RE:More now, than before Trogarzo FDA nodIt amkes a lot of sense that you have more TH stock now than before Trogarzo because Trogarzo was a big deal for TH but a not a huge potential market. In both NASH and cancer, we have huge potential markets. Both are markets that are of great interest to Pfizer or Lilly or any of the big pharma companies. Now, because of that, there is a lot more competition to be dealt with in NASH and cancer and there really was not any competition intially with Trogarzo. In the end, if TH hits on both NASH and cancer, a big pharma is going to buy it out. In fact a big pharma might buy them out for just one of those two indications.
On NASH, we know we are in phase III, we just do not know the exact dimensions of the trial yet. But being in phase III is a very big accomplishment for TH. No analyst thought they could pull it off and we all had our fingers crossed here before the news came down on it. At the moment, the stock is getting absolutely no credit for being a phase III NASH player. That is a wonderful opportunity for shareholders as one would think that gap will close. The stock could rise by 200% and still be a signficant valuation gap to other phase III NASH stocks. It should probably trade at a discount to the top of the line NASH players due to the very unusual way TH got to be a phase III NASH player, but a 100% discount does seem a wee bit extreme, no?
On cancer, it is hard not to be excited. If this PDC drug technology works, it is going to be enormous. But I don't give the company much credit for it yet because it has not been tested in humans yet. Still, we are months away from discovering if it is safe in humans and maybe we will even get some early indication of efficacy. So, we shareholders have an extremely attractive option on cancer and it is getting hard to keep enthusiasm about cancer under wraps. Still, that is where it deserves to be until we at least find out that the drug does not harm humans.
On the issue of forgetting the financing in time, I don't think I will be among those who do, even if TH does hot on both NASH and cancer and the stock soars like I think it has a very good chance of doing. The plain fact is our board of directors authorized a share offering at a share price that put no value on NASH, for which they already knew they were approved to begin the phase III trial and also not even a little value for the cancer option either. We gave away a whole lot and it remains unclear that we got anything other than a lower share price in return. In every respect it was about the exact opposite of what kind of financing I thought the company would ultimately complete. It was a monumentally bone-headed deal unless some other new development sheds a better light on it. No one should forget what those we entrust to protect our interests did in regard to this financing. They have done many good things for the company as well but you really cannot afford to screw up on something that important and to this magnitude and hope to be welcomed by cheering shareholders, even if the stock jumps like we think it will.
The financing problem arose because the company proved unable get the market, in the midst of one of the biggest bull markets of all time where investors are runnung around chasing bankrupt company stocks and things like Signal, to properly appreciate the NASH and cancer opportunites in the last six months. I am sure we all struggle to understand how they failed at this when it seems so easy for just about any other stock to get a great following and and exorbitant share price relative to reality in this environment. It was a cataclysmic failure that led directly to the disaster of a financing. Now, if you want to be charitable to management, you would say they could not really convince anyone on the NASH phase III until the FDA spoke. But then why give only three days for the market to take that really amazing NASH phase III news on board before squashing the stock with a worst case scenario of a share offering?
On the sales front, Jovan was replaced and apparently a new approach instigated by Paul is working nicely. So, that is an interesting concept - if something is not working, you take the required action to fix it. Hopefully, we will see more accountability in action from Paul and maybe we will all see a better result in the stock price as a result. I am not convinced we will see 25% annual growth in Egrifta Lipo and Trogarzo sales like Paul suggested on the B. Riley call yesterday, at least not beyond the Trogarzo Europe introduction, which will temporarily boost sales. But no one is likely buying TH's stock with that in mind. If Paul can pull that off, it will be a nice bonus for us all. But really serious stock appreciation will be the result of progress on informing the market well that a 100% discount to other NASH phase III stocks is a bit extreme and from success in the cancer phase I.
I don't think we will need to wait a year to see excitement build quickly around the cancer indication. In April, they obviously have something of interest to present at the AACR meeting. Last year, their presentation there that highlighted the vascualr mimicry immpact of TH-1902 led to a big jump in the share price on 7 millions hares traded in a single day, which is likely a record trading day for TH. So, I think we can expect some excitement coming out of AACR. But, companies can tell you all the good stuff about their pre-clinical work while leaving aside the more worrying aspects. In an actual FDA study, it is much harder to cover up the flaws. So, it will be important to see what the phase I results produce. If the drug is shown to be safe up to a high dosage, that alone will be a very big deal. If it also shows some signs of shrinking the tumors and extending people's lives, that obviously will be a very, very big deal. If it indicates that it achieves similiar efficacy to the linked drug with less side-effects, that too would be a very big deal. We could know a lot of that by around July. The longer we have to wait for info on the Maximum Tolerable Dose, the better as it means they are having trouble finding too high a dose. But the company could announce data on individual patients as the dose escalation study goes along if they want to. So, we might hear really encouraging news even earlier.
The next catalyst is how the remaining analysts react to the offering and the phase III news. After that, we have the earnings report and quarterly conference call. After that is the AACR meeting which runs from 4/9-14.
FredTheVoice wrote: I bought more this morning,
I am more invested now in TH than before approval of Trogarzo.
Confidence, despite general bashing (market, and reaction after financing), is in my view higher today with two studies who will create lots of excitment around this company.
In a year or so, and maybe much faster with the oncology study, I think no one will be thinking about the january 2021 financing. With the attention around the financing, we all forgot that sales are gaining momentum......
GLTA.
FTV.