Theratechnologies Inc T.TH

Merck buys Velosbio

[qwerty22]

ADC developer. Just commenced Ph2 in lead program. $2.75 bil cash for outstanding shares.
Their Ph1 commenced Feb 2019. The Ph2 just started Oct 2020.

https://velosbio.com/news-events/press-releases

[qwerty22]

https://www.fiercebiotech.com/biotech/merck-inks-2-8b-velosbio-buyout-to-snag-anti-ror1-adc Their data is very strong with good response rates and CRs but only 20 patients in 2 tumour types.  "The deal cements ADC’s status as a hot modality. This year, AstraZeneca and Merck have entered into deals worth $1 billion or more upfront to access ADCs in development at Daiichi Sankyo and

[Wino115]

So two things. This is initially going after hematological cancers (leukemia, lymphoma, etc.) and then solid tumors. But it's still very similar in general terms.  But the list of SORT1 cancers appears to be much larger than those targeting ROR1. The list of series B investors from just last summer is filled with big hitters.  So a lot of very smart money is more than happy to take

[SPCEO1]

OK, time for more wild speculation that might have an element of truth to it. TH has always been pretty excited about the cancer opportunity. My strong impression from talking to the company and listening to their presentations is there is alot of interest in what they have in cancer. What I don't know is if that interest is from investors or also from big pharma. It is probably both but I

[SPCEO1]

Here is another link about the Merck purchase today: https://www.fiercebiotech.com/biotech/merck-inks-2-8b-velosbio-buyout-to-snag-anti-ror1-adc?mkt_tok=eyJpIjoiTjJOaU1UazNNakE1T1RRMyIsInQiOiJsd1F5dHpJK1c4dzZMOTB0dlJlUTAwejRoajB4ZWNXOVQrKzI1aWczOWtrSGswUHhZRDlrdzZDXC92RFQwVzROQjBLTnB1R050QUtUOWZzVUZvcGZqc3VJSHB3YkM1czZjWGppSlVTVGpkY3dYcENLWlpaYVBWc2dRWGlkTHBSSE0ifQ%3D%3D&mrkid=1103803 The

[SPCEO1]

Sorry - same link that has already been posted - should have checked first. But note my comments anyway.

[qwerty22]

You can't underestimate how success in a sector drives investment in biotech. Immunotherapy has been the big hope in cancer for a long time, it's generated some blockbusters but people are also starting to understand its limitations. The clinical numbers coming out of some of these ADC programs do look very, very strong and they work in a very different way to immunotherapy. There is a

[Wino115]

There's a big difference between a private placement for a private company and a share issue by a registered public company.  Privates can do whatever they want subject to how each party sees valuation.  My knowledge may be outdated, but I know Canada had a rule of the largest discount you could do to market was 10%.  Registered shares at least  have some protections.  

[SPCEO1]

I don't know about whether Merck had a stake int he company ahead of time but the $137 million financing with the big name investors apparently was just completed in July. I think what we should be looking for is something like that - investors who are looking to get in early and likely then quickly shift to selling the company to big pharma to lock in a nice profit. Given the tiny share

[qwerty22]

Early financing only really makes sense in order to lock in some value that would be lost if the decisions didn't go the way you hoped. They haven't managed to generate any of that value. I tend to think one reason they've gone soooo strong on the Ph3 signalling in NASH was to try and generate some speculative value ahead of the decision but that has failed. That was the path to an

[SPCEO1]

I suspect you are right about the hope they likely had to take advantage of the NASH news to raise money at a decent price. On a fundraising related to investors looking to take a stake for the cancer play, however, it could be different. Those funds Wino noted are today cashing some big checks from the previous deal. They may want to try again with TH and may be willing to structure a deal that

[Wino115]

I think given the cost of the cancer trial, they will get a lot more value post any kind of human trial. There's the obvious risk of failure, but as we've said, this is not about the chemo agent being used, it's about attaching to the SORT1 receptor, internalizing it, and seeing the toxin work.  That seems to be a lot less risky kind of trial in my view.  So to get the best

[SPCEO1]

Management appear to have talked themselves into a belief that one of problems for the stock price is the concentrated ownership of the stock represented on this board which leads to a desire for them to diversify the ownership of the stock. They may be right but I am not totally convinced. Still, if they do some sort of offering and they do one wisely, it could be a positive long term development

[longterm56]

How is " the concentrated ownership of the stock represented on this board" a problem? We're all long term investors which makes less shares available to trade so if there was a demand for the stock it would run. The problem is the company fails to make a demand for the stock. How did you come to this conclusion? Did you just make it up? -LT

[qwerty22]

How bad was the ownership situation at the start of the Trogarzo story? The stock ran up on something investable, namely the potential of Trogarzo. It ran down as that potential failed to materialize. Why can't they do the same with NASH and/or cancer?

[longterm56]

Exactly!   I've never heard that loyal shareholders are to blame for a low stock price.  Actually, this kind of worries me ....  seems like SPCEO is running out of explanations for why this stock doesn't move.  And if HE can't keep coming up with reasons .... then we are all doomed. I'm almost ready to get a new user name ("Long Term" might not be the

[realitycheck4u]

This post has been removed in accordance with Community Policy

[SPCEO1]

I think you are blaming me for a theory the company actually has. I am just noting it and discussing it with the board. I can see the company's point of view but think their conclusion is not fully accurate.

