Foamix Pharmaceuticals Ltd (FOMX)

[tdeck]

Final DD post on Foamix

I want to first start this post out with an issue that shorts on multiple boards will be attempting to push which has NO basis as the situation has already been sorted, unlike many other smaller pharma companies that succeed in bringing to market one and soon to be two innovative products with very large markets Fomaix as they did everything else, already saw the issue and when they knew approval was at hand sorted it out.

Cash to execute the strategy, it takes quite a bit of money to hire 4 top senior managers in major markets, 51 pharma reps, and establish both trademark and patent protection. Well it is a very good thing all of these things were already accomplished not least of which the $39 million in cash Foamix had but also secured $64 million in additional capital financing investment by Perceptive Advisors (Joseph Edelman) and OrbiMed.

http://www.foamix.com/news-releases/news-release-details/foamix-announces-64-million-capital-financing-investment

These people aren't financers that loand money out to sell shares, that isn't what they do, they nvest in companies for the long term and both are/have been shareholders/investors and haven't sold a share so to think they will now when the pot of gold at the end of the rainbow is ahead in 2020 and beyond is quite laughable.

These guys want to own parts of highly successful pharma companies not loan them money to make a profit on the loan as a bank/financier would. They are in for the long haul, the really long haul.

https://www.institutionalinvestor.com/article/b19hj4gjrwh1x9/The-41-Man

You don't turn $6 million into $4 billion plus loaning money out to sell sell shares before the ultimate payday is upon you then you selectively pass them out like candy to all the good children in class.

When short sellers come in droves to boards spouting such things it always reminds me of the movie Jack Nicholson gave the following memorable speech.

You don't want the truth because deep down in places you don't talk about at parties, you want me on that wall -- you need me on that wall.

We use words like "honor," "code," "loyalty." We use these words as the backbone of a life spent defending something. You use them as a punch line.


I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the blanket of the very freedom that I provide and then questions the manner in which I provide it.

I would rather that you just said "thank you" and went on your way. Otherwise, I suggest you pick up a weapon and stand the post. Either way, I don't give a DAMN what you think you're entitled to!


I switch it up a little bit

Your not worried for me, trying to save me from myself or the bad dilution boogeyman, you just don't want to admit, you made a mistake, deep down inside in places you don't want to admit exist, you are feeling an angst, a gut wrenching feeling of despair, of miscalculation of disappointment in your choices. You don't want my shares to save me, you don't want me to sell my shares to help myself you need me to sell those shares becasue you need a way out of your predicament to try and not lose too much money, to maybe lose a little to to even make a little so you can feel good again and pat yourself on the back, telling yourself you were right, you made the right call. Well I suggest you suck it up buttercup, lose a little lose a lot, its obvious you NEED those shares, well open up your wallet today is judgement day.

The truth is, there will be no dilution, there is no need for money, there is no real downside in the coming 8 months only upside. Don't chase the stock bid sit them, because these fools will try and try and try again and again and again. Til they realize it is time to move on, until they do, I will bid sit them, take their flipped shares, shorted shares and thank them, because I already won the game, we are just waiting to see what the final score will be. They are trying to save face and money with your money and deserved profits from a risky yet now successful investment, 2020 will be the year no doubt, not a doubt in the world that's why investors like the Biotech whisperer, the Warren Buffet of Biotech's Joeseph Edleman is here and has been along with Orbimed and countless others investing/increasing their position at ever stage of the process, now we just as they get to ride in the shiny car to the finish line.

If you add or start a position, do it on the bid, today, tomorrow next week, investors always buy on the bid. Then place your stocks for sale good til canceled $30-35 they can always be changed if you wish to sell a few @10 or 15 or 20 but until then helps keep them out of the hands of unscrupulous short sellers looking to steal someones wallet.


Now that the unpleasant but much needed touch on shares dilution and short seller and flippers hustle is over I want to get into a few things.


The analysts and their thoughts on the stock/company going forward. These analysts judge/rate stocks in the Biotech sector, it is their job and if anyone has any real insight into what is ahead it is them, not I, not short sellers, not flippers, day traders or hustlers, they do.

Bank of America

Bank of America analyst Jason Gerberry.The analyst reiterated a Buy rating on the stock, citing an attractive valuation and pipeline optionality. Gerberry also maintained an ultra-bullish price target of $11 prior to the approval of (FMX101) AMZEEQ™ and prior to the acceptance by the FDA of the applications of FMX103 which its pdufa date in June 20, 2020.

