Oncology ABCs (part one) – a small-cap biopharma prospectus series

A small-cap biopharma prospectus series

Despite the tightening financial market, oncology is anticipated to remain front and center of healthcare, and the successful emerging biotechs will continue to blaze new trails in driving advancements. Similar to other sectors with rapid growth, biotechnology stocks have been adversely affected by rising rates (broadly, the SPDR S&P Biotech ETF (XBI/US) has declined c 40% from 31 December 2021 to 15 June 2022.). As seen in prior cycles, we expect that companies with the most robust science will continue to advance despite the challenging macro environment.

Finding a needle in a haystack

Oncology remains the fastest growing pharma segment, where innovation is largely driven by emerging small companies. However, among this highly concentrated group, each has a different approach. These variables create a very dynamic and complex sub-segment to track especially for those not involved in the day-to-day across the various silos (even within oncology).

Exhibit 1: Evaluate Pharma growth forecasts by therapeutic area

This series will aim to outline the rapidly evolving oncology pharma landscape by taking a deep dive into the key mechanisms and science within the overall pharma backdrop. The concepts and treatment approaches have changed so dramatically that we believe a recap, highlighting differentiated approaches, is a timely exercise.

To begin unpacking the niche categories where pioneers are concentrated, we have isolated roughly 110 publicly listed biotech companies with market capitalizations ranging from US$50m to US$150m. Although the landscape is likely to further evolve, we wanted to capture a snapshot of the progress made to date across what we view to be three niche categories:

• small molecules
• immunoncology (IO) and
• non-immunogenic protein therapies.

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