focusIR May 2024 Investor Webinar: Blue Whale, Kavango, Taseko Mines & CQS Natural Resources. Catch up with the webinar here.
a In terms of the news and consequences that are to unfold for the next of the year here is a likely scenario:
Blautix®: Phase II IBS, full readout is expected to come first and we have strong grounds to be optimistic as to the outcome. 4D is a company with very finite resources so they wouldn't have continued with the trials, past the primary endpoint, wasting funds and efforts, if success was unlikely. "The interim analysis supports and informs 4D Pharma's future development and commercialisation plans with partners." The term non-futile is indeed a standard term. It could be that companies are discouraged from being overoptimistic before the end of the trials as there would be a serious risk to mislead investors.
The market for IBS in 2018 was $1.071 billion (source google) so a treatment that creates no further would surely capture a significant part of that market relatively early and also likely to cause it to expand further than it would otherwise.
With a (likely) IBS success under its belts, 4D will look forward to the outcomes of the next two programmes, notably MRx-4DP0004: Phase II COVID-19, preliminary data and MRx0518 + Keytruda®: Phase I/II, comprehensive Part A data.
The outcome of each of those trials would have a greater degree of uncertainty than the IBS one. However in each case, we have reasonable grounds to be optimistic compared to a scenario where we were starting from scratch.
In the case of MRx0518 in particular and given the very small sample of patients, the percentage that has shown an initial
"clinical benefit" appears to stands at a much higher level than the threshold that will eventually determine its success.
In the case of MRx-4DP0004: Phase II COVID-19 it is very encouraging that we are targeting the overinflammation symptom whilst leaving the immune reaction undisturbed.
So we are looking at a success that's not in the bag but very likely (IBS) and then aiming at positive results with covid-19 and oncology. While those successes are not guaranteed, it is a very rare opportunity in the pharma/biotech sector to be looking at not one but three possibilities that could change significantly the fortunes of the company and its position in the sector.
The buys far outweigh sells but the SP is dropping. Perhaps the MMs working on a big sell order.
First, the benefits of a nasdaq move should not be overestimated. It can help unlock further value but that value has to be there at first place. However, for a company to be aiming at nasdaq its management must think it has some aces under its sleeve or at least expects those aces to be there soon.
Can't help but draw some parallels with Tiziana that has been aiming at nasdaq as its only listing (currently dual listing). Tiziana almost trebbled from levels where -at least I thought- it had already done well. That was as its management stepped up the release of pieces of news, one after the other. Some were of more substance than others but you could tell that it was a well orchestrated market update exercise ahead of the such shift.
The two companies, 4D and Tiziana, have a lot of differences including management style - if anything, my impression is that 4D's management is more conservative with the content of its announcements. Nonetheless, one gets the impression that Q3/Q4 may prove transformational for 4D (in a similar fashion that Q2 proved for Tiziana) ahead of a likely nasdaq listing. Furthermore, 4D's management seems wise enough not to present it as an end in itself: it is perhaps something that will come naturally after possible successful phase II results in IBS, covid-19 and part A data results in oncology or in any of the aforementioned as even a single success would still be a very important milestone not only for the company but for biotherapeutics in general.
The reported feedback yesterday simply firmed up the positive message that we seem to be getting from the company in the course of the last few months through RNSs, interviews or presentations. Also we knew from a previous CEO interview that the favourite project (among favourites) is the oncology one.
Looking forward to the first piece of news in the next few weeks.
July 2020 presentation gives approx. timings re the various programmes:
https://www.4dpharmaplc.com/en/investors/reports-presentations
That's the main factor that would determine a decisive price movement one way or another from current levels. It's worth taking charts into account but for the SP to make a serious attempt to break the 95-100p barrier (possibly technical as much as psychological), significant fresh buying power has to come in. However, the bulk of people that are to take positions, ahead of any news, have probably already done so (all other factors being equal).
We may get some upward movement as we get into September but ultimately and in my opinion, it is now mainly down to news. In any case, I think investment rationale remains strong - after all price is back to where it was before the fire sales by a couple of IIs - so the yesterday's has encouraged me to buy back some of the top slices that I sold the other day.
