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“Teplizumab wasn’t completely dead back in 2010 when Lilly dumped the whole thing. But it came awfully close to that.” – John Carroll, Endpoint News (5/10/18)

New data from a long-forgotten trial presented this weekend at the American Diabetes Association’s 79th Scientific Sessions reveals a drug that Eli Lilly and Company (LLY) and MacroGenics, Inc. (MGNX) left for dead in 2010 actually works.  

Spectacularly well.

  • A single dosing course delayed the onset of Type 1 Diabetes (T1D) in over a half dozen “at risk” patients by up to 60 months (and counting).
  • The median delay checked-in at an impressive 24 months with a p-value of 0.006.

In case you don’t know, there’s been no new meaningful treatments for T1D developed since the introduction of insulin roughly a century ago. And certainly not any that can delay the onset of this highly predictable, life-altering disease.

Translation? This is a Joe Biden-esque big deal.

  • It marks the first drug to impact the pathogenesis of an auto-immune disease. Ever.
  • It also holds the potential to treat multiple auto-immune diseases.

Hats off to Dr. Jeffrey Bluestone, TrialNet, the National Institute of Diabetes and Digestive and Kidney Diseases (NIDDK) and the Juvenile Diabetes Research Foundation (JDRF), among others, for never giving up on the drug and never stopping the trial that began all the way back in December 2009.

That’s right. This news has been almost a decade in the making. But don’t go looking for shares of Eli Lilly to soar on the development.

Instead of being owned by the $108 billion market cap behemoth, all the rights to the drug now belong to an inconspicuous $160 million market cap company that’s still within one year of its IPO – Provention Bio, Inc. (PRVB). 

Combine the measly company valuation with the multi-billion-dollar, near-term potential for Teplizumab and we’re officially initiating coverage on Provention with a buy up to price of (almost) anything.

Sounds ludicrous, I know. So let’s review all the critical context first. Then, we can strategize about reasonable and actual entry levels ahead of the market open.

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