Welcome to the Flan Page! This site will serve as a one stop collective for the hot takes of Matty Flan the Science Man. I’ll share some research I’ve done about a given topic and get some skin in the game behind my theses. Hopefully adding an accountability layer by g̶a̶m̶b̶l̶i̶n̶g̶ responsibly investing in the public markets and putting it next to some sports picks will make a great disguise for my thinkboi pieces. I’ll try my best to deliver it here in a digestible way, but will always encourage anyone reading to investigate my sources for themselves.
TL;DR AT THE BOTTOM
Probably best to take this time to disclaim that I may/may not own securities in the companies mentioned. I’ll try to tell you when I do, but in no way are my stock plays financial advice. Everything I do is satire and should be taken as such.
There, think that should cover me from a liability stand point so lets get right into it with an obvious first topic: COVID-19
Moderna ($MRNA) and Pfizer ($PFE) have emerged as frontrunners in the batch of phase-3 vaccines. Administering drug-class mRNA in two intramuscular injections, the prime and booster method has elicited a significant immune response in the blood of vaccinated individuals with preliminary data suggesting over 90% efficacy. Both vaccines are set for emergency use authorization from the FDA. This finally looks like a light at the end of 2020.
If that paragraph is news to you, or looks like it’s written in another language, The Lancet recently published a great review of COVID19 and the current batch of vaccine candidates. I suggest you take a look!
While at this point in quarantine I’d welcome a vaccine protocol that called for a weekly booster, the impending public health nightmare of vaccinating millions becomes undeniably more complicated with a two-dose system. School and workplaces may call for mandatory vaccinations, but I’m not confident there will be many rushing to be vaccinated. On top of that, the supply chain and logistical issues with first-generation vaccine technology provides significant challenges on our path to defending against and eradicating this virus. (i.e. vial & syringe supply chain bottlenecks, dependency on suitable refrigeration & health care workers for administration)
Everyday since the start of November, newly confirmed infections have been in the six figures. Regardless of recent good news, over 2,000 people are dying daily from complications due to COVID and will continue to do so until therapeutic and immunization options are improved. While much of the focus has been concentrated on the 20% of symptomatic individuals that regress to a severe condition, there is a noteworthy absence of treatments proven to be efficacious for patients with early or mild infection.
Dr. Fauci wrote an editorial recently in JAMA commenting on this issue and the current state of COVID therapeutics — remdesivir requires daily infusions for up to 10 days. Several other drugs, such as dexamethasone and hydroxychloroquine, have failed to show efficacy in rigorous clinical trials despite early uncontrolled studies suggesting a positive effect. He goes on to imply that improving early treatment could reduce the risk of chronic respiratory and cardiac ailment in COVID recovery. Outpatient treatments for COVID-19, coupled with an effective vaccine strategy, will have significant implications for our ability to end this pandemic and diminish the residual burden on our healthcare system.
Tons of unknowns in the COVID landscape moving forward, but you probably didn’t need me to tell you that. It’s still very much unclear how long protection from Moderna & Pfizer’s vaccine will last and if it will even stop people from transmitting the virus. Intramuscular vaccination protects against lower, but not upper, airway infection and does not efficiently induce mucosal immunity. It is very possible for someone to be immune but still have the virus replicate in mucosal membranes; similar to the replication mechanism for viral meningitis.
I was reminded of this when I was going over that Lancet article. I came across this quote:
“The front runner candidates are all administered by the intramuscular route; therefore, focus is on evaluating immune responses in the blood rather than those in the mucosal surfaces. The role of mucosal immunity should not be discounted, and several intranasal vaccine formulations are under investigation.”
Going over the sector notes I took in August when Pfizer began their phase-3 trial, I rediscovered Altimmune ($ALT), a company funding one of the research papers on mucosal immunity referenced above. I saw they were presenting this week at the Jefferies Virtual London Healthcare Conference and thought I’d tune in so you don’t have to.
It’s clear they’ve had a very productive year with five products in clinical pipeline. Two of which are COVID based and have seen extremely positive results in pre-clinical rodent models (essentially where Pfizer was back in May):
T-COVID is an intranasal therapeutic fully funded by the DoD for early anti-inflammatory COVID treatment. Pre-clinical data suggests that treatment with T-COVID administered as a single intranasal dose to patients with an early onset of symptoms and recent diagnosis of COVID-19 may prevent the progression of severe lung inflammation and thereby decrease the development of severe COVID-19 implications and need for hospitalization. The treatment can possibly be self-administered and more importantly shows results within days of administration.
AdCOVID is their intranasal vaccine candidate which offers mucosal immunity among other unique attributes. The most important strategic advantages for their vaccine candidate include:
- Single Dose — Altimmune’s single dose solution is a clear advantage compared to the rest of the phase-3 vaccine candidates. Pre-clinical data suggests that a booster will not be necessary with protection lasting +13 months, but it’s worth mentioning that their phase 1/2 clinical trial will include a booster group.
