Michael Meltzer- Submitted Myovant (MYOV) to Idea Lab and made his "Bang the Table " alert. Commentary is included below:
I don't do it often as reserve for only my highest level of conviction picks. For me that means seriously derisked/severely mispriced/very high up side. MYOV-4.83 MC $431M. 38% Tute 56% Insider so limited float. IPO a couple of years back T 22.50. Last financing in May for 8.25 and parent company(get to that later) bought $20 M more in shares. This is mispriced because it involves 3 companies and 2 countries in a very confusing structural set up and deal that I have dug through and try to simplify. I believe I have connected all the dots correctly, but as always do your own DD before investing. Roivant is a privately held co. owned by a 34 year old Anglo/Indian who has a program designed to find discarded or unappreciated holdings of larger pharma. He then purchases these products in their own companies called "vants" and incubates them through the FDA process. He has at least 20+ of these vants. Last month a PR emerged saying that Roivant which owns 42% of MYOV had signed a Memorandum of Intent(MOU) with Sumimoto Pharmaceuticals, one of the 10 biggest pharma CO's in Japan to sell their share of MYOV plus UROV(get to Urovant later) and I believe 4 other vants as well as option on 5 other vants for $3B. Scheduled to be signed off on by end of October, and ready to hand off and room in April as numerous thing need to be tied up. I took the time to look at and listen to the Sumimoto CC explaining their reason for the deal. Their biggest cash cow is losing patent coverage in 2022 leaving a large shortfall in revenues. They believe that MYOV and UROV have blockbuster drugs to compensate for that event. They do say the deal brings back other things but focus is on those 2 vants. Roivant purchased the drug they now call Relugolix's rights to worldwide except Japan from another large Japanese Co. Takeda Pharma who ran the mid stage successful trial for equity(Not cash) and high single digit royalties. So Takeda now an insider motivated owner. Roivant not capable of commercializing was very happy to then book a profit and turn it over for final development to Sumimoto as mgmt themselves still hold lots of shares and now have a very motivated deeper pocket pharma co. To drive it to profitability. Let's finally get to the drug. Reglugolix an oral once-daily small molecule gonadotropin-releasing hormone receptor agonist that decreases estrogen and progesterone. They have 3 through or in ph3 indications all of which are huge.First is the 2 Liberty Trials for Uterine Fibroids which met the phase 3 primary endpoint of decreased bleeding to a p<.0001. This is the primary symptom women with Uterine Fibroids complain of. The second is pain, and Regulogix is the only treatment for this condition to actually trial for reduced pain again hitting endpoint to p<.0001. The treatment involves adding 40 mg Reglugolix to 1.0 mg estradiol and .5 mg progesterone(those are also the 2 active drugs in Bijuva to stop menopausal symptoms). This guarantees somee estrogen while it is decreased and creates a situation showing no loss in bone density which has made AbbieVie competitor an underachieving launch drug. Competitor Orlissa is twice daily, and because of varied estrogen levels in women has 2 dosages. The higher limited to only 6 months due to bone density issues. Reglugolix will have unlimited time span, good for patient and company as Fibroids last till full onset of menopause.The story gets better as also in phase 3 for endometriosis(current indication for Orlissa) and data has been more of the same. Final data due end of year. Should be filing both NDA's early in 2020. AbbieVie got expedited status from FDA, so could happen here. But wait there is more, Relugolix has also started it's phase 3 in Prostate Cancer. Phase 1&2 showed "rapid control" of PSA,as well as "rapid" return to normal testosterone levels for men on intermittent androgen deprivation therapy. If early enough treated with this may delay or postpone castration-resistant issue in disease where risk of metastatic complications and death rises. They also are in a phase 2with a female infertility drug also from Takeda. So much to unpack. Sumimoto in all likelihood will look to get company sold off to or partnered to unlock some financial benefits.Stock should easily be at least a billion dollar MC and $12/share. Not much downside at this price. Trials appear well run. Data shows similar efficacious ability and superior safety. I love strong mgmt and have listened to 2 presentations. All well seasoned. CEO has brought another product for Uterine Fibroids to market. Added bonus Leerink has a PT of 26. Late add: Sumimoto becomes a strong bet to buyout rest of company (53%) after signing. Do your own DD listen to all presentations I mention for yourself.
AI
