New IPO Stock Therapix BioSciences (NASDAQ:TRPX) Is Undervalued Compared To Peers – But Not For Long

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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.

Here Are The Next Major Catalysts To Watch From VBI Vaccines, Inc. – Ordinary Shares (NASDAQ:VBIV)

VBI Vaccines, Inc. – Ordinary Shares (NASDAQ:VBIV) has had a strong start to 2017, currently trading for a circa 22% premium on it’s December close price. For this young biotechnology company, however, things are really only just getting started. With a diverse pipeline of development stage assets, and a commercial product poised for expansion in to two of the largest global markets, VBI has a spate of near term catalysts that promise to inject some upside momentum into its market capitalization if they come out as favorable.

In anticipation of these catalysts hitting press, here’s a look at each one individually, and an analysis of why (and to what degree) we expect it to move the company’s share price.

For those new to VBI, let’s kick things off with a quick introduction to the company. We’ve already noted it’s a biotechnology entity, and its primary focus is in developing assets related to the vaccine space. Right now, its lead programs are a hepatitis B vaccine called Sci-B-Vac; a cytomegalovirus (CMV) vaccine called VBI-1501A; a glioblastoma multiforme (GBM) immuno-oncology candidate called VBI-1901; and a vaccine stability platform that promises has the potential to dramatically reduce the cost of vaccine transportation and storage. Secondary programs include vaccines in respiratory syncytial virus (RSV) and Zika, as well as an immuno-oncology asset targeting medulloblastoma.

We are going to go into a number of these assets in a little more detail shortly when we look at the catalysts.

Before doing so, however, a short note on institutional interest.

For a company of its size (a $150 million market capitalization as of end January 2017), VBI has attracted an unusually high caliber of institutional interest and big name backers. Through Opko Health Inc. (NASDAQ:OPK), billionaire biotechnology entrepreneur, and the focus of a feature in January’s print edition of Forbes Magazine, Dr. Philip Frost, owns 25% of the company. Joseph Edelmen, a recent addition to Institutional Investor’s Hedge Fund Rich List having earned $300 million during 2015, through his biotechnology fund Perceptive Advisors, owns 15.8% of VBI.

With that noted, let’s move on to the catalysts.

The first event of note is rooted in the CMV vaccine. VBI kicked off a phase I study investigating safety and efficacy of the vaccine in 128 patients in September 2016. The study spread sites across three locations in Canada, and aimed to determine the immunogenicity of the drug in question, the above mentioned VBI-1501A.

CMV is generally a silent virus, meaning that the majority of those infected don’t display any symptoms. In certain sub-populations of those infected, however, it can be very serious. The virus can cause serious disease in newborns when a mother is infected during pregnancy; what is known as congenital CMV infection. Each year, approximately 5,000 U.S. infants will develop permanent problems due to CMV, some of them severe, including deafness, blindness, and mental retardation. Economic costs associated with the infection total $2 billion annually in the US, and the virus affects more live births than both Down’s Syndrome and Fetal Alcohol Syndrome.

Right now, there’s no commercially available vaccine, and VBI is working to fill this large unmet need in the US. Interim data from the immunogenicity phase I study that the company initiated in December was initially reported to be scheduled for release during the first half of 2017. However, VBI now expects to report this data during the first quarter of the year. This represents the next catalyst for the company. Data from an animal study demonstrated efficacy of 95% 28 days post-second vaccination (the interim data will also report on post-second vaccination efficacy) so there’s a decent chance this catalyst should come out in favor of the company. If it does, it opens up the potential for a big name partnership on the vaccine.

The second catalyst we’re watching for relates to the hepatitis B vaccine, Sci-B-Vac.

This vaccine is currently available as a next generation hepatitis B vaccine in fifteen countries and currently has 50% market share in Israel, where approximately 500,000 patients have been dosed since the vaccine picked up regulatory approval in the region. It’s a third generation vaccine designed to build on both the safety and the immunogenicity of the currently available assets, and VBI has a strong bank of data that points to an improvement over current standard of care in both instances.

VBI generates revenues from the hepatitis B product right now, but the real potential is rooted in the US and European markets. Driven primarily by increasing immigration from medium and high-prevalence countries, growth in the hepatitis B therapeutics space will center in the US, Canada, the UK, France and Germany over the next half decade. Research puts the annual size of the market at $3.5 billion by 2021.

The company is looking to these regions, and especially the above mentioned US and European markets, to boost its top line going forward, and we should see VBI move a step closer to commercialization in these regions near term. Specifically, the company expects to kick off a phase III in Europe during the second quarter of this year, and this should be sufficient to underpin an application in both the US and Europe. Peak sales forecasts in these two regions come in at $200 million annually, so an approval in one or both will inject a considerable amount of upside momentum into VBI as and when they are announced.

These are just the primary, near term catalysts; those that we see as dictating sentiment (and in turn, valuation) between now and the second half of 2017. As the company’s remaining pipeline matures, we expect secondary catalysts to come in to play, and boost VBI outside of the CMV and hepatitis indications.

