New IPO Stock Therapix BioSciences (NASDAQ:TRPX) Is Undervalued Compared To Peers – But Not For Long
Some of the biggest biotechnology winners of 2017 so far are cannabis stocks. GW Pharmaceuticals PLC- ADR (NASDAQ:GWPH), a $3 billion pharmaceutical cannabis company and probably the most well known company in this subsector of healthcare, is up around 7% since the start of the year. Zynerba Pharmaceuticals Inc (NASDAQ:ZYNE), a $250 million company, is up 22% year to date and close to 80% across the last twelve months.
Both of these companies have something in common – they are working to bring synthetic cannabinoids through clinical development in the US to treat conditions with a high unmet need, and in turn, a large potential market.
While we expect both to continue to appreciate throughout 2017 and beyond, as their respective pipelines mature towards commercialization, the already registered advance in each limits the upside somewhat.
There’s another company, however, with a very similar development strategy (synthetic cannabinoids) to those of GW Pharmaceuticals and Zynerba, but which has yet to benefit from the upside revaluation described above.
The company is Therapix BioSciences (NASDAQ:TRPX) and the reason it’s not yet revalued in line with its strategic peers is simple – it conducted its IPO today.
Before we get into the company, a bit of background on the space.
The medicinal benefits of cannabis are well established in a large number of different diseases and conditions. There’s evidence to suggest that sufferers of everything from neurodegenerative conditions (Alzheimer’s, dementia, etc.) to pain management to oncology and chemotherapy induced nausea can benefit from cannabis consumption in various forms, and this is the foundation of the medical marijuana industry in the United States. There are some inherent problems with using cannabis to treat these conditions, however, and the primary of these issues are side effects, consumption method and dosing. It’s incredibly difficult to ensure consistent dosing when a patient is smoking cannabis as an administration method. It’s also often undesirable (there are patients who don’t want to smoke) and creates obvious side effects, many of which are unwanted – cerebral high, respiratory issues, cancer, etc.
Synthetic cannabinoids are the focus of the above discussed companies, and many more, because they allow for the creation of cannabis based therapies, i.e. those that employ cannabinoids, or synthetic versions of cannabinoids, that don’t bring about the unwanted side effects that the natural product might, and can be administered in a controlled, measured format.
With GW Pharmacetucals, it’s a sublingual spray. With Zynerba, it’s a CBD based gel. Other companies, companies like Cannabics Pharmaceuticals Inc (OTCMKTS:CNBX), are developing topical administration, cannabis based creams.
Therapix’s answer is a sublingual tablet.
The company is developing a lead asset called THX-TS01, in a primary indication of Tourette’s syndrome. Tourette’s is a neuropsychiatric disorder that causes twitching, involuntary sounds and noises, blinking, and various other ticks, and the current standard care in the space is drug called haloperidol. It’s only really used in the most severe cases, however, as it brings with it some pretty nasty side effects, and it doesn’t really do anything about the tics side of the condition. Many Tourette’s sufferers use cannabis to ease the physical symptoms, and there’s a growing body of evidence that this is an effective method of treatment and control.
However, as mentioned above, many don’t want to smoke cannabis just to treat their symptoms. They either don’t want the high or don’t want to risk the respiratory and oncologic issues associated with smoking.
This is where THX-TS01 comes in.
The drug is a combination of synthetic THC (the active compound in cannabis) and what’s called PEA. PEA is a natural compound found in many substances (milk, fruits, etc.). It isn’t strictly a cannabinoid, but it shares many properties with cannabinoids, and – and here’s an important point – can enhance the impact of synthetic cannabinoids on the central nervous system (CNS) through what’s called the Entourage Effect, without enhancing its effect on the brain.
This Entourage Effect means Therapix has been able to take a small amount of synthetic THC (an amount not potent enough to bring about the cannabis associated high) and boost its impact on the CNS to a degree where it can improve the physical and tic-related symptoms of Tourette’s syndrome.
That’s the theory, at least, and it’s this theory that the company is out to prove subsequent to today’s IPO.
With both synthetic THC (probably more commonly known as dronabinol in the pharmaceutical space) and PEA already used in other approved drugs, there’s no need for Therapix to carry out preclinical or phase I studies for THX-TS01. Instead the company can take it through a phase II trial, and on succesfull completion of the phase II, directly into a pivotal investigation.
