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$MNLO is a cash cow being born with

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BiotechValues   Saturday, 05/02/20 04:59:30 PM
Re: None
Post # of 240491 
$MNLO is a cash cow being born with 6/2 PDUFA and recent China expansion.

Might want to take a look at Menlo Therapeutics (MNLO).

PDUFA 6/2 for FMX103 for moderate-to-severe papulopustular rosacea in adults. Phase 3 results: https://www.foamix.com/news-releases/news-release-details/foamix-announces-positive-topline-results-phase-3-program

250M market cap after 3/9/2020 merger with Foamix, with about $130M in cash.


Investor Presentation

http://ir.menlotherapeutics.com/static-files/9f09b650-c86a-4a01-a062-9a77d086f7c0

Cash Cow

Peak sales $250M plus

Launched Amzeeq,( https://www.amzeeq.com/ ) a topical mynocycline foam for acne this quarter with strong uptake and a run rate of $20-$25M according to Cowen in this article: https://blog.tipranks.com/3-biotech-stocks-under-4-with-big-upside-potential/

That $20-25M run rate does NOT include a rollout in China with a $10M up front payment announced a week ago: https://www.globenewswire.com/news-release/2020/04/23/2020865/0/en/Menlo-Therapeutics-and-Cutia-Therapeutics-Enter-into-Exclusive-License-Agreement-for-AMZEEQ-and-Approved-Topical-Minocycline-Products-in-Greater-China.html

(How many kids in China with zits?)

Expecting new territories for Amzeeq to be announced also per the press release.

Sales of Finacea restarting now, adding to sales that I don't think are included in the Cown note above.

There were supply chain issues and patent litigation involving Foamix and LEO Pharma which have been resolved in favor of MNLO/Foamix. At any rate, sales (as of April 2nd) were expected to resume "in the coming weeks" with royalty payments resuming.

Another drug, FMX105 (also for moderate to severe acne) in Phase 2 with top line results due out in the current quarter.

I think a market cap of $250M, with a 6/2 PDUFA, a $20-25M run rate estimated before expansion into China and resumption of Finacea sales, plus results from phase 2 of FMX105 due this Q, all combine to make MNLO an undervalued stock at $1.77/share.

I'm not too big on technicals with smaller, less active issues like MNLO (trades about 2-3M shares daily) but the stock did hold it's $1.70 support nicely yesterday during the market sell off and looks like if it can get thru some short term resistance at $1.87-$1.90 the next resistance isn't until $2.25 or so.

Would be happy to hear any thoughts anyone has on this one.



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