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Page 16:
"The research analyst(s) primarily responsible for the preparation of this research report have received compensation based upon various factors, including the firm’s total revenues, a portion of which is generated by investment banking activities.
Maxim Group makes a market in Neurotrope, Inc.
Maxim Group expects to receive or intends to seek compensation for investment banking services from Neurotrope, Inc. in the next 3 months."
https://www.scribd.com/document/379427337/NTRP-initiation
"We are initiating coverage of Neurotrope BioScience with a Buy rating and $16 price target.
Neurotrope’s bryostatin has a differentiated mechanism of action that may induce synapse regeneration in Alzheimer’s Disease (AD), the underlying cause of cognition impairment.
• Phase 2 data (N=150) in patients with mod-sev AD demonstrated Severe Impairment Battery (SIB) improvement, which continued to increase for weeks after treatment ended, suggesting an impact on synapse regeneration/preservation.
• Confirmatory P2 is next, we see it as a “smart” move; Neurotrope, rather than jumping right to a P3 study based on a small P2 study and subgroup analysis, is stepping back and designing a second P2 study to validate dosing and to zero in on the right patient population (initiate 2Q18, data mid-19).
• Bryostatin is a platform drug with potential in several indications; stroke, TBI, Fragile X, Niemann-Pick Type C and Rett Syndrome. P2 studies expected.
• Conclusion: By regenerating synapses and attacking AD at its core, we believe that bryostatin could emerge as a viable therapy in AD and potentially have the clinical success that other approaches have not. In our view, positive P2 confirmatory data can position the company well for partnering opportunities or to become an acquisition target for big pharma. Catalysts lay ahead; we see upside at the current ~$70M valuation of the company."
We'll see what happens. Either way, I just sent Jeffrey an email about this and hopefully he'll let me know what they think.
The thing about discounted warrants is that they would have to be exercised within a year, and if the price drops the company wouldn't receive any money because the exercise price would still be above the market price.
Discounted shares would eliminate that uncertainty and bring in cash immediately no questions asked.
Looks like they updated their website:
http://www.neurotropebioscience.com/
I like it.
How do you know they are aware?
I don't think discounted warrants would be enough, since the company needs money soon and can't risk waiting for warrant holders to decide when to exercise their warrants.
Exchanging their warrants into shares that are cheaper than current market price would not only bring in cash immediately for the company, but it would also be an offer investors can't refuse, since they would make an immediate profit.
Also I made an error in my previous post. The $6.40 offer would be an 80% discount for Series E warrant holders, not 75%.
Interesting idea. They could offer investors to turn their Series E & F warrants into shares for $6.40 (75% discount for Series E holders and a 50% discount for Series F holders). In that case, no additional dilution would occur and the company could bring in $29,254,061.
Hell, I kind of want to tell IR about this proposal now and hope they'll forward it to management.
I made a prediction a while back saying that they'll issue 2 million more shares for $10 each, bringing in $20 million in total.
A positive confirmatory trial could then send the share price soaring and inspire investors to exercise their warrants and inject some more cash into the company.
Neurotrope could potentially then have about $90 million in the bank for the upcoming phase 3.
10-Q looks pretty boring.
Only thing I got out of it was an updated share count and a deadline for the company to raise new funds before August 2019.
My guess is that this means they will raise new funds at the end of this year or early next year.
$6.9 million in costs? Now I know why they say they can afford their cash burn for another 18 months while running another trial at the same time.
Is anyone here in the green yet? I'm averaging down since last year whenever I can, but if this thing keeps rising it won't be long before I break-even and have to start averaging up instead.
Since there are now 4 times as many non-memantine 20 dose/placebo patients included, I'll make a quick uneducated guess and say that the p-values next year will most likely be below 0.01.
My point is that while there are less patients in total this time around, there are more non-memantine patients being included.
Or to put it differently, getting rid of the 40 dose and patients taking memantine makes it much easier to prove statistical significance, and so we don't need as many patients this time around.
100 patients may seem smaller at first, but you have to keep it mind that not only did the previous trial have 3 patient groups (20, 40, placebo), but some of them were also on Memantine.
If you look at the most recent presentation, only 25 non-memantine completers were receiving either the 20 dose or placebo.
So while there are less patients this time around, there are significantly more non-memantine patients per patient group.
There is some pretty impressive name-dropping going on in that press release.
