RE:RE:RE:Tranche 3 by end 2023 I think you are confused when you write about a big tick needed to get revenue of 90 millions in a 12 month period immediately preceding the funding of Tranche 3 so at the latest they would need 90 million in sales ftom March 2023 to March 2024
If they only reach 90 million sales till then that would be anemic sales from the current year not a big tick!!!
=SPCEO1]See my thoughts in red below
palinc2000 wrote: Why woukd they need to make an acquisition to meet the 90 million $ in revenue?
I don't share your confidence on a big kick higher in Egrifta and Trogarzo sales. It has nothing to do with management - I don't think any management team would have much chance of success in reinvigorating those sales after such a long time without success on the growth front without something dramatically new happening. I don't think the IV Push will be an important enough development to drive sales of that product markedly higher. F8 should help Egrifta sales but that is a ways off. The weight of evidence supports my case for a slower progression of sales growth and I think you are overvaluing management's ability to influence these things. We have heard so many explanations and sales force changes in the past that never panned out that I think we have earned the right to be skeptical that the latest iteration will amount to anythign significant. All that being said, I hope your optimism on this is correct and I am wrong. You really think they would do a bad deal which would involve a cash outlay to get their hands on the 3 rd Tranche?
We already know it is hard to do a good deal since no deals have been done over many years of the company talking about it. TH has shown good financial discipline in not doing such bad deals in the past. It is going to take some special circustances to get a good deal done and, from time to time, they arise, such as with Trogarzo. In this case, a bad deal regarding the actual purchase of the new revenue stream which could be bad or neutral for earings on its own might be a good deal from an overall company perspective if it gets TH the extra year of interest only payments and an additional year on the term of the loan. That incentive on the loan structure might lead TH to do a deal they otherwise might not do. These are the kind of statements which I consider as being the same as calling mgmt stupid..
You are entitled to your opinion but I think it might be fairer if you let me speak clearly for myself about whether I think management is stupid versus you imputing such thoughts to me. I also think you are just wrong in coming to that conclusion. If the water problem is resolved in October 2022 why do you think approval of F8 is a BIG IF?
You have been around long enough to know that most things related to the FDA take longer than hoped. Will the water problem be resolved by October - Paul indicated they are relying on the FDA website for that info so it sure doe not sound like they have any unique insight into the matter. Would you be shocked if there was an update in late September that pushed that date back? Would you be surprised if the FDA asked for clariifcations to the F8 info before approving it that took longer than we would like? Stuff like that seems to occur with regularity, particularly with an understaffed FDA. Moreover, F8 is certainly not a high priority item for the FDA. FDA has approved the revised protocol for Phase 3 in Nash...Logic would dictate that FDA will accelerate the approval process for F 8......pure logic!!!
More like pure hope - but I hope you are right. Again Spceo you seem to question or undercut a lot of statements on operational issues ....dont you have any confidence in their ability to run the business on the day to day basis?
I disagree with your assertion. I am an analyst who is looking at all angles of the company to make the best judgments about their plans in order to hopefully make my clients some money. What you are apparently seeing as negativity is just normal analysis that we do for all of our holdings. There are no perfect companies and all important corprate decisions and market situations should be examined closely by investors. I actually think TH management have done a decent job of runnning the company, particularly Christian on the scientific front, but the ONO on the financing front was really, really bad. Now, the Marathon loan deal was really good, so that side of the equation is back on track. And it is indisputable that TH has been at the bottom of the barrel with regard to their interaction with the invesment community, which is a very important part of their management role. Their are some feint, early signs of improvement on that too - let's hope they grow into something really meaningful. Good cancer data will make everyone look like a genius, so let's hope they get it and get it sooner rather than later. SPCEO1 wrote: I have said that it seemed like a reach to get the F8 approved by the end of in order to get the extra year of interest only payments on the Marathon loan and the extra year on the term of the loan. Yesterday Paul indicated they would file the F8 as soon as the water situation is cleared up which the FDA is still saying on their website will be by October. If that all holds up and there are no delays, they could have the F8 approval in hand by the end of 2023. Still a big "if", but certainly possible.
TH also would need to get to $90 million in trailing year revenues, so that would likely require an acquisition of some sort between now and then of revenues. The risk is they do a bad deal to acquire revenues just to be sure they meet that goal and are able to take down tranche 3 and trigger the benefits of doing it a bit early.
Of course, if they end up with three 25 member cohorts in the phase 1b and half of the patients in those cohorts see nice benefits from TH-1902, then all of the loan related things may become irrelevant since raising new equity on attractive terms as well as partnership capital would likely become a more preferred route to raise money. With a phase 2 trial likely requiring $40 million or more (can't see how they could get a registrational phase 2 trial done near the low end of Paul's cost estimate) they will need capital. Since the brokers know that, they would likely start recommending TH's stock soon as good cancer data is available in order to have a chance to be involved in any potential capital raise.
Now they could pull down the remaining amounts on the Marathon loan and raise less equity. And they could renegotiate the Marathon loan to up the amount they could borrow to finance a phase 2, but that seems unlikely unless they (and especially Marathon) were really very, very confident about the outcome of the phase 2 trial. If you knew you had a huge winner on your hands, debt financing would be ideal for shareholders. But you need to get that call right.
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