The PlaybookNow that Paul has posted his letter we can more clearly understand the playbook that they are following. I am happy to see that it is a logical and methodical one.
- Focus on people and culture: as a shareholder craving clarity in the aftermath of the TH1902 P1 pause this was a challenging step to wait through, but very necessary as an organization needs great people to achieve great things. The posts on social media regarding non-core presentations and the like were puzzeling, but these efforts were to celebrate and acknowledge the people, community, and culture of the company. I am sure there were even more internal efforts to bolster morale and retain key talent.
- Address the Issue head on: Paul did what needed to be done and finally acknowledge the issue and lay out the next steps. They don’t have all the answers yet, but are committed to finding solutions. Now the messaging will shift to repairing the other aspects of the business to realize better value while we wait.
- Build a solid foundation: For this you need to determine what your core business is (IE. what is the asset that has the clearest path to realizing substantial value). Right now, for Thera that is the existing commercial assets. They are generating cash and the efforts to grow sales and improve patient experience are beginning to bare fruit. There is even more opportunity on the horizon with Egrifta F8 and Trogarzo IM, but the market isn’t seeing value. This letter is the first attempt to earn a better valuation by laying out the parts in a clearly defined manner.
- De-risk non-core assets: [EGRIFTA NASH] I was happy to see them specifically say that the NASH program is partner ready rather than use mixed language that could see them trying to go it alone. The P2b/3 process has taken so long that any revenues will be heavily discounted, and this helps to remove the possibility of significant near-term dilution to fund an expensive trial. This asset could be a wild card that could provide some great upside with the right partner. [TH1902] The scientific committee will help to provide validation to the path forward vs. a pure management lead hail Mary, while the methodical stage-gated approach will provide a clearer path to an outcome. I think a lot has been said on this board already regarding the program so I wont rehash it. There isn’t much more to say until the plan is announced.
Really the thing I would want them to add to this list is better engagement and awareness with investors. There is a huge liquidity premium due to the low volumes that is preventing the above from achieving its maximum value. They need to be able to give buyers and sellers the opportunity to move in and out of the stock without driving the price up/down 10-20%. To do this that need to keep filling the hopper. If institutional is on a pause go for HNW retail with some large brokerage visits etc.