RE:RE:RE:RE:RE:Further to my TNSH listing ideaI have not been able to figure that out from just PR announcements. Likely need to dig in to various filings to get actual economics of these deals. Will try to see if I can find one. But did notice none of their deals appear to be in NASH yet, and lots of oncology. So they may like the shorter start to finish on those.
SPCEO1 wrote: Do you know what a typical deal looks like for the drug company? I cannot make out what SFJ normally gets in exchange for their financing?
Wino115 wrote: Here's their Plan B, or maybe even a Plan A. Drug Development investor with pharma experience (including Pfizer) and backed by Blackstone Life Sciences and Abingworth. Both have done investments like what THTX is looking for. They may not bring as much "in the clinic" experience as a pure pharma, but it's pretty close.
SFJ Pharma (Strat Dev & JV)... https://www.sfj-pharma.com
SPCEO1 wrote: The investors valuing AKRO, IVA and MDGL where they are valuing them have no hedges from other programs, so that does not seem to be an issue. In fact, they may want to sell their holdings and buy the much cheaper TNSH to play the possibility of one of these companies being a winner in NASH. Or they might want to own a number of NASH players as they do not know which will win, but whoever does win, will win big.
In the end, from our perspective, it is all about a big broker stuffing the deal down its distribution system and then letting the market settle all that out afterward. And the big firms certainly have the capacity to get a deal like this placed.
A deal like this offers THTX better economics than a parntership as well since THTX is unlikely to retain 60% of the economics in any partnership.
qwerty22 wrote: One weakness of this is from the risk perspective. If we finally get an active NASH program then both clinical programs are a hedge against the other programs failure. Once you split NASH off as a separate entity then TNSH loses cancer as a hedge. The scenario is still fine for thtx shareholders cause you still have skin in the game with both programs but TNSH loses any benefits from success in cancer.
Wino said it in a different way but why would you buy TNSH shares when THTX shares might look like a more attractive proposition? In your scenario when you buy thtx you get 0.6 of TNSH as well. If both programs are active and moving forward wouldn't you prefer thtx with some diluted TNSH rather than TNSH alone? There's going to be a long wait for data out of TNSH and hopefully good data flow from THTX. On many intangibles (and tangibles?) THTX for most of the next 3-4 years always looks more attractive (unless cancer bombs). I know it comes down to price but there are factors here that complicate the equation.
As I've said I really like the idea of something that forces a valuation onto the program. For this next period I think a partner is still the best option even if it's challenging. If that fails they move on to plan B (or C or D).
SPCEO1 wrote: I put that together pretty quickly and did not have tome to fully flesh it out,and still don't, but I thought I should at least mention that the idea of buying back the convert (last traded at $91) was that it would give the broker more fees to entice them to take THTX seriously and because the hope would be that the $200 million share sale of THTX shares following the release of the cancer data (and also following the stock finally reflecting some significant value for the TNSH holding following its listing), would be done at a price higher than the $14.80 conversion value of the convert.
So, my hope would be the listing of TNSH would roughly double the share price of THTX, the redemption of the convert would add further to the share price and then the cancer data would be good enough to really get the stock going, in large part because we would now have the backing of a major US broker to spread the news of that data to a much more welcoming group of now institutional shareholders who are pretty excited about the prospects of THTX's TH-1902.
Now, that all depends on the cnacer data being good. THTX likely already knows quite a bit about that data so they can handicap whether such a bold move makes sense. But the TNSH listing makes sense in almost any scenario and is not reliant on cancer to make it work.
The alternative, and because we have not seen a lot of boldness from THTX in the finance area, most likely scenario, is to simply report out good cancer data and sell enough shares to fund the NASH trial at that time. But I think that process results in a much lower share price because it is less likely to entice a major US broker to get involved with THTX.
My suggestion also counts on that big broker being able to earn very large fees and I don't think THTX gets their attention without paying out some big fees to them. It also assumes that broker feels confident they can place $200 million in TNSH shares. My guess is that broker's confidence about that rises as the fees they could potentially earn rises.
THTX's NASH asset is the result of some tremendous work by the company. Few would have believed they could pull off what they have pulled off in NASH. But the job is not done until the phase III is at least partly financed and taking a bold financial move to match the bold medical moves THTX has already made seems like a good idea. The math works unless THTX does not really believe its NASH asset is somewhat comparable in terms of likely success to IVA and AKRO. Even then the terms I have suggested put it at a significant discount to those two competitors, to say nothing of the huge discount to MDGL.
Get 'er done!