- Stable at Room Temperature — Both Pfizer and Moderna’s mRNA vaccine candidates require sub-zero refrigeration up until administration. This introduces significant costs and challenges into the vaccine supply chain which Altimmune will avoid.
- Heterologous prime/boost regimen suggested by the CDC — Nearly all phase-3 vaccine candidates require a 2 shot prime/boost regimen and none provide mucosal immunity. As a potential way to provide comprehensive immunogenicity and enhanced durability of response, Dr. Scott Harris of Altimmune thinks that the CDC will suggest vaccinating first with one of these phase-3 vaccines then boost with an intranasal vaccine like AdCOVID. This will likely elicit better compliance by reducing the adverse event profile which mostly occurs with the booster dose, not prime.
One key difference between Altimmune and the leading candidates is their delivery mechanism. While Pfizer (BNT162b2) and Moderna (mRNA-1273) rely on an mRNA delivery system, Altimmune is offering a vector based on the Adenovirus 5 (Ad5) pathway, more commonly known for its role in causing the common cold. replication-deficient chimpanzee viral vector based on a weakened version of a common cold virus (adenovirus) that causes infections in chimpanzees and contains the genetic material of the SARS-CoV-2 virus spike protein.
Scientists have reprogramed this vector to train your immune response towards the receptor binding domain of the COVID spike protein. After vaccination, the surface spike protein is produced, priming the immune system to attack the SARS-CoV-2 virus if it later infects the body. Originally developed as a gene therapy candidate, adenoviral vectors are excellent targeting systems and have been tested in far more people than mRNA vaccines have, but so far, no adenoviral vector vaccines have demonstrated they can prevent disease in humans.
AstraZeneca, another Ad5 candidate, is scheduled to release phase-3 data at the end of 2020. This will be our first look at how efficacy compares to the already promising results from Pfizer and Moderna. Despite this uncertainty, my fundamental analysis and understanding on immunology has me thinking that the COVID infection pathway is relatively exposed to unproven technologies like mRNA and Ad5 vaccines. The table is hot and I think Altimmune will make a great candidate for the first trade on the Flan Page.
$ALT has had a significant price move from when I first made note of it in August. I searched for any news to explain the sharp decline after mid-August without much success. Outside of the market experiencing an overall correction during that time, Altimmune released positive clinical trial data on Aug. 25th and the stock has been slipping since.
The recent investor call has me excited about the advancement of Altimmune’s product portfolio and at the current price, I’m willing to believe there is a decent potential upside here. Let’s trade!
A $1,200 starting account balance will represent the second round of Trump Bucks and PPP that never came because Mitch McConnell decided to go into his shell for the winter.
I’m looking to take a bullish position in Altimmune and want to cash in on the high volatility by selling premium on out of the money call options.
IN OTHER WORDS: I think the price of Altimmune will go up but maybe not right away given they aren’t expecting a data read out until 2021. Therefore, I am going to execute what is known as a Covered Call trading strategy:
- Buy 100 shares of $ALT
- Sell someone the option to buy my 100 shares at or before an expiration date at a price higher than what I bought it at.
In terms of risk, this strategy performs well if $ALT sits still or increases but does not break through the option contract price. In this case, we collect all of the premium and retain our entire stock position.
If $ALT goes down, a covered call also performs well, because we will collect the premium against our losses in the stock position. Without the covered call, we would have simply experienced the loss on their stock (with no gain from the short premium).
In the case where $ALT goes up, the performance of the covered call will ultimately depend on the specific strike selected and the price of the stock.
Now that you’re an options expert, if you’re interested in riding with me or fading me, you can do so with the Robinhood app. If you use my referral code, I’ll write an option play about the free stock it gets me and start a Flan Club Fund. Free opt-in options trading platforms like Robinhood have made it possible for retail investors such as ourselves to make these kind of trades. All kidding aside, selling the right call options on a stock which is apart of your underlying portfolio is a legitimate way of generating income from an asset and I hope to demonstrate that over the next few weeks! And in the unlikely case I lose any money, I want you all to keep in mind that this is purely educational.
TL;DR
Altimmune has several near-term value driving catalysts from their robust product pipeline, primarily their single-dose intranasal vaccine which offers a unique solution to provide comprehensive mucosal immunity to COVID-19. I’ll use a covered call strategy to collect premium while waiting for stock movement.
- Bought 100 shares of $ALT at $9.33 at market-close on Friday 11/20/20
- Sold 1 call option contract with a $12.50 strike price expiring on 12/18/20
After paying $933 for the shares and receiving a $40 credit for the contract we sold, we will spread the remaining balance of our portfolio in equal positions across a number of investments.
Diversification Strategy
- ✅ Ohio State vs Indiana OVER 66.5 (-110)
- ❌ Wisconsin vs Northwestern OVER 44 (-110)
- ✅ USC (-2.5) vs Utah (-110)
- ✅ Saints (-3) vs Falcons (-120)
- ❌ Packers (+1.5) vs Colts (-110)
- ❌ Buccaneers (-4) vs Rams (-110)
