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Bah! I'm going down with the ship if that's what it comes to. That's what the gambling fund is for. No folding like a chicken for me.
Bring it home, Leo!
So it went well and we have approval to proceed to phase 3?
Good post.
We really have no great way of valuing our current trials. The 40 billion IBD and 90 billion cancer markets thrown around in PRs do not have much bearing on things at this point. They are big numbers trying to illustrate potential and draw in buyers of stock to help support the price.
We see that $600M-$1.2B OM market number chucked around a lot recently too. Combine that with some crazy PE of 40-140 and you wind up with ridiculous stock prices.
The truth is we don't have any idea how any potential suitor values our trial results. It is almost certain that they value them lower than IPIX management and shareholders. They also view things with an eye that is massively risk-averse. BP pays up big for a sure thing and only swings for the fences when they think they're getting a very good deal.
Anyone who feels certain there is a big deal already in the bag is being naive. We had some very interesting and compelling trial results. I think the odds that we strike a deal are good but there is still very real risk that we won't.
I think if we strike the deal we will see good returns on the the stock from here. A 200%+ gap up on announcement is very possible. I also think many of the more optimistic IPIX shareholders will be very underwhelmed by the first deal terms and stock price reaction based on the numbers floating around the forums. The first deal is about the survival of the company.
Here is where patience, wisdom, and a little bit of guts can combine to produce a great potential payout with limited capital.
The fully diluted is already around 225M counting the 0.11 warrants that are not underwater. If the MFO has been dribbling in cash this quarter we are likely approaching 250M.
We have heard this before. Obviously it is nonsense. Four of the top five highest grossing drugs are non-oncology drugs.
https://en.wikipedia.org/wiki/List_of_largest_selling_pharmaceutical_products
1. Humira
2. Harvoni
3. Enbrel
4. Remicade
5. Rituxan (cancer)
As you say the simple answer is either BP is not convinced that Brilacidin is a winner of such caliber or they are unwilling to pay the price Leo wants.
Pursuing a lesser pharma isn't necessarily a bad idea. There are a number of small-mid pharmas that have failed drugs but still have $50M-100M in the bank. Unlike BP, they need a drug to get back on the development path. Going 50-50 with them to get to the point where we can go 50-50 with a BP (resulting in 25% of the pie) is better than going 90-10 with BP now.
The silver lining is that BP should be fighting each other to pay top dollar for Kevetrin if we can work out the pill form and show some efficacy against tumors.
I think your thoughts on the partnership are very possible. I think it is highly likely that many longs will be underwhelmed by the first deal. Doesn't mean it won't juice the stock 5-10x, but some of the numbers being tossed around seem a bit silly.
Hope they're right though. Id strongly prefer $5 over $1.
I'm sorry that was a throwaway thought as I retired into bed. Not untrue though
The answer to the original question that they would not be paying $400M-$800M. A $50M-$100M upfront was what I was thinking to usher us back to that market cap.
Why would they pay even that much? Well, as I said before, it takes two to tango. At a low enough price, competition for our hand probably exists.
It was little money to continue operations "as planned". They obviously scaled back plans in order to make the runway long enough for takeoff. We're almost three weeks past the 3/31 deadline and we're still a going concern.
There is no May 31st deadline.
It was...if you sold at $4.
It's tough being the conservative bull on the board. Nobody likes my numbers.
Only if you bought them at $3.
Thanks Karin.
So I'll assume 100% of NDA applications are approved and use 25% as my floor. If 85% of NDA applications are approved, my 22% looks like it is still very relevant. Either way, close enough for napkin math.
Only if IPIX is selling the entire company for cheaper.
I'd be curious what the current success rates are. That was the newest figure I was able to find. I hear a lot about more relaxed FDA standards but I haven't seen much evidence yet.
I would be OK with a Brilacidin franchise value with a STARTING POINT of $20+/share plus dermatitis in 2020
Patience. You'll be proven wrong in time.
