RE:RE:RE:RE:RE:Alternate Financing for NASH I think in some regards they are on a par with AKRO and Iva and in some very important ways they aren't. Putting it simplistically I say Iva and AKRO have both got over that non-futility hurdle and thtx have yet to do that. So I just took a look at iva's data. The have biopsy data in 247 patients. ~80 placebo, and ~80 in two different dose groups. They are hitting both endpoints (fibrosis and Nash). If you think thtx have to first prove non-futility as their next clinical milestone then generate a full dataset for approval. These other two I would say have already got over the non-futility hurdle.
(As an aside I don't see why thtx couldn't do a similar sized non-futility as IVA if they took the stand alone exploratory trial path. They rightly want to explore the more valuable Ph3 route to exhaustion but to me that is what the back-up option looks like.)
Thtx have other data that allows them a chance at a Ph3 like a good safety record and other Grinspoon data but none of that answers the non-futility question. I accept that just looking at what phase these 3 companies are at might make them seem like comparables but a lot of expense and derisking is associated with these other two companies having answered this non-futility question so I'd still think about discounting against these companies. To be honest I don't know by how much.
Lets say I have low expectations. When I thought about a spin-off of the NASH asset I thought raising $100mil for 50% of TheraNASH was doable. Or maybe $150 mil for 50% might be what they need. It seems like a lot to be getting a $500mil valuation but I'm just pulling numbers from the air.
As I say I still think there needs to be some discounting against Iva and AKRO but obviously the general principle that THTX's NASH asset gets some comparison to these types of asset is a fair one. And it's something that is just not being done it seems outside of this board. I would have thought the minimum that came from having those prestige KOLs opinion would be to challenge analysts and others to do those types of comparisons. There's no evidence it's being done anywhere that immediately impacts the SP but is it possible it's happening in other places (like with partners)?
I'd score the NASH KOL event A for conception and execution. And E for impact. The company have to be feeling that too and wondering what's missing here.
SPCEO1 wrote: Also, the big question on this is does the endorsement of the three scientists, Harrison's perhaps being the most significant, fill the data gap and allow a more proper valuation of TH's NASH asset. Up until the KOL, many were leery of putting AKRO, IVA and Th on equal NASH footing. Is that still a legit argument. I mean, these are the NASH sector's biggest consultants - that must mean something.
SPCEO1 wrote: But who is that market ascribing that value? Mackie, Canaccord and NBF - not a very influential gorup. MAckie is still only saying a 25% chance of success, Canaccord ran some numbers but really did not work hard at it and NBF has not run any numbers. Why is anyone accepting this lame evaluation of TH's NASH asset? What if Piper, Raymond James and HC Wainwright ran the offer and said they believe that Loomba, Harrison and Grinspoon are medically correct (which they likely are)? And that if that is true, then TNSH is not that much different than AKRO or IVA. It would take some selling, but there has rarely been a better time to sell something that is fake (as CYDY has proven) and this is likely true.
Do you think TH has a lower probability of success in NASH than AKRO or IVA?
Wino115 wrote: I have a hard time believing a market that currently ascribes a rather low value to the asset would readily accept it at a massively higher valuation. One bigger than the current company they could buy for less.
One alternative was put up here before. It was a healthcare oriented venture bank that lent to biotech projects for future revenue streams. I don't recall who posted it but it was a deal where they Committed a chunk of money to see a drug through a trial and they released portions of it based on milestones. The interest rate was either low or non-existent and the economics were they owned a portion if it was successful and also got the principal paid back. While the company sounded very legitimate and it's creative, it adds nothing beyond money as opposed to a pharma industry player doing something similar but also providing some intellectual value-add.
qwerty22 wrote:
I had a thought of this as well but didn't know how doable it was. It seems a way to force a valuation and also limit the risk to the company somewhat.
SPCEO1 wrote: Paul mentioned they are pursuing alternate methods to finance the NASH phase III trial. What might that include?
One option would be to spin off TH's NASH assets as a spearate company. If they did that it would be fascinating to see the brokers suddenly ascribing value to NASH as they compete to get the lucrative fees in the listing. It should not be too hard to separate the NASH assets either. Probably two of the best companies to compare TH's NASH asset to would be AKER and IVA. They have market caps of $866 million and $535 million respectively.
TH could list TheraNASH (my suggested name) for a valuation of $500 million with TH keeping 60% of TNSH's stock (my suggested symbol) for itself and with the other $200 million going directly to TNSH to fund the trial.
We are at the top of a huge bubble. Brokers like large fee income. Something like this could probably be pulled off.