It's not often that you are looking at a company which has a number of important factors going for it namely:
- strong IP and a number of good hints as to future success from early stage resutls
- (what appears to be) strong management with serious skin in the game
- operating in a very high growth area (biotherapeutics) which only now starts to show its potential
- good value price for the risk/reward potential (again DYOR)
- significant risk mitigation due to the number of projects which are probably not highly correlated in terms of probability of success
- last not least: ... good timing!
Cityal
Has it closed?
https://shorttracker.co.uk/company/GB00BJL5BR07/ I think it means 0% change as of Aug 17 rather than change to 0. Take a look at the table with DDDD against the other companies. In some cases it says change -0.10% and you can't have a negative short .
Until very recently SP was in the 40s and 50s and it had been there for some time ... should one mention the high 30s?. So some volatility in the 85-95p range is hardly a surprise.
The main thing that has changed, apart from getting closer to autumn and the results, is Seres's success. The latter has earned 4D some deserved attention from the market. It may have changed the perceived probability of success for 4D but apart from a positive reality check for the biotherapeutics sector, there is no major impact on 4D chances as it seems to be using a different approach to Seres.
Even a 0.50% short for a share that has doubled in such a short time is OK or in fact, more than OK: the extent of the short (as it stands) indicates that it is more likely to be a play on volatility more than anything else. For all we know it may have been a hedge on a shareholding that is below a notifiable interest!
Also there are a number of projects on-going which makes one success all the more likely. But, not all of them will come at once and investors may well be thinking of strategies ahead and after the first expected announcement e.g. where will the price go if Blautix is or isn't a success? And then results from other projects, in q3 and q4, will be fast approaching to further ignite or reignite interest (depending on Blautix's outcome).
All-in-all apart from crystallising some profits, I'm as optimistic as before and with the bulk of my original investment built since end of April/early May, still in here. Though fully prepared that the first endpoint results may not be sufficiently positive.
MICODX ?
At least I'm aware of the Fx rate USD / GBP :-)
Zengah, true of course.
I was thinking of an additional even bigger success eg in the oncology or covid-19 arena.
It would be a slight concern if we were invested in Dddd whilst being unaware of Seres :-))
Indeed. There are a few binary outcome trials at the moment in various areas, including oncology, that could catapult the microbiome market into billions of USD if not tens of billions. All that's needed is at least one major successful phase III trial to address a major illness or health issue.
Agreed. Seres was only a catalyst for the long awaited re-rating. The very welcome SP rise is a result of the biotherapeutic sector and 4D coming (back?) into prominence. After all, the SP is now just over the levels to which it rose after its covid-19 treatment received the green light and was fast tracked in April. Also agree and as a number of people have been remarking for some time, the risk/ (ultimate) return ratio has been and remains one of the most attractive.
However, it's good to remain grounded in that Seres's success does doesn't necessarily indicate a higher probability of success here in the case of IBS or the other projects. The two companies have different approaches in the biotherapeutic arena and 4D in particular relies on single strains of bacteria.
Have de-risked to some extent after the recent rises but retain a significant part of the original investment.
Production at the end of 2025? Has that always been the plan?
Are they to spend the rest of the year "understanding" the newly landed assets?
Having paid with shares very dearly for the nil cost options for the Columbus directors and the advisers' fees, are they now saying further dilution is necessary? What was the point of buying a cash generator then and making the whole venture so much more complex?
A lot of jam tomorrow.
Nothing is in the bag just yet though the company is well placed for a further breakthrough in the biotherapeutic space following suit after Seres. As we have remarked before, the risk/return prospects are probably among the most attractive for the sector and possibly across a number of sectors!
All projects are very worthwhile but I'm most excited about the prospect of a biotherapeutic in oncology. After all, as per p.9 of the July presentation: www.4dpharmaplc.com/application/files/9815/9482/4216/4D_pharma_Management_presentation_July_2020_FINAL_web.pdf
"FIRST-IN-CLASS POSITIVE CLINICAL OBSERVATIONS FOR A LIVE BIOTHERAPEUTIC IN ONCOLOGY" ... whereby clinical benefit has been observed in 33% of the case vs. the threshold of 10% for further research to be carried out.