Dr. Lee-Jen Wei
- Professor of Biostatistics at Harvard University
- was elected as a Fellow of the American Statistical Association
- was named “Statistician of the Year” in 2007 by the Boston Chapter of the American Statistical Association
- received the Wilks Memorial Award in 2009 "for statistical methods used in clinical trials.", which is one of the most prestigious awards among all the international statistical societies
- See: https://en.wikipedia.org/wiki/Lee-Jen_Wei
Dr. Richard Thompson
- Senior Scientist in the Department of Biostatistics at Johns Hopkins University
Dr. Martin Farlow
- Professor Emeritus in the Department of Neurology at Indiana University
- Co-director of the AD Center at Indiana University
Dr. George Perry
- Dean of the College of Sciences, Professor of Biology, and the Semmes Foundation Distinguished University Chair in Neurobiology at The University of Texas at San Antonio
- Editor for numerous journals including Editor-in-Chief for the Journal of Alzheimer's Disease and a member of the Company's Board of Directors.
- Has received all kinds of awards for his work. See: https://en.wikipedia.org/wiki/George_Perry_(neuroscientist)
"Neurotrope, In Consultation With Leading Neuroscientists, Completes the Study Design for its Confirmatory Phase 2 Trial in Advanced Alzheimer's Patients"
https://www.prnewswire.com/news-releases/neurotrope-in-consultation-with-leading-neuroscientists-completes-the-study-design-for-its-confirmatory-phase-2-trial-in-advanced-alzheimers-patients-300643259.html
They should certainly do more to educate the biotech industry and investors about why outdated approaches in the industry keep on failing while Neurotrope produces results like no one else can.
However, I think it's not something they should do now since it's not the best way to maximize shareholder value.
A monthly webcast would not only take away time and effort from the daily work that is essential for the future success of the company, but it would also make Dr. Alkon less productive, as he now has to use his knowledge to answer questions and educate people rather than use it for cutting-edge research that could further benefit the company in the future.
I think their top priority now should be to start the confirmatory trial, sort things out with the FDA, and then maybe raise some more cash before or after the new results are released.
Once they have bulletproof data that can't be criticized, then they can start thinking about marketing.
So the industry is slowly waking up to the fact that the amyloid theory is wrong.
Now we just have to wait for them to discover the PKCe theory...
I certainly hope so. The longer the stock stays cheap the more shares I can buy up before this thing lifts off.
Always great to see new research articles from Dr. Alkon.
The guy is 75 years old but still manages to crank out new articles every year while at the same time doing his work at Neurotrope.
I really hope he lives for at least another decade so he can see the millions of lives his research will save.
About two weeks left before the 10-Q and 13-Fs start rolling in.
The thing that makes AD so serious isn't just the fact that it destroys your memories and your ability to function like a normal human being. It's the fact that it affects so many people.
AD is the sixth-leading cause of death in the US:
https://www.cdc.gov/nchs/fastats/leading-causes-of-death.htm
AD and dementia care in the US is expected to cost $277 billion this year alone, and $1.1 trillion/year by 2050:
https://www.bloomberg.com/news/articles/2018-03-20/spotting-alzheimer-s-early-could-save-america-7-9-trillion
In fact, the problem is getting so serious that people are trying to make it the top issue at the G20 summit next year:
https://www.forbes.com/sites/robinseatonjefferson/2018/04/16/thought-leaders-want-alzheimers-at-the-top-of-g20-agenda/#18a21c147ee9
An effective treatment for dementia and AD could literally save the world trillions of dollars.
Do you happen to have a link to that report?
I think I read somewhere that the same analyst wrote both the Aegis and Roth reports, both times setting very bullish target prices.
They certainly have more potent drugs in development, but since that's all pre-clinical stuff I wouldn't really worry about that until the late 2020s (unless of course a partnership or acquisition significantly fills up their coffers with more cash).
Even Bryostatin will mostly likely need a phase 3 going into the early 2020s before it starts bringing in any revenue.
For investors, I think a more relevant focus for now will be on how big pharma and the rest of the world reacts after the next results are released.
Something else to note is how the biotech industry as a whole is suffering right now, which is encouraging all this M&A activity as you can see here: http://fingfx.thomsonreuters.com/gfx/rngs/BIOTECH-M-A-%20/010060Q91BT/BIOTECH-MA.jpg
Even as I'm writing this, Takeda is trying to merge with Shire.
Personally, I'm currently betting on Pfizer to put down the best offer in a few years. They're one of the biggest fishes in the pond and pretty much live next door to Neurotrope after all.
Great article, even if it's clearly biased and posted on Seeking Alpha (not exactly the most reliable information source).
At first I was incredibly disappointed by how investors reacted to the phase 2 results last year. Even if it wasn't a home-run, Bryostatin had clearly outperformed any other AD drug on the market.
