Matt Phipps, Ph.D., Biotechnology Analyst, William Blair
Matt Phipps, Ph.D., a biotechnology analyst, joined William Blair & Co, LLC, in November 2014, after working as a postdoctoral research fellow at Texas Scottish Rite Hospital for Children. In the 2019 StarMine Analyst Awards from Refinitiv, Dr. Phipps was ranked the No. 1 earnings estimator in biotechnology and No. 3 across all industries.
Dr. Phipps earned a Ph.D. in cellular and molecular physiology from the University of Alabama at Birmingham and a B.S. in physics in medicine from the University of Notre Dame.
In this 3,974 word interview, exclusively in the Wall Street Transcript, Dr. Phipps has the top stock recommendations he’s making from his William Blair post.
“I think generally there are definitely some attractive companies that have pressured stocks, absent of individual performance, just kind of broader pressure across the biotech industry.
And I think that’s definitely where you get some nice opportunities when you’re thinking about the next six to 12 months for these specific companies.”
The William Blair analyst has several picks.
“One of my favorite names going into the last quarter includes Chinook Therapeutics (NASDAQ:KDNY), which is a company focused on developing novel drugs for kidney diseases — devastating kidney diseases…
It’s a small-cap company, $600 million market cap. And all clinical trial drug development does carry risk. This one is not approved. It’s in mid-stage development.
Yet it’s already passed a good amount of the safety hurdles. It looks to be safe. Obviously, we’ll continue to look at longer treatment periods, but the initial treatment periods looks to be safe.
And what gives me confidence here is that there are a number of different data points that are all lining up. This drug targets a protein called APRIL, the acronym for a proliferation-inducing ligand. APRIL is kind of a growth factor for certain immune cells.
And so there’s been some data showing that in this population of IgAN patients, APRIL’s probably what’s driving the accumulation of these proteins that accumulate in the liver, which are immune-related proteins. And that kind of drives the kidney damage. And many of these patients will have to go on dialysis and may need kidney transplants.
And so, the ability to block that protein from building up in the kidneys would really change the course of disease for these patients and could keep them from ever really needing to go on dialysis.
So that’s a big win for the patients and a big win for society because dialysis is, one, very expensive; and two, has poor outcomes and leads to other comorbidities just from having to go through the dialysis procedure regularly.”
Another top pick from the William Blair expert Dr. Matt Phipps is Autolus Therapeutics (NASDAQ:AUTL).
“When thinking about results here towards the end of the year, and also some going into next year, we like a company called Autolus Therapeutics (NASDAQ:AUTL). It is a $530 million stock. So in the small-cap range. They are developing very novel oncology drugs called CAR T therapies.
So there are a couple of CAR T therapies already approved. CAR T is a process where you take a patient’s white blood cells, and you engineer those white blood cells so that now they know which cells to target, which tumor cells to go after. It is a complex process. But it has shown dramatic results in patients with leukemia, lymphoma and multiple myeloma. And will expand hopefully into additional indications over the next couple of years.
Autolus does not yet have an approved drug, but they do have one that’s in that last stage of development, the pivotal trial. The results from that trial will come out mid next year. So that’s the next year catalyst, but they’re looking at the same drug in additional indications and they’ll have data from those towards the end of this year.
And so the pivotal trial, the lead indication there that can get them approval, first is in patients with adult leukemia. These are obviously going to be patients who have previously been treated with chemotherapies and other available therapies and unfortunately have relapsed. And this is really what could give them that long-term cure that obviously everybody wants.
And the data so far for this drug has looked very strong and that’s what gives me confidence in treating a number of patients across different tumor types. They consistently see that this drug looks to be a nice combination of efficacy and safety compared to the competition. It is a very efficacious, but also it doesn’t require as much physician interventions.
That’s one shortcoming about some of these CAR T therapies — that is the first ones that were approved. Patients must be closely monitored, especially in the first week, because if that immune system gets too active, and those engineered immune cells are too strong, the patient’s going to need some intervention to try to prevent the immune system from going too far and damaging the patient.
This intervention could be something like steroids, but it could also be admitting to the ICU for IV drugs and monitored closely.
Autolus’ drug seems to be much safer than those, doesn’t require as much intervention, and doesn’t require as much patient management after you infuse it, which ultimately could lead to it being more broadly adopted after approval. That’s largely because there are definitely some smaller institutions that are hesitant to start giving these CAR T therapies because they don’t have the resources to monitor patients for the first week.
That’s one of the advantages of the Autolus lead drug. And also, it does look like it’s a little bit more efficacious. It’s not like they can run a trial comparing these drugs side by side, but when we make comparisons from one trial to another trial, it looks encouraging for Autolus. And they have additional trials that are ongoing as well. They’re looking at types of lymphoma, and they’ll have data from those later this year.
We believe you can value this lead indication in the adult leukemia at, say, maybe a $300 million to $500 million market opportunity as far as revenue from that. And then, when you look at some of the lymphoma indications, they could really expand the market for their lead drug, called AUTO1, and could potentially push into that blockbuster range.
Those additional indications are still at an earlier stage trial, so they have to get good results there and then launch a new trial. But could very well provide additional upside longer term.”
Get the complete picture on Autolus, and the rest of Dr. Matt Phipps top biotech stock picks from William Blair by reading the entire 3,974 word interview, exclusively in the Wall Street Transcript.
Matt Phipps, Ph.D., Research Analyst
William Blair & Company
email: mphipps@williamblair.com
