deathTouch

Based on our conversations with the buy side and sell side, one thing is clear: the market is still struggling to define the actual safety bar for $ABVX. Specifically: how many non-NMSC events would ABTECT Maintenance Part 2 need to show before FDA reviewers or sophisticated pharma BD teams should become concerned that obefazimod may have a true carcinogenic signal, rather than background malignancy events in a refractory UC population? We provide our analysis and conclusions below. Said simply: under our assumptions, $ABVX would need to show a malignancy burden far beyond one or two incremental cancer cases before the bear case becomes statistically and biologically coherent. When a drug trial reports a handful of cancer cases, the natural question is: is this a real signal, or just bad luck? A drug study with 150 patients over one year will almost certainly see some cancers — because UC patients get cancer at a background rate even without any drug. In fact, even otherwise healthy people get cancer at a background rate without any drug. The real question is whether the number of cancers seen on the drug is more than we would expect by chance from that background rate alone. Enter statistics: the formal language of separating signal from bad luck. In this case: what is the event burden and pattern that is high enough, coherent enough, and biologically plausible enough to overcome a low causal prior to obefazimod being carcinogenic? This is exactly the kind of question Bayesian inference is useful for answering. Our Bayesian inference model asks a simple question: Given an estimated background non-NMSC incidence rate of ~0.5/100 PY, how many additional non-NMSC events would need to appear in the next ~450 PY of 50 mg exposure before the pooled 50 mg maintenance dataset begins to look meaningfully above UC background? At ~0.5/100 PY, the expected background incidence over ~450 PY is roughly 2–3 non-NMSC events. Our model suggests the upcoming 50 mg Part 2 update would need to show something closer to 10 additional events above background — roughly 14 total non-NMSC events in the pooled ~600 PY 50 mg maintenance dataset — before the posterior begins to suggest a >50% probability that the true obefazimod non-NMSC rate exceeds the upper bound of UC background. We favor a Bayesian inference framework in these cases because it contemplates the data through a lens similar to that of what we believe an FDA reviewer and pharma regulatory teams would look through: exposure-adjusted rates, confidence intervals around those rates, event heterogeneity, organ clustering, baseline UC cancer risk, prior therapy risk, timing of exposure, investigator attribution, and whether the pattern resembles a broader immunosuppressive AE phenotype. Most importantly, with this approach we do not need to assume obefazimod causes cancer. In fact, the causal prior should be low because there is no obvious a priori hypothesis for obefazimod causing cancer, including clean preclinical work, no clustering to a specific cancer type, no broader adverse event pattern associated with impaired immune surveillance, and investigator assessment that the disclosed prostate and breast cancer cases were unlikely related. Thus, the analysis is not whether “observed cancers divided by patient-years is greater than zero.”; that is coarser than the data allows. The question is whether the observed event pattern is adequate to overcome a low causal prior. We estimated background malignancy IRs across an aggregate 7000+ PY based on a synthesis of Colombel et al. (2017), Rubin et al. (2026), D’Haens et al. (2023), Swissmedic (2024), Sands et al. 2026, Abreu et al. (2022), and Sandborn et al. (2019), and arrived at an estimated non-NMSC IR of 0.5, which is the midpoint of the range provided by management in the Part 2 primer deck published earlier today (ir.abivax.com/static-files/7…). We use 0.5/100 PY as the non-NMSC IR as the background prior of our model. Our analysis allows us to use 7000 PY as the weight of that prior probability. Then, we ask how many non-NMSC events need to be observed in the ~450 PY from Part 2 for the aggregate obefazimod non-NMSC IR to indicate that the true obefazimod non-NMSC rate exceeds the UC patient background upper bound with at least 50% probability. We set the PY reported in ABTECT Maintenance Part 1 according to management feedback. An estimated background non-NMSC IR prior of 0.5/100 PY is at the midpoint of the range provided by $ABVX management and implies an expected 2-3 non-NMSC events per 450 PY. Our model suggests that the ABTECT Maintenance Part 2 update for the 50 mg dose would need to show 10 additional events over and above those background events in 450 PY (i.e., total of 14 non-NMSC events) before the pooled 600 PY maintenance dataset (Part 1 + Part 2) for the 50 mg dose to indicate a greater than 50% probability that the true obefazimod non-NMSC rate is greater than the upper bound of UC background rate, when the observed non-NMSC IR begins to possibly be considered elevated above background expectations. Even when we cut the prior probability weight in half to 3500 PY, the conclusions remain unchanged: ABTECT Maintenance Part 2 update for the 50 mg dose would need to show 7 additional non-NMSC events over and above the number of events expected given the background IR before the pooled 600 PY maintenance dataset (Part 1 + Part 2) for the 50 mg dose to indicate a greater than 50% probability that the true obefazimod non-NMSC rate is greater than the upper bound of UC background rate. Said differently, the key risk is not that another cancer event occurs; the UC and IBD literature documents an expected incident rate for non-NMSC at their background rate (0.3-0.7/100 PY). The key question