The first of these, the phase II (actually a phase IIa) is already underway, having initiated in December 2016. It’s enrolling at Yale University right now, and 4 out of a planned 20 patients are already on board. The trial should wrap up early third quarter 2017, and the company intends to put out topline in the same quarter. This paves the way for a pivotal trial (likely a phase IIb/III) kicking off before the end of the year.
It’s also eligible for Orphan Designation in the US, and Therapix intends to file for this designation once it has the data form the ongoing phase IIa in hand.
Beyond the Tourette’s indication, Therapix is targeting a host of other conditions, with the next in line being mild cognitive impairment (MCI). This is a bigger market than Tourette’s (although it won’t qualify for Orphan Designation) and Therapix expects to initiate a phase IIa study – the equivalent of the study that’s ongoing in Tourette’s right now – during the third quarter of this year.
With just 3.1 million shares outstanding, this company has a low float and high insider ownership – circa 60% as things stand. The company has $12 million cash, which it expects will carry it through to end 2018. Based on its mid point offering price of $6, the company was expected to hit markets with a market capitalization of $18.6 million.
The company opened at $6.30, and at time of writing, morning US session, is trading at $8.60. Based on the 3.1 million expected outstanding share count, this gives the company a current market capitalization of just $26.6 million – above expected, but still low given Therapix’s underlying operations.
Not only is this a low valuation compared to some of the mid cap players with comparable programs, like the above mentioned Zynerba, but it also falls far short of other cannabis stocks with far less promising, or far less developed, programs.
The above mentioned Cannabics Pharmaceuticals, which we noted above as developing topical administration assets, is pre clinical and has a market capitalization of $330 million. OWC Pharmaceutical Research Corp (OTCMKTS:OWCP), a company working to develop cannabis based oncology therapies, is, again, preclinical, and had a market capitalization of more than $178 million at last close.
Bottom line here is that this is a company that is only valued at its current market capitalization because it’s yet to enjoy the exposure to public market capital in the US that some of its strategic and operational peers have.
Now it’s a NASDAQ company, chances are this discrepancy will quickly disappear.
Milacron Holdings Corp. (NYSE:MCRN) Is Bringing In The Smart Money
In a just published Form 13, filed with the US Securities and Exchange Commission (SEC), Milacron Holdings Corp. (NYSE:MCRN) reported that Ccmp Capital Investors Ii, L.p. has picked up 36,483,301 of common stock as of 2017-01-30.
The acquisition brings the aggregate amount owned by Ccmp Capital Investors Ii, L.p. to a total of 36,483,301 representing a 53.6% stake in the company.
For those not familiar with the company, Milacron Holdings Corp. is engaged in the manufacture, distribution, and service of engineered and customized systems used in the plastic technology and processing industry. The Company operates through three segments: Advanced Plastic Processing Technologies (APPT), Melt Delivery and Control Systems (MDCS), and Fluid Technologies (Fluids). The APPT segment is engaged in the manufacture, distribution and service of equipment and products used in the plastic technology and processing industry, including injection molding, blow molding and extrusion applications. The MDCS segment is engaged in the manufacture of plastic delivery and precision control systems, which are recurring, consumable sales for injection molding applications. The Fluids segment is engaged in the manufacture of coolants, lubricants, process cleaners and corrosion inhibitors that are used in a range of metalworking industries, such as cutting, grinding, stamping and forming and high speed machining.
A glance at Milacron Holdings Corp. (NYSE:MCRN)’s key stats reveals a current market capitalization of 1.26 billion based on 68.07 million shares outstanding and a price at last close of $18.54 per share.
Looking at insider activity, there are a few transactions worth noting.
Specifically, on 2015-12-09, Goeke picked up 15,000 at a purchase price of $12.84. This brings their total holding to 239,858 as of the date of the filing.
It’s possible to gauge a company’s potential by tracking the activity of its major holders, as well as checking in on insider activity such as those transactions listed above. We’ll be keeping an eye on Milacron Holdings Corp. (NYSE:MCRN) as things move forward to see if its progress aligns with these transactions.