Seres and 4D both focus on the microbiome and on the general principle that it can be used to enhance or even help direct the immune system. But do similarities in their approaches extend beyond that?
In hoping to find any commonalities between the two and in particular 4d's IBS and Seres's C.Difficile (e.g. employing similar strains of bacteria), I came across the following report:
http://www.biomx.com/wp-content/uploads/2018/10/BC_Microbiome_Collection__FINAL.pdf
On p.31 there is a useful table which demonstrates the difference in the approaches by the respective companies for the above mentioned illnesses: Serres relies on a mixture of bacteria (presumably with synergistic effects) whereas 4D on a single strain. Will not go as far to say that 4D's approach is one of higher risk as it relies on a single strain but couldn't find any evidence that would justify 4D's chances being higher than they were as of yesterday morning.
Nonetheless, what Seres's results highlighted though is that the microbiome therapeutic area is becoming mainstream and it can provide real solutions. So 4D is one of the prime beneficiaries from such attention. Hopefully, it will be come to much more than that if the positive indications from the Phase I trials, be they from IBS, covid-19, oncology are anything to rely upon.
Have posted before about the announced collaboration between Merck and a biopharmaceutical company of approx. US$5bn market cap (PeptiDream) vis-a-vis the development of a drug to fight the covid-19 virus:
www.pharmaceutical-technology.com/news/peptidream-merck-covid-19-therapies/
What may be especially interesting is that "PeptiDream noted that the partnership builds on the research collaboration and licence agreement signed between the companies in April 2015." ... In a similar vein, when are Merck and DDDD going to go public about their collaboration projects?
It also begs the question as to why Merck is not - publicly at least - backing DDDD re its covid-19 efforts. Could it be that Merck is watching closely the current trial with a view to assessing its options as soon as the results are out?
The Roche phase III trials have not been successful so far, but a combination with an antiviral / another treatment is possible:
https://www.roche.com/investors/updates/inv-update-2020-07-29.htm
Synairgen, DDDD and the large players, notably Roche, are making headway with Covid-19 treatments. Time we had an update from SCLP re the progress on the various fronts? Fundraising is very good news as is the presence of a new, sector specialist, institutional investor who must have seen some kind of business plan. However, we still have vague references to plans re the various programmes and Covid-19 vaccine in particular or repetition of old information.
Otherwise, looking forward to the AGM.
The Roche phase III trials have not been successful so far but a combination with an antiviral / another treatment is possible.
https://www.roche.com/investors/updates/inv-update-2020-07-29.htm
No good news from the Acterma trials front but a combination with an antiviral is possible.
https://www.roche.com/investors/updates/inv-update-2020-07-29.htm
"... early signs from China, where all dealerships were re-opened in June, are encouraging with retails up 11% year-on-year in the month"
Otherwise - "Q2 down 48%, weaker than Q1 down 34% due to full quarter impact of Covid-19" and high losses even at operating level (£145m). Yet at 49p, is it worth a punt? Too early to talk about recovery play but it could be on the hope the year-on-year positive trend continues or (even starts) not only in China but in other main markets too.
Without news where can the SP rise on the back of expectations?
After the green light re 4D's phase II covid-19 treatment trials the SP reached 80-85p in late April / early May. Since then there have been solid progress and to some extent, positive news. On the other side of the scale, we had fire sales.
So it is reasonable to expect it to go back to those levels or perhaps £1 but, I believe that looks optimistic (again on the basis of expectations only and without news) as there may not be enough "firepower". However, even if the sellers haven't gone completely, the situation seems more stabilised. We've also had some publicity and we've benefited from the Synairgen "wave" as 4D is an attractive option for the next bet...
Also, we've had the crossing of the SP graph with the long term average so who knows where that might lead? I'll be pleased with a base of circa70-75p ahead of the next RNS.