is whether the next ~450 PY expected from the Part 2 50 mg arm is consistent with the drug-driven malignancy hypothesis: repeated non-NMSC events, organ clustering, biological patterning, exposure-duration logic, or a broader immune-surveillance signal. That is what our model tests. If the next cut instead shows low-count, disparate, background-plausible events, the current obefazimod-driven malignancy argument becomes increasingly difficult to sustain. But what about Rinvoq? They didn’t see a big imbalance? This is not a Rinvoq/Xeljanz-style RA safety signal, where a nearly 4,500-patient outcomes study produced a statistically significant malignancy and immunosuppressive AE cluster in line with an a priori safety hypothesis prior. So far, these few malignancy observations are easily explainable by the background rate of UC cancer in this population especially, and mechanistically, there is also no obvious reason to believe obefazimod should be carcinogenic. If anything, Qin et al. (miRNA-124 in Immune System and Immune Disorders - PMC) discuss miR-124 biology in anti-proliferative and anti-fibrotic contexts, though we would not underwrite an anti-cancer effect here. Against the magnitude of efficacy demonstrated by obefazimod to date: ~50% clinical remission versus ~10% placebo, plus large effects on endoscopic remission, HEMI, steroid-free remission, and sustained remission that is life-altering; these non-NMSC events do not appear to alter the risk-benefit equation. We do not think these disclosed data support a black box. A black box for what appears likely to be background artifact would risk causing net harm to patients by creating unnecessary friction around delivery of a novel and highly efficacious therapy. A brief comment on NMSCs: Based on our diligence, including conversations with former FDA review leadership responsible for evaluating new IBD drug approvals, NMSCs are most commonly basal cell carcinoma and cutaneous squamous cell carcinoma. Importantly, these cancers are: 1) very common; 2) very slow growing; 3) very visible; and as a result, 4) very treatable and curable. These cancers are rarely metastatic, and very rarely fatal. There is published evidence that IBD patients appear to be at elevated rates of NMSCs, hypothesized to result from either higher baseline persistent inflammatory processes and/or thiopurine use. In fact, clinical guidelines published in April 2025 following an expert panel from the American Gastroenterological Association Clinical Practice Update provided specific guidance that all adult patients with IBD should follow skin cancer primary prevention practices by avoiding excessive UV exposure, that patients on immunomodulators, anti-TNF biologic agents, or small molecules should undergo yearly total-body skin exam, and that patients with any history of thiopurine use should continue yearly total-body skin exam even after thiopurine cessation. In the cohort study, the incidence of NMSC was higher among patients with IBD compared to controls (IRR 1.64, 95% CI 1.51–1.78). Recent thiopurine use was associated with NMSC (adjusted OR 3.56, 95% CI 2.81–4.50), and persistent thiopurine use was associated with NMSC (adjusted OR 4.27, 95% CI 3.08–5.92). While, prior to our analysis, we were not concerned that the FDA or pharma would view elevated NMSC rates as a major issue, we were concerned that investors might continue to misclassify them as a serious systemic malignancy signal. However, based on recent conversations with other buysiders, we sense the market is beginning to understand that NMSCs are not a meaningful issue here: they are generally detectable, manageable, and already incorporated into the standard-of-care dermatologic monitoring framework physicians use for UC patients. For completeness, we repeat our Bayesian inference analysis as described above but for NMSC. Taking the NMSC background IR of 1/100 PY provided by management today, we expect 4.5 cases in a 450 PY dataset. Our model suggests that the ABTECT Maintenance Part 2 update for the 50 mg dose would need to show 12 to 13 additional events over and above those background events in 450 PY (i.e., total of 21 NMSC events) before the pooled 600 PY maintenance dataset (Part 1 + Part 2) for the 50 mg dose to indicate a greater than 50% probability that the true obefazimod NMSC rate is greater than the upper bound of UC background rate, when the observed NMSC IR begins to possibly be considered elevated above background expectations. In summary: The right conclusion is not that no cancer events occurred, or that no events will occur in the future. They will occur, not only because cancer risk is elevated in UC, but because cancer can occur in anyone, at any time, including otherwise healthy patients. We think the right conclusion is that the events that did occur look explainable by baseline patient risk, common cancer epidemiology, UC biology, and routine screening detection, rather than acting as evidence of an obefazimod-specific oncogenic signal. We think FDA reviewers and pharma regulatory teams are more likely to reach this conclusion than to view the disclosed cases as a coherent obefazimod-specific malignancy signal, making increasingly clear what we believe is a best-in-disease efficacy/risk profile in the lucrative maintenance setting for UC and substantially de-risking the company’s opportunity in Crohn’s. Disclosure: I/we may be long ABVX and may buy, sell, hedge, or otherwise change exposure at any time without notice. Not investment advice or a recommendation. Analysis reflects current views and assumptions based on public disclosures, published literature, and non-confidential conversations, and may change as new data become available. No compensation from ABVX or any third party.

