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Some Stocks I Bought

While I said I wanted to be cautious into year-end, the combination of A. being flush with cash, B. having a market that does not want to go down and C. seeing some stocks that have just been obliterated into year-end, made it hard for me to hold to that. I ended up adding a few new names to my portfolio.

Most of these are tax-loss selling type picks. Meaning I think they could get a bounce in the coming weeks because they have been hammered so hard, but I’m probably not going to hold them too long. I’m going to try to sum each of these up into a couple of sentences.

Arca Biopharma – trades at -$2 per share. It is not a particularly interesting biotech, but like I said, it trades at negative $2 per share.

Checkpoint Pharmaceuticals – Immunology biotech with a readout in its lead candidate, Cosibelimab, expected any day. The stock could go either way on those results but they are going after a huge cancer market with a anti-PD-L1 drug which is same kind of drug that Keytruda, Opdivo are – and you can google these and see that they are multi-billion dollar revenue drugs. CKPT is trying to come up with a similar drug they can price cheaper and take share with. Interim results showed that Cosibelimab is comparable to Keytruda and Opdivo so all Checkpoint has to do is duplicate those over the rest of the patients. We will know soon and I will get creamed on my small position if the results are bad.

Radcom – If you read through the last earnings transcript, and have read through the prior umpteen earnings transcripts, you may note a change in tone in the delivery. I suspect that Radcom is finally getting close to some deals. The stock price seems to be saying as much. They are a 5G telecom play and 2022 is supposed to be the year when we finally see 5G telecom implemented with some scale. We shall see.

Silicom – Thanks to Florian for pointing this out. Much like Radcom, there seems to be some momentum building here, and in this case you can see it in orders as well as in tone. The stock price is backing that up.

Caribou Biosciences – Owned it before. Did not really think I’d own it again. CRISPR patents and immunology biotech run by Rachel Horowitz, one of the original CRISPR discoverers. They do autologous T-cell therapy. Autologous means its other peoples cells, ie. you take T-cells out of a healthy person, modify them to attack a malignancy and then put them into the sick person. Doing autologous T-cell therapy is tricky because your body rejects and attacks foreign cells, and so once it recognizes the T-cells aren’t your own it kills them and that is the end of their efficacy. Caribou is using CRISPR editing to make many edits to the T-cells and basically hide them from your immune system, so they can work longer. I didn’t think I would get another chance at Caribou below the IPO price.

Mustang Bio – not quite trading at cash but close ($34 million EV). They do autologous CAR-T, which means, unlike Caribou Biosciences, they engineer your own T-cells to fight a malignancy. In the long-run, everyone thinks that the Caribou method will win out because using your own cells means you have to go through a cumbersome process of extracting T-cells, sending them to a lab, modifying them, sending them back, reinjecting them. But so far using other peoples T-cells hasn’t worked great because, as I already noted, your body is good at finding them and killing them. So there is a place for autologous. Mustang Bio announced pretty good data a couple weeks ago and the market of course sold off the stock even more.

Lyra Therapeutics – trading at cash, this is a horribly broken IPO that has a slow-release nasal patch that delivers the SOC for 6 months to patients with chronic sinus infections. It seems to work. There are definitely things not to like about this one, the biggest of which is their cash runway is not big enough to get them to the next readout, but the stock seems to bounce regularly and it has been hammered extremely hard. And its trading at cash.

Aldeyra Therapeutics – they whiffed big to everyone’s surprise with their ph3 results in dry eye disease. But now they trade at a little over cash and the results they announced has a silver lining. Again, seems pretty beaten up and due to bounce.

Finance of America – these guys originate mortgages. This is another one of those not particularly interesting companies that has been absolutely demolished over the past few months. I’ve read through the filings, listened to the transcript and I’m just not sure what is so bad about them. They are a mortgage company. They have a reverse mortgage business, a renovation HELOC type business, a regular mortgage business. It is nothing particularly exciting but I don’t quite see why the stock has been clobbered like it has.

BM Technologies – I mentioned in a prior post that one of the first things I did after I became convinced Omicron wasn’t going to amount to much for the markets was I bought back the banks. Most of these were boring old typical banks (CUBI, BSVN, BCBP, PKBK, SFBC). But I also bought BM Technologies. I owned these guys through Customers for some time, and prior to that I owned them when they were Higher One. I plan to go into this one in more detail, but briefly, they just announced a deal to buy a bank that gives them a bank charter. They have a deal with their former parent company CUBI that allows them to take back deposits and (I believe) loans that were originated by them but held by CUBI because BMTX did not have a bank charter. If you do the math on what BMTX will look like once those loans and deposits are brought back on their own balance sheet (I’ll give this math when I post on this) it seems pretty compelling.

Contrafect – Trades at $40 million EV with $60 million cash. I was actually looking at another biotech, called Cidara Therapeutics (which is also interesting and I might buy but I’m getting pretty biotech heavy here), when I stumbled on these guys. They have an antibiotic called exebacase. Antibiotics are a graveyard indication. The problem is that trials are geared to show non-inferiority rather than superiority. This means that new drugs don’t get prescribed much because they are only considered equivalent of the old drug. On top of that, you don’t want to introduce a new drug if you don’t have to because you want it in your back pocket once the old drug really stops working. Reimbursement is also tricky. But exebacase seems to actually work better than Standard of Care. Contrafect is in the middle of a Ph3 study that is looking at exebacase again, but this time it is geared to show superiority. That seems like it could be a game changer. They are supposed to readout some interim results soon, so we’ll see.

Sangoma Therapeutics – There has been so much said about these guys on Twitter and in the message boards that I don’t have a lot to add. But the stock is at the bottom of the range it trades in and the data they released in Q4 was good, not bad. Its going to go back up when biotechs start going back up, which I think is soon.

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