VTVT; A risky gamble for better medicine
DISCLAIMER
This is in no way, shape or form, fluid and function, an analytical, qualitative or intelligent compte rendu. I am obviously not rich, so obviously I haven't made it with my own thinking, so definitely don't put faith in me. But maybe read and learn some things about a company that might just change the standard of care for quite a few diseases.
ALSO: Tradingview forced me to remove my links due to some reason, waiting to hear back from support, will reupload with links if allowed, otherwise ignore where it says links provided.
Thesis
VTV Therapeutics might just be a real diamond in the sea of penny biotech stocks. I absolutely believe that one should always do their own due diligence, and always read everything for themselves, as the old adage goes, trust but verify. I genuinely see VTVT as exactly what the stock market was made for. This company has lofty goals, big dreams and big programs that could absolutely dominate their respective illnesses, or at the very least modify and become a part of the standard of care. The company in no way has the ability to guarantee successes, no way to guarantee anything works, and no reasonable guarantee they could give anyone that the stock will go up; but I think this one deserves the try. I have absolutely no idea if the science is sound behind the therapies, it is outside of my specialty, and there is such a drastic change from lab to human, or even mouse to human, or even small amounts of healthy humans to very large amounts of sick humans. But isn't the right to fail a part of the business? How many rockets fell back down to earth before we touched the stars, or stepped on the moon? How many die from early iterations of surgeries or therapies, another brick in the progress of humanity? Where the risk is high, so is the reward. For a micro-cap biotech, they have sensational early programs they have managed to license to other clinical stage biotech's in other countries. Perhaps the best, and the most reason to show that this company is undervalued, is their recent deal with Anteris Bio, giving them $2 mil up front with $151 more for developmental milestones, + royalties, and a minority equity stake in Anteris. All of that just for one of their drugs limited to kidney diseases, in a very non-kidney limited effector pathway(www.ncbiotech.org/ne...date-biotech-startup).
I think VTVT might just have something special: a great scientific team popping out hit after hit. A great admin team popping deal after deal for licensing. A great appreciation for science from bottom to top, its even in their investor slides!
This one fills a great spot in any portfolio, solid long term investing, great short and medium turn runs depending on catalysts, and a genuine support for the translation of science into life-saving medicine. Of course, manage your own finances and risk, never invest (read:gamble) more than you can absolutely afford to lose.
Science/Pipeline
Wow, the science and pipeline coming out of this company is impressive. Their chemistry team has got to be amazing, pure genius. I get a great feeling from the science and pipeline, its aggressive, each drug could be a real hit all on its own, most are ambitious and fragile, but it comes down to the science; did VTVT do enough research before jumping in?
Institutions+Insiders+Shenanigans
So here is where it gets interesting: according to their recent prospectus, there is 54.05 million shares, plus 1.82 million shares specific to MacAndrews & Forbes Group.
Whalewisdom has M&F group at 61.5 million shares, where as REFINITIV analyst (thru fidelity) has M&F at 59.7 million shares (M&F is owned my Perelman). Assuming whalewisdom is adding the 1.82 million shares it can gain thru exercising of options, there are too many shares in existence.
Fidelity Research Center has institutional+mutual fund+insider ownership at 5.6% total of the 54 mil total, so 3 million shares there (as of 5/3/21).
I will make a note that I do have some issues with MacAndrews and Forbes Group, I have looked into a few stocks they have significant holdings on and come across them before. The head of M&F's wife was made CEO of Revlon, while she is also not able to fulfill her current role at M&F due to illness, so she is likely not doing her job at Revlon either. I don't know if M&F can afford to sell VTVT as it is one of the few jewels in their holdings, but I also don't know if they would hold on for too long if VTVT skyrockets, limiting upwards momentum.
If M&F have 59.7 million shares, and Insiders, Institutions like Blackrock and Vanguard, and Insiders own 3 million shares, how many apples does John have? And how many extra shares are in the float? Can anyone explain to me what the hell is going on in the market when every stock has ~20% short volume every day and every stock has a float ~20%+ bigger than it should? This isn't just sloppy book keeping at the clearinghouses, this is a systemic and monstrous issue.
If VTV Therapeutics issues it's 3.5 million share or 5.5 million dollars worth of shares from its recent prospectus, then it is doing itself a massive disservice without first addressing the issue of the synthetic shares.
On top of all of this, it is unknown how many shares are owned by retail or small holding hedgefunds/investment groups. Over all, this stock is over-saturated and the drops in price are extremely confusing to me without a recent filing showing massive sale in shares, which did happen. Two Sigma and Frazier management sold their shares, ~2 million total as of mid-feb, so who else is selling is unknown.
