New presentation up - realistic review.Basically sums up the letter, but adds a few more points around HIV drug markets and where they are emphasizing engagement to grow the market (screening, for example with EGRIFTA). Also emphasizes the potential for very strong drug combo results with Trog and a new pill (Gileads new lenacapavir) as a way to get quickly to zero and for a long time frame. TH1902 shows a 1H restart but subject to keeping EBITDA positive for the year. Overall, sound plan and basically have to do what they are doing. They have to emphasize drugs first, partnership on NASH second and oncology third to get a fair valuation in the market.
Like Palincs been saying, that's the right way to go and if you look at the overall revenue growth chart in there (a new chart), they have done double-digit well since inception. It's just the starting number was way lower than hoped. They have fixed the addreasable market numbers and these seem more realistic, and still a lot to go for. Overall just seems the commercial side has a far better handle around the potential, how to do it, and how to penetrate it more rapidly. Let's hope that keeps up as it's their (and our) salvation for underlining corporate value.
Here's the overall strategy summarized and basically following the shareholder letter.
<a href="https://ibb.co/Tkbm6md"><img src="https://i.ibb.co/t4x8g8F/Screen-Shot-2023-01-08-at-12-26-26-PM.png" alt="Screen-Shot-2023-01-08-at-12-26-26-PM" border="0"></a><br /><a target='_blank' href='https://imgbb.com/'>anonymous image post</a><br />
On the lawsuit ---
Useless endeavor, unsupported by the facts. It will never even get to the stage of being filed once the ambulance chasers see documentary evidence they announced the enrollment pause once the investigators told them their conclusion to rethink dosage regime based on the interim read of data they interpreted. This will take THTX all of 2-3 letters and a few hours work before those lawyers move on to cases where there is actual facts to back up their efforts. Who would you rather represent, Tesla shareholders who’ve seen billions wiped out as the CEO sold shares while talking up prospects or a flimsy case that will likely never move forward? Waste of time.
But your other points are valid in order to underlie the companies value at this point --hit cash flow breakeven through rev growth, cut costs, show profits, cautious RD spend. If you want comps, average pharma EBITDA multiple is around 17x EV/EBITDA (their EVs around 110mil, mkt cap $90mil) and revenue multiple 3x. Stock currently around 1x revs. Once they announce more detailed plans, if the cost cutting is solid (which PL’s letter points and new presentation points to) they have low-ish EBITDA this year, should be targeting a 2024 EBITDA around $13 mil growing 30% to $17/18mil following year. That would support market cap around $200mil+ and then $300mil+ using EBITDA multiple. The clearer they are around getting there, the sooner they'll get the valuation they and shareholders want to see ASAP.
Paul knows he has to get there because, barring success in the pipeline which he will no longer budget on, he could attract an underwriter if showing he’s got $50mil cash in the bank and profits growing 30%. Then he can raise the money to just pay off the debt and provide some growth capital if they need it. Basically has to manage the financials to that point and the share price is now far more important to him than at any point in his tenure. I think he knows that based on his letter and I wouldn’t be surprised if there is finally a change in approach and tone to be much clearer around financials, cost cuts, RD and partnerships or drug add-ins so he can manage the share far more positively based on financials. But everything will be about bottom line in those offices for the foreseeable future, which is a good thing for shareholders.
First step, report 2022 and put more meat around the 2023 breakeven plan and 2024 profits. If you figure out TH1902, that’s pure upside now since it’s back to fully risked and the market assumes, correctly for now, there’s minimal value.