But as time went along, I saw that maybe the muddled results were actually a good thing, since I have now managed to significantly average down with new shares, and I can continue to buy more at bargain prices while this thing is still under the radar.
Either way, we're all in for one hell of a ride once confirmatory trial results are announced.
I certainly believe it's going to be a black swan event for the entire biotech industry. I also expect it to cause major headaches for any company still heavily invested in chasing after amyloid or tau deposits such as Biogen.
If the results are positive (which will most likely happen unless the memantine-free population miraculously improved by more than 6 points because of something else in the previous trial), I expect there to be a fierce competition between major biotech companies as they desperately try to outbid each other in acquiring the world's first AD treatment that actually reverses the damage.
They'll probably try buying Dr. Wender's Bryologyx too, so that they not only have the exclusive right to sell Bryostatin to AD patients, but also have the exclusive right to synthesize it.
That's why I have personally started looking more into the following big pharmas to see if they have caught onto what's happening (I know at least Pfizer has cancelled all their AD drug development so far):
Johnson & Johnson
Pfizer
Novartis
Merck
AbbVie
Novo Nordisk
Amgen
Abbott
Sanofi
Gilead
GlaxoSmithKline
AstraZeneca
Bristol-Myers Squibb
Eli Lilly
Celgene
Biogen
Allergan
I just realized that Biogen is in deep trouble if Bryostatin makes it to the market.
https://www.biogen.com/en_us/research-pipeline/biogen-pipeline.html
More than half their pipeline consists of drugs for neurodegenerative disorders, and all their AD drugs seem to be going for the amyloid approach.
Imagine how investors will react when they see a smaller competitor put a drug on the market that does the job of more than half their entire pipeline.
If this thing breaks through $9 again, I will be very disappointed I didn't buy more while it was still under $8.
On the other hand, if this runs all the way up to $14 or so, we can delay the next fundraiser because of all the new warrants being exercised.
Something that concerns me (and excites me at the same time) is that as institutions (which are more likely to hold than finicky retail investors) buy more shares from retail investors, they could contribute further to the liquidity problem, which on one hand is good for the stock price and our current holdings, but on the other hand makes it harder for me to buy more shares for cheap prices.
I'm seeing some trades execute at prices with 3/4 decimals, and they're usually higher volume trades than the regular 2 decimal ones.
Would you say those are institutional trades? Because I suspect they are.
Some interesting excerpts from the 10K:
Page 9:
"We believe that deficient activity or low concentrations of PKCe in aging subjects is one of the main causes of the neurodegeneration seen in AD."
"PKCe activation reverses most, if not all, of the pathological processes leading to the progression of Alzheimer's Disease, and represents a unique singular point for therapeutic intervention which could arrest further development of the disease in either early or late stage patients"
Page 10:
"The morphology of the damaged neurons in these animal models looks strikingly different after they are treated with experimental drugs that activate PKCe. The new growth of dendritic trees on the damaged neurons creates a multiplicity of new synaptic connections, basically re-wiring the damaged neurons and restoring their function. Earlier therapeutic intervention with a PKCe activator produces markedly improved outcomes in tests measuring restored animal cognitive function."
Page 11:
"Upon activation, PKCe migrates from the intraneuronal cytoplasm to the cell membrane, where it activates signal-regulating enzymes (specifically the m-RNA stabilizing protein, HUD, and downstream growth factors such as BDNF, NGF, IGF, etc.; MAP kinases Erk1/2; the BCl-2 apoptosis cascade; and NF-?ß), causing a series of changes leading to increased DNA transcription, synaptic maturation, a consequent increase in levels of growth factor proteins (such as nerve growth factor and brain-derived neurotrophic factor), an inhibition of programmed cell-death and a reduction of ß amyloid, and hyperphosphorylated tau."
Page 12:
"CRE has developed a new chemical family of polyunsaturated fatty acid (“PUFA”) analogs, which appear to be effective in the activation of PKCe."
"These molecules activate PKCe by binding to two different and distinct active sites on the enzyme. The natural ligands that bind to these sites are diacylglycerol and phosphatidylserine. Bryostatin acts as a mimetic (mimic) for diacylglycerol by binding to the diacylglycerol site and, similarly, the PUFA analogs act as mimetics for phosphatidylserine by binding to the phosphatidylserine site."
Page 28:
"We believe we are the only company currently pursuing PKCe activation (with consequent prevention of neuronal death and induction synaptic network growth) as a mechanism to treat AD and neurodegenerative disease. Although we believe that we have no direct competitors working in this same field at the present time, we cannot provide assurance that our competitors will not discover compounds or processes that may be competitive with our products and introduce such products or processes before us."
