One of the Fun Features of Biotech Investing, is Getting Paid on a Treatment That Hasn’t Even Entered Clinical Trials.
A lot of investors believe a ‘payday,’ in Biotech, can only come at the end of very costly clinical trials. Meaning the judgement day, coming ONLY after completing Phase III, and getting final verdict from the FDA. Which of course can take years and years (and patience and more patience by investors) to complete. And not to forget, some Biotech firms get the thumbs down – on judgement day.
Well, GSK just annonuced paying up to $367 million for the global rights to an ADC (doesn’t even have a name yet) from French based Synvidia. ADC refers to an Antibody-Drug Conjugate.
Pre-clinical trials are the stage where scientists study a new drug or treatment before it’s ever given to human. This stage is like a “safety check” and “proof of concept.” If the drug looks promising and not too dangerous, it can move into clinical trials (Phase I), where it’s tested in people for the first time.
GSK pens $357M pact with French biotech for pre-clinical prostate cancer ADC
It’s a reminder never to forget, and lesson to be learned, that lighting (partnerships and acquisitions) in biotech can strike, at any stage — from pre-clinical through Phase III – and often out of the blue.
The timing reflects risk appetite and strategic fit of the acquirer. Synvidia’s recent deal with GSK at the pre-clinical stage is not unusual, though it highlights how Big Pharma is increasingly willing to secure rights to promising assets earlier than in the past.
That’s $367,000,000. Too bad it wasn’t publicly traded. We follow 100’s of Biotech’s with markets caps under $36 million, implying a 10X return. We’ve had fifteen 10X’rs in the past 18 years and are on the hunt for more. They’re not easy to find, and even harder to hold onto, once you find one.
What’s going on here is the big pharmaceutical companies, as we all know, became big via acquisitions. What a lot investors don’t know is Big Pharma has 100’s if not thousands of scientist on staff reading academic papers, reading posters, scouring clinical notices and attending conferences to find the next big thing. The hunt (their’s and ours) starts well before final FDA approval.
Acquirer’s face two risks. Waiting until they have ‘just enough’ evidence – and maybe pouncing to soon. It happens. Or waiting too long and any one of 100 other pharma executives who are watching the same company, end up grabing it before they do. Most are not sitting in front of a computer refreshing “today’s FDA approval” page and then pouncing minutes after approval.
Just to be clear this all hinges on risk appetite and strategic fit. For both acquirers and investors.
- Pre-clinical: Very, very, very, very risky.
- Phase I: Very, very, very risky.
- Phase II: Very, very risky.
- Phase III: Very risky.
- FDA Approved. Less risky, but investors may have to pay ten or 20 times higher than the pre-clinical investors. Trust us on that one. This is not like investing in a Food or Beverage company.
Our best story of risk (of being too early) to reward, was Immunomedics, which we added to the Watch List at $3.00*. Over a year and a half it gradually worked it’s way to $15, on good interim clinical news. Then one day (April 3rd, 2022) a Goldman Sachs analyst/scientist comes out and says the FDA won’t green-light it and it plunges to $9.00, on his $5.00 price target.
The report was so technical and scientific hardly, that hardly anyone could understand it. What they could understand was it was Goldman saying sell, the stock was at $15, and the new target was $5.00 (down from $24). So everyone bailed.**
Two weeks after GoldmanSach’s brilliant call on April 22, 2022, and the day of our 64th birthday, Immunomedics gets ‘accelerated‘ FDA approval (maybe they pissed off the FDA). It jumps to $20, gaining $2 billion in value in a day. Yes, we had a massive party, starting well before the market closed. Some big pharma could have saved $2 billion, by striking earlier.
Accelerated means ahead of the stated June 2, 2020 FDA judgement day. Why they decided to approve 6 weeks early, is anyone’s guess. Think about it.
Immunomedics (IMMU) up 100% Today or $2 Billion in Value.
But that’s where the story gets good. Shortly after approval SAC Capital (Steve Cohen, Point72) acquires a large stake near $20. You can buy 10x higher than Phase I investors and still make good money.
Immunomedics (IMMU) $33 | Raising Price Potential to $60.
Shortly therafter, it gets acquired by Gilead for $88 a share or $21 billion. The point of the story isn’t to brag, but to point out a Big Pharma could have come in much earlier, when the company was planning on entering Phase III and possibly saved $18 billion ahead of FDA approval.
We asked one of our Biotech guys if there was any similarity between the ADC and Gedeptin which is a cancer drug being deveoloped by an old favorite GeoVax (GOVX). He gave a great description worth sharing.
Roland, ADC (Antibody-Drug Conjugate) and Gedeptin are both innovative cancer therapies, but they differ fundamentally in how they deliver treatment. ADCs use antibodies to carry chemotherapy directly to tumor cells, while Gedeptin is a gene-directed enzyme prodrug therapy (GEDPT) that activates chemotherapy inside the tumor itself.
- ADCs are like guided missiles: they use antibodies to deliver chemotherapy payloads directly to cancer cells.
- Gedeptin is more like a Trojan horse: it delivers an enzyme into the tumor, which then converts a harmless prodrug into a powerful chemotherapy agent inside the cancer cells themselves.
- Both approaches aim to maximize tumor killing while minimizing systemic toxicity, but they differ in delivery strategy and cancer type focus.
