Solebury Trout
Fund & Investor Interest: Investor Feedback / Market Commentary by Solebury Trout
Solebury Trout

Investor feedback/general market commentary gathered from outreach program here at Solebury Trout.  Below are a few soundbites/points of interest. A lot of this is well-known.

  • In general, I-O fatigue is real. Investors are increasingly skeptical given failures in recent years; underwhelming data at ASCO didn’t help. A couple continue to like oncology
  • Investors across the board demanding much more robust patient data sets than recent years
  • Valuation sensitivity unsurprisingly cited as gating factor for X-over participation by nearly everyone
  • Investors recognize value of combination therapies, but hurdle for showing single-agent activity is high vs SOC/control; Some noted that recent IO combination stories haven’t been impressive
  • Investors specifically said they could get more comfortable in a particular story “post Phase 2 response rate data– not sure if that is a function of a specific name or whether Ph 2 data is theoretical bar for some investors
  • One prominent investor in particular recently said Ph 2-3 is their sweet spot (avoiding pre-clinical risk as well as commercial/regulatory risk)  
  • A few on this list who said they are increasingly looking at pre-clinical stories
  • Investors guided mgmt. to “stay private as long as possible”
  • Investors do not recommend waiting long time between IPO and Crossover
  • Failure to show efficacy when moving from small patient population to larger trials spooking investors based on recent failures
  • One investor said key to have data 6 mos out from IPO vs 12-18 mos
  • Some private investors being more selective or taking break from X-overs:
    • Investor A: capped out on privates right now
    • Investor B: We are being more selective on the private side in the I/O space given the competitive landscape
    • Investor C: “finite resources for privates right now” – deals taking longer, more insider term sheets
    • Investor D: “In general, X-overs are challenging for our strategy right now; step-ups we’re seeing are low.”

Some investors showing re-emerging interest in crossovers (One of those Investor had pulled back in recent years, Another came back into arena last year)