jfm1330 wrote: I explained it many times, I will try do it again in a better way. Thera is not seen as a legit NASH player at this point for many reasons, I think.
1- We still don't know what the exact phase III protocol will be, including the enpoints they will need to meet.
This is a rather weak argument. The FDA has established the required endpoints and the company can select which they want to target. There is no mystery there. As for the protocol, we have alreadyy published a lot of details about that too although the FDA is looking to make some adjustments. But it is a phase III test and those adjustments therefore are not likely to be massive or unusually costly to us. This is just fine tuning an already well-advanced pahse III trial design. 2- One thing we know is that they intend to treat for 18 months. In a sense it is positive, but it can also be seen as a lack of confidence in the effect of the drug, so giving it six more months would help it meet the endpoints. Add to that the 18 months will make the timeline to possible approval longer and the trial more expensive. But one thing is sure, some can interpret the 18 months as a lack of confidence in the drug.
Everyone knows what a graveyard NASH drugs have been so far. Many of the previous failed tests may have succeeded had they been given more time. For a fat burner like Egrifta, the fat burning likely takes place quickly but the NASH resolution takes longer. Giving the drug a longer period of time to achieve NASH resolution or improvement in fibrosis is just a sensible decision based on learnings from past failed tests, which increases our chances of success. It is not a lack of confidence, just smarter test design. 3- They are allowed to go straight to phase III without any formal phase II data in general NASH. It is great if you believe the HIV patients trial with NAFLD/NASH data is good enough,HIV patients being harder to treat and all that, but it is obviously out of the norm. The bottom line for many is that they will not go into phase III with great results in a nice and clean phase II in general NASH. They have safety history of Tesamorelin on their side as a positive aspect, but on the efficacy aspect, there are gaps in the data that need a some kind of leap of faith to be clearly positive on the final outcome, or at least some positive scientific educated guess. In other words, it is not a straight road, you need to build some mental bridges to go above some holes.
It is not a straight road, for sure, but it is not as curvy a road as you suggest either. There is a lot of good data on some nasty livers that suggests strongly we do not have too much to worry about in achieveing worthwhile efficacy results, as well as no safety issues, in a large, well designed phase III test. That leap of faith you referenced is actually a rather small jump. It may even be better described as a skip than a jump or leap. 4- Yes, the safety profile of Tesamorelin is a great positive aspect, but we have it because it is now an old drug, and one drawback of old drugs, is the fact that the patent protection is not as strong as it is for a new chemical entities. The stongest patent is always the one covering the molecule itself. This patent will no longer be valid for Tesamorelin. So this is another thing that distinguishes Thera's phase III program in NASH. It is all based on an older drug that is now protected by patents on formulation and indication. These maybe valid, but the odds of some legal challenges down the road are higher than with a patent on a new molecule valid for a decade after approval.
If you look at the indication patent that we got on the back of Grinspoon's impressive findings in liver disease, you will find it is quite broadly written and actually offers us considerable IP protection, despite the fact it is not a composition of matter patent. We are not losing sleep about that issue. In fact, the broad patent may give us the opportunity to explore the potential benefits of Egrifta in other liver diseases. We are actually quite happy about the patent we were able to obtain and believe it will provide us with unuaually good protection. 5- Not only the patents on formulation and indication are not, in theory, as strong, but the phase III trial will be done with a formulation that has never been used in a clinical trial before, and this formulation will need in the end to work with a pen injector for potential commercial success. The idea of having it in a pen and approved by the FDA is great, but it still need to be done and it is not a sure thing.
This is not a legitimate objection. Designing a pen is already mostly completed and is not a task which is fraught with great risk. It is the least of our worries. I am playing the devil's advocate a bit here. But I think that these points show that we are not, at this point, in front of a classical and well defined phase III trial stemming out of a great phase II backed with very strong intellectual property. We are in front of an incomplete puzzle with still many missing pieces. It requires positive scientific thinking at this point to assume that all the holes will be filled properly for approval to be reached. This is my best attempt to illustrate why no value is given by the analysts and the market to this program at this time. Do I think it is fair to give it no value at all? No. As I said, I play the devil's advocate here, but even in my more positive view, there are still holes in the puzzle.
