Mirati Therapeutics, Inc. (NASDAQ:MRTX)

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zzlangerhans (99.83)
Submitted November 05, 2017

Mirati was either seriously overlooked in June at 3 or seriously overvalued in November at 14. Based on the preliminary nature of their pipeline and lack of big pharma partners I'm going with the latter. Mirati has benefited from a renewed enthusiasm… More

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Member Avatar pchop12316 (92.19) Submitted: 11/16/2017 1:18:59 PM : Underperform Start Price: $17.15 MRTX Score: -0.84

back to reality very soon

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1
Member Avatar zzlangerhans (99.83) Submitted: 11/5/2017 4:39:29 AM : Underperform Start Price: $11.60 MRTX Score: -45.47

Mirati was either seriously overlooked in June at 3 or seriously overvalued in November at 14. Based on the preliminary nature of their pipeline and lack of big pharma partners I'm going with the latter. Mirati has benefited from a renewed enthusiasm for oncology biotechs in the latter half of this year, based on a spate of approvals and buyouts related to CAR T and immunooncology. Mirati doesn't have any CAR T or IO of its own, but instead they've glommed onto the 1 + 0 = 1 train driven by Newlink and numerous other small cap bios. What's 1 + 0 = 1? It's what I call the practice of running single arm phase I/II trials of a drug of indeterminate efficacy along with an IO drug with known efficacy. As expected, some positive responses occur with the combination and the company then explains why the responses are so much better than one would have seen with the IO drug alone. Of course, since there's no control group with IO alone we have to wait until phase IIb or III to find out for sure whether the company's drug has any activity or if it's just pocket lint. Meanwhile, the company has raised a ton of cash that should have gone to develop better prospects and they're well on to promoting the next drug in their pipeline.

In this spirit, Mirati revealed 3/11 partial responses from a single arm phase II trial of their kinase inhibitor sitravatinib combined with IO nivolumab for non-small cell lung cancer previously treated with chemo and checkpoint inhibitor. Naturally, management and sellside claim that the responses couldn't have been due to IO nivolumab because the cancer previously failed checkpoint inhibitor therapy. But there are three approved checkpoint inhibitors. Is it possible that one works where another failed? Which checkpoint inhibitors were previously used in the three patients with partial responses? In the eight who didn't respond? I haven't seen that data, if it was revealed at all. We also haven't had enough time to see if these partial responses are sustained or if they are meaningful enough to have an effect on quality of life or overall survival.

Mirati's other big reveal was a single partial response to sitravatinib monotherapy in a phase Ib trial for NSCLC with a CBL-inactivating mutation. This is apparently a highly refractory population, but it is still exactly one case and not something I would expect to create a major shift in company valuation without further data.

Mirati has reported similar quality data (3/11 PR) from a phase Ib trial of monotherapy with their kinase inhibitor glesatinib way back in May 2016 and that didn't stop the stock from a steady downward trajectory that finally ended a couple of months ago with this startling 200% gain. More data is expected from that glesatinib trial as well as further updates from the two ongoing sitravatinib trials before the end of the year. Meanwhile Mirati's market cap has bloated to 350M from 100M in June and there's 100M in hidden cap from 7M exercisable warrants with an effective strike price of zero. Perhaps there will be more exciting news by the end of the year, but I suspect that unless there's a significant number of new responses or a partnership announcement, we'll see Mirati's share price back in the single digits by the beginning of 2018.

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Member Avatar oscillation (76.66) Submitted: 7/31/2016 6:51:42 PM : Outperform Start Price: $4.65 MRTX Score: +252.13

nev

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turningpoint84

turningpoint84 (42.71) Score: +265.41

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Top
Pick
Member Name Member
Rating
Start
Date
Call Time
Frame
Start
Price
Stock
Gain
Index
Gain
Score Commentary
turningpoint84 42.71 4/20/2017 Outperform 5Y $4.60 +275.00% +9.59% +265.41 0 Comment
oscillation 76.66 8/1/2016 Outperform 5Y $4.65 +270.97% +18.84% +252.13 1 Comment
flypower 97.80 8/2/2016 Outperform 5Y $4.66 +270.17% +19.74% +250.43 0 Comment
2gud2btrue < 20 7/13/2016 Outperform 5Y $5.40 +219.55% +20.09% +199.46 1 Comment
conliskjr < 20 8/16/2016 Outperform 3Y $5.52 +212.50% +18.13% +194.37 0 Comment
Bigsef77 70.82 3/2/2017 6/28/2017 Outperform 1Y $5.90 +192.37% +8.00% +184.37 0 Comment
gunda7907 < 20 6/13/2016 Outperform 5Y $7.52 +129.39% +23.45% +105.94 0 Comment
IKHNATON 89.41 9/18/2017 Outperform 5Y $10.78 +60.02% +3.46% +56.56 0 Comment
MylesPatrick 83.30 11/10/2017 Outperform 3W $14.65 +17.75% +0.15% +17.60 0 Comment
HDTVBG < 20 11/20/2017 Underperform 3W $17.55 -1.71% -0.02% +1.69 0 Comment

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