Rubius: Bad Data, Punitive Environment, Battered Stocks (NASDAQ:RUBY) – Low Calorie Diets Tips

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Ruby (NASDAQ: RUBY) had 24% short interest when I covered it in March. The price was over $6. Anyone who sold the stock short back then made a lot of money, because after the company presented additional data from RTX-240 at the AACR in April, the stock fell more than 80%. Today it’s a penny stock trading at 79 cents. It’s only been 3 months. This is the unpredictable world of biotechnology.

Rubius was once a highly attractive stock. It wasn’t attractive because of strong fundamentals or solid data, but because its founders are world-renowned scientists. The company was built “on the discoveries of Professors Harvey Lodish and Hidde Ploegh of MIT’s Whitehead Institute for Biomedical Research and the research and insights of Flagship Pioneering’s VentureLabs.” Professor Lodish is a highly respected biologist under whose tutelage several scientists have won the Nobel Prize. So that was the initial attraction of Rubius.

However, the company has not kept its promise. After an initial burst of decent data, Rubius has consistently failed to show any positive data. Their first molecule was RTX-314, and it was a complete failure. RTX-314 targeted phenylketonuria, a rare genetic disorder in which BioMarin (BMRN) is a market leader. So, despite the promise of its novel red blood cell therapeutic platform, Rubius was off to a bad start.

Last year, RUBY stock experienced a brief boost after producing some positive data on the AACR, and I certainly expected another such surge if it were able to repeat last year’s performance this year on the AACR. However, this did not happen and RUBY released very disappointing data this year. This caused the terrible downturn in this grueling economy and made me doubt the future of the company itself.

Data presented at AACR was for RTX-240, which is targeting a group of advanced solid tumors. This was a phase 1/2 study. A few partial responses have been observed in some cancers – non-small cell lung cancer (“NSCLC”), metastatic anal cancer, and metastatic choroidal melanoma. However, this was not good enough to consider the molecule as a monotherapy, with only 3 responses from 27 patients.

At AACR, the company presented data from two arms of this Phase 1 trial, one arm in solid tumors and the other in AML. The AML program has not generated much drug activity at all and is being phased out. There were only 5 stable diseases out of 17 patients with late-stage disease. This wasn’t impressive at all as dozens of AML studies have produced much better data.

Also in the solid tumor arm, in addition to the two previously reported partial responses – one confirmed, the other unconfirmed – there was one additional unconfirmed partial response, bringing the number to 3 out of 27. 7 of these patients achieved stable disease, but overall, despite the company’s optimism, the results were fairly unimpressive. Perhaps a combination with pembrolizumab will boost the drug’s activity, but the company definitely needed a better monotherapy outcome to impress investors.

For reference, the PR data was:

  • an unconfirmed PR (uPR) with a 41% decrease in all target lesions and a notable decrease in an externally protruding chest wall mass in a patient with NSCLC whose disease had progressed on prior anti-PD-L1 therapy;

  • a confirmed PR with a 54% reduction in target lesions in a patient with metastatic anal cancer whose disease had progressed on anti-PD-L1 therapy; and

  • a uPR showing 100% reduction in target liver lesion and resolution of multiple non-target liver lesions in a patient with metastatic uveal melanoma whose disease had progressed on anti-PD-1 therapy

The company will also report Phase 1 data for RTX-240 in combination with pembrolizumab in advanced solid tumors and data from additional NSCLC and renal cell carcinoma patients in the second half of the year. They just expanded the original study to include 20 new, less previously treated patients with NSCLC and RCC. This was based on the activity of a single agent in these two indications from the just reported study. These dates were as follows:

The uPR in NSCLC and 5 cases of stable disease (SD) were observed in the 3e10 cohorts, including 3 SDs in patients with metastatic NSCLC and 2 with RCC, supporting the company’s decision to expand the phase 1 arm of RTX- 240 plus pembrolizumab to extend to NSCLC and RCC patients.

They will also report initial data for RTX-321 in HPV-16 positive cancers. According to the company, this molecule showed “promising pharmacodynamic effects with a dramatic expansion of CD4+ T cells.”

finance

RUBY has a market cap of $80M and cash on hand of $176M. R&D spend was $38.3 while G&A was $12.6M. At this rate they have little money for 2 more quarters as these are March numbers. The company claims they have cash until the second half of 2023, but I don’t understand the math.

bottom line

The data they presented could have been forgiven in a better investment environment, but 2022 is not the year for this kind of lukewarm data. This is a tough time for biotechnology, and Rubius has been severely punished for her mediocre data. The company also doesn’t have a lot of money, or rather, it simply spends too much money on the results it produces. At its core, the theory itself is attractive, but I’d be very cautious about investing in this stock no matter how low its share price has fallen.

Via the TPT service

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