Phone call with Peter went well. I feel that he has been pretty direct and doesn’t really inflate expectations. You expect to get sold on all the good things happening and hear none of the bad things but that has never been the case in my communications with him. In his words he likes to share the good, the bad, and the indifferent and that is exactly what he does. Got some good information which I will outline below:
*This is just a summary of my call. It probably doesn’t hit on everything discussed but does hit the main points of interest. All ideas expressed herein are my own opinion and as always everyone should do their own DD.
To start, the deadline to file the 10k is This Sunday so we should see that either Tomorrow or Monday. We should get an earnings call after that to discuss the year end results and future milestones. So, my expectations are PR to announce earnings call early next week, sometime between Tuesday and Thursday, and then the actual earnings call the following week. We should get some good updates there relating to future milestones which I know we have all been wanting since the merger and Peter even admitted that the milestones have been a long time coming. It was good to hear him acknowledge that.
Now for the good stuff. I started out discussing the primary completion dates on clinicaltrials.gov. A couple trials meet hit their date in April. I wasn’t sure if we would see any updates at that time or not, but I did confirm the dates are arbitrary. Don’t hold your breath on trial updates at that time on the two trials meeting primary endpoints. The phone call focused primarily on two trials. AML, not surprising as this has clearly been the primary focus since day 1, and surprise, surprise, pancreatic. I’ll start with AML.
AML PII Trial: The company is going to have their pre-IND meeting with the FDA in Q2, IND filed in Q3 and hopefully the first patient will be dosed by the end of the year. They are excited about the trial design which they designed with the help of medical directors at Juno. We all remember Juno right? The trial design should allow them to achieve 2-3 different approvals in AML for patients going through transplants as well as cut off up to a year of the overall trial timeframe given how they will be enrolling patients. There are other companies developing treatments for post-transplant AML which, as the name implies, will be used to treat patients post-transplant. The trial is being designed to treat patients either before transplant effectively negating the need for these post-transplant therapies should we get our product to market. Another key point to the trial is that they will be able to dose patients sooner than in the PI. Roughly 10-12 weeks sooner if I remember correctly. So, you look at the results of the PI and think, what would these results look like if we were able to get the patients does 12 weeks sooner? The hope is that we could even see a bump in efficacy but if we can just mirror the PI results then we will be golden. I asked about timeframe on the PII and he was hesitant to give that. We should know more on the timeline after the pre-IND meeting, but the hope is, worst case scenario, it could take up to 18 months. If we dose first patient by EOY then that would take us out to middle of 2021 at the latest. If we want to estimate an approval date, we can look at Kite. They started their PII in mid-2015 and was approved in October of 2017. If we follow the same timeline we could potentially see approval by the end of 2022 if not shortly after. I don’t know about everyone else, but I have been in this stock longer than it will take to potentially see an approval. My ass is definitely sticking around.
Pancreatic Trial: This is the solid tumor trial that I have previously mentioned. They did submit an abstract to ASCO and I think we will know if it was accepted by the end of this month. They are very optimistic that it will be. I know I have previously mentioned that the solid tumor data could be a game changer. Of all the solid tumors pancreatic has been a really pesky one to nail down for various reasons I won’t go into right now. The main point is CAR-T has historically had a tough time showing any efficacy with solid tumors. If we can show efficacy with our MultiTAA technology then it seriously will be a game changer. I was told multiple times to just wait for ASCO, wait for ASCO. Sit tight. The last time I was told to just sit tight was right before the merger so I am pretty amped right now, lol. Peter mentioned that when the merger was completed their main focus was on the AML trials. Still is for obvious reasons and that won’t change. Pancreatic wasn’t going to be a main point of focus just because it has been historically tough to treat. That has changed given the initial data they are seeing. If the data, while very early, continues to progress then this trial should fall right behind the AML trial on the list of importance. From what I was told last December the pancreatic trial had 10 patients enrolled. After they got the readout of the first two patients in December they started to add more patients. As of last month, 30 days if I remember correctly, enrollment was up to 30 patients. They would increase the enrollment that much if they weren’t seeing some results. They need at least three months in the trial before they can present their findings so right now it’s anyone’s guess as to how many patient readouts we will see at ASCO. I believe the cutoff for adding to the abstract is sometime in May though. We will find out come ASCO but I am pretty excited for it. I hope I’m not let down, lol.
In regard to trial enrollment in general Peter mentioned that patients are pretty well read up, their live’s are on the line after all, so once you show a bit of efficacy then the trials start to enroll fairly quick. The expectation is that we shouldn’t have any problem enrolling patients for future trials and they will fill up pretty quick. Good things to hear.
I also wanted to touch on the financials as well. We should get a look at these come the earnings call, but I have some info now. They started the year off with ~$61M. Cash burn in 2019 will be ~$27M and cash burn in 2020 will be ~45M. So that is on par with what has been said before as cash running close to the end of 2020. Obviously, this means the need for more money will come sometime early next year, IMO. I expressed this opinion and was given some details as to what the next offering could look like. The most important thing is NO MORE WARRANTS. That’s exciting. Warrants suck. It’s basically going to look like a standard follow on offering. They are generally priced at a discount to the last trade. It will depend on what the market is looking like but the expectation is for the discount to be single digits. So, under 10% of market price. For an example if we are trading at $10 when the time for an offering comes we shouldn’t see it priced any lower than $9/shr. Obviously this is just a basic example. I also asked on the potential for a partnership as this could bring some non-dilutive funding. I couldn’t pinpoint exactly if any are in the works or not as it sounded like they could have been approached as he mentioned top tier pharma companies showing interest but mentioned it would be a way off before anything is finalized. Timeframe I was given to complete a partnership offer is about 12 months from first contact. Last time I heard top tier was in relation to the entities buying into the merger financing and I was not disappointed there. While I don’t expect it soon I won’t be surprised to see a partnership with a “top tier” pharma company in the future. He mentioned the pancreatic trial could be a good one to partner. It should get some attention at ASCO.
Lastly, I asked about the discrepancy in current value and perceived value. Obviously, most of us believe this to be severely undervalued here and Peter has been hearing the same thing from the institutions as well. We should be trading multiples higher. I know it, you know it and they know it. A lot of this is due to the overall trading and share structure. Get ready for some disappointing news now. Over the past 10 years a lot of institutions have mostly gotten away from purchasing shares on the open market. It sounds like 683 Capital Management and potentially Armistice have added to their positions on the open market but the amount of institutions willing to do this are dwindling. We could see current institutions add but will most likely not see new ones buying on the open market. The reason, as I have discussed before, is that there just aren’t enough shares available for them to purchase without drastically moving the share price. Essentially, they want a larger position than they can realistically buy on the open market. Unfortunately, it looks like the share price will be subject to retail investors so get to buying boys (and girls). The upside is that there are institutions lining up to buy. They will just need an offering to do so. While offerings suck I would put money on the line that the next one will not be extremely discounted and will be priced fair. I don’t expect it to hurt much and will look at it as another buying opportunity.
So, there it is. Lots of good info to come and I’m looking forward to the ride. I will be adding to my current position unless fundamentals drastically change which I don’t see happening anytime soon. Stay tuned.
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