@RodLambertCPA @A_May_MD @TripleGateCaptl My read was that he was saying they may need an adcom because of the novel MOA (which FDA sometimes does), not because of the safety risk. FWIW, a recently former FDA GE senior reviewer said to us they would be "extremely surprised" if obe got an adcom.

@A_May_MD @TripleGateCaptl @deathtouch2k Think the reason for $abvx price dislocation is that on the ABVX investor/KOL call, a KOL indicated that an AdCom might be needed. If no BB and safety is clear, why the need for AdCom? Keep in mind, KOLs are the most optimistic people on earth!

$ABVX — strong framework, but it's using mgmt's background which seems to be inflated. The 0.3–0.7 (non-NMSC) / 0.7–1.4 (NMSC) ranges depend on thiopurine-treated cohorts: the 1.36 NMSC ceiling is literally Abbas year-5 thiopurine, plus a Kaneko "5× prostate" that I couldn't find in the paper. Thiopurine-naïve UC is ~0.3–0.5 / ~0.4–0.9 → events-to-signal drops well below 10–14. On NMSC: the ABX464-104 protocol (NCT04023396) discloses the N-Glu metabolite is phototoxic at clinically relevant exposure — a real drug-specific BCC/SCC mechanism. So skin cancers aren't purely background, even if manageable. Sources: Abbas 2014 → pubmed.ncbi.nlm.nih.gov/25244964/Kaneko 2024 → pubmed.ncbi.nlm.nih.gov/38592255/Proto… (NCT04023396) → cdn.clinicaltrials.gov/large-docs/96/…

@GYuengling24986 @mickeychiku Oh I know that's what their strategy was, and it was rationale for them. I'm still curious from an academic point though what that data would have shown. I think ABBV's view of obe data would have been different if upa's LOC was earlier-dated.

@deathtouch2k @mickeychiku BP wouldn’t do that unless forced to by regulators. What BP would do is leverage existing data to publish evidence of low AE risks. This was the part of the point of the next-gen drugs. So of course they can talk shit, it’s in their interest, and there’s data to support it.