SPCEO1 wrote: Begging your pardon, but we already got an enormous value enhancer when the FDA said that TH could be one of the relatively few companies that has the privilege of chasing the giant NASH market. The stock started to react to that and then the company squashed it with the offering. There is no legitiate reason why TH gets zero value for NASH at this point. We really should not have to wait for any new trial success when other NASH stock apparently do not need to to in order for the market to give them some value for their NASH programs. I agree that TH should not get full value for their NASH program given the odd way in which they got here but assuming the market does not need to give it some value is just not a viable argument at this point.
Wino115 wrote: I am also totally in the camp you are in, that evidence of success on both trials is the only proof that will work to turn around the markets ignorance (and it is more ignorance than ambivalence). It's these value-enhancing actual facts that create complete support for a higher valuation.
Biotechs are also hard because there's just so many of them. It's very easy to find the 5-10 you are interested in that are much closer to value-enhancment or have much more actual factual science proving the drug is on it's way to commercialization. We'll get there, but we clearly are not. It should be this year -- 2021.
jfm1330 wrote: Sorry SPCEO,
This a dialogue of the deafs or to put it another way that is line with the times we are in, we do not agree on facts, so it is very hard to have a healthy discussion. I don't agree that board and management at Thera are a bunch of fools or incompetents on the financial side of the business. They did not make a better deal because there was no better deals on the table anywhere. Also, Thera's SP is not close to other NASH players because clearly the market does not see the actual situation of the company as you, me and others here see it. If Thera would obviously look like such a bargain, investors would drive the SP much higher, but it is not the case. Why??? Many here put the blame on the management, but if the bargain was so obvious the management would have nothing to do. Do you think we are the only ones able to make comparisons of market caps between Thera and other NASH players??? Seriously. Come on! Many are aware of this situation but for some reasons are not convinced. Analysts are giving no value at this point to NASH and oncology programs? Why? Don't tell me it's because of management. Is it so hard to acknowledge that at this point in the development of these two programs the market is not convinced they have very high chance of success? Cry as much as you want about the financing, one thing is sure, a lot of financial risks are now out of the equation and given the size of the markets they are aiming at, even a 120 M shares outstanding, Thera should be a bargain in your view, in my view, and in the view of many here. So why with less risks and still very high potential return is it still a bit above 2$ US? Why. Before financing, after financing, the market has not changed its view. It still give zero value to the two clinical programs.
Think about it. Thera bought Katana two years ago for around 15 M$ CAN. Why were they able to buy it at such a cheap price if it's the next blockbuster in cancer? Two possibilities, potential buyers were not convinced by the science behind it, or they were wrong in their analysis, the science is in fact great. Here we think the science is great and that odds of success are good. Great! But two years ago, all Katana was able to get for that great science was 15 M$ from Thera, a very small pharma from the same city. Is it possible that most US investors won't believe in Canadian science until clearly proven wrong. I say MOST US investors, not all. I am just asking the question and it is not aimed at you because you clearly believed in Thera since a long while. When I read some here about the Canadian management of Thera, or the fact that Thera is a Canadian company, it is not hard to believe there is some kind of bias against Canadian stuff in general. The little neighbour that do not belong in the big leagues. This prejudice seems to be there, at least from my point of view. I know there are many Americans here that are shareholders, so clearly this not true for everybody, but to make a stock rise you need more than a few people.
I think the actual undervaluation of Thera is due to many reasons. But it is real. It is not the result of poor promotion. Again, analysts are well aware of everything the company is doing. They know the whole story and the give zero value to both clinical programs. What we see as convincing is not convincing them. That's the reality. Only new clear positive data in cancer and a clear protocol and timeline in NASH will change that.