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I couldn't agree any more. Invested since July 2014, was attracted by the science, in fact was one of my first ever investments. I sentimentally hung on despite all the obvious red flags you mention. The idea that Celgene would ever enter into a collaboration with such a buffoonish company is insulting to Celgene. Do you really have confidence in Leo and this management making a pitch to anyone, let alone Celgene? At this point, there's no point to me even selling my shares, in my eyes it's equivalent to a lottery ticket. I guess all we can do is wait and pray.
The way I see it, the news from this 10-K means one of two things:
1. Management is way savvier than we expected. Dealing with only $2.4 million in cash, they finally cave and sign a term agreement with fairly good upfront payment/royalties for Brilacidin. They held off on paying the CRO because they didn't want to have to use more dilutive financing, and were simply biding time until the transaction is complete.
2. IPIX is a total scam. They don't have the funds to pay for the Prurisol Phase 2b trial, an unheard of event in the biopharma world. Or perhaps, they are tipped that the result is poor, and simply do not want to pay. I think the former is more likely, but considering I cannot ever think of a positive development in this name since December 2014, nothing would truly surprise me at this point. The "term agreement", which really should not be publicly disclosed unless they are supremely confident that an agreement will actually be reached, is simply misdirection to shareholders as a last gasp effort to restore confidence. The dilutive death spiral continues.
No, more likely I'm suggesting that perhaps they saw a CTIX presentation, did some DD, and then reached out to CTIX about a private financing.
Again, the question I am asking myself is: why would CTIX do this? Certainly they knew their shareholders wouldn't appreciate the dilution. It's not like they can't utilize their Aspire agreement. So my inference here is that something good is probably coming. You think these investors decided to come on board and be forced to hold shares thru bad news?
At least, that's my interpretation. Welcome to hear others.
I really don't think this offering had anything to do with cash. What does $2.2 million really do for CTIX? Cover some G&A expenses?
Nah, it means that 3 people with a lot of $ were willing to place a large bet on CTIX. My guess is, they did a fair amount of DD before sinking 800k into the company. Perhaps they are wrong, but i actually find it reassuring.
Does this help us with negotiating posture? Probably not, it's not enough $ to provide any real additional runway. But what if these investors are credible? I think that kind of show of confidence could give the company the validation/legitimacy it has lacked the last few years.
I'm curious to see what this means. It seems as if they were willing to offer a slight discount to 3 individual investors for what in the grander scheme is a minimal amount of money ($2.2 million).
To me, this indicates 2 possibilities:
1. Grand incompetence. They offer these shares out of complete desperation bc they have no other means of financing.
2. They offered at a discount bc the investors bring value to the table in some way, and perhaps in due time we will find out who they are. It seems unlikely they would allow these shares to be loaned out, so in all likelihood we have some bigger sharks that see some upcoming CTIX catalysts and were able to take advantage of an OTC company trading at a low valuation.
I lean towards the latter option, but with CTIX i'm never really surprised. The timing is certainly curious, though.
http://www.mpadvisor.com/xyz/Cellceutix_160826.pdf
I'm not sure if anyone has read this, but it's an extremely thorough overview and valuation of Cellceutix done by MP Advisors, a firm described by Bloomberg as one which " ...offers strategic advisory services to the pharmaceutical companies engaged in innovation, manufacturing, formulation of drugs, contract manufacturing, and research organizations."
I'm pretty sure the dropped patient had to do with the investigator non-compliance; hence, the difference bt ITT and PP populations. It is curious that the treatment leg dropped 7 patients (yet no non-responders) while the placebo leg dropped 12 patients (and 1 responder, although the placebo response rate actually increased as a result). However, I'm pretty sure investigator non-compliance is what management claimed. Does anyone know how many trial sites were in this study? If it was a smaller number, this story would make at least a little more sense.
While I agree that it is short-sighted to make predictions whether the Ph2B will show efficacy, I agree that it certainly stands to reason that the increased dose will show enhanced efficacy. Additionally, I think that the placebo response rate will likely be much lower in the sicker patient population, which in addition to the much larger sample size, should allow a much more demonstrative level of statistical validity to the Ph2B trial.
Prurisol isn't being sold before results are provided; that is fairly obvious, and to suggest otherwise shows a lack of knowledge about how these markets work.
Anyway, clearly the success of CTIX as a company and stock comes down to the P2B prurisol result (and to a lesser extent B-OM). The Ph2A showed a chance of success in this trial at the higher dose, but due to the small sample sizes/non-compliance and some questionable management decisions (poor data dissemination, attacking a short seller on SeekingAlpha--you don't see a lot of other companies doing this), I personally feel likelihood of success is closer to a coin flip at this point.
We all know it's not going to triple by end of February 2017, and I'm an optimist. I do thank you for your investigation into liver tox, which I agree is an overblown issue.
Companies re-evaluate their strategy all the time. Perhaps funding the B Ph3 would've been possible but maybe they would have had to partner and reduce future potential profits, which in my opinion would have been a short-sighted move. I think their development strategy has been fairly clear for some time now, but alas, we seem to disagree.
They didn't shelve the P3. The problem is that P3 trials cost the most by a substantial margin due to the #'s needed for patient enrollment. In this case, would probably be upwards of $30 million, which management does not have at this moment. So though while I consider a P3 B success in ABSSSI a near lock, it is not certain whether this trial will ever take place unless they are able to partner off another compound for some upfront $ to fund it. To me, that's why this thing could truly range between $0-$10 based of Prurisol P2b results. If I had to guess, the increased dose as well as sicker patient population probably skews the likelihood of that to 70%; a 30% chance of total loss of capital is too much for most to stomach.
