RE:Did it move tail risks?So much of what happens with TH in the future now revolves around cancer. If it goes well, then we will all be happy. Today, we learned we have to wait even longer to find out just how well it has gone, which is pretty much how it always seems to go with all drug trials - hurry up and wait!
I don't have a lot of time right now to get into the nitty gritty details of today's release and call but it basically did not move the needle much despite being a pretty comprehensive review.
I suspect they have seen some preliminary signs of efficacy but they will hold that info for the inevitable share offering that is forthcoming following the release of the phase 1a results, which will no doubt have a lot of exciting aspects to them. They also are clearly going to have some interesting presentations at the two cancer conferences and that might generate a lot of buzz around the stock as well.
Anyone thinking of selling before that cancer info is out will likely be making a mistake they will later greatly regret. Good cancer info sets off a chain of positive developments if we get it and I would say the odds of that remain pretty high and are perhaps a little higher than before today's call. Good cancer results begets good analyst coverage, a higher share price, a share offering to raise money to fund the early phase III NASH trial. Throw in a parntership deal in China as well as some outlicensing deals in the US/Europe and you get yourself a whole new company and a much higher share price. To me that remains the most likely scenario.
One positive is that TH did not have signs of efficacy to reveal today when the market is at a low point due to Ukraine. Hopefully, good news on cancer will now come out at a more auspicious point for the market and the stock.
Wino115 wrote: To me, I just want to make sure they're putting TH1902 in a position to become a viable treatment in the future. Christian let it slip how they are hoping to use this treatment and it aligns with what Belevieu said before --they want the ability to use a good dose that gets concentrated and internalized over a longer period with no major safety issues. He let slip that the "issue" with refractory patients is to get something that helps put tumor on the defensive for as long as you possibly can --supress the tumor and stop spreading so the patient can live longer. By going to 300 and eliminating whatever they saw at 460 will create that therpeutic approach with what they saw was negligible safety issues.
I think it's pretty clear the 300 level should pass since they had already moved beyond that and we never heard issues with 300. So that's the final group going now. To me, that eliminates some of the downside since they are solid on the safety and have a dose that's large enough.
Sounds like any efficacy data will likely only be in 1b, so I can't change the probabilities much on the option value. But what they did do is the increase the size of the market they're going for by a bunch. Adding in the second HR+ breast cancer makes it much larger as does melanoma -- those are both very large markets. Same for lung. I'm not sure if the HR+ market would also allow them to move into more to 2L or 3L markets, but it's definitely no longer just $12bil market they are addressing. I would guess HR+, melanoma and lung alone would add another $4-5bil to that market size as a guess.
The quicker move to get a "parallel" development going in markets they don't want to set up in seems to point to a China deal happening sooner than I would have thought, so that's a positive given the current prices being paid for ADC deals. I guess you can add somethiing in for that now in a valuation model.
My net conclusion just around oncology is the negative tail of 1a not reaching a therapeutic dose or being unsafe is off the table, but the larger part around efficacy is still there since no data. The probability is the same for that reason, but the ultimate size of the prize -so the scale of the upside potential is much larger by 50% or so. If you were to actually throw that into the oncology option model you'd likely increase the option value by $.75 to $1.00.
But I doubt the market is actually trying to think this way, so don't expect to see that even though analytically, what they've said around TH1902 is a net-net positive. I guess the surprises will be China quicker than I thought, and the published data and on to the larger 1b in 2-3 months according to Christian. But rest was a bit of a ho-hum, kick the can down the road for me.