Page 29:
"While we anticipate our current cash resources on hand will be sufficient to sustain operations and a follow-on clinical trial for the next approximately 18 months, we do not have sufficient capital to complete all necessary clinical trials in order to have a product approvable for commercial sale. As a result, we will need to raise additional capital and/or obtain a strategic partner to facilitate bringing a product to market."
Page 33:
"We currently do not have an FDA approved manufacturing facility. We expect to rely on contract manufacturers to produce quantities of products and substances necessary for product commercialization."
Page 34:
"We currently have no experience in sales, marketing or distribution. We do not anticipate having the resources in the foreseeable future to allocate to the sales and marketing of our proposed products. As a result, if our product development is successful, our future success will likely depend, in part, on our ability to enter into and maintain collaborative relationships with one or more third parties for sales, marketing or distribution, on the collaborator’s strategic interest in the products we have under development and on such collaborator’s ability to successfully market and sell any such products. We intend to pursue collaborative arrangements regarding the sales and marketing of our products as appropriate."
Page 36:
"The pressure to grow revenues while containing the escalating costs of basic research and development has resulted in an increase in mergers and acquisitions in our industry. More consolidation in the pharmaceutical industry is expected over the next five years. We could become an acquisition target by a larger competitor and, as a consequence, suffer serious disruptions to our business model or even lose control of our ability to operate as an independent entity."
"There is currently a limited public market for shares of our common stock, and an active trading market may not continue to develop or be maintained. Our common stock has been listed on The Nasdaq Capital Market since March 29, 2017 and was quoted on the OTC Market prior to such time. The average daily trading volume in our common stock was approximately 40,000 shares during the 90-day period ended February 28, 2018. If an active market for our common stock does not continue to develop or is not sustained, it may be difficult for investors to sell shares without depressing the market price for the shares, or at all."
Page 40:
"Since May 17, 2017, two purported class action lawsuits have been commenced in the United States District Court for the Southern District of New York (the “NY Litigation”). On August 10, 2017, the lawsuits were consolidated and Plaintiffs filed their Amended Consolidated Complaint on October 9, 2017. The Amended Consolidated Complaint names as defendants us, our former Chief Executive Officer and our co-founder and President/Chief Scientific Officer. The lawsuit alleges violations of the Securities Exchange Act of 1934, as amended, in connection with allegedly false and misleading statements made by us in certain press releases and in our Annual Report on Form 10-K relating to the results stemming from our Phase 2 clinical trial for bryostatin. Plaintiffs seek, among other things, damages for purchasers of our securities between January 7, 2016 and July 18, 2017. Because each of the pending actions is in the early stages, no reasonable estimate of possible loss, if any, can be made.
We and our directors and officers believe that this action is without merit and intend to defend the lawsuit vigorously. On November 21, 2017 we and the other named defendants filed a motion to dismiss all of the claims. The motion to dismiss is now fully briefed and we await a decision from the Court."
Page 48:
"We have formed and are advancing our discussions with an experienced clinical advisory board to assist us with protocol development for a planned Phase 2a study in FXS patients. We seek resources to initiate the first clinical trial with bryostatin in patients with FXS. We have been granted orphan drug designation by the FDA for the use of bryostatin in the treatment of Fragile X Syndrome."
Page 52:
"As of February 28, 2018, we have paid WCT approximately $9 million relating to our recent Phase 2 clinical trial. We estimate that we will pay an additional approximately $750,000.
As of February 28, 2018, we had approximately $15.2 million in cash, cash equivalents. We expect that our existing capital resources will be sufficient to support our projected operating requirements for approximately the next 18 months, including the continuing development of bryostatin, our novel drug targeting the activation of PKC epsilon. Funds are anticipated to be used to complete the current Phase 2 study treating moderate to severe Alzheimer's patients, plus the potential initiation of a follow-on clinical study treating patients similar to those in our most recent Phase 2 study. We also plan to possibly initiate an open label study in Fragile X syndrome. The balance of the funds will be used for general corporate and working capital purposes."
Could be.
Either way, I agree with your viewpoint that we'll probably (hopefully) never get above 25 million fully diluted shares.
These are the numbers I use for my current projections:
Series G (late 2018/early 2019): 2 million shares sold at $10/share, bringing in $20 million that should support the company comfortably beyond the announcement of the confirmatory trial results
Series H (late 2019/early 2020): 4 million shares sold at $20/share, bringing in $80 million that will support the company until Bryostatin starts bringing in the revenue. I expect this to be the last fundraising round.