Gerberry has compiled the following takeaways from the call: 1. NDA review - FOMX is through mid-cycle review with the FDA and remains confident for the anticipated approval of '101 in October. 2. Launch preparation - sales force alignment is underway (hiring offer to be made contingent on FDA approval). FOMX remains on track for early January launch of FMX-101, and plans to have 51 sales rep ready at launch. 3. Pricing - launch price has not been finalized for FMX101, but mgmt. reiterated expectation that reimbursement access with limited restriction (tier 2 to tier 3) is feasible for FMX-101 with a net-to plan pricing range of $200-$400m. 4. FCD105 (acne) - FMX plans to initiate a Phase 2 trial of FCD105, a topical foam formulation that combines 3% minocycline (anti-bacterial) and 0.3% of adapalene (anti-inflammatory), for the treatment of acne in 3Q19. The trial will be a randomized US study of ~400 patients, with topline results expected mid-2020.

Cantor Fitzgerald

Cantor analyst Louise Chen reported on Foamix’s presentation at the firm's healthcare conference in early October, noting: "After listening to FOMX's presentation, we continue to look forward to the potential launches of FOMX's two late-stage products in the 2019/20 timeframe. We expect approval for the company's lead product candidate FMX101 for the treatment of moderate-to-severe acne."

Says her 25 physician survey supports her positive view on the market opportunity for Foamix's FMX10. If approved, FMX101 has the potential to address a significant unmet need in the treatment of moderate-to-severe acne, which remains a difficult condition, Chen tells investors in a research note. She reiterates an Overweight rating on Foamix shares with a $15 price target ahead of the upcoming FDA action date for FMX101 on October 20. The analyst thinks the Street is underestimating the uptake of acne drug. Chen rates FOMX an Overweight with $15 price target before approval of (FMX101) AMZEEQ™ and prior to the acceptance by the FDA of the applications of FMX103 which its pdufa date in June 20, 2020.

Cowen & Co

Ken Cacciatore of Cowen & Co. -- is now saying. In a bull argument to beat all bull arguments, Cacciatore stated that in his opinion, Foamix could be on track to do as much as $600 million in peak annual sales, and Foamix stock could be worth as much as $30 a year from now --as much as 750% more than what it costs today.

Foamix has two products in development, both targeting the dermatology market. Both products are topical minocycline products, with the main difference being that "FMX101" is a formulation targeting acne, while "FMX103" addresses rosacea.Both products are wrapping up Phase III clinical trials with the FDA, and both work essentially the same way, even though they treat different conditions. To wit, a liquid medication is salved into the skin, and it acts to lower the melting point of facial "sebum" (an oily substance that can block pores and permit bacteria to grow within the skin, resulting in acne or rosacea), with the result that the oil melts away, allowing the pores (and any bacteria within them) to be exposed to the air, inhibiting microbial growth.In late 2018 results from the clinical trials, reports Cacciatore, FMX103 was proven to be "safe and effective" for the treatment of "moderate-to-severe papulopustular rosacea." More than that, says the analyst: The results of the study were "impressive," and statistically significant to boot, with "81.6%" of patients in the trial showing improvement in their condition after 52 weeks of treatment.At this point, Cacciatore says he sees "essentially no clinical development risk" attached to either formulation, meaning that once the FDA approves them for sale, Foamix should see no obstacle to marketing the treatments through its sales force of "50+ sales reps focusing on the 6,000 prescribers that cover roughly 75% of the acne prescription market." FMX101 could be approved as early as October 20, 2019, and FMX103 could follow in a few months. Its New Drug Application was filed with the FDA just last week.Nor will financing be an issue once approvals are in hand. "Foamix is well-financed for the initial FMX101 commercialization period," argues the analyst, "having raised $64MM in July ... and ending Q2 with $70MM in cash." At current cash burn rates, that should be enough to keep Foamix afloat for more than a year as sales ramp up -- longer, if the costs of running clinical trials abate, as seems likely.With financing in hand and a likely receptive market in the form of anxious teens and long-suffering rosacea patients seeking a solution to their little-understood disease, Foamix looks well positioned to prosper once the FDA gives it the green light.

Barclays

From June prior to the approval of (FMX101) AMZEEQ™ and prior to the acceptance by the FDA of the applications of FMX103 which its pdufa date in June 20, 2020.