Looking finally at financials, VBI reported revenues of $300,000 during the third quarter of 2016 (the latest reported numbers) and just closed on a $23.6 million financing with the above discussed Perceptive Advisors. As such, while the company will likely need to raise cash at some point between now and its pipeline reaching full maturation, we don’t see it as a near term risk.

Here’s Who Just Picked Up Zendesk Inc. (NYSE:ZEN) Shares

In a just published Form 13, filed with the US Securities and Exchange Commission (SEC), Zendesk Inc. (NYSE:ZEN) reported that Svane Mikkel has picked up 3,635,297 of common stock as of 2017-01-26.

The acquisition brings the aggregate amount owned by Svane Mikkel to a total of 3,635,297 representing a 3.7% stake in the company.

For those not familiar with the company, Zendesk, Inc. is a software development company. The Company provides software as a service (SaaS) customer service platform. The Company’s platform consolidates the data from customer interactions and provides organizations with analytics and performance benchmarking. The Company also provides SaaS live chat software that can be utilized independently to facilitate communications between organizations and their customers. The Company’s platform provides organizations with a single customer service interface to manage all their one-on-one customer interactions. The Company’s customer service platform helps organizations track and predict common questions and provides a path to answers. It offers a range of subscription plans for its customer service platform, which include Essential, Team, Professional and Enterprise. Its analytics software allows subscribers to connect and build queries across multiple data sources and analyze results through a range of data visualizations.

A glance at Zendesk Inc. (NYSE:ZEN)’s key stats reveals a current market capitalization of 2.36 billion based on 95.34 million shares outstanding and a price at last close of $24.54 per share.

Looking at insider activity, there are a few transactions worth noting.

Specifically, on 2014-05-20, Charles picked up 160,495 at a purchase price of $9.00. This brings their total holding to 13,856,636 as of the date of the filing.

On the sell side, the most recent transaction saw Mcdermott unload 1,590 shares at a sale price of $23.75. This brings their total holding to 80,000.

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 Zendesk Inc. (NYSE:ZEN) as things move forward to see if its progress aligns with these transactions.

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Here’s Who Just Picked Up Birner Dental Management Services Inc. (NASDAQ:BDMS) Shares

In a just published Form 13, filed with the US Securities and Exchange Commission (SEC), Birner Dental Management Services Inc. (NASDAQ:BDMS) reported that Birner Mark A has picked up 579,023 of common stock as of 2017-01-26.

The acquisition brings the aggregate amount owned by Birner Mark A to a total of 579,023 representing a 31.1% stake in the company.

For those not familiar with the company, Birner Dental Management Services, Inc. is a dental service company. The Company provides business services to dental practice networks in select markets, including Colorado, New Mexico and Arizona. The Company provides a solution to the needs of dentists, patients and third-party payers by allowing its affiliated dentists to provide dental care in patient-friendly, family practice settings. The Company offers specialty dental services through affiliated specialists at some of its locations. The Company has approximately 47 affiliated dental practices (Offices) in Colorado and over 11 in New Mexico. It provides business services to approximately 68 Offices. The Company’s affiliated offices seek to develop long-term relationships with patients. Dentists practicing at its offices provide general dentistry services, including crowns and bridges, fillings (including gold, porcelain and composite inlays/onlays), implants and aesthetic procedures, such as porcelain veneers and bleaching.

A glance at Birner Dental Management Services Inc. (NASDAQ:BDMS)’s key stats reveals a current market capitalization of 17.67 million based on 1.86 million shares outstanding and a price at last close of $9.50 per share.

Looking at insider activity, there are a few transactions worth noting.

Specifically, on 2015-12-23, Wolf picked up 500 at a purchase price of $9.85. This brings their total holding to 50,317 as of the date of the filing.

On the sell side, the most recent transaction saw Genty unload 1,000 shares at a sale price of $12.66. This brings their total holding to 123,320.

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 Birner Dental Management Services Inc. (NASDAQ:BDMS) 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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Elliott Associates Just Bought Arconic Inc. (NYSE:ARNC) Shares

If Trump is to carry through with his word, and his promise to raise employment in the US (although it’s currently at pretty high levels, so he’s going to have to work hard to do it) then the engineering industry should see a boom across the coming three to five years. It seems institutional funds are recognising this, and positioning themselves accordingly.

In a just published Form 13, filed with the US Securities and Exchange Commission (SEC), Arconic Inc. (NYSE:ARNC) reported that Elliott Associates, L.p. has picked up 14,432,682 of common stock as of 2017-01-25.

The acquisition brings the aggregate amount owned by Elliott Associates, L.p. to a total of 14,432,682 representing a 3.3% stake in the company.