[canadapiet]

What??????????!!!!!!!!  I have never ever heard such "a &"#:" reason for a low share price !!!!!!!! They can start with:  1) better execute  2) more visibility  3) making deals with BP  4) Insider buying (they hold a "sh...y" amount of shares)  5) IR has to do "a job" 6) CFO has to do "a job" 7) 8) etc etc etc 

[longterm56]

Who at the company conveyed this to you? If it was the IR lady, she's making excuses. So, all the following makes the stock price go down.. - shorts - weak handed longs - long term holders - tax loss selling - poor sales - poor communication THTX has all the above. Pretty sad. -LT

[SPCEO1]

The CFO and IR said this on separate calls within the last couple of months. My guess is they were trying to figure out how the stock did not react positively to the general NASH news. And they may be right about that too, at least in the short term. If the FDA approves their phase III NASH trial and the stock doesn't move, then that would be strong evidence they are right. But I think the

[qwerty22]

Is it too difficult to pursue both and see which one works? What do they have to do to attract retail?

[Wino115]

I don't go for that argument they are stating either.  Non-sensical.  First off, very rarely will a biotech move on stating they are going to be filing a protocal, even if for a large indication.  That just doesn't happen.  In fact, getting a Phase 3 approval doesn't always even do much.  In this case, given the odd path and different data set, it may move some

[SPCEO1]

I agree with your conclusion but note my comments in Red in the body of your post below:

[canadapiet]

I was buying recently and even relatively small purchases by institutional standards were moving the stock more than I would ahve liked. Any effort to buy $5 million would likely send the stock soaring and the buyer would back off. ????????? Sorry, but i don't buy that nonsens!!!!  If that was the case (soaring stock), it would be EASY for us to get the share price to 10 .....!!! 

[SPCEO1]

Go for it! (just joking) And it was hardly nonsense, it was reality - 30,000 shares being purchased on a given day caused the stock to move meaningfully. Institutions are not going to go near a stock that is that illiquid. And we are part of the reason for the illiquidity because we know, or are at least highly confident, the stock is stupidly underpriced right now relative to its potential and

[Wino115]

I appreciate those views.  I think the biggest difference is how we each interpret "execution".  I agree they have moved developments along.  But so far it's all just talk.  It's like the sell side guys, you can't really model in these values until you actually get a YES from regulators. There's too much hair around how they got there.  There'

[SPCEO1]

Some more comments in Red in your post below:

[realitycheck4u]

This post has been removed in accordance with Community Policy

[scarlet1967]

As CYDY was mentioned here and how to reach out to retail investors the CEO of CYDY was presenting his company on drbeen not long ago. At first I thought it was a pitiful attempt by him to get the attention of the retail investors but looking at drbeen's followers on YouTube (over 200 k) maybe not, note despite recent pullback CYDY is stil has a market cap of 1.5 billion US dollars vs THTX 150

[SPCEO1]

If you needed any additional proof that the stock market is broken, CYDY's market cap at 10X TH's should be all that is required. But it also highlights the opportunity for TH. They actually have a real story while CYDY is all smoke and mirrors.

[Wino115]

I think what this all points out is what we've all said before. The fact the last 12-18 months of development has seen nothing but a lower share price likely is because: 1. The company has lost it's overall confidence and credibility with the market due to the severe disappointment with Trogarzo and Egrifta.  I think all those investors still can't believe they're just at 400

[qwerty22]

It's pretty clear to me that the logjam for the analysts is where Theratech sit on the regulatory pathway. For better or worse we will get past that when the regulators decide and everybody (analyst, management, investors) are going to need to re-assess Theratech's new situation based on the details of that decision. No matter the IR strategy things WILL move to some new place. I'm

[SPCEO1]

My best guess is that management feels like they have tried to get the stock price higher but because volume is so low since long term shareholders won't move their large positions in the stock, institutional investors can't buy it. So all those good things they have done over the last year get no positive reaction in the stock. The solution from my perspective is a more retail focused IR

[scarlet1967]

Exactly, they need to focus on increasing the demand by getting the attention of retail investors . It is quite obvious that the shares on daily, weekly and monthly basis only have been traded by short term swing investors and shorts with no interest from new investors,low volume, volatile and disconnected from the broader market not to mention the health sector. Their job is to first execute in

[scarlet1967]

While the whole market specifically the health sector likes the outcome of the election so far due to the fact that Democrats might not win the senate therefore harder to hike taxes and  push the drug prices lower THTX seems to have not benefited from the rally, although the latest investor presentation was a step in right direction the current valuation of the company is stupidly very low!?

[realitycheck4u]

This post has been removed in accordance with Community Policy

[JayjayUSA12007]

Quote:"How is " the concentrated ownership of the stock represented on this board" a problem? We're all long term investors which makes less shares available to trade so if there was a demand for the stock it would run." This type of argument is typically come from some institutions (WS in particular). It always happens for small, but potential biotech/starup companies

[SPCEO1]

What you have said is exactly correct. But let's give credit where credit is due. So far at least, TH has not done this. And it is pretty hard to pass on institutions waving big chunks of cash at you. It is possible the company has had some cancer investors waving big bucks at them already and they have passed on it.

[qwerty22]

Well actually it can still be about the chemo used. If you read this little history of ADC development you'll see it's about all three parts of conjugate drugs - the chemo bomb, the targeting delivery system and the linker that joins the two.  https://www.adcreview.com/articles/how-the-next-generation-antibody-drug-conjugates-expands-beyond-cytotoxic-payloads-for-cancer-therapy