I like this board as most of the postings (bullish or bearish) are informative. I do my own DD and any information is welcomed. Thank you.
Just wanted to share with you why I am still long CDYD, in spite of buying a substantial amount of shares at an average price of $0.78 (47% unrealized loss of a large investment so far).
My idea (and still is) is that the HIV drug can be competitive for two main reasons: it helps with compliance and it lacks (so far) adverse effects. Only one of these, on its own, is huge. However, there is always competition and poor executing: GILD with Biktarvy (a triplet) is trying to enter the market and, apparently they are doing well as it saw growth in its HIV product revenue, which rose to $3.7 billion on the back of Biktarvy sales, nearly 20% above consensus forecasts. Also, they announced in March a new prophylactic HIV drug similar to Truvada. GSK is selling LOTS of Juluca (a single pill two-drug combo, dolutegravir/rilpivirine) and is estimated that peak sales will approach 5 Billion (sold almost $130 Million in 1998). These two companies control about 90% of the market. The thing is GSK I working in a once-a-month injectable combo. And there is J&J’s Symtuza (darunavir) approved mid-last year that uses the company’s drug Prezista in combination with GILD’s drugs, for a strong viral suppression.
The problem is always that that doublets could invite treatment-emergent resistance compared to standard triplets, and, more to the point, that a monotherapy will be riskier. Fortunately, Leronlimab apparently has not shown any symptoms of resistance so far a HUGE plus.
The market is there with more than 1.4 Million patients in US alone living with HIV (around 40 Million worldwide according to UNAIDS). The global market around $30 Billion.
Now, if CYDY is to succeed it needs to tap the non-compliance market (a large percentage of patients don’t take medication because is difficult) and do it quickly. The holy grail is a no side effects drug that helps with compliance.
PRO-140 seems to be that drug provided it can be successfully incorporated into a combo, or even better, c as a monotherapy.
So, back to why did I invest in CYDY?, well I thought that in this cut-throat environment GILD (or GSK or J&J) would pay anything to “have a look” and incorporate PRO-140 in their combination drug research to make a potential drug with higher adherence rate and less side effects (hell, with total HIV-related sales of Billions I would buy CYDY in a second, more-so when multi-class combination drugs are projected to be the top market growth in the HIV space).
My biggest worry is that CYDY management have not seen the need to speed up and, either launch the drug as a combo, or simply sell the company to whomever can incorporate it quickly and effectively. If NP treats CYDY as a good milk-cow for future assured salaries time will catch up and all of the sudden the competitive advantage will be eroded (say J&J succeeds in a once-a-month injection with a combo that does not include PRO-140). BP with myriads of researchers and capital are not just sitting there waiting for CYDY to obtain results or “share” what it has. If this is delayed PRO-140 advantage might well disappear (and our investment with it).
I am very optimistic about the drug (actually, I believe is almost de-risked), but don’t like what I see in management. The obvious course of action is to sell the company to the best bidder, PRO-140 as a combination ingredient is worth a LOT of money. If RP wants to continue doing research or NP wants to launch another company and pursue TNBC and GvHD is good and well (believe me, there will be plenty of money for that), but FIRST need to take home PRO-140 before is too late. I honestly don’t like this going about the bushes with this and that, at the end we will be all left holding bags.
In essence, I bought CYDY thinking that the company was going to be BO. Still think, the moment my original motivation is proven wrong I will re-evaluate and probably take my losses.
Good luck to you all longs.
AI
