Hey Bull, great questions. I didn’t proofread all this too much, I’m in the middle of a few things this weekend. Didn’t want to leave the question hanging though, going into what is likely to be a crazy trading week.
Even if MDGL is significantly overvalued (the topic of ‘are nash stocks overvalued’ — lol, not even going there), we still remain disproportionately undervalued, even when adjusting for much more modest valuations of MDGL’s supposed worth... which is giving me a bit of confidence holding our stock. Funny to say, but I actually think the offering may be unknown factor that we were missing, to mount a true, real run. I think that the large amount of VKTX owned by insiders and LGND has kept out bigger players and removed the usual pathways for people to secure stakes and then push the price to enrich themselves. I know that MDGL has a relatively more palatable management team for Wall Street, but I don’t think our mgmt is otherwise scaring everyone away. Giving some bigger players a chance to enter on the heels of MDGL news with the offering may end up being all that was missing to start a real run.
Hate to be overly simple, but... Barring anything unforeseen, I basically anticipate being higher in share price during the nash results run-up, than we are now. That’s all I am comfortable betting on at this point. I’ll continue to sell some small chunks as we march, and will continue reloading if we have any big dips, all the way up until mar/apr. If I have to wait a few months, that’s ok. That’s all I know for sure. This week will set the tone. We will either run out of the gates early or mid this week and possibly not look back until 300+ mil cap, or we will stall out for a few weeks (not much more than that tho, imho). I’d expect a sustained stall or dip If someone big decides to really buy in, and keeps the price down to secure a real entry. If we end up treading water at these levels, it will be a bullish indicator to me. We have been pretty methodical and transparent with trial timing updates (acknowledging that delays occurred lol)... almost too much so. I don’t know if we will stall out until they announce that enrollment is complete for nash. They keep giving a detailed roadmap. It’s smart to do when attracting investors, but it also tells bigger players exactly how much time they have to get what they need. A lot of people are sitting on big gains- no matter how undervalued we are, it may be too much to maintain this momentum at this moment, even if this momentum is long overdue.
I’m long and still holding a ton, and I like our chances of a big run up, I just don’t know how close it would come to March or April, if this week stalls us.
I will say something controversial here... regarding our drug vs MDGL. Imho, There is zero way to know which version is or will be ‘better,’ and for anyone to guess or postulate without having some incredible degree of advanced bio chem research knowledge specific to nash and outside of mainstream concrete medicine... it’s just too soon. They are exactly the same bet imho, right now at least. Our drug technically has shown equivalence in many categories, and is actually a more effective on at least one of the data subsets they measure. Who knows what the Optimal profile will be. (Just because you can do “X”, doesn’t always mean it will be the best thing for the patients disease). All of the long-term downstream effects of what this class of drugs does, is unknown- which really helps our cause, just as much as it limits us. Logic says that if you reduce the liver fat and can potentially stall or reverse the cascade of inflammation (at most any cost?) and prevent a few liver transplants etc, that most means would justify those ends. We have never been able to fix nash, so we don’t know which specific pathway targets will end up being the most important. It will likely be determined anecdotally, once we actually find something that really works... usually the way it goes. Find something that works, then figure out why exactly it did it. We solve a problem the other way around, usually when we exhaustively fail at finding something that works haha. Ie.. start trying to find ways to target specific subsets of things loosely involved and see what happens. So... my biggest questions... if this works... Would they give it at therapeutic doses to reduce liver fat burden as a temporizing measure when things get really bad... start it early in the nash course... give it to people with metabolic syndrome stuff who are at risk... or dose it long term to stave off smoldering damage with people who already demonstrate a propensity to develop the most legit manifestations of nash disease... there’s no way to know, until a lot of long term stuff and complex metabolic stuff gets sorted out. Nothing against our drug at all... it’s just a new molecule class in general, right now it’s all about immediate effects, short term safety, and big obvious limiting stuff, at this stage. It may be as simple as our drug works better overall if the data keeps coming in the way it has, or it may end up being too much, and they need to tone it down dose wise, or maybe our profile of action is the best fit with the pathways they eventually nail down as most pertinent and meaningful, maybe not. At this stage of the game, more effect seems better, but who knows. It may be something where there is a role for both of our drugs (VKTX and mdgl) in