Based on our conversations with the buy side and sell side, one thing is clear: the market is still struggling to define the actual safety bar for $ABVX. Specifically: how many non-NMSC events would ABTECT Maintenance Part 2 need to show before FDA reviewers or sophisticated pharma BD teams should become concerned that obefazimod may have a true carcinogenic signal, rather than background malignancy events in a refractory UC population? We provide our analysis and conclusions below. Said simply: under our assumptions, $ABVX would need to show a malignancy burden far beyond one or two incremental cancer cases before the bear case becomes statistically and biologically coherent. When a drug trial reports a handful of cancer cases, the natural question is: is this a real signal, or just bad luck? A drug study with 150 patients over one year will almost certainly see some cancers — because UC patients get cancer at a background rate even without any drug. In fact, even otherwise healthy people get cancer at a background rate without any drug. The real question is whether the number of cancers seen on the drug is more than we would expect by chance from that background rate alone. Enter statistics: the formal language of separating signal from bad luck. In this case: what is the event burden and pattern that is high enough, coherent enough, and biologically plausible enough to overcome a low causal prior to obefazimod being carcinogenic? This is exactly the kind of question Bayesian inference is useful for answering. Our Bayesian inference model asks a simple question: Given an estimated background non-NMSC incidence rate of ~0.5/100 PY, how many additional non-NMSC events would need to appear in the next ~450 PY of 50 mg exposure before the pooled 50 mg maintenance dataset begins to look meaningfully above UC background? At ~0.5/100 PY, the expected background incidence over ~450 PY is roughly 2–3 non-NMSC events. Our model suggests the upcoming 50 mg Part 2 update would need to show something closer to 10 additional events above background — roughly 14 total non-NMSC events in the pooled ~600 PY 50 mg maintenance dataset — before the posterior begins to suggest a >50% probability that the true obefazimod non-NMSC rate exceeds the upper bound of UC background. We favor a Bayesian inference framework in these cases because it contemplates the data through a lens similar to that of what we believe an FDA reviewer and pharma regulatory teams would look through: exposure-adjusted rates, confidence intervals around those rates, event heterogeneity, organ clustering, baseline UC cancer risk, prior therapy risk, timing of exposure, investigator attribution, and whether the pattern resembles a broader immunosuppressive AE phenotype. Most importantly, with this approach we do not need to assume obefazimod causes cancer. In fact, the causal prior should be low because there is no obvious a priori hypothesis for obefazimod causing cancer, including clean preclinical work, no clustering to a specific cancer type, no broader adverse event pattern associated with impaired immune surveillance, and investigator assessment that the disclosed prostate and breast cancer cases were unlikely related. Thus, the analysis is not whether “observed cancers divided by patient-years is greater than zero.”; that is coarser than the data allows. The question is whether the observed event pattern is adequate to overcome a low causal prior. We estimated background malignancy IRs across an aggregate 7000+ PY based on a synthesis of Colombel et al. (2017), Rubin et al. (2026), D’Haens et al. (2023), Swissmedic (2024), Sands et al. 2026, Abreu et al. (2022), and Sandborn et al. (2019), and arrived at an estimated non-NMSC IR of 0.5, which is the midpoint of the range provided by management in the Part 2 primer deck published earlier today (ir.abivax.com/static-files/7…). We use 0.5/100 PY as the non-NMSC IR as the background prior of our model. Our analysis allows us to use 7000 PY as the weight of that prior probability. Then, we ask how many non-NMSC events need to be observed in the ~450 PY from Part 2 for the aggregate obefazimod non-NMSC IR to indicate that the true obefazimod non-NMSC rate exceeds the UC patient background upper bound with at least 50% probability. We set the PY reported in ABTECT Maintenance Part 1 according to management feedback. An estimated background non-NMSC IR prior of 0.5/100 PY is at the midpoint of the range provided by $ABVX management and implies an expected 2-3 non-NMSC events per 450 PY. Our model suggests that the ABTECT Maintenance Part 2 update for the 50 mg dose would need to show 10 additional events over and above those background events in 450 PY (i.e., total of 14 non-NMSC events) before the pooled 600 PY maintenance dataset (Part 1 + Part 2) for the 50 mg dose to indicate a greater than 50% probability that the true obefazimod non-NMSC rate is greater than the upper bound of UC background rate, when the observed non-NMSC IR begins to possibly be considered elevated above background expectations. Even when we cut the prior probability weight in half to 3500 PY, the conclusions remain unchanged: ABTECT Maintenance Part 2 update for the 50 mg dose would need to show 7 additional non-NMSC events over and above the number of events expected given the background IR before the pooled 600 PY maintenance dataset (Part 1 + Part 2) for the 50 mg dose to indicate a greater than 50% probability that the true obefazimod non-NMSC rate is greater than the upper bound of UC background rate. Said differently, the key risk is not that another cancer event occurs; the UC and IBD literature documents an expected incident rate for non-NMSC at their background rate (0.3-0.7/100 PY). The key question is whether the next ~450 PY expected from the Part 2 50 mg arm is consistent with the drug-driven malignancy hypothesis: repeated non-NMSC events, organ clustering, biological patterning, exposure-duration logic, or a broader immune-surveillance signal. That is what our model tests. If the next cut instead shows low-count, disparate, background-plausible events, the current obefazimod-driven malignancy argument becomes increasingly difficult to sustain. But what about Rinvoq? They didn’t see a big imbalance? This is not a Rinvoq/Xeljanz-style RA safety signal, where a nearly 4,500-patient outcomes study produced a statistically significant malignancy and immunosuppressive AE cluster in line with an a priori safety hypothesis prior. So far, these few malignancy observations are easily explainable by the background rate of UC cancer in this population especially, and mechanistically, there is also no obvious reason to believe obefazimod should be carcinogenic. If anything, Qin et al. (miRNA-124 in Immune System and Immune Disorders - PMC) discuss miR-124 biology in anti-proliferative and anti-fibrotic contexts, though we would not underwrite an anti-cancer effect here. Against the magnitude of efficacy demonstrated by obefazimod to date: ~50% clinical remission versus ~10% placebo, plus large effects on endoscopic remission, HEMI, steroid-free remission, and sustained remission that is life-altering; these non-NMSC events do not appear to alter the risk-benefit equation. We do not think these disclosed data support a black box. A black box for what appears likely to be background artifact would risk causing net harm to patients by creating unnecessary friction around delivery of a novel and highly efficacious therapy. A brief comment on NMSCs: Based on our diligence, including conversations with former FDA review leadership responsible for evaluating new IBD drug approvals, NMSCs are most commonly basal cell carcinoma and cutaneous squamous cell carcinoma. Importantly, these cancers are: 1) very common; 2) very slow growing; 3) very visible; and as a result, 4) very treatable and curable. These cancers are rarely metastatic, and very rarely fatal. There is published evidence that IBD patients appear to be at elevated rates of NMSCs, hypothesized to result from either higher baseline persistent inflammatory processes and/or thiopurine use. In fact, clinical guidelines published in April 2025 following an expert panel from the American Gastroenterological Association Clinical Practice Update provided specific guidance that all adult patients with IBD should follow skin cancer primary prevention practices by avoiding excessive UV exposure, that patients on immunomodulators, anti-TNF biologic agents, or small molecules should undergo yearly total-body skin exam, and that patients with any history of thiopurine use should continue yearly total-body skin exam even after thiopurine cessation. In the cohort study, the incidence of NMSC was higher among patients with IBD compared to controls (IRR 1.64, 95% CI 1.51–1.78). Recent thiopurine use was associated with NMSC (adjusted OR 3.56, 95% CI 2.81–4.50), and persistent thiopurine use was associated with NMSC (adjusted OR 4.27, 95% CI 3.08–5.92). While, prior to our analysis, we were not concerned that the FDA or pharma would view elevated NMSC rates as a major issue, we were concerned that investors might continue to misclassify them as a serious systemic malignancy signal. However, based on recent conversations with other buysiders, we sense the market is beginning to understand that NMSCs are not a meaningful issue here: they are generally detectable, manageable, and already incorporated into the standard-of-care dermatologic monitoring framework physicians use for UC patients. For completeness, we repeat our Bayesian inference analysis as described above but for NMSC. Taking the NMSC background IR of 1/100 PY provided by management today, we expect 4.5 cases in a 450 PY dataset. Our model suggests that the ABTECT Maintenance Part 2 update for the 50 mg dose would need to show 12 to 13 additional events over and above those background events in 450 PY (i.e., total of 21 NMSC events) before the pooled 600 PY maintenance dataset (Part 1 + Part 2) for the 50 mg dose to indicate a greater than 50% probability that the true obefazimod NMSC rate is greater than the upper bound of UC background rate, when the observed NMSC IR begins to possibly be considered elevated above background expectations. In summary: The right conclusion is not that no cancer events occurred, or that no events will occur in the future. They will occur, not only because cancer risk is elevated in UC, but because cancer can occur in anyone, at any time, including otherwise healthy patients. We think the right conclusion is that the events that did occur look explainable by baseline patient risk, common cancer epidemiology, UC biology, and routine screening detection, rather than acting as evidence of an obefazimod-specific oncogenic signal. We think FDA reviewers and pharma regulatory teams are more likely to reach this conclusion than to view the disclosed cases as a coherent obefazimod-specific malignancy signal, making increasingly clear what we believe is a best-in-disease efficacy/risk profile in the lucrative maintenance setting for UC and substantially de-risking the company’s opportunity in Crohn’s. Disclosure: I/we may be long ABVX and may buy, sell, hedge, or otherwise change exposure at any time without notice. Not investment advice or a recommendation. Analysis reflects current views and assumptions based on public disclosures, published literature, and non-confidential conversations, and may change as new data become available. No compensation from ABVX or any third party.