NR will be crushed if IPIX gets a decent deal. Let's just place our bets and see if we get a filing saying we're in business or one that says we're out of business.
What exactly did you find weak? I took your exact numbers, applied at 22% chance of first-pass success (with citation of where I got that figure), and still managed to demonstrate IPIX as a screaming buy.
So you believe we should apply a 100% chance of success of getting through phase 3 and NDA when calculating our valuation? I know everyone thinks their child is special but that's hardly objective.
This was meant to be a conservative estimate (as was yours apparently). I proved that even when factoring in a significant chance of failure, the proper valuation is still 15-30x our current market cap if we secure a deal. I get that you would rather see people write 50x-500x but doesn't my argument strengthen the case for buying IPIX even more than yours?
Total revenue from just B-OM = $72M-$144M ($600m-$1.2B x 12% royalty)
Annual IPIX Earnings using only revenue from B-OM = $52M-$124M (deducting $20M/yr expenses)
Earnings per Share = .236 to .472 ($52M-$124M / 220M shares)
IPIX stock price using royalty based IONS PE of 41 = $9.67- $19.35
IPIX stock price using biotech average PE of 145 = $34.22 - $68.45
Approval applications were filed for 55 percent of the drugs that made it to Phase III testing, and 80 percent of those gained eventual approval, although only about half were approved on their initial FDA review.
Not true at all. All he needs is a partnership.
Probably not.
It was a reference to one of Frrol's posts about an absentee Dad. He might be at the bar, or the strip club, or buying Christmas presents, or the brothel. The ever optimistic yet neglected children always assume he's out buying them presents.
Risk of going to $0 is very present and is not just a boilerplate concern. No one knows what the actual chance of this is. Likely somewhere between 1% and 99%.
If there is a 50% chance of IPIX going to $0, essentially a coin toss, what payout upon success is necessary for it to be a good investment? We will very likely go to $0.50+ on a deal centered around anything remotely close to the numbers suggested IPIX management. 4x or more makes this coin toss a very compelling purchase for a high-risk portfolio.
The upside beyond that is tremendous and also very present. I think it is likely we gap above $1 the morning of a deal, possibly higher depending on the terms. Very exciting.
Yes, it would seem if any potential partner believes the actual valuation of B-OM is anywhere near $600 million/year, it should be easy to sign a partnership that will increase our market cap to many times what it is today.
Management is telegraphing huge numbers and imminent phase 3 plans. Unfortunately their credibility is at an all-time low. One deal changes ALL of this though. Financing, credibility, momentum, credit for future pipeline candidates....all of it repaired with one good deal. The market will continue to shrug off any PR until that time though.
You either have patience and faith that management will deliver or you sell. I can't believe they would be this upbeat if there was no realistic path forward that is reflective of these hyped expectations. I think they will bring us a deal that will get us through.
I think Dad is out buying us a Christmas present.
I agree. I was thinking 6-9 months for the term sheet deal. That was in back in August. Sounds like we may make that window or come in shortly thereafter.
If B-OM has great phase 3 results and approval, Kevetrin shows some efficacy with the pills and IBD has another good phase 2....its possible we get taken for 3 bills.
Yup. My 300mm which is the AS is my assumption we dilute to there over the next year or two. That’s if we don’t partner with big upfront which I believe we will very very very soon. We were around 180mm last Q with 909k series B
Yes, I do.
Well, that's a $120B market cap assuming we're still around 225M shares fully diluted. So yeah, I think that's a ways off if not long gone.
300M shares per D's assumption
$1B/year per D's assumption
15% royalty (0.15 multiple) per my assumption
5 x earnings multiple (x 5 years) per my assumption
You can adjust them how you like but that seems pretty conservative. I'm ok with pretty conservative though when it nets me a 25x my investment. Feel free to dream of 50x or 100x if it suits one's tastes.
1000M/year x 0.15 / 300M shares = $0.50/share per year.
