Posting this to Reddit - Thoughts?THTX/TH - The micro cap you haven’t heard of 2
Nasdaq: THTX
TSX: TH
Theratechnologies is a commercial-stage biopharmaceutical headquartered in Montreal, Quebec. But before we get to the approved drugs’ (still growing) revenue, the real value in this stock are the two trials in the pipeline:
**Phase** **I** **Oncology**: peptide-drug conjugate (PDC) targeting sortilin receptors (SORT1), selective delivery of anticancer agents into cancerous cells; PDC drugs may be more effective than ADCs (antibody-drug conjugates); SORT1 technology leads the oncology world in PDC advancement, with IP protection (a) FDA accepted THTX as a Phase I cancer player in January 2021 with an IND (b) TH1902 in preclinical breast cancer: “TH1902 induced complete tumor regression in Triple-Negative Breast Cancer (TNBC) with no apparent decrease in neutrophil count.” (c) December 2020 saw new pre-clinical in vivo results that additional cancers expressing SORT1 could be receptive to TH1902: ovarian (mkt size $3B by 2022), TNBC (mkt size $55B by 2027), pancreatic (mkt size $4B by 2025), colorectal (mkt size $17B by 2025), endometrial (mkt size $12B by 2027), and melanoma (mkt size $12B by 2025) – now all to be tested in the Phase I (d) “In animals, treatment has been shown to slow down tumor growth, or even completely eradicate, without causing weight loss or neutropenia, deleterious side effects often associated with chemotherapy,” said Borhane Annabi, of the Department of Chemistry at UQAM’s Molecular Oncology Laboratory (e) FDA granted THTX Fast Track Designation for TH1902 in February 2021 based solely on preclinical data so if the trial shows safety and efficacy in P1, the P2 and P3 will move significantly faster given unmet medical need (f) 50-60% of patients who died of cancer had overexpressed sortilin (g) $12B revenue for advanced stage cancer which could be much higher if THTX can start treating early-stage cancers (f) TH1904 (another PDC) actively awaiting an IND from the FDA
PDC science background: The proprietary peptide (TH19P01) is a ligand to sortilin, a receptor expressed in many types of cancer and also a drug carrier since different drugs can be linked covalently to the it by a selectively cleavable linker. In the case of TH1902 the drug linked to the peptide is docetaxel, and in the case of TH1904, it is doxorubicin, both are generic, highly toxic, well known anti-cancer drugs. The innovative approach for the cancer program is that the PDCs allows to deliver free cytotoxic agents inside the cancer cells while protecting healthy cells. So the peptide part of the PDC allows the linking of the cytotoxic drugs on it while retaining the ability of specific binding to the sortilin receptor expressed on the outside membrane of cancer cells. Once the PDC is bound to the sortilin receptor, both are internalized into the cancer cell through a process called endocytosis. Once inside the cancer cell, the higher acidity, in comparison with the bloodstream, allows the cleavage of the linker and the release of the free anticancer agent. The key to this oncology platform is the overexpression of the sortilin receptor in many types of cancer. The sortilin receptor is the target to allow selective intake of the drug into the cancer cell. The other key part is the 17 amino acids peptide that has high affinity to the sortilin receptor that will lead to the specific binding of the two parts. The other critical feature of the peptide is the possibility to link to it two drug molecules through the use of a linker stable in the bloodstream, but unstable inside the cancer cells due to higher acidity. So this platform through the use of a proprietary peptide allows the selective intracellular delivery of cancer drugs. The advantages of this technique are that it allows higher concentration of the drug in the cancer cells, and much lower concentration in other healthy cells, leading to higher anti-cancer efficacy and lower toxicity in animal models with human cancer xenograft overexpressing the sortilin receptor.
Presenting at American Association for Cancer Research (AACR) in April: This is their second invite to the AACR conference based on their preclinical oncology results. This year, however, they will hopefully be in the beginning of their phase I oncology program. Hoping for more insight on the PDC’s Phase I dosing here.