ADCs (like GSK’s new prostate cancer program) are expanding the frontier of targeted biologics in oncology. Gedeptin represents a novel gene therapy approach, already in clinical trials for head and neck cancers, with encouraging results and FDA orphan drug designation.
Together, they highlight two complementary strategies in modern oncology: precision targeting (ADC) versus local activation (Gedeptin). Your on the right path, keep digging.
And so we will keep digging. GeoVax is down significantly since Kennedy dampened funding for many vaccines, but at some point (and GeoVax is NOT pre-clinical) enough is enough. While risky, the price potential is maginified by its recent under-performance and it may be time to re-visit.
RECENT PARTNERSHIPS
The ADC space has seen many billion-dollar deals as pharma companies look to shore up their pipeline with the emerging modality.
Pfizer acquired Seagen for $43bn in December 2023 while MSD and AbbVie have also completed $10.8bn and $10.1bn deals in recent years.
While mammoth deals have cooled, there have still been notable transactions this year. In January 2025, Boehringer Ingelheim spent $1.3bn on a licensing deal with Synaffix for ADC technology on several undisclosed targets.
In March, Taiho Pharmaceutical agreed to acquire Swiss-based ADC specialist Araris Biotech for up to $1.14bn.
**One of the amazing things about Copilot is rather than spending hours looking at our past reports, we simply asked Copilot “When did goldman sachs issue a $5 price target on Immunomedics and why?”
In one half a second she replied “Goldman Sachs issued a $5 price target on Immunomedics (NASDAQ: IMMU) on April 3, 2020, after downgrading the stock from Buy to Sell. The downgrade was driven by serious FDA inspection findings at the company’s New Jersey manufacturing facility. Analyst Paul Choi.
Reason:- The FDA issued a Form 483 detailing 10 major observations at Immunomedics’ Morris Plains, NJ plant.
- Issues included quality control failures, inadequate procedures, poor implementation, and substandard equipment.
- Goldman Sachs believed these deficiencies made it unlikely that Immunomedics’ lead drug, sacituzumab govitecan (Trodelvy), would be approved at its upcoming June 2, 2020 FDA action date.
- The analyst also expressed caution about Immunomedics’ ability to execute other ongoing clinical studies without revenue from Trodelvy.
**HOW COOL IS THIS!
After asking Copilot about the GoldmanSachs we decided to see if it knew anything about us?
We asked, “When did the Biotech Stock review add Immunomedics to the Watch List and at what price, please?”
Biotech Stock Review added Immunomedics (NASDAQ: IMMU) to its Watch List in early 2017, when the stock was trading around $4–$5 per share.
📌 Context of the Watch List Addition
- Timing: Immunomedics was highlighted by Biotech Stock Review in February 2017, shortly after the company announced positive clinical data for its antibody‑drug conjugate sacituzumab govitecan (Trodelvy) in triple‑negative breast cancer.
- Price at the time: Shares were trading in the low single digits ($4–$5).
- Catalyst: The Watch List inclusion was driven by:
- Strong Phase II data showing meaningful tumor response rates.
- The potential of Trodelvy as a first‑in‑class ADC for breast cancer.
- Investor interest following Immunomedics’ licensing discussions with Seattle Genetics (which ultimately fell through).
📊 What Happened Next
- 2017–2018: Immunomedics’ stock began climbing as Trodelvy advanced toward pivotal trials.
- 2019: FDA initially rejected the company’s BLA due to manufacturing issues, causing a temporary setback.
- April 2020: FDA granted accelerated approval for Trodelvy.
- September 2020: Gilead Sciences acquired Immunomedics for $21 billion ($88 per share) — a massive premium compared to the ~$5/share level when Biotech Stock Review first flagged it.
✅ Summary
- Added to Watch List: February 2017
- Price at the time: ~$4–$5 per share
- Reason: Early clinical success of Trodelvy and strategic interest in ADCs
Roland, would you like me to pull the archived Biotech Stock Review newsletter from February 2017 so you can see the exact wording of their Watch List note on Immunomedics? That would give you the precise context they used when flagging it.
About Syndivia
Syndivia is a biotechnology company focused on the design and development of innovative antibody-drug conjugates. Its proprietary technology enables the creation of next-generation ADCs with optimized therapeutic profiles, aiming to expand treatment options for patients with cancer.
GSK in oncology
Our ambition in oncology is to help increase overall quality of life, maximise survival and change the course of disease, expanding from our current focus on blood and women’s cancers into lung and gastrointestinal cancers, as well as other solid tumours. This includes accelerating priority programmes such as antibody-drug conjugates targeting B7-H3 and B7-H4, and IDRX-42, a highly selective KIT tyrosine kinase inhibitor.
About GSK
GSK is a global biopharma company with a purpose to unite science, technology, and talent to get ahead of disease together. Find out more at gsk.com.
Cautionary statement regarding forward-looking statements
GSK cautions investors that any forward-looking statements or projections made by GSK, including those made in this announcement, are subject to risks and uncertainties that may cause actual results to differ materially from those projected. Such factors include, but are not limited to, those described in the “Risk Factors” section in GSK’s Annual Report on Form 20-F for 2024, and GSK’s Q2 Results for 2025.
#GSK, #GOVX
