Biotech Trade Idea
Alright guys would love feedback on this trade.
I want to go long all companies with GLP or GLP/GIP exposure while subsequently shorting any companies that are in development of NASH therapeutics.
The premise of this comes from the current treatment of NASH is weight loss given it’s a symptom of obesity and not (typically) the underlying disease. The market of some of these NASH drugs is going to shrink by a big margin (eaten up by GLP/GIPs).
The current data for these NASH drugs looks strong so it’s not a function of these drugs not working properly, but better treatment modalities. As a clinician why would I treat my patient with NASH specifics therapies vs GLPs when the GLP can treat so many more issues the patients is likely facing.
Anyone have thoughts on this? The NASH drugs will come to market and work like they’re intended to but don’t see the market being as big as people initially thought.
If you honestly think this is a good idea you shouldn’t post it for the entire internet to steal.
Lol it’s not for me man. I work in biotech ER and my company wont let me trade HC stocks, unfortunately.
I do have aspirations for the Buyside, so I’m trying to get a picture of how buysiders view the market and learn.
Well for some genuine feedback if you are interested - this isn't a thesis this is just a very early stage idea. You need to isolate down to which companies you want to long and short, and quantify the mispricing and upside + downside. Maybe there isn't as much juice here as you think there is. Maybe these companies are already priced in with some uncertainty from these issues. You need to put some numbers behind what the opportunities are. Then find some evidence to support your supposition. Who decides these things? How have they ruled in the past? Why would they rule this way in the future? Where is your evidence that it would likely break one way or the other? Is this just a binomial bet then? What is my risk on this bet? Do you have previous cases you can point to that saw similar outcomes? If you wanted some super general feedback on the soundness of the thesis - I mean yea it sounds like something that could potentially work.... but only if you can provide compelling arguments on whether there is an opportunity here.
Yea very fair. Definitely need to delve deeper into this idea. Just trying to see if this has legs for a very early stage idea. Is this how HF analyst are thinking? Obviously they have models and do deeper research on specific names.
Getting on the phone with some of my professors from medical school tomorrow who are hepatologist and internist to see their thoughts on treating nash.
Not a bad thesis but both of these baskets of companies are pricing in a high probability of what you laid out happening already
That could be the case. Tbf though I see these compressing at higher highs and SS ER hasn’t changed it’s price targets to reflect this since the rise of GLPs.
Again I think the NASH medications will work and come to market, but doctors aren’t going to be treating just the NASH.
I’m gonna get some channel checks in and update the thesis accordingly.
Mind if I pm? Interested in HC ER.
Yep shoot me a DM we can chat.
Good thesis but this is already starting to get priced in. See orthopedics, obesity (or lack thereof) has similar impact on joint replacements
Markets are too damn efficient man…
Also on the ortho front that’s interesting. I was an ortho resident interested in joints. So you’re saying that in the future the US will be less obese —> ortho procedures will cost more (because of less joints procedures from lower obesity? Or the market is shrinking given less wear and tear on the joints?
Shrinking. I think directionally the cats out of the bag already. Maybe the magnitude of impact on specific names isn’t fully priced in yet. Keep in mind though this will happen over many years and there isn’t a simple near term catalyst per se which makes it harder to trade
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