**Phase** **III** **NASH**: using the already-approved drug tesamorelin that has a proven record of reducing abdominal fat in lipodystrophy patients (and safety profile of over 10 years of commercial use) (a) FDA accepted THTX as a Phase III NASH player in January 2021 (b) Impending Phase III likely to Q3 2021, still finalizing trial design with EMA (c) Trial design assisted by Dr. Rohit Loomba of UC San Diego (NASH expert), Dr. Steven Grinspoon of Harvard Medical School and Massachusetts General Hospital (Metabolism expert), Dr. Jennifer Cohen Price of UC San Fran (liver disease expert), Dr. Vlad Ratziu of Sorbonne University and Piti-Salptrire Hospital in Paris (NAFLD and NASH expert), Dr. Jrgen Rockstroh of the University of Bonn in Germany (HIV expert), and Dr. Graeme Moyle of Chelsea and Westminster Hospital (HIV and lipodystrophy expert) (d) compare THTX market cap to other Phase III NASH players:
**THTX:** **$287M**
MDGL: $1.899B
ICPT: $890M
Phase II players:
NGM: $2.06B
VKTX: $519.862M
THTX is undervalued on their P3 NASH program alone. *Then* factor in its oncology program + legacy drugs.
**Current** **Financial** Position** (with 1/21 bought deal):
$66.7M cash
$110M current assets ($146M assets)
$42M current liabilities ($97M liabilities, $51M of which are convertible notes at $14.85)
4Q Revenue: $19M, 16.6% YoY
4Q Adjusted EBITDA: ($1.4M)
4Q Net Loss: ($5.5M)
Loss due to higher spending on R&D activities
Outstanding shares: 95,787,479 + 9,454,900 warrants at $3.18 exercise
Fully diluted: 105,378,111 shares (+$30M more in cash from warrants)
**Legacy drugs**:
**Egrifta** **(tesamorelin)**: approved in U.S. and Canada for reduction of abdominal fat in lipodystrophy patients living with HIV. (a) 70K+ lipodystrophy patients with HIV in U.S. (b) re-emphasizing: this drug is what THTX seeks to treat NASH patients with and is already approved and commercialized, a safety profile of over ten years (c) THTX owns 100% of the rights to this drug and has a patent for this indication & NASH through 2040
**Trogarzo**: approved in U.S., Canada, and Europe as an antiretroviral antibody for MDR (multidrug resistant) HIV-1 infected patients (so patients using it essentially have no other option as they’re multidrug resistant and seemingly cannot use anything else to stabilize (or lower) their viral load – however, there is no reason Trogarzo should be exclusively thought of as an MDR patient’s drug – THTX’s plan (pre-covid) centered around re-educating doctors that Trogarzo can be implemented before a patient is out of other options since it could work more effectively. (a) 20K-25K MDR HIV-1 patients in U.S. (b) THTX has failed to meaningfully capture the number of patients they initially projected – this is the cause of the stock pop in 2018 followed by the selloff; however, prior CEO was not a sales and marketer guy, current CEO is and predicting 240% increase in sales in coming years
**Disclosure**: 6600 shares solely based on the pipeline – obviously the real reason I’m posting: the market is currently only valuing their legacy drugs. Notably, the chairwoman of the board, Dawn Svoronos, bought 74k shares on the open market last year. Levesque (CEO) bought 40k shares in the last bought deal, Director Paul Pommier bought 30k shares in the latest bought deal, and the CFO and Director Trudeau also bought shares in the latest bought deal. Oh, and Soleus Capital Master Fund, L.P. (healthcare oriented investment fund) apparently participated in the last bought deal now owning 7,425,382 shares.
https://www.sec.gov/Archives/edgar/data/1512717/000119312521052350/d257822dsc13g.htm Investor Presentation, 1/19/21:
https://www.theratech.com/investors/presentations/