The good news IMO is that the only things that truly matter to SP are the trial results. There's only so much further it can really fall; if trial results are good, it will rocket, even if we have to wait a little for a partner...additionally, if the results are good, they can take out a bridge loan to help fund B P3 which they can quickly repay with proceeds from a partnership when that is formally announced.
For those questioning Leo Ehrlich's committment with regards to his skin in the game, I'd refer you to this post: http://investorshub.advfn.com/boards/read_msg.aspx?message_id=110546479
He loaned the company $2 million of his own cash, of which a substantial amount hasn't been repaid. He also has a large amount of shares in the company, as does Menon. I think their interests are aligned with ours moreso than many of us previously realized.
It has nothing to do with these short attacks; I actually agree with AF in that they are a distraction from the larger leadership problems with CTIX. I have been long CTIX for 2.5 years and this is the first time that I have questioned my investment.
Why does Leo Ehrlich always mention partners in his PR's? He eliminates any and all possible leverage in negotiations with companies, as well as creating expectations from shareholders. And yet, this is not his first promise he has made to shareholders over the years that he hasn't delivered--they didn't uplist, either, as he promised. He bashes Mako and everyone rallies to his defense, and while he may be right, why does he care so much about a frivolous and clearly erroneous report on SeekingAlpha? Go focus on delivering us some statistically significant trial results--maybe that would move the SP enough so that we can uplist and have the credibility/stability to not worry about AF and Mako.
This is not to say that I don't believe in the science of Cellceutix; I do. I especially think Ph. 3 Brilacidin in ABSSSI will work, and am hopeful with regards to OM and K. However, I worry that the company won't be able to fund Ph. 3 B unless they are able to successfully partner Prurisol after Ph 2b, and considering the full results of this trial were never PR'ed (and they PR EVERYTHING), not to mention they were underwhelming upon seeing the totality of the data (and the fact that they NEVER fully explained the differences in the ITT and PP populations), I'm not as optimistic that management will be able to deliver. Only time will tell.
"Sub-population analyses further showed greater efficacy demonstrated in patients who had a baseline IGA score of 3 (“moderate”) as compared to those with a baseline score of 2 (“mild”). Some of these patients even experienced a 3-point reduction in their IGA score, going from “moderate” to “clear.” This suggests Prurisol may be more effective in treating moderate to severe psoriasis patients to a greater degree than those patients who exhibit less severe symptoms. In moderate to severe psoriasis studies, the placebo response also tends to be lower. "
Yeah this would seem to confirm Leo's comments in that earlier life science report. In fact, in the earlier post I made, I didn't even notice that I was comparing CTIX's trial in "mild to moderate" vs. Otezla's in "moderate to severe". If we can match their trial response rates in the "mild to moderate" patient population, I would imagine that we can probably exceed their response rates by performing another trial in the "moderate to severe" population.
I'd also point out that all of the treatments are being developed in this field for the "moderate to severe" population, it seems. I doubt that patients in the "mild to moderate" population would be as interested in taking biologics due to the side effects, but a safe oral option? It seems only Otezla and Prurisol are truly candidates in that segment. Finally, I would imagine that the majority of the psoriasis market probably falls in that "mild to moderate" population, and the market is expected to grow substantially by 2024. Even more excited now than I was originally.
Well, if you remember Otezla's development, I think that the Prurisol data is actually quite good.
In ph 3 of apremilast, only 33% of those being treated reached the endpoint, which was actually below the best result they saw in one of their multiple phase II trials (41%). Some of the lower doses barely outdid placebo, and none of them ever really exceeded a 29% response rate.
If you contrast the CTIX results to this, I think it is actually quite promising. First, there were no real SAE's, which is important because of the difficulty of using biologics; this is why Otezla sells at all in the first place. Second, its efficacy (either 35% or 43.7%, depending on which data you like to use) was at the very least comparable to Otezla. I usually am wary of cherry-picking subset data, but the wide range in dosing in Prurisol indicates to me that the management genuinely did not know what range would be effective or not, and likely preferred to err on side of caution, as the worst thing for them would be to witness high rates of dropouts due to SAE's.
I think it is also of note that the placebo leg in CTIX's trial had an abnormally high rate of efficacy (16.7%) vs. those of the Celgene trials, all of which were in the 5-10%. Perhaps this could be attributed to randomness and if that # decreased in a Ph.3, that could make the trial look even more appealing.
All this to say, I doubt that CTIX will be able to prove superiority of Prurisol to Otezla based on these study results. HOWEVER, I do believe that the drug has shown efficacy, certainly enough to warrant a Ph. 3 trial, and likely enough to become a serious competitor to Otezla in what is a pretty huge market. Pretty good for a compound most considered an after-thought compared to Kevetrin and Brilacidin.
http://www.ncbi.nlm.nih.gov/pubmed/26089047
http://www.ncbi.nlm.nih.gov/pubmed/22748702
http://www.ncbi.nlm.nih.gov/pubmed/23030767
I'm admittedly a little unnerved by Dr. Jorgensen moving on to another opportunity. I've been long CTIX since 2014, so I question why would Dr. Jorgensen want to leave now, particularly with success so seemingly imminent. His expertise was brought in for Brilacidin P3, but we are yet to even initiate the trial. Even shadier to me was that they tried to sneak it in to the back end of a PR, then issued another positive but rather insignificant PR today which was a thinly veiled attempt IMO to hide the news. I still like the science, but between frivolous lawsuits, lengthy trials, staff turnover, and lack of transparency, it has been a frustrating equity to own.
This DCF is only accounting for ZX-008, not any Zohydro payments nor (more importantly) Relday, which has p2 results coming soon. $28 may ultimately still prove conservative...all Brean really did was increase operating margin to that in line with other orphan drug producing companies and increase likelihood of approval from 70% -> 80%.