As of 4/15/21 ~latest data by nasdaq on short interest, there are 5.2 million shares shorted, which a massive jump from March 31st. Barring someone covering, which something tells me they have not based on price action and the extremely low volume, this could be squeezed very hard. Yahoo has the short% of float at 24.74%, which is insane. But what is insane is that they may win in the short term. VTVT has some risky and heady programs, but they could succeed and make any short seller instantly regret their choices.
The Board
Not much to say about the bunch, they all seem fine on paper, qualifications, experience in biotechs getting limited amounts of products through FDA, but certainly a foundation for management. I think the element that highlights management's abilities are its numerous licensing deals. While they may not have glamour, they are getting the job done. Offloading the grunt work of phase 1 trials to foreign companies (and foreign news agencies), combined with the Anteris deal, the company is doing great at offsetting research and development costs with licensing deals.
Possible catalysts
Disclaimer
I am going to be real honest with you; congratulations for getting to the end. Thank you for your time, I hope it was worth it. If you have any suggestions, I would love to hear it. Please don’t make an investment decision on my information alone, always double check. I am not a financial analyst, I do not get paid to write any of this, and I do not currently (5/3/21) have an investment in VTVT or it's stock price. Thanks.
This is in no way, shape or form, fluid and function, an analytical, qualitative or intelligent compte rendu. I am obviously not rich, so obviously I haven't made it with my own thinking, so definitely don't put faith in me. But maybe read and learn some things about a company that might just change the standard of care for quite a few diseases.
ALSO: Tradingview forced me to remove my links due to some reason, waiting to hear back from support, will reupload with links if allowed, otherwise ignore where it says links provided.
Thesis
VTV Therapeutics might just be a real diamond in the sea of penny biotech stocks. I absolutely believe that one should always do their own due diligence, and always read everything for themselves, as the old adage goes, trust but verify. I genuinely see VTVT as exactly what the stock market was made for. This company has lofty goals, big dreams and big programs that could absolutely dominate their respective illnesses, or at the very least modify and become a part of the standard of care. The company in no way has the ability to guarantee successes, no way to guarantee anything works, and no reasonable guarantee they could give anyone that the stock will go up; but I think this one deserves the try. I have absolutely no idea if the science is sound behind the therapies, it is outside of my specialty, and there is such a drastic change from lab to human, or even mouse to human, or even small amounts of healthy humans to very large amounts of sick humans. But isn't the right to fail a part of the business? How many rockets fell back down to earth before we touched the stars, or stepped on the moon? How many die from early iterations of surgeries or therapies, another brick in the progress of humanity? Where the risk is high, so is the reward. For a micro-cap biotech, they have sensational early programs they have managed to license to other clinical stage biotech's in other countries. Perhaps the best, and the most reason to show that this company is undervalued, is their recent deal with Anteris Bio, giving them $2 mil up front with $151 more for developmental milestones, + royalties, and a minority equity stake in Anteris. All of that just for one of their drugs limited to kidney diseases, in a very non-kidney limited effector pathway(www.ncbiotech.org/ne...date-biotech-startup).
I think VTVT might just have something special: a great scientific team popping out hit after hit. A great admin team popping deal after deal for licensing. A great appreciation for science from bottom to top, its even in their investor slides!
This one fills a great spot in any portfolio, solid long term investing, great short and medium turn runs depending on catalysts, and a genuine support for the translation of science into life-saving medicine. Of course, manage your own finances and risk, never invest (read:gamble) more than you can absolutely afford to lose.
Science/Pipeline
Wow, the science and pipeline coming out of this company is impressive. Their chemistry team has got to be amazing, pure genius. I get a great feeling from the science and pipeline, its aggressive, each drug could be a real hit all on its own, most are ambitious and fragile, but it comes down to the science; did VTVT do enough research before jumping in?
- TTP399-Glucokinase activator for Type 1 Diabetes
To explain this very quickly without making it hurt, Glucokinase is a protein that activates insulin secretion in your alpha pancreatic cells via membrane potential activation, so its an indirect effect almost, but phase 1/2 data in Type 2 diabetes patients show an increased circulating blood insulin level, which means it works. Now to put it in a simpler way, this drug causes special pancreatic cells to pump out insulin more frequently, thus giving a higher normal level of insulin, which will work to handle the glucose pathway as it naturally does. The 2 following links are to the 2 major papers for the drug, both worth a scan (the first link is the supplemental because it’s a pay-for-view journal but the supplemental data has almost everything you want (no circulating insulin levels in type 1 diabetes patients, don't know if they checked but was genuinely curious as I was under the assumption Type 1 Diabetes usually involves a pathway mutation in the insulin biosynthesis, so I am almost at a loss of how this drug helps Type 1 Diabetes other than improved liver function, which makes sense as protein atlas has it limited to liver + gallbladder, limited stomach and muscle.