@mickeychiku I would have loved to see ABBV report out a randomized long-term safety study on upa in IBD to see if the FDA's conclusion that 1 year was not sufficient follow-up to see a malignancy or infection signal It was pretty rich for ABBV to publicly ****talk obe MoA/safety "concerns"

@deathtouch2k Nice work. Funniest thing that might end up happening from all of these is that FDA may issue post market safety study assessments task to some of the drugs these patients took prior to joining Obe trial. And one of those drugs might end up getting black box.

@A_May_MD @TripleGateCaptl Your staff is going to LOVE you...

@deathtouch2k @TripleGateCaptl I’ll be able to make an entire career out of this when Seedy19 (obefazimod 50mg tablet) supplants Entyvio as IBD king 😜 😅

@A_May_MD @TripleGateCaptl Don't worry, I already mocked up a label for ABVX mgmt

@deathtouch2k @TripleGateCaptl (This is a testament to how easy it is to cure NMSC, not a brag about my skills - it really is that easy 😅)

@TripleGateCaptl @A_May_MD Adam should secretly be wanting as much NMSC attention so he can get a boatload of Gastro yearly skin exam referrals after Obe starts taking 2L share

@A_May_MD @deathtouch2k I'm not worried about a black box either.

@A_May_MD @TLS_Invests Either the market gets it right, or one person senior enough within pharma BD gets it right. Either/or works.

The market mispriced $ABVX by >1,000% going into the induction readout with existing data almost mathematically proving it was going to hit. It’s only mispriced by 50-80% this time! The market consistently gets this “do the work on your own” stuff wrong until a press release and company presentation crams the truth down its throat. I’ve seen this movie before!

We looked hard for a formal meta analysis of UC Ph3 pbo rates for non-NMSC and NMSC IR. But we have not found one. What we do have to-date is the mgmt estimated ranges and the non-thiopurine range proposed by another reader. For both cases,  we asked the question, "how many more events need to be observed before there is a greater than a coin flip chance that the true obefazimod IR is elevated over the given background IR for non-NMSC and NMSC, respectively?". Our Bayesian Inference model is indicating that the 50mg obefazimod dose non-NMSC and NMSC IR profile is far below even a coin-flip chance of being elevated over the given background IR, whether we use mgmt IR ranges or non-thiopurine IR ranges. Again, we are testing the threshold of events to get us to more than 50% chance of elevated IR, not 75% or 95%.

@deathtouch2k @mahasr199 Is management overstating or widening the range in order to make their outcomes fit into the range. Is there any thought that they are artificially trying to inflate this range?

@mahasr199 That’s correct. Theres error bars around all of these numbers, even if they are often presented as point estimates. The other read of mgmt putting out these numbers is that they’ve looked at the blinded data and are confident it falls in that range…

@deathtouch2k so from this read it seems even if there are 3-5 cases of non-NMSC events in the p2 data (which would push the event rate above the company communicated benchmark of 0.3-0.7 today) it's still a non-event statistically and doesn't mean a BB label?

Whether a patient responds to drug or whether they develop cancer randomly are completely independent events. Responding to drug is a very common event. Having a non-NMSC is, comparatively, a very rare event. The statistics around the efficacy and safety analysis are worlds apart.

@deathtouch2k the "unlucky cluster" $abvx defense. if randomization failed on safety by stacking the 50mg arm with cancer cases, fda can argue it failed on efficacy too. you can't claim the trial math is broken for safety but pristine otherwise. bbw is likely based on precedence.

@Msp194 Also $ABVX posted this primer today. See slides 17 and 18.

@deathtouch2k Great stuff. 450/150 PY your est exposure adj for 50mg/25mg in pt 2? Headline imbalance to be expected at that rate then, w exposure adj more inline?

