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COGT: Worth a Look Despite >60% Higher Valuation

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COGT

I have been updating my diligence in COGT over the past month


  • They had a big positive readout on 7/7/25

  • They have several more big readouts this year, although probably not as big as the 7/7 readout

Background


  • I initially started to follow COGT after I saw them as a biopharma hedge fund favorite at that time (great way to find new companies to dig into)

  • They are trying to develop a better drug than BPMC's Ayvakit targeting same mutation of same enzyme, with more potency and less blood/brain barrier penetration

  • Read our prior article on COGT vs BPMC from December 2013

  • BPMC was acquired by Sanofi earlier this month for about $8B

  • A reasonable current valuation of COGT is NOT close to $8B

    • BPMC has the only approved drug for nonadvanced Mastocytisis (Ayvakit), which will do >$700M rev this yr in just 2nd year after launch

  • COGT is now up ~60% since before its 7/7 report out

  • COGT is up over 200% since its multi-year low in April 2025

Key question:

  • Is COGT now fairly priced by market at $1.7B MC and $1.3B EV?


Pros:

  • COGT has 2 additional catalyst readouts this year that are significantly derisked from the 7/7 readout, and will provide more data from SUMMIT Ph3 readout

  • Caution: Derisked never means NO risk in bio/pharma

  • COGT's lead drug - Bezu, appears to be more potent than BPMC's Avakit, at least at doses that are pretty well tolerated

  • There were some complete remissions, whereas very few if any of those with Avakit

  • Avakit has some cognition side effects from the fact that it penetrates the blood/brain barrier

  • COGT's Bezu has no apparent cognition issues (it crosses the blood brain barrier much less than Avakit)

  • Although Bezu has other side effects, which spooked the market in the past, as more data comes out, Bezu side effects seem minor compared to potentially high benefit to patients

  • Only 5.9% of patients in Bezu Ph3 discontinued, and only for transiently high grade ALT/AST, which reversed on discontinuation

  • Although there was a large placebo effect in the Bezu Ph3 readout (placebo had higher efficacy than Avakit had in its Ph3s), Bezu efficacy was so strong, it overcame the high placebo


Cons:

  • Patients appear to be happy on Avakit and BPMC (now Sanofi) and physicians can prescribe higher doses, and Sanofi is testing a more potent inhibitor

  • 1st mover advantage here might be very hard for Bezu/COGT to overcome if/when it is approved (probably not until late 2026)

  • Bezu side effects caused prior drops in COGT stock, and if liver tox (other than transient ALT/AST readings) appears in any future readout, COGT stock will likely drop >50%

  • Bezu has other side effects like hair color change, hair loss, and transient ALT/AST liver enzyme increases that Avakit does not have

  • Placebo effect was very high in recent Bezu Ph3, this could create an issue in upcoming readouts


My take on Key Question and BPIQ portfolio (and my other personal portfolio) holdings:

  • Hedge Funds/BPIQ portfolios

  • COGT has been a holding of a number of our BPIQ portfolios for the past 1.5 years

  • With the strong Ph3 Bezu data and BPMC now acquired (at ~6X current COGT valuation), biopharma hedge funds will likely hold/increase COGT, thus it will likely remain in a number of our BPIQ portfolios

  • I increased my position in COGT in my other personal accounts too, in early July (even in the 1-2 days after the 7/7 readout because market reaction was slow to Ph3 readout)

  • I love that COGT acquired key members of the Array Bio drug discovery team (Array was acquired by Pfizer), potentially bringing additional value (addntl new drug candidates?)

  • There is the risk of liver tox showing up, which would be very bad for COGT and its stock, but there is also the possibility that bezo efficacy will increase further over time, which would be excellent news for COGT

  • I think there is considerable upside in current COGT valuation over the next 1.5 years, and far less risk after SUMMIT readout

  • I plan to hold my COGT position in my personal non-hedge fund accounts


Please like this post if you found it helpful. That will help me justify posting more list this.


 

This article is not investment, tax, or legal advice. Please do your own diligence and seek advice from professional advisors representing your interests.


Article history:

First published 07/30/25 EJV, AV

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