TTP399 helps type 1 diabetics most likely through improved liver function via a secondary pathway parallel to insulin, which means it isn't a diabetes drug, it’s a liver drug. Diabetes, big bucks, Liver, bigger bucks. This drug could be an absolute bombshell knockout 1-2 punch to give them a multi-billion dollar valuation, but there isn't just sunshine here:
1) Mechanism of action is unknown, they admit it, that’s why they are doing the recent share selling. I am curious why they announced the share sell before announcing more positive news to give themselves a pump and get more buck for their bang, but it could mean that they are hesitant on the program.
2) The clinical data on the phase 2 in type 1 diabetics at 1200mg look like they are forming a parabolic curve in response and coming back to the 400mg response. This could be very possible, a lot of membrane receptors get tired of being activated so much, so they will decrease expression, leading to a decreasing effect of the drug (see all neuro drugs like anti-depressants) . That doesn't mean the drugs useless, it just means the clinical benefits long-term will be limited. Of course there are ways around that as well, but if I am being honest, we are too close to mRNA being the end-all be-all for liver programs in ~5-10 years, so the effect is what it is. Phase 3 will sort that out, but it would be nice to know now.
3) Will the FDA accept combinatorials galore? The chance that this therapy helps diabetics currently insulin resistant is pretty high, but is that a big enough market and is that the end of adoption? Will the FDA say, well, let them eat cake, give them all the drugs that could help? Part of me wants to say yes, they have been giving open label access for breakthrough chemos, but this is a far step from that. I think the fate of this drug might rest with the fate of semaglutide; will it get obesity treatment designation?
Otherwise, the drug looks awesome, and I cannot wait to see what the Phase 3 data shows.
- TTP273-Oral GLP-1R agonist
There isn't too much to say here, this is already a therapy, but its injectable and obnoxious, this is oral and nice. They have solid looking data, other programs have done the hard work of bringing the concept to phase 3, and current pre-clinical research standards reduce the risk of off target effects ruining clinical trials, and it already passed phase 2 with great results, plus they arent doing the hard work in China, so they get money and the research they need to push it in europe+america. Not a solid market for the drug in diabetes as it’s a limited population, but a drug is a drug, and this one just backs their expertise in the field.
- HPP737 - PDE4 inhibitor
This is far from my expertise, and these are very important fields in inflammation, wound healing, immune response stuff, so I cannot accurately explain the abounding effects of touching the pathway. But I also don't know that it isn't safe. The concept of increasing intracellular cAMP has been around for a while, and is a great drug for a lot of thing, but it causes a lot of side effects, such as nausea and vomiting, GI issues (you are telling all the GI smooth muscle to activate, so they do). If the drug is bypassing the GI system, which is my guess for how they are saying they are avoiding the usual side effects, and gets metabolized in the liver only, which is pretty likely, and pretty smart (liver is the processing station, so if the drug needs to be processed before it does anything, than the liver is where the action will happen). The real question becomes dosing and side effects. Luckily they partnered with an asian pharma to deal with that, so if anything bad happens it won't even spill over to Western sources. If it works out, this is a great potential drug, but its in a crowded space with psoriasis. That doesn't mean its dead, but I doubt there will be a large market for it when/if it comes to.
- Azeliragon
I am impressed. I read a lot of papers, I read a lot of them with all of these drugs and therapies and pathways and it sucks. This one is cool. I think they know exactly what they have, which is why it has a name. I think if this passes phase 3, it gets its own paycheck. I have this working hypothesis that the body has evolved to perfect homeostasis, but in achieving that elegant point, it will destroy itself if out of homeostasis for long. Fevers are because our immune system thinks it needs to heat things up to kill foreign agents. And while it works, it also kills the person if left unfettered. The immune system is clumsy and heavy handed, but also beautiful and mysterious, elegant and deadly. When the immune system is activated, as happens more and more often as you age, it tears away a little bit more and more, which is great when you are sick, kills infected cells yay, but when you are older, cells cant keep up, and permanent damage is done.
This drug supposedly inhibits RAGE (receptor for advanced glycation end products), which is a major component of the inflammation pathway. Thus, this could become a treatment against most auto-immune or overly active immune diseases. I have no idea if this thing will pass trials, the pathway is complex and super competitive, which means specific is very difficult. If VTVT really has it, boom.
