Mallinckrodt Plc (MNKT)

[Trend-Setter]

BioVie's Coverage initiated by Tailwinds Research Group
from the article:
"In my opinion, BioVie has a relatively easy path to FDA approval. Their drug, terlipressin, has been proven effective in over 40 countries. It is commonly prescribed and has a known effect on patients with liver cirrhosis. In addition, their proprietary (in the US) delivery technology has been shown to increase effectiveness while lowering toxicity in trials".

"In the near term, BioVie has results coming from their Phase 2a safety trial. These are expected early in April. The results of this will hopefully be positive, leading to a Phase 2b trial starting in the summer. Optimistically, the FDA could move BIV201 straight into a Phase 3 trial. We will learn if this is going to happen in May, but the odds of this are not very high".

"After the Company gets their results from the Phase 2a trial, I expect them to raise the funds necessary to take them through Phase 3 and onto the market. The company requires somewhere between $10 and $15 million to accomplish this. With a positive Phase 2a trial, fundraising ultimately shouldn’t be a big issue".

"Once approved, I anticipate BioVie being acquired by a larger company with a sales force, etc. The potential price for this acquisition could be over $1B. With a phase 3 trial taking about a year until completion and FDA approval, I believe an acquisition would be a 2nd half of 2020 event at the earliest. Certainly the majority owner, Terren Peizer, is looking for a large exit and not making this investment for a small win".

"With a current market cap of $30M, BioVie is an attractive investment. They have the rights to a known drug that has been proven effective over many years. They have a novel delivery technology that increases effectiveness while reducing negative side effects. Finally, they have US patents in place and orphan drug designation that will enable them to capture a large market that is currently unaddressed. I am long BioVie and look forward to holding my shares through FDA approval and an eventual liquidity event."

"I believe the end game here is an exit through a sale of the Company. In my opinion, the most likely acquirer would be Mallinckrodt as they are active in terlipressin already. Once the drug is approved, any sale of the Company would likely return well over 5x on an investors’ money with the chance of much larger gains; typically, acquisitions of drug companies with high margins like BioVie should see can range from 10 times revenue to as high as 20 times"

For full coverage check:
.https://tailwindsresearch.com/2019/04/biovie-an-undiscovered-gem/