$0.50 x 5 years = $2.50/share on B-OM royalties alone.
You can come on down to the office. I assure you, it's not vacant. Emails and phone calls are being returned.
All is well. Just a little more patience. The big game isn't over until the Hail Mary hits the ground. Lets see who catches it.
It remains to be seen. If IPIX can pull in a large deal for B-OM they would be vindicated in their decision.
Not true at all. There is a very, very large upside here on what essentially is a coin toss. If we don't get a deal we're hosed. If we do get a deal you get 5-10x your money overnight. Probably going to happen this year. I think IPIX is a great investment for some high-risk, high-reward funds.
The company opted to use the money to explore Prurisol, B-OM, and B-IBD. Obviously we struck out on Prurisol. Time will tell on the other two as to whether it was a mistake or not. We'll know by the size of the B-OM deal.
Not that we haven't suffered some unjust attacks, but I think you're understimating the company that 2015 CTIX was:
CTIX 2015:
Just came off stellar phase 2b B-ABSSSI results. (Heavily touted by management)
Kevetrin caused spleen lesions to disappear PR (we have not since heard of cancer treatment efficacy in K)
B phase 3 for an ABX was a shoe-in (never happened - too much money)
-A partnership for B was a foregone conclusion (never happened - had to test anti-inflammatory)
-University of Bologna was going to fund a Kevetrin phase 2 (fell through due to lack of funds)
-Embarking on a phase 2 for Prurisol, the most promising psoriasis drug yet (failed after many millions)
-Secured a good Aspire funding agreement paired with a plush and rising market cap (we now can only dream of those financing terms)
-Uplisting to NASDAQ was just around the corner (here we sit still on the OTC)
-Outstanding shares has increased 30-40% from that time ($5 then is only $3.50ish now)
-CTIX was coming off a series of wins rather than the missed milestones and trial failures of 2018.
It's not really fair to say we had less accomplished back then. Our share structure, financing, and future plans/potential were all just as good or better back then. Momentum counts and we had it going in the right direction in 2015. We have it going in the wrong direction in 2019.
I agree that some good cash on the balance sheet will do wonders for giving us future credit on our pipeline.
It has always been just around the corner. We just underestimated the length of the hallway.
The streak continues....should be impossible to do this without FTDs.
That is about to change.
I'm not the authority on whose opinion is superior to others. I think many here have rabidly bashed the company for years on end with faulty premises and bad data but they have been correct on the price action and I have been wrong. I like to consistently see the following from a poster over time in order to really value their opinion and insights:
Calmly and rationalizing data points without the the polish of management/pumpers nor the tarnish of rabid bashers.
Understanding that this investment has a very real possibility of going to 0.
Understanding that this investment has a very real possibility of returning a 10x or more.
Understanding that this investment is likely never to reach $20/share. If we eventually get there - great...but it's not relevant to today's position.
Understanding that management is not a bunch of scammers/crooks but also that they are doing the best they can in an very uphill battle.
Not jumping to convenient nor inconvenient conclusions based on unknowns.
Understands how incredibly long anything to do with biotech takes and doesn't constantly whine about needing updates.
Understanding that our drugs are not magical wonders and that getting financing and reaching approval will be a long, hard, and uncertain slog. As he noted, Prurisol, OM trial, OM BTD, successively worst financing deals and really anything from the last three years should make that apparent.
Only a handful of people meet this standard and F is one of them (actually both of the F's on this board fit the bill and I put extra weight on their considerations). That's why when he says he has been buying and will continue to do so, my ears prick up. Some call his posting pattern soft bashing. I call it skeptical investing. When I see a skeptical investor taking a long position, it might be time to consider buying some stock.
Just my opinion.
There is a difference between bashing and being conservative. A little skepticism and critical thinking would have saved us all a lot of money here. I wish I had started my buying plan in January 2019 rather than 2015. I'd have a lot more shares and a lot more money.
When a guy like F is ready to step and and start buying, you can be certain we at least have a chance.