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Biotech / Medical : PARANOID! TIRED OF TALKING TO YOURSELF? LET'S TALK(TTP) -- Ignore unavailable to you. Want to Upgrade?

To: Arthur Radley who wrote (516)	11/12/1999 8:08:00 AM
From: Arthur Radley	Read Replies (1) \| Respond to of 626

TTP should report their 3Q numbers in the next few days. I project that they will improve to about a (.12-.14) cent loss from the previous Q's .17 cents loss. With so much going on with the company, if this number continues to drop, you have to agree that the management is doing a good job of cost control.

To: Arthur Radley who wrote (516)	11/14/1999 11:41:00 PM
From: RCMac	Respond to of 626

Here are a few useful links, and a summary of the investment case as I see it for TTP. I wanted to gather this material in one place for the use of anyone who wanted to look in detail at TTP as the period of volatility triggered by the warrant call comes to an end this week. The big story (possibly the only story) is TTP's lead product, Zomaril (iloperidone), an "atypical antipsychotic", i.e., a latest-generation product being "developed for the treatment of schizophrenia and related psychotic disorders-a market expected to exceed $4 billion within one year" (quoting TTP's 10-K). TTP licensed Zomaril from Hoechst, and later sublicensed it to Novartis. Novartis will pay all development costs, pay TTP a royalty of 10% on sales, and pay Hoechst separately another 15%. (Royalty numbers not formally released, but these numbers are pretty surely accurate.) Zomaril is in Phase III trials, expected to be completed in 2000, with product launch in 2001 or early 2002. Schizophrenia is a significantly underserved indication. Although new medications introduced in the last decade or so have been immensely helpful to those suffering from schizophrenia, they have a fairly severe side effect profile, limiting their use and leading many patients to stop their medication. TTP has been saying that about 30% of schizophrenia patients are either not helped by approved medications or stop taking them because of the side effects. Zomaril, if approved, will compete with two atypical antipsychotics already on the market, LLY's Zyprexa and JNJ's Risperdal, both of which, although considerably better than prior antipsychotics, still have significant side effects. If Zomaril's efficacy is comparable to or better than Zyprexa and Risperdal, with a superior side effect profile (as the clinical trial results suggest so far), Zomaril could be a very large-selling drug indeed. (Zyprexa sales were above $700 million in its first year, 1997, about $1.4 billion in 1998, and will be perhaps $2 billion this year.) I first got interested in TTP (thanks to MZ, Rick Harmon, Neuroinvestment, John Metcalf, TexasDude, et al on the TTP and "Paranoid . . . TTP" threads on SI) when Novartis announced in January that it would expand the previously announced Phase III trials for Zomaril from 2600 patients to 3300 patients at 206 centers in 24 countries Message 7313972 (Useful discussion in the couple of dozen posts after this one, see esp. ## 244-247, 257-58.) The investment point, IMO, is that if Novartis -- with access to information and scientific judgment both vastly superior to mine -- thinks enough of Zomaril's prospects to invest something like $100-125 million in its development (even though Novartis will keep only 75% of the sales proceeds while doing 100% of the work from here) it may be a good bet for me to follow along. (continued next post)

To: Arthur Radley who wrote (516)	11/14/1999 11:44:00 PM
From: RCMac	Respond to of 626

How likely is FDA etc. approval of Zomaril? Hard to say, someone else can try to put a probability number on it, still a lot of risk of non-approval; and since this is probably a one-product company, FDA non-approval would be nasty for TTP's stock price. But IMO the risk of non-approval appears to have gone down recently. Novartis presented a lot of information on Zomaril at its R&D conference in NYC on 9/21. Indeed, Novartis unexpectedly summarized results from the first 600 patients in the Phase III (previously we had results of only a 90-patient Phase II), and spent more time and presented more slides on Zomaril than on any other pipeline drug. In short, Novartis appears to be very enthusiastic about the drug. Here is the link to the R&D conference info: info.novartis.com Slides 30-36 are on Zomaril/iloperidone. Here is a link to the individual slides: info.novartis.com There were a number of posts on the Yahoo TTP board about the R&D conference, one by someone in attendance, others by those who listened to an internet audio feed, and some comments on the data. See posts in range 1062-1090, especially 1077, 1079, 1081 (http://messages.yahoo.com/bbs?action=m&board=7077329&tid=ttnp&sid=7077329&mid=1081 ), and 1090. (On Yahoo, you can get a list of 41 posts, 10 before and 30 after any given post, by clicking on "Msg. List" below that post. For example, if you go to post 1074 messages.yahoo.com and click on "Msg List" you will get a list of posts 1064 through 1104, covering the conference posts.) (continued next post)