Now I personally believe that the $20 share price after positive results are announced is a very conservative estimate, but I use that number anyways since I like to underestimate these things rather than overestimate them.
In this case we would add an additional 6 million shares. Throw in a million or two more for additional options and placement warrants, and we'll maybe add another 8 million shares in total before any significant dilution stops.
14,356,968 + 8,000,000 = 22,356,968
I then round that number up to 23 million (just to be conservative again) and there you have it.
As for the future company valuation, it's really just a matter of guessing how many billions you think the world's first AD treatment will be worth.
I think the partnerships with academic institutions are just for the trial design. When it comes to actually conducting the trials, they'll have to go back to WCT and pay another $12 million or so.
Now if they only raise another $20 million like in 2016 rather than the full $100 million shelf offering, that should only dilute us by another 2-3 million shares or so.
In that case, we would have about 16-17 million shares after dilution when results are announced next year.
Positive results could then significantly lift the stock price and let them raise the other $80 million for a better price in 2019/2020.
Considering how Neurotrope spent $12 million last year and the company only has $16 million in cash left, I'm almost certain they will have to raise funds again later this year.
Waiting for the price to go above $12.8 so investors can exercise their warrants just seems too risky for me.
Oh yeah, I think a friend of mine showed me that article a while ago, joking about how NTRP is finished.
What he doesn't know is that Bryostatin works in a similar fashion, and I think even Dr. Alkon mentions it in several presentations how Bryostatin not only deals with the damage, but also has an effect on the relevant genes, something to do with epigenetics and signaling I think. That is why patients kept improving even after Bryostatin treatment stopped.
Even then, not all AD patients have the APOE4 gene. They all seem to have a PKCe deficit though.
https://www.biospace.com/article/another-one-bites-the-dust-vtv-therapeutics-alzheimer-s-drug-fails-in-phase-iii-trial
"Also of interest is Neurotrope’s bryostatin, which showed some cognitive improvement in Alzheimer’s patients in a Phase II trial earlier this year. Bryostatin activates Synaptic Growth Factors, but it also activates amyloid-beta degrading enzymes, and activates alpha-secretase, which reduces formation of beta-amyloid. However, the veracity of earlier studies by Neurotrope have been questioned over its data analysis."
The intro box was full of outdated information so I hope you guys don't mind that I updated and cleaned it up a bit.
Competitors are slowly but surely going down one by one.
AVXL is now worth less than $100 million and VTVT has plunged over 70% below $1 per share. Even AXON is dangerously close to going under $1 per share. Soon enough, these companies will be bumped off the NASDAQ for failing to meet listing requirements.
Any small company still chasing amyloid/tau theories is going to get absolutely destroyed once their trial results are released and investors slowly wake up to what Dr. Alkon has been saying all along.
So I took a look at the warrants again and here's what I found:
If the price stays above $6.40, the company can bring in an additional $2,498,404 through Series A, C, and placement warrants.
If the price stays above $12.80, the company can bring in an additional $48,013,222 through Series F warrants.
If the price stays above $32, the company can bring in an additional $26,237,248 through Series E warrants.
Then there's the $100 million shelf offering.
This means that there's a whole $176,748,874 waiting to flow into the company, which I think is more than enough to keep it floating until Bryostatin is released on the market and starts generating revenue.
To put it differently: Once the $100 million of new shares have been issued, and given that the confirmatory trial shows the same results as the post-hoc analysis next year, there's no significant dilution to worry about anymore as an investor.
Not to be a buzzkill but the stock is down more than 50% since last year.
Also, according to Google Trends the interest in this company has completely flatlined ever since phase 2 results were released last May: https://trends.google.com/trends/explore?date=2017-03-31%202018-03-31&q=neurotrope
I very much doubt this thing will go anywhere before either the FDA fast-tracks this thing or the company releases confirmatory trial results in 2019.
On the bright side however, that means we have an entire year to load up on extremely cheap shares.
Either way, we can all expect 2019 to be a big year for us.
The FDA has several times expressed its willingness to compromise when it comes to AD, so it wouldn't surprise me if this next confirmatory trial will be enough for them to approve it for the market, at least on a preliminary/conditional basis while further trials are conducted at the same time.
The FDA is also currently led by a anti-regulation, pro-free-market administration, so i doubt they'd want Bryostatin to get tangled up in too much bureaucracy.
A follow-up phase 3 (and maybe even 4) will obviously be obligatory, but I think the world's potentially first safe treatment for AD will be enough to make them reconsider taking this through the usual isolated trial process while millions of patients out there are slowly getting killed by this disease every single day.