Foamix is a late clinical-stage specialty pharmaceutical company focusing on foam-based medications for the treatment of acne and rosacea. Foamix stands out in this report primarily by virtue of the extremely high hopes Barclays'. Barclays believes that within a year, Foamix stock will be selling for $10 -- a four-bagger in just one year.

As the analyst explains, Foamix is on the cusp of becoming a "commercial stage company" -- i.e. a company with actual revenue from sales, a rarity in small drugs stocks -- thanks to its topical Minocycline product for acne and rosacea. Designated "FMX-101" for acne treatment and "FMX-103" for rosacea, both these foam-based products "combine [the] proven efficacy of minocycline with a more tolerable side effect profile" says Barclays. From $3 million in annual revenue today, the banker predicts Foamix could do as much as $272 million in annual sales by 2025E.

Considering that the entire company has a market cap of barely half that number -- $138 million -- today, Foamix at least seems to have earned its place on Barclays' list.

Foamix has a few upcoming catalysts that could send its shares surging higher:

There is a scheduled PDUFA for FMX-101 on October 20, 2019. This is a key event for Foamix, as FMX-101 is its lead product in acne.
Foamix anticipates filing an NDA in mid-2019 for FMX-103 in moderate-to-severe papulopustular rosacea.
FCD-105 Phase II study initiation in mid-2019: FCD-105 is another pipeline product being evaluated in patients with acne and is a foam-based combination of minocycline and adapalene.

"We value Foamix on a DCF basis, assuming an 11.5% discount rate and a 3% terminal growth. We include risk adjusted pipeline values for both FMX-101 (90% probability of success) and FMX-103 (70% probability of success). We also assume base uptake of FMX-101, reaching 2025 risk-adj. sales of ~$200mm.

Credit Suisse in May 2019

Analyst Vamil Divan sees a high likelihood of regulatory approval for FMX101, applying a 90% probability of success (POS). The analyst rates FOMX stock an Outperform with a $9.00 price target, which implies nearly 250% upside from current levels. With an FDA approval in hand (100% POS), Divan says his price target will be boosted to $11.00. According to the analyst, “an increase in the sample size (1,507 patients in this trial vs. ~500 each in the two prior trials) and improved site selection and training helped drive statistically significant [clinical] results,” which put the company on track to win FDA approval.

H.C Wainright from May 2019

Analyst Ram Selvaraju estimates the probability of regulatory approval at 85%, and assigns a $12.00 price target for the stock. If the price target is reached within 12 months, that would provide a 12-month return of nearly 360%. Selvaraju opined, “We believe that the current valuation situation presents an attractive entry point for value-focused investors, given the fact that Foamix currently trades about 2x book value […] Our risk-adjusted net present value (rNPV) of FMX101 is $400M, which factors in an 85% probability of regulatory approval […] We have employed a sum-of-the-parts valuation approach that yields a total projected firm value of $696M, which translates into a price objective of $12.00

Selvaraju believes investors seem to be discounting both FMX101 and FMX103 from a commercial standpoint, but “this is unwarranted.” Why? “These agents are based on well-known, validated and effective compounds in their respective target indications and have generated statistically significant efficacy data in large, robustlypowered pivotal studies. We also draw investors’ attention to the large size and underserved nature of the target markets—namely, acne and rosacea—and the willingness of patients and physicians alike to try new formulations when they are introduced. Furthermore, we point to the user-friendly and well-tolerated nature of the Foamix formulations, which utilize the company’s proprietary foam-based delivery technology to enhance efficacy while minimizing off-target systemic side effects,” Selvaraju answers.


Overall, this acne drug maker stands as a 'Strong Buy' name among Wall Street analysts. In the last three months, FOMX has won three more bullish recommendations, while the 12-month average price target lands at $17.00, or more than 500% ahead of the current share price. Which were given prior to the approval of (FMX101) AMZEEQ™ and prior to the acceptance by the FDA of the applications of FMX103 which its pdufa date in June 20, 2020.

Many times, more often than not in the months following FDA approval and other material events coming in regards to the pipeline of companies products, such as the pdufa date of June 2020 and the commercial launch of AMZEEQ™ in Jan 2020 analyst will reiterate and even upgrade the sock of a company, shall we see it here? Maybe, but we already have an excellent start.

I was going to go into the market etc, but, I realized the analysts already covered those topics quite well. I would suggest everyone do their due diligence and follow any analyst updates as the reasoning behind their actions will be well stated and really probably will state the case much better than I.

Peace out.