@Msp194 Yes exactly right -- I'm confident ABVX mgmt has had this now bludgeoned into their heads that they need to adjust for exposure years so I'd expect the upcoming safety readout to be placed into that context

Even if these patients aren't on any drugs, you'd expect 3-4 of them would get cancer in the 50 mg arm given rate of .5/100PY in UC and ~450 PY of incremental safety data. Even if these were healthy 40-year-old patients, we anticipate at least 1 would develop cancer. Anticipating 0 cases is assuming these patients are Supermen. The math that can instruct this is: seer.cancer.gov/archive/csr/19… NCI SEER Cancer Statistics Review, “All Cancer Sites (Invasive).” In the age-specific table, for ages 40–44 (similar age to average age of patients in the Obe study): All sexes: 218.4 per 100,000 person-years Males: 143.2 per 100,000 person-years Females: 292.8 per 100,000 person-years Converted to per 100 person-years: .22 cancers per 100 person-years OR ~1 cancer diagnosis per 450 people-years.

@JackMan724444 No more events beyond what was presented in maint update

The $abvx update won't be clean, I'm afraid.

@jay51289 @A_May_MD I think it's more a function of the more severe/more refractory patients in general in this trial. Absolute PBO rates can be influenced by patient severity, as it's less likely that a patient with intractable disease has a spontaneously better response than newly diagnosed.

@A_May_MD from the abvx press release: “The trial also recorded a 10.4% placebo clinical remission rate, the lowest reported to date in a Phase 3 UC maintenance responder re-randomization trial.” Does this mean the delta is artificially a bit higher due to a random placebo result?

Absolutely KEY $ABVX point attached here that I have so far seen absolutely NOBODY mention. Opportunity abounds.

Exactly right. Think about this as a patient. Even if we assume the drug doubles the relative rate of cancer in a UC (no evidence it does) to 1/100 from .5/100; if you have 8 years of intractable IBD, and this drug takes you from severe to DISEASE FREE, it’s a no brainer. Here’s what severe IBD looks like: * 10–20+ bowel movements/day, often urgent * Blood, mucus, nocturnal diarrhea * Severe abdominal pain/cramping * Weight loss, malnutrition, dehydration * Anemia from chronic bleeding * Fatigue that is not normal tiredness * Fever, tachycardia, high inflammatory markers * Steroid dependence or hospitalization * Failure of normal work/life functioning vs. a slightly higher than very low chance you develop cancer from thr drug while you remain completely symptomtically free. Refractory patients would be BEGGING to be put on this drug.

@deathtouch2k @mickeychiku All the benefit/risk analysis FDA needs to see: Absolutely crazy ... 50% better delta than the closest drug, and that's on the 25mg dose!

$ABVX You thought you will get a break from abvx over weekend? Addressing NMSC which I didn’t earlier: See below FDA review of NMSC in Xeljanz NDA. Section 7.7.5, pdf page 217-218. Why only UC trial had more NMSC and not other indication trials of the same drug if drug causes this? Cause UC patients are already at risk of NMSC (with history) and cocktail of so many treatments makes it hard to attribute these cases to any single drug. There was dose dependent risk as well. 15 total case, 12 in 10mg and 3 in 5mg. FDA didn’t think of it as worthy of anything more than a general patient education statement under warning and precaution section of label that “regular dermatology exams recommended (not must require) and stay away from light if possible” accessdata.fda.gov/drugsatfda_doc… Clinical trial INDs require 7day, 15 day, quarterly and annual safety reporting. FDA has already seen Obe safety. I neither see black box nor Addcom. This will be 5 min discussion during NDA review. Again, this is based on Obe data released so far. * Not a financial advice. My Opinion only. Please do your own due diligence.

@Antifunbw My argument isn’t that risks can’t materialize, it’s that I believe the realization of a risk that could lead to a non-approval are extremely low at this point, and that the next worst option, a BB, should still allow it to position ahead of JAK maintenance, anchoring valuation.

@deathtouch2k Surely there has to be some negative side. There's data we haven't seen, possibility of data compiled shows numbers that spook market again, etc. correct? There has to be some risk involved, or is it literally "people got it wrong, we have all the data"?