different settings, depending on the individual lab values of patients (a likely course). Personalized medicine with genetic profiling and increased reliance on lab parameters is the name of the game lately. It wouldn’t start that way, they would both likely hit market (given that there are no alternatives) and then it would get sorted out in the journals and with subsequent specialized subset trials, done by viking or mdgl or by outside folks. It’s simultaneously the best and worst place to be in, being a new molecule class. Thyroid agonists are a safer nash bet than many (Many) other nash plays that are currently out there, imho, because of the current side effect profiles and the similarity to a naturally occurring compound. And for many reasons, everyone is betting on nash lately. I would hope that it is a trend that will continue. There are a lot of ways that people are approaching nash, really really different approaches sometimes. Hard to know where the answer will be. We stand a much higher chance of remaining in the nash game of musical chairs though, because of our side effect profile and the characteristics of our molecule class. So looking from a nash play only perspective, betting on us and betting on MDGL... are basically the same nash bet, at this point at least. Which is why I loved throwing money at our stock... I can bet on thyroid beta agonists for dirt cheap, compared to buying MDGL. We will very likely suffer the same exact short term fate as MDGL, it will take awhile for all the long term data stuff to become meaningful and to knock one (or both) of us out of the running, such is life. The molecule class will be validated or it won’t. And both will go up big potentially if one of them hits it big in phase 3, regardless who gets there first. Right now... for example- is similar to trying to decide which statin could be better for high cholesterol, before they ever knew if statins would be tolerated, short or long term, and what the rate limiting factors would be with side effects.
That being said, if our drug shows a similar side effect profile in our upcoming data, to what MDGL showed, I think that both MDGL and VKTX will become much much (much) more attractive to the nash world. The longer the clock ticks without horrible side effects and weird metabolic downstream stuff being found, and the more consistently that tolerability and lipid benefits are shown from this class of molecules, the more intriguing this all becomes. I suspect that some other companies that are exploring nash will hit pitfalls in the next year or so, and we will remain in the running, and become a buy based on exclusion, if nothing else... I don’t know how long it will take for the market to realize we are here, but we are currently one of the few nash companies with time on our side. As a nash play only, a 100-200 market cap (without phase 2 data), based upon the currently available data from MDGL indicating that this class of molecule will be allowed to continue, seems prudent. It completely ignores our Sarm, and the rest of the pipeline, which really de-risk us... there are some one-trick ponies in the nash market. A disclaimer though- anything bad that comes up in either our (or MDGL’s) drug developments will equally impact us. You won’t be able to say that another thyroid beta agonist did X, but ours won’t. We’ll be forced to prove it, and stuff like that costs good money. We have been infinitely blessed, thus far, in this realm. If our side effect luck continues, others will no longer be able to ignore this. A drug that does Anything without serious side effects... is a unicorn in modern medicine. The FDA process works ‘best’ when forced along by statin pushing giants with massive financing lol. This is big competition. Statins have tolerability issues for a fair amount of patients, and they are very profitable. If this train keeps rolling, buyout is the only ending that makes sense. Because nobody is otherwise going to make a nash approval route an easy task.
MDGL is good company to share this bumpy road with though. They are on their game thus far. And so far, we have been able to piggyback and add on to their accomplishments. We are less likely to be dragging them behind us, trying to prove to the world that thyroid agonists are safe and reasonable to temporize the nash process. Ie... they are becoming less and less likely to inadvertently sabotage us by screwing up their trials and stalling the advancement of this molecule class.
You could take bad things from this, but in my mind, it’s all good. I’m really looking forward to holding this stock and waiting for the run up to nash results around apr-june. The orphan indications are a better bet with the FDA, but nash is the Wall st buzz word that will bring in huge money someday soon hopefully. The sarm and nash drugs are each blockbusters. The orphan indication drugs may end up getting approved, even if bad things came up in the nash race. Even bad side effects (still yet to be found) would be unlikely to hold us back from approval on the lucrative orphan indications, because of how severe the diseases are that they will address. Risks, benefits...
I hope this helps Bull. I’m a big ‘teach a man to fish’ type guy. I don’t have the answers, but I have been taught a lot of questions to ask. Take care brother.
I’ll be MIA for a few days, my second life is calling. Have a nice week all, and best of luck