For those not familiar with the company, Arconic Inc., formerly Alcoa Inc., is engaged in providing materials and engineered products. The Company operates through segments, including Global Rolled Products, Engineered Products and Solutions, and Transportation and Construction Solutions. The Company offers engineered products and solutions, including fastening systems and rings, titanium and engineered products, power and propulsion, and forgings and extrusions. Its transportation and construction solutions include wheel and transportation products; building and construction systems, and extrusions. Its global rolled products include aerospace and automotive products; Micromill products and services, and brazing, commercial transportation and industrial solutions. It offers a range of aluminum sheet and plate products for the aerospace, automotive, commercial transportation, brazing and industrial markets.

A glance at Arconic Inc. (NYSE:ARNC)’s key stats reveals a current market capitalization of 10.27 billion based on 438.48 million shares outstanding and a price at last close of $22.53 per share.

Looking at insider activity, there are a few transactions worth noting.

Specifically, on 2017-01-24, Elliott picked up 192,700 at a purchase price of $21.74. This brings their total holding to 30,669,451 as of the date of the filing.

On the sell side, the most recent transaction saw Jarrault unload 12,810 shares at a sale price of $10.23. This brings their total holding to 352,889.

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 Arconic Inc. (NYSE:ARNC) as things move forward to see if its progress aligns with these transactions.

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Kemet Corp. (NYSE:KEM) Is Bringing In The Smart Money

We’re heading into what could be a second golden age of technology, as the quantum becomes reality. Whereas the semiconductor behemoths ruled the 80s and 90s, a number of funds are looking for a bit of diversification in the space. Kemet offers said diversification. Here’s a look at the company’s latest institutional buyer, and what it means for the company

In a just published Form 13, filed with the US Securities and Exchange Commission (SEC), Kemet Corp (NYSE:KEM) reported that Marda Rama S. has picked up 335 of common stock as of 2017-01-20.

The acquisition brings the aggregate amount owned by Marda Rama S. to a total of 335 representing a 7.26% stake in the company.

For those not familiar with the company, KEMET Corporation (KEMET) is a manufacturer of passive electronic components. The Company operates in two segments: Solid Capacitors, and Film and Electrolytic. The Solid Capacitors segment primarily produces tantalum, aluminum, polymer and ceramic capacitors. Solid Capacitors also produces tantalum powder used in the production of tantalum capacitors. The Film and Electrolytic Business Group produces film, paper and wet aluminum electrolytic capacitors. It also designs and produces EMI Filters. The Company’s product offerings include surface mount, which are attached directly to the circuit board; leaded capacitors, which are attached to the circuit board using lead wires, and chassis-mount and other pin-through-hole board-mount capacitors, which utilize attachment methods, such as screw terminal and snap-in.

A glance at Kemet Corp. (NYSE:KEM)’s key stats reveals a current market capitalization of 325.84 million based on 46.28 million shares outstanding and a price at last close of $7.07 per share.

Looking at insider activity, there are a few transactions worth noting.

Specifically, on 2016-02-01, Lowe picked up 10,000 at a purchase price of $1.51. This brings their total holding to 525,264 as of the date of the filing.

On the sell side, the most recent transaction saw Mcadams unload 1,446 shares at a sale price of $8.82. This brings their total holding to 24,957.

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 Kemet Corp. (NYSE:KEM) as things move forward to see if its progress aligns with these transactions.

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Wayne Savings Bancshares Inc. (NASDAQ:WAYN) Is Attracting Smart Money

We looked at Wayne last week, when the company picked up a decent chunk of institutional capital. Well, the company has hit the tape again, and is attracting yet more smart money interest. Here’s what the latest filing says about the transaction, and what it means for the company going forward.

In a just published Form 13, filed with the US Securities and Exchange Commission (SEC), Wayne Savings Bancshares Inc. (NASDAQ:WAYN) reported that Stilwell Joseph has picked up 269,853 of common stock as of 2017-01-17.

The acquisition brings the aggregate amount owned by Stilwell Joseph to a total of 269,853 representing a 9.7% stake in the company.

For those not familiar with the company, Wayne Savings Bancshares, Inc. is the unitary thrift holding company for Wayne Savings Community Bank (the Bank). The Bank is a community-oriented institution, which offers a range of consumer and business financial services. The Bank’s primary lending and deposit gathering area includes Wayne, Holmes, Ashland, Medina and Stark counties, where it operates over 10 offices. The Bank’s principal business activities consist of originating one- to four-family residential real estate loans, multi-family residential, commercial and non-residential real estate loans. The Bank also originates non-real estate, secured commercial loans, consumer loans and construction loans.

A glance at Wayne Savings Bancshares Inc. (NASDAQ:WAYN)’s key stats reveals a current market capitalization of 47.29 million based on 2.78 million shares outstanding and a price at last close of $17.00 per share.

Looking at insider activity, there are a few transactions worth noting.

Specifically, on 2015-12-21, Marthey picked up 25 at a purchase price of $12.86. This brings their total holding to 5,500  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 Wayne Savings Bancshares Inc. (NASDAQ:WAYN) as things move forward to see if its progress aligns with these transactions.

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