To: Arthur Radley who wrote (516)	11/14/1999 11:49:00 PM
From: RCMac	Respond to of 626

How much might Zomaril be worth to TTP? See the discussion by MZ and Neuroinvestment re potential sales of Zomaril: Message 11026365 responding to Message 11016877 . In this context, note also Novartis' slide 36 on the claimed advantages of Zomaril over the competing medications: info.novartis.com and slide 35 re side effects: info.novartis.com Some revenue projections re Zomaril/iloperidone: Yahoo TTP post 1228 (mine): messages.yahoo.com "If, as suggested by the look we got at the phase III trials at Novartis' 9/21 R&D show-and-tell, Zomaril is as effective as (or maybe a little better than) Zyprexa, with a substantially better side effect profile, it's easy to imagine sales of $600 million in the second year, and it isn't really too hard to imagine sales of $1.5 billion or even twice that in 4-5 years." A 10% royalty on any of these numbers would be a huge number. As said in Yahoo post 1228: "10% of $1.5 billion = $150 million. 15.4 million shares + convert 7.45 million warrants + 2.7 million employee options + some future employee options, etc. = about 27 million shares. "Divide $150 million by 27 million shares = $5.56/share. Subtract something for SG&A and other R&D, etc. and put a multiple of 35 on it. Maybe $175/share? And this even if the Spheramine, cancer vaccine and Pivanex projects go nowhere." See also biotechking's #1241 messages.yahoo.com , which refers back to his #989: messages.yahoo.com There's more yet. The above estimates are for only the schizophrenia indication. But the recent FDA approval of Zyprexa for an additional indication, acute mania associated with bipolar disorder, suggests that Zomaril/iloperidone might also be approved for this additional huge indication. See MZ's post: Message 11755045 ("Iloperidone market size doubled.") Of course, Zomaril's FDA approval is not in the bag. Until the Phase III results are fully reported we won't clearly know how effective Zomaril is, or whether some unexpected side effect(s) may preclude approval or sharply limit its sales. So everyone should do his/her own due diligence and make his/her own risk assessment. But it does seem to me that, when you look at the potential huge rewards if Zomaril is approved, the stock's current price discounts a much greater risk of FDA non-approval than is appropriate. (continued next post)

To: Arthur Radley who wrote (516)	11/14/1999 11:52:00 PM
From: RCMac	Respond to of 626

Some other useful links: The TTP 10-K, filed 3/31/99: edgar-online.com Survey of antipsychotic medications: members.aol.com Schizophrenia home page: schizophrenia.com Janssen study, "atypical" antipsychotic Risperdal v. earlier antipsychotics: Message 9539609 (continued next post)

To: Arthur Radley who wrote (516)	11/14/1999 11:56:00 PM
From: RCMac	Read Replies (1) \| Respond to of 626

TTP's pipeline, in addition to Zomaril, includes: (1) its Spheramine cell therapy for Parkinson's, see: Message 11472882 (press release re NIH grant for spheramine program), and Message 11495848 (Neuroinvestment comments on program, including: "Titan has shifted the bulk of its preclinical energy to the Spheramine program"), (2) Pivanex, a cancer therapeutic for non-small cell lung cancer and potentially other cancers, see Message 7371893 (possibly backburnered?); (3) several cancer vaccine programs, possibly also backburnered; and (4) something to do with Sertoli cells, see: Message 11490207 I'm not a scientist, and have little basis for judging whether any of these shows any promise, but from the opinions on SI and elsewhere of those whose scientific judgment I've come to trust, my guess is that nothing in the pipe has any value, with the possible exception of the Spheramine/Parkinson's project. None of these pipeline items appears to have any effect on the stock's current price; but announcement of a rumored big pharma partnership for the Spheramine/Parkinson's project could certainly drive the stock up. Assuming that all the warrants are converted by the 11/19 deadline, TTP will have another $44 million in cash to devote to this pipeline. Hope this is helpful. --RCM