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Here’s Who Just Picked Up Tallgrass Energy Gp Lp (NYSE:TEGP) Shares
In a just published Form 13, filed with the US Securities and Exchange Commission (SEC), Tallgrass Energy Gp Lp (NYSE:TEGP) reported that Salient Capital Advisors, Llc. has picked up 8,007,559 of common stock as of 2017-01-27.
The acquisition brings the aggregate amount owned by Salient Capital Advisors, Llc. to a total of 8,007,559 representing a 5.09% stake in the company.
For those not familiar with the company, Tallgrass Energy GP, LP is a limited partnership company. The Company, through Tallgrass Energy Partners, LP (TEP), provides crude oil transportation to customers in Wyoming, Colorado, and the surrounding regions through Pony Express. Its business segments include Crude Oil Transportation & Logistics Segment, which is engaged in the ownership and operation of a crude oil pipeline system; Natural Gas Transportation & Logistics Segment, which is engaged in ownership and operation of FERC-regulated interstate natural gas pipelines and integrated natural gas storage facilities, and Processing & Logistics Segment, which is engaged in the ownership and operation of natural gas processing, treating and fractionation facilities, the provision of water business services primarily to the oil and gas exploration and production industry and the transportation of natural gas liquids (NGL). The Company, through TEP, owns and operates natural gas processing plants in Casper and Douglas.
A glance at Tallgrass Energy Gp Lp (NYSE:TEGP)’s key stats reveals a current market capitalization of 4.47 billion based on 157.23 million shares outstanding and a price at last close of $27.69 per share.
Looking at insider activity, there are a few transactions worth noting.
Specifically, on 2015-12-11, Brauchle picked up 6,450 at a purchase price of $16.13. This brings their total holding to 9,205 as of the date of the filing.
On the sell side, the most recent transaction saw Raymond unload 5,175,000 shares at a sale price of $22.00. This brings their total holding to 0.
It’s possible to gauge a company’s potential by tracking the activity of its major holders, as well as checking in on insider activity such as those transactions listed above. We’ll be keeping an eye on Tallgrass Energy Gp Lp (NYSE:TEGP) as things move forward to see if its progress aligns with these transactions.
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Tpg Specialty Lending Inc. (NYSE:TSLX) Is Bringing In The Smart Money
The finance space is in a bit of a tough spot right now. With the Federal Reserve likely to carry on raising rates throughout this year, and the impact of a Trump presidency inflicting what remains a relatively uncertain outlook across a spate of industries, capital allocation is difficult. This is weighing on sentiment, and in turn, prices. Of course, when prices depress, smart money is able to pick up an exposure at a discount, and we’ve seen just that happen today.
In a just published Form 13, filed with the US Securities and Exchange Commission (SEC), Tpg Specialty Lending Inc. (NYSE:TSLX) reported that Strs Ohio has picked up 4,357,09 of common stock as of 2017-01-25.
The acquisition brings the aggregate amount owned by Strs Ohio to a total of 4,357,09 representing a 7.296% stake in the company.
For those not familiar with the company, TPG Specialty Lending, Inc. (TSL) is an externally managed, closed-end, non-diversified management investment company. The Company is a specialty finance company focused on lending to middle-market companies. It seeks to generate current income primarily in the United States domiciled middle-market companies through direct originations of senior secured loans and, to a lesser extent, originations of mezzanine loans and investments in corporate bonds and equity securities. It is engaged in direct equity investments, sale of loans and debt and equity securities, and loan origination. The companies in which TSL invests use its capital to support organic growth, acquisitions, market or product expansion and recapitalizations.
A glance at Tpg Specialty Lending Inc. (NYSE:TSLX)’s key stats reveals a current market capitalization of 1.13 billion based on 59.72 million shares outstanding and a price at last close of $18.94 per share.
Looking at insider activity, there are a few transactions worth noting.
Specifically, on 2016-11-21, Waxman picked up 230 at a purchase price of $18.39. This brings their total holding to 139,327 as of the date of the filing.
On the sell side, the most recent transaction saw Mssb unload 2,593,099 shares at a sale price of $18.07. This brings their total holding to 3,012,582.
It’s possible to gauge a company’s potential by tracking the activity of its major holders, as well as checking in on insider activity such as those transactions listed above. We’ll be keeping an eye on Tpg Specialty Lending Inc. (NYSE:TSLX) as things move forward to see if its progress aligns with these transactions.