Passing on $ABVX at this valuation is equivalent to passing on buying it at $55 in the post-market following the induction data readout. The market is getting a second chance at the same mistake. Here is the question the market will answer over time: what is the right value for what may be the best UC drug ever developed? Obefazimod appears to be a safe, once-daily oral therapy with no pre-prescribing burden, no meaningful ongoing monitoring burden, a unique mechanism of action, and exposure to what should become a ~$20B IBD TAM? The answer is likely more than ~$7B. Let’s put this in perspective: ~$7B is roughly what Pfizer paid for etrasimod before the Phase 3 UC data read out, which was a second-in-class S1P modulator behind ozanimod, with weaker efficacy, QT-related considerations, ECG screening, monitoring burden, and a less differentiated commercial profile. So what is capping the stock today? Outside of the cancer debate, based on conversations with market participants, the current pushback appears to be that there is “no catalyst.” They appear to have missed there is a major safety update expected by the end of this month that should nearly double the total patient-years of obefazimod safety exposure. I know pods have short-term thinking, but three weeks does not seem that far away when the next dataset has the potential to directly address the central bear case. That matters because the current bear case is safety. If the upcoming dataset continues to show that the malignancy rate is in line with UC background risk and non-JAK UC comparators, it should materially reduce the central sentiment overhang on the stock. That is the broader setup. The market appears to be treating the June 1 safety update as a structural impairment. That interpretation is wrong. These data now establish obefazimod as a potential frontline “prescribe and forget” oral therapy in UC which is a profile often hoped for and talked about in IBD and I&I more broadly, but rarely realized. The concern around non-NMSC events reported on June 1 is overblown. The June 1 data update should strengthen, not weaken, the core $ABVX thesis. The 50 mg safety concern is best understood as a red herring when evaluated against pooled exposure, the elevated baseline cancer risk of a refractory UC population, and malignancy rates observed with other UC therapies that do not carry black box warnings. The more important signal is efficacy. The 50 mg dose remains highly effective, with potentially best-in-disease endoscopic remission data, while the 25 mg dose provides meaningful flexibility for chronic maintenance, labeling, and physician adoption. The market reaction materially over-discounted safety-related risk, underappreciated the commercial significance of 25 mg / 50 mg dose flexibility, and failed to appreciate that the strength of the endoscopic remission data supports potential earlier-line use in UC while materially increasing the probability of success in Crohn’s disease. UC supports the base case. Crohn’s is the key upside driver for valuation. The reported 50 mg obefazimod malignancy data should be evaluated in totality by combining the pooled 96-week Phase 2b dataset, which used the same dose and similar NMSC surveillance, with ABTECT Maintenance Part 1. The right question is not whether there were headline malignancy events. The right question is whether the rate looks out of line for a refractory UC population that is already at elevated risk of cancer, and whether it looks out of line versus other UC therapies that do not have black box warnings. On the totality of the data, it does not. By construction, per regulatory convention, and consistent with standard practice in clinical IBD trials, dysplasia should not be counted as a non-NMSC malignancy event. Dysplasia is pre-malignant and, by definition, is not cancer. Such findings are also not uncommon against the background risk of longstanding ulcerative colitis. Including dysplasia as cancer distorts the safety interpretation and makes the 50 mg dose look worse than the data support. There were two non-NMSC events reported in ABTECT Phase 3 Maintenance Part 1. There was one non-NMSC event reported in the ongoing Phase 2 series of trials. It is unclear whether this event occurred during the 96-week portion of the Phase 2 series, but conservatively counting it against obefazimod still yields an event rate of approximately 0.58/100 patient-years. This places obefazimod in the middle of the range across UC comparators, including ustekinumab, vedolizumab, etrasimod, ozanimod, and mirikizumab, none of which carry black box warnings for malignancy, and ahead of black-boxed JAK inhibitors, including upadacitinib and tofacitinib. That is not what a broken 50 mg safety profile looks like. The safety debate is distracting from what should be the dominant interpretation of the update: the efficacy data are exceptional. Obefazimod has produced what may be the most impressive endoscopic remission dataset observed in ulcerative colitis, particularly after adjusting for how refractory the ABTECT population was. This was not an easy-to-treat biologic-naive UC trial. The study included substantial advanced-therapy inadequate responders and prior JAK inhibitor inadequate responders, yet the 50 mg dose still delivered a level of mucosal efficacy that appears best-in-disease or near-best-in-disease on a refractory-adjusted basis. That is the point the market appears to be missing. RINVOQ likely remains the stronger acute induction/rescue benchmark, but upadacitinib’s pivotal UC trials did not face the same degree of prior JAK-exposed disease biology. For chronic maintenance, obefazimod appears highly competitive and potentially superior when adjusted for baseline severity, with particularly strong endoscopic remission and corticosteroid-free remission performance. A non-JAK oral drug delivering this level of mucosal efficacy in this population is not just “strong data.” It is a potential frontline-enabling efficacy profile. This is what creates the frontline “prescribe and forget” opportunity. Community GIs manage many moderate UC patients before they become severe or refractory. A clean 50 mg profile would offer a rare combination: enough efficacy to keep moderate UC patients controlled, and enough safety comfort that physicians do not feel burdened managing the drug. Oral dosing, strong efficacy, no infusion logistics, no JAK-label discomfort, and minimal incremental workflow burden create a practical profile that community physicians can use earlier. The larger opportunity is not merely post-biologic / pre-JAK