagocytose and destroy tumor cells. By blocking this “don’t eat me” signal with decoy receptors, we aim to unmask tumor cells and make them visible to the immune system. As a leading CD47-focused company, Trillium Therapeutics has two decoy receptors (TTI-621 and TTI-622) that are currently being evaluated in patients with hematological malignancies.

At the end of 2019, under new leadership, Trillium underwent a transformational program that included corporate reorganization, the creation of a more clinical development-centric organization and strategic re-prioritization to focus on our intravenous products in large hematology-oncology indications."Yes, after new leadership I took notice and so did a lot of others when the company was trading at very cheap valuations. Since their transformation that's still ongoing, the stock has appreciated several-fold and continues to gain attention from very large institutions. 

Do your own DD

If you dig deep enough you will also find that there are some very smart funds that have taken a foothold position in both ALXO and TRIL. This is what catches my attention and it should catch yours too. Don't listen to chat boards and get caught up in misinformation or the usual FUD. Don't be lazy, go dig to see the big institutions holding these companies. If you do as I suggest, you will see that even Merck and Pfizer are involved as serious investors. 

Lastly, I have a saying that goes like this, "Know what you own!" Each company is well-positioned and they are leaders in their respected field, namely CD47. Do expect more catalysts to come in 1Q21 and try not to worry so much about the day-to-day fluctuations or investor chat "noise". (Remember what happened to my (IMMU) that I followed a few years ago. Well, it went from $10 to $20 and then (in due time) to $88 per share on an acquisition. These 2 companies, ALXO and TRIL must be viewed as a potential M&A as well, but there is no guarantee.) I hope this brief post today helps?

Analyst's Disclosure: I am/we are long TRIL ALXO.

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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