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Here’s Who Just Picked Up Vycor Medical Inc. (OTCMKTS:VYCO) Shares
January has been a big month for biotech, with the JP Morgan conference dominating the start of the year. The conference traditionally brings about a host of deals and new buys, and this latest Vycor pick up suggests there’s plenty more to come before the end of the month.
In a just published Form 13, filed with the US Securities and Exchange Commission (SEC), Vycor Medical Inc. (OTCMKTS:VYCO) reported that Fountainhead Capital Management Ltd. has picked up 9,733,832 of common stock as of 2017-01-20.
The acquisition brings the aggregate amount owned by Fountainhead Capital Management Ltd. to a total of 9,733,832 representing a 55.74% stake in the company.
For those not familiar with the company, Vycor Medical, Inc. provides surgical and therapeutic solutions. The Company operates through two segments: Vycor Medical, which focuses on brain and cervical surgical access systems for sale to hospitals and medical professionals, and NovaVision, which focuses on neuro-stimulation therapies and diagnostic devices for the treatment and screening of vision field loss resulting from neurological damage. The Company designs, develops and markets neurological medical devices and therapies. The Company operates in the United States and Europe. Vycor Medical’s product Vycor Medical’s ViewSite Brain Access System (VBAS) is a next generation retraction and access system. VBAS is a disposable product that can be used with microscopic, endoscopic and neuro-navigation systems.
A glance at Vycor Medical Inc. (OTCMKTS:VYCO)’s key stats reveals a current market capitalization of 2.82 million based on 11.22 million shares outstanding and a price at last close of $0.250 per share.
Looking at insider activity, there are a few transactions worth noting.
Specifically, on 2014-12-31, Fountainhead picked up 8,380 at a purchase price of $1.79. This brings their total holding to 4,366,844 as of the date of the filing.
On the sell side, the most recent transaction saw Bronsther unload 6,241 shares at a sale price of $2.75. This brings their total holding to 18,216.
It’s possible to gauge a company’s potential by tracking the activity of its major holders, as well as checking in on insider activity such as those transactions listed above. We’ll be keeping an eye on Vycor Medical Inc. (OTCMKTS:VYCO) as things move forward to see if its progress aligns with these transactions.
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Chemours Co. (NYSE:CC) Scores Big With Latest Filing
Chemicals are always going to be hot, and as we move forward into a renewable focus world, things are only going to get hotter in the space. The latest Norges bank transaction highlights this fact.
In a just published Form 13, filed with the US Securities and Exchange Commission (SEC), Chemours Co. (NYSE:CC) reported that Norges Bank has picked up 8,911,449 of common stock as of 2017-01-20.
The acquisition brings the aggregate amount owned by Norges Bank to a total of 8,911,449 representing a 4.90% stake in the company.
For those not familiar with the company, The Chemours Company is a provider of performance chemicals. The Company operates through three segments: Titanium Technologies, Fluoroproducts and Chemical Solutions. The Company’s Titanium Technologies segment manufactures titanium dioxide (TiO2), which is a pigment used to deliver whiteness, opacity, brightness and protection from sunlight in applications, such as architectural and industrial coatings, plastic packaging, polyvinyl chloride (PVC) window profiles, laminate papers, coated paper and coated paperboard used for packaging. Its Fluoroproducts segment provides fluoroproducts, such as refrigerants and industrial fluoropolymer resins. Its Chemical Solutions segment provides industrial and specialty chemicals used in gold production, oil refining, agriculture, industrial polymers and other industries.
A glance at Chemours Co. (NYSE:CC)’s key stats reveals a current market capitalization of 4.35 billion based on 181.83 million shares outstanding and a price at last close of $24.78 per share.
Looking at insider activity, there are a few transactions worth noting.
Specifically, on 2016-05-13, Newman picked up 1,300 at a purchase price of $9.70. This brings their total holding to 2,800 as of the date of the filing.
On the sell side, the most recent transaction saw Newman unload 16 shares at a sale price of $9.37. This brings their total holding to 121,178.
It’s possible to gauge a company’s potential by tracking the activity of its major holders, as well as checking in on insider activity such as those transactions listed above. We’ll be keeping an eye on Chemours Co. (NYSE:CC) as things move forward to see if its progress aligns with these transactions.
