Trevena Inc (TRVN)

[lattices]

The company will file it's nda in 4th Q, so market entry 2H 2018.

They will need more cash by then.

The market is no longer betting on data results or the likelihood of FDA approval. It's market size.

There are the two other trials and. At this point in my early education, I'm assuming the method of action/the drug itself is the same as Oliceridine but in a different formulation and point of care. So, the semi-failure of Oliceridine's trial suggests worse outcomes for the other trials. Again, I'm still early in understanding my new investment and I'll correct this (or another member will) if I'm wrong.

As this CNBC article notes (http://www.cnbc.com/2016/10/12/the-new-drugs-with-a-chance-to-reverse-the-opioid-addiction-epidemic.html ) the promise that lured investors was that it didn't have opiate-like addictive issues.

Instead, the advantages are sufficiently minor that we need a magnifying glass to see them.

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I bought shares mid-Friday at what turned out, by luck, to be the low, without knowing much about what I was buying other than what I could learn from an quick hour of study, and limited experience. Now, I'm evaluating how bullish to be.

Shareholders at $7 had to make quick decisions as to what they thought the market size would be for the product. With a collapsing share price, holders at $7 needed to be decisive because they couldn't know where the bottom was. The sellers were likely to understand the collapse of the market opportunity than someone like me -- a buyer attracted by the apparent opportunity to buy a certain-to-be-approved drug where the risk was market size and not trial risk.

Unlike most successful trials, where the optimism pre-data is matched by the data, we had a weird outcome...good enough to get FDA approval, and good enough for some market adoption, but how to price this opportunity?

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Acquisition for this company seems particularly important and now it's chances of being acquired is much lower. It's not a blockbuster earner opportunity.

Without selling itself, the company has to raise money by 4th Q-- I would guess by mid-summer. They can't let the cash run so low that the market runs ahead of the CFO and trashes the share price anticipating the secondary. The company can't borrow/add debt because of the iffy commercial prospects of Olino.

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There's also the competitive threat from CARA, which may have superiority.

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My view, at this point, is that these are downsides only relative to the opportunity that the market was pricing at $7 per share -- very successful drug + optimism for acquisition.

Let's assume the company has $75M cash as of this moment, i.e. end of Feb. At $7 per share, the enterprise value less cash was priced at $5.2, whereas now the enterprise value-less cash is priced at $2.7, so the real non-cash market value collapse was 50%.

If I enter the stock with the trial data facts known, and I pay an enterprise value for the company of$140M (number of shares X non-cash equity value of the shares,) how good an opportunity is this?

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As of this moment, I'm struggling to see why there still won't be a usage by anesthesiologists. As one wrote on seekingalpha,

I am an ABA board Certified anesthesiologist. We will use fentanyl intraop & dilaudid or morphine post op....unless patient is old, frail, or with sleep apnea and then will use the more expensive newer Med Olino (Oliceridine). This small patient population is expanding though. The other benefit of less vomiting is quite important also. Patients do expect post op pain but post op nausea & vomiting is a real & significant problem I like to avoid worsening.

This anesthesiologist also explained that they couldn't use Olino if it wasn't carried within the hospital -- underscoring the market and distribution challenges.

The company has done a horrendous communications job with investors. No investor day/webscast where they explain the various issues/marketing plan/competitive position. They should have done this pre-data, though maybe they didn't because the company anticipated the mixed results.

In any event, we had only a moderately informed investor base. Few biotech institutional investors; and a market guessing on the odds of acquisition; the downward pressure from a 2H possible secondary; the marketing plan as an independent -- or preferably the search for a BP to at least handle the sales and distribution.

The company retains global rights -- it seems that if there's any usage adoption potential the US, there should be such potential for those humans who reside outside the US...it's not clear to me why the market seems to be allocating basically a zero value to the non-US revenue/licensing possibilities.

From the company:

wing our End of
Phase 2 meeting with the U.S. Food and Drug Administration, or FDA. We have retained all
worldwide development and commercialization rights to oliceridine, and plan to commercialize it
in the United States for use in acute care settings such as hospitals and ambulatory surgery
centers if it receives regulatory approval. I

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At this point, owning this company for $140M market value seems like an excellent price, and I'll continue to hold as I learn more.