RE:RE:Trying to look at the positivesAt this point, it's pretty simple and we just have to watch it play out. We can bemoan the fact that the pipeline assets were invested in via RD and so far have not produced any return on investment for shareholders. While the science is at least as plausible as many other NASH and oncology products, the issue is they didn't raise a lot of capital back at $12 and instead issued converts. Their logic was flawed --they thought they could fund RD that way and because their market study of the HIV drugs was flawed, it never got near the convert price. In hindsight, they should have loaded up the RD bank account raising $100mil and talking about the pipeline assets they were buying. This is all past history and completely hindsight bias analysis --so it's clear now but wasn't then.
So now we are in a position where there are still 2 pipeline assets that may have value over time. I think everyones view on NASH is maybe there's someone out there who wants to get in to that market and understand that IGF/upstream fat-buster aspect which has valid science around it and vetted by a number of NASH leaders. For a price, someone may bring that forward. Oncology we'll learn a lot more in time, but seems pretty clear they (which includes MDAnderson lead investigator and other outsiders) see enough to rethink administration and mechanisms to possibly recommend a new approach. They have the guy who trialed docetaxol from start to finish, a breast cancer drug specialist and a DNA target specialist on board. It will be data-driven completely so they may or may not recommend trying a revised protocol. They may not. Either way, we'll see. I certainly hope they see a reason, given there was some response, to try the lower/longer approach. Regardless, the investment is in the past and the future on spending there will be more "risked" and cautious. Given the revenue line, as they extend the timeframe, there is RD dollars they can commit while staying in their quest for profitability in 2024. So there may or may not be a return on those investments.
But the driver at this point and the future for the next 12 months is to prove to the skeptical market they are growing at 15% and will see a large drop-off in spend starting soon, thus bringing more cash to the operating profit line. It will be those financial metrics that will move the share from the ridiculous $1 to something closer to intrinsic value for a company selling close to $100mil in products and moving to profitability on the bottom line next year. On just a free cash flow basis, that's worth $200-$300mil, same with earnings multiples, sales multiples --any way you want to cut it. If they can achieve that $100mil mark based off a good result this year (the 7% price increase already gets them half way there and if the patient adherance keeps up, will be a huge boost toward the top end), the stock price will respond. So that's the simple view and they know it too --the only thing the price will really respond to at this point is the financial metrics cointinuting to build positively --more sales, lower costs, more operating profit. The rest won't really drive it unless they get a little lady luck. I assume they are really 100% focused on making sure those numbers are met or exceeded. If so, it gives them a lot of options in 12 months time, so they really have to and I'm sure that is what the major shareholders are telling them --execute that financial plan and worry about the ROI on pipeline later.
I'm in the camp the outside experts should give a pretty good view on the prospects for TH1902. It's really a checkpoint. If they don't see a way forward without going back and just looking at the S38 (or whatever it's called) version which they said they were still working on, then it's a low spend RD situation and something for 2024 and beyond. If they decide it's worth another shot with new protocol, it will also be fairly low spending to see if there's any response difference. Given that won't happen for a while and RD cuts from the two HIV drug trials will drop off, there will be some money in the bank to fund that and hopefully it's a higher probability ROI attempt. Regardless, given the valuation those are not even events the market cares about or is paying for. It's just about the sales continuting to grow, profits building, etc...
A nice tuck-in drug partnership would be a solid help. So the wildcard would be if Leisure can find a steady or declining drug in the HIV or infection area that a large player is de-emphasizing and they can structure a deal to capture whatever upside they bring to the table with a focused selling team. Those deals happen a lot, so hopefully they can find something there. He seems quite capable and is getting things done in a very realistic and fast-paced way.
I think we all need to just be calm here, watch nothing but sales, hear what they say about retention, new patients, if that number is at least the $90mil and that will rebuild the case. If they can exectute a few quarters like that, the stock will find it's footing and start to rebuild values for shareholders. They are doing exacty what you shoudl be doing and really the only thing you can do at this point --build up your fundamentals and increase your chance of an ROI on your past investments without spending much.