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Here’s Who Just Picked Up Loxo Oncology Inc. (NASDAQ:LOXO) Shares
In a just published Form 13, filed with the US Securities and Exchange Commission (SEC), Loxo Oncology Inc. (NASDAQ:LOXO) reported that Access Industries Management, Llc. has picked up 2,080,897 of common stock as of 2017-01-18.
The acquisition brings the aggregate amount owned by Access Industries Management, Llc. to a total of 2,080,897 representing a 8.15% stake in the company.
For those not familiar with the company, Loxo Oncology, Inc. is a United States-based biopharmaceutical company. The Company is engaged in developing selective medicines for patients with genetically defined cancers. Its pipeline focuses on cancers that are dependent on single gene abnormalities, such that a single drug has the potential to treat the cancer. Its pipeline includes LOXO-101, LOXO-195, Rearranged During Transfection (RET) Program and Fibroblast Growth Factor Receptor (FGFR) program. LOXO-101 is a selective inhibitor of tropomyosin receptor kinases (TRK) for the treatment of patients with soft tissue sarcoma. LOXO-195 is a selective TRK inhibitor capable of addressing potential mechanisms of acquired resistance that may emerge in patients receiving LOXO-101 or multikinase inhibitors with anti-TRK activity.
A glance at Loxo Oncology Inc. (NASDAQ:LOXO)’s key stats reveals a current market capitalization of 947.01 million based on 25.55 million shares outstanding and a price at last close of $37.61 per share.
Looking at insider activity, there are a few transactions worth noting.
Specifically, on 2017-01-10, Aisling picked up 160,000 at a purchase price of $31.00. This brings their total holding to 4,188,920 as of the date of the filing.
On the sell side, the most recent transaction saw Flaherty unload 7,250 shares at a sale price of $30.23. This brings their total holding to 38,732.
It’s possible to gauge a company’s potential by tracking the activity of its major holders, as well as checking in on insider activity such as those transactions listed above. We’ll be keeping an eye on Loxo Oncology Inc. (NASDAQ:LOXO) as things move forward to see if its progress aligns with these transactions.
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Stonemor Partners Lp. (NYSE:STON) Just Found Some Institutional Interest
In a just published Form 13, filed with the US Securities and Exchange Commission (SEC), Stonemor Partners Lp. (NYSE:STON) reported that Hellman Robert B Jr has picked up 2,285,820 of common stock as of 2017-01-17.
The acquisition brings the aggregate amount owned by Hellman Robert B Jr to a total of 2,285,820 representing a 6.00% stake in the company.
For those not familiar with the company, StoneMor Partners L.P. owns and operates cemeteries and funeral homes. The Company operates through two segments: Cemetery Operations and Funeral Homes. Its Cemetery Operations segment sells interment rights, caskets, burial vaults, cremation niches, markers and other cemetery related merchandise. Its Funeral Homes segment offers a range of services, including family consultation, final expense insurance products, the removal and preparation of remains, provision of caskets and related funeral merchandise, the use of funeral home facilities for visitation, worship and performance of funeral services, and transportation services. It sells cemetery products and services both at the time of death, which it refers to as at-need, and prior to the time of death, which it refers to as pre-need. It operates approximately 310 cemeteries in over 30 states and Puerto Rico, and approximately 100 funeral homes in over 20 states and Puerto Rico.
A glance at Stonemor Partners Lp. (NYSE:STON)’s key stats reveals a current market capitalization of 375.25 million based on 35.50 million shares outstanding and a price at last close of $10.53 per share.
Looking at insider activity, there are a few transactions worth noting.
Specifically, on 2017-01-03, Hellman picked up 1,109 at a purchase price of $8.95. This brings their total holding to 23,611 as of the date of the filing.
On the sell side, the most recent transaction saw Miller unload 3,260 shares at a sale price of $8.95. This brings their total holding to 138,743.
It’s possible to gauge a company’s potential by tracking the activity of its major holders, as well as checking in on insider activity such as those transactions listed above. We’ll be keeping an eye on Stonemor Partners Lp. (NYSE:STON) as things move forward to see if its progress aligns with these transactions.
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