positioning; it is post-generics / pre-biologics use by physicians who want an effective, low-friction oral option. The 25 mg dose further strengthens this profile. It is not a rescue thesis; it is a strategic advantage. It provides flexibility for chronic maintenance, labeling, and physician adoption, while preserving 50 mg for induction, higher-need patients, or flex-up dosing. A commercially viable regimen could mirror the established IBD treatment paradigm used with RINVOQ: higher-intensity induction followed by lower-dose chronic maintenance. In practice, patients could receive 50 mg obefazimod induction or JAK induction followed by 25 mg obefazimod maintenance, with the ability to flex back to 50 mg in selected patients who require additional disease control. This preserves the key commercial attributes of the asset: potent induction optionality, a lower-exposure 25 mg maintenance backbone, oral dosing, dose flexibility, and strong mucosal efficacy. A potential 50 mg chronic-label limitation should therefore be viewed as a manageable dosing/labeling issue rather than a thesis-breaking safety problem. If the practical regulatory choice were between preserving broad 50 mg chronic dosing at the cost of a black box warning versus adopting a cleaner regimen of 50 mg induction and/or selective flex-up with 25 mg maintenance, the rational commercial strategy would be to prioritize the label that maximizes broad chronic use, physician comfort, and adoption. Even if, for the sake of argument, obefazimod ultimately received a black box warning, the asset would still not be broken. RINVOQ is black-boxed and still represents a multi-billion-dollar IBD product. That creates a reasonable downside commercial anchor for obefazimod: constrained label, not zero. In that scenario, obefazimod could still have a role in the post-biologic / pre-JAK setting, and potentially as maintenance after RINVOQ induction or after 25 mg / 50 mg obefazimod induction. If obefazimod is viewed as safer and more effective in maintenance, it could still be used ahead of RINVOQ for chronic disease control in selected patients. But the Crohn’s readthrough is the major upside driver, and the headline of the maintenance data should have been "Crohn's now appears largely de-risked". Can anyone think of a therapy that produced this degree of mucosal efficacy in UC and then failed to work in Crohn’s? Tofacitinib is the closest example, but it is not a close comp: inferior mucosal healing, a much easier-to-treat UC population, and a JAK mechanism with a very different safety and commercial profile. The point is not that UC success guarantees Crohn’s success. It does not. The point is that a non-JAK oral drug producing this degree of mucosal efficacy in a hard-to-treat UC population should materially increase the prior probability of CD success. Above a coin flip certainly seems reasonable given prior UC to CD translational examples, and we would venture should be closer to 75%, but regardless, meaningfully above where the market appears to be underwriting it today. That makes Crohn’s a real valuation driver today, not a free option worth zero. Global peak obefazimod sales can be reasonably framed at approximately $3.5–5.0B in ulcerative colitis alone, with upside to $6.0–10.0B if Crohn’s disease is successful. On a risk-adjusted basis, assuming a high probability of UC approval and a 66% probability of success in Crohn’s disease, a reasonable underwriting range could be approximately $4.5–6.5B in global risk-adjusted peak sales across IBD. There is additional upside approaching or exceeding $10B globally if the safety profile remains benign and the drug moves into frontline or earlier-line UC/Crohn’s use. The UC-only case is supported by a differentiated profile: oral once-daily dosing, strong maintenance efficacy, robust endoscopic remission, potentially cleaner chronic safety, 25 mg / 50 mg dose flexibility, and a refractory-adjusted efficacy dataset that compares favorably with leading advanced therapies. The base case is that obefazimod remains a multi-billion-dollar IBD asset. The downside case is a narrower 50 mg maintenance label, a 25 mg-centered chronic-use strategy, or even a constrained/black-box label, which remains commercially manageable and still anchored by a RINVOQ-like IBD revenue framework rather than zero. The upside case is a clean label, earlier-line UC positioning, community-GI adoption in the post-generics / pre-biologics setting, and successful Crohn’s development, which could support global peak sales toward the high end of a $6–10B range. To sum it all up: The risk/reward appears highly attractive because the market is focused on a worst-case interpretation of the 50 mg safety signal while failing to credit the durability, mucosal efficacy, Crohn’s readthrough, and commercial flexibility of the 25 mg / 50 mg profile. Layered on top of that is fast short money arguing there is “no catalyst,” despite a major safety update expected before the end of the month that should add a truckload of patient-years and directly address the only real bear case. If that dataset is clean, the debate should quickly shift from “is 50 mg impaired?” to “why was a potential best-in-disease oral IBD drug, now post-pivotal UC data, ever valued below inferior IBD assets acquired before their Phase 3 readouts?” Disclosure: May hold or trade securities mentioned, including $ABVX, and views/positions may change without notice. Not investment advice.

@Antifunbw There’s always tail risks that can materialize, though with greater and greater data, those risks becoming increasingly and eventually infinitesimally small. And eventually benefit outweighs risk.

@2035Bio @A_May_MD @byebyegoodguy @thetwitabides @AndrewRangeley Small N issue. If you add ph 2 exposures you end up right in the middle of the fairway for placebo in UC trials for 50mg. ~150 pt years of data is small w/r/t N=193 The long term follow-up safety data is often single arm, so you need to compare to natural history.

@A_May_MD @byebyegoodguy @thetwitabides @AndrewRangeley That‘s why there is a placebo arm…. which should be fully equivalent, e.g. the arm for sure had 62 year old participant and they didn‘t get a malignancy. Chi^2 distribution between placebo and 50mg cohort was just shy of being significant. So it‘s not a home run.

Excited to have @A_May_MD back on the pod Monday. It's been a crazy week; we'll be talking all about what adjustments the Spurs can make to try to steal one from the Knicks at MSG. Just kidding; we'll be talking $ABVX readout + $NKTR + all things bio. Any questions for Adam?