- Nrf2/Bach1
This has already gotten too long, to sum it up, it’s a unique chemical that supposedly does what a lot of others have failed to do. That right there is all you need to know, this is preclinical, got picked up by Anteris Biopharma for renal diseases and its in phase 1. If that trial succeeds, this could be another big drug in a growing list. I honestly don't even know the number of diseases that would benefit from this, as I do not know the pathway, but it suppresses oxidative stress and inflammation, which means it could be a great combo drug for sudden stresses, VTVT lists radiation protection, ischemia, mitochondrial and neurodegenerative diseases, but it really depends on how the drug works. If the pathway can stand to be overly active, and the cell can take the added metabolic stress with no effect, then this would be huge in preventing daily oxidative stresses through the body which lead to protein, RNA and DNA damage, last of which can and does lead to cancer. I am definitely going to watch this phase 1 by Anteris with interest.
Institutions+Insiders+Shenanigans
So here is where it gets interesting: according to their recent prospectus, there is 54.05 million shares, plus 1.82 million shares specific to MacAndrews & Forbes Group.
Whalewisdom has M&F group at 61.5 million shares, where as REFINITIV analyst (thru fidelity) has M&F at 59.7 million shares (M&F is owned my Perelman). Assuming whalewisdom is adding the 1.82 million shares it can gain thru exercising of options, there are too many shares in existence.
Fidelity Research Center has institutional+mutual fund+insider ownership at 5.6% total of the 54 mil total, so 3 million shares there (as of 5/3/21).
I will make a note that I do have some issues with MacAndrews and Forbes Group, I have looked into a few stocks they have significant holdings on and come across them before. The head of M&F's wife was made CEO of Revlon, while she is also not able to fulfill her current role at M&F due to illness, so she is likely not doing her job at Revlon either. I don't know if M&F can afford to sell VTVT as it is one of the few jewels in their holdings, but I also don't know if they would hold on for too long if VTVT skyrockets, limiting upwards momentum.
If M&F have 59.7 million shares, and Insiders, Institutions like Blackrock and Vanguard, and Insiders own 3 million shares, how many apples does John have? And how many extra shares are in the float? Can anyone explain to me what the hell is going on in the market when every stock has ~20% short volume every day and every stock has a float ~20%+ bigger than it should? This isn't just sloppy book keeping at the clearinghouses, this is a systemic and monstrous issue.
If VTV Therapeutics issues it's 3.5 million share or 5.5 million dollars worth of shares from its recent prospectus, then it is doing itself a massive disservice without first addressing the issue of the synthetic shares.
On top of all of this, it is unknown how many shares are owned by retail or small holding hedgefunds/investment groups. Over all, this stock is over-saturated and the drops in price are extremely confusing to me without a recent filing showing massive sale in shares, which did happen. Two Sigma and Frazier management sold their shares, ~2 million total as of mid-feb, so who else is selling is unknown.
As of 4/15/21 ~latest data by nasdaq on short interest, there are 5.2 million shares shorted, which a massive jump from March 31st. Barring someone covering, which something tells me they have not based on price action and the extremely low volume, this could be squeezed very hard. Yahoo has the short% of float at 24.74%, which is insane. But what is insane is that they may win in the short term. VTVT has some risky and heady programs, but they could succeed and make any short seller instantly regret their choices.
The Board
Not much to say about the bunch, they all seem fine on paper, qualifications, experience in biotechs getting limited amounts of products through FDA, but certainly a foundation for management. I think the element that highlights management's abilities are its numerous licensing deals. While they may not have glamour, they are getting the job done. Offloading the grunt work of phase 1 trials to foreign companies (and foreign news agencies), combined with the Anteris deal, the company is doing great at offsetting research and development costs with licensing deals.
Possible catalysts
- T1D/TTP399 - 2nd half of 2021 they will initiate more trials, news may cause a bump from PR limited company
In Q2/3 they also have readout from mechanistic study for TTP399 before pushing into phase 3 (likely a request/comment made by FDA forced/suggested this, nothing from previous suggested any risk for ketogenesis from the drug, but it’s a big concern, and phase 3 is a lot of people compared to phase 2).
- Inflammation/HPP737- Q2 readout for phase 1 study looking for dosing, if there is going to be a significant side effect, hopefully it presents itself early making this phase 1 a sink or swim for the program, which isn't too big of a deal considering the depth here
- Anteris phase 1 initiation was recently, more news from that will spill over here into major gains.
- Any number of their partnerships are possible catalysts, as they finish their own milestones and trials, it turns into major news for VTVT via royalties, milestone payments, equity interest maturation or just straight up proof of concept/safety for themselves in running their trials in European/American markets.
Disclaimer
I am going to be real honest with you; congratulations for getting to the end. Thank you for your time, I hope it was worth it. If you have any suggestions, I would love to hear it. Please don’t make an investment decision on my information alone, always double check. I am not a financial analyst, I do not get paid to write any of this, and I do not currently (5/3/21) have an investment in VTVT or it's stock price. Thanks.