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Trius Therapeutics, AŞ Message Board

  • brandonuk03 brandonuk03 Nov 18, 2012 12:21 PM Flag

    Strong buy in this area, but be cautious

    All technical parameters, RSI, Stochastics, MACD are still pointing to way oversold territory. RSI is the lowest it's been in the last year and the stock has been in the oversold range longer than it has all year. RSI currently at 23. 200 and 50 day moving averages are in the mid 5's. Why is the stock being sold off?

    There's a few reasons IMO. The fiscal cliff is one, as most biotechs have been taking a beating, especially the small cap speculative stocks. Secondly, Trius updated investors with more timelines last week. With the drop in price, I'm assuming some investors lost patience as the ESTABLISH-2 trial results are now to be reported close to the end of 1Q2013 which is by the end of March. That puts us 4 months away from the 2nd Phase 3 data release which in the world of biotech is a long time. Most investors probably believe their investment is dead money for the next few months. However, on the upside, buying at this point close to the 52-week low ahead of this data release should give the patient investor a high return IMO as I expect Trius to make a run back towards it's 52-week high of $8/share. Mean analyst price targets are in the $12 range.

    Trius also guided that they expect to file the NDA for Tedizolid in mid-2013 providing another catalyst that will bring interest to the stock. Additionally, Trius is also somewhat de-risked because we have highly positive Phase 3 trial data already in comparison to Zyvox. Tedizolid is also operating under a SPA with the FDA which is a preferable route to approval. A recent seeking-alpha article also brought up a positive point that a generic Zyvox will likely be delayed until mid-2015 or early 2016 providing Trius with a longer time frame to come to the market and establish itself before having to compete with a generic Zyvox. This competition my scare some investors, but any health care practitioner familiar with MRSA will not be scared to invest in Trius since Tedizolid will have less resistance to MRSA and is even active against some Zyvox resistant MRSA strains. Tedizolid also offers more convenient dosing and shorter duration of dosing, less drug-drug interactions and a slightly better side effect profile. Zyvox currently produces of 1 billion dollars in revenue world-wide. If Trius were to capture just half that, our market cap of 186 million dollars is very undervalued from a valuation standpoint.

    Other things to keep in mind is that Trius currently has an ATM financing option available. This is bad in that further dilution will happen. It is favorable in that Trius can decide at what price to exercise that dilution at and can do it small amounts at the companies discretion. One would not think Trius would dilute at these levels. The last dilution was around $5.70 a month or 2 ago and investors buying today can get the stock 20% cheaper than the offer price which doesn't happen very often. The ATM financing option also gives the company more freedom to be less dependent on striking an unfavorable partnership for Europe or other territories. The company also guided they will not partner Europe until ESTABLISH-2 data is released by the end of March. While they are still enrolling patients for this trial through December, I believe management expects positive results as evidenced by their patience to wait to partner until after this data is released. This leads me to believe that with an additional phase 3 trial under their belt, Trius can command more favorable partnerships and better negotiating power.

    My investment strategy in Trius is as follows:
    1) Be patient. This stock is not going to move overnight, but offers a lot of potential upside to patient investors. I expect the stock to start to run in the next few months ahead of ESTABLISH-2 data.
    2) Keep some dry powder on hand in order to average down if you need to. I recently bought 25% more of a position at $4.76 on Friday and was able to average down.
    3) Watch for the $4.70's to show strong support for the stock. If the stock breaks through $4.70 with volume, watch out below. Either sell or wait until the stock settles to average down.
    4) Watch for partnerships after ESTABLISH-2 to start to take hold.
    5) NDA to be filed in the middle of 2013 will cause the stock to pop.
    6) Trius will be pursing other indications for pneumonia etc.

    While I hate to see the price and my portfolio to take a hit with the recent price decline, I strongly feel patience will be rewarded with TSRX. Disclosure: This is my opinion only. I'm not a financial analyst and do not consider this financial advice. Do you own due diligence like I have. I'm long TSRX and a practicing pharmacist.

    Sentiment: Strong Buy

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    • Brandon, Solid advice. I bought 10K shares at 5 and on the same day (could have been the day you reloaded) it dropped to 4.76 or so. Will reload if it hits that spot again. Tom

      Sentiment: Buy

      • 2 Replies to heyjustaswag
      • 4.75 are U reloading?

      • Listened to the webcast and several things stood out:

        1) Expect better results from ESTABLISH-2 due to IV bioavailability being higher than oral. Patients at sites in Europe tend to have larger lesions (due to delay in treatment by Europeans) and from previous data analysis, Tedizolid (TZD) shows better results in these patients than Zyvox. Jeff Stein said this trial is pretty much "de-risked" from an investment standpoint.

        2) Jeff Stein CEO said, "we are in partnership discussions." He recently posted on twitter that management has been undergoing partnership training seminars via a professor at Harvard. Eluded that big pharma has high interest and that there is no hurry to partner until after ESTABLISH-2 data is released. They can command better terms with great results that are expected from this trial. To note, Trius has a ATM (at the market) financing deal with that will sell up to $25 million dollars worth of stock at Trius' discretion. This also gives flexibility for management not to feel rushed to partner.

        3) Trial to be completed by December with top-line data by March/April. NDA filing in Q3 (July-Sept) with a 6-8 month review under GAIN Act placing approval at the beginning of 2014.

        There are lots of catalysts to drive the share price coming up. Lots of analyst upgrades recently with $10-15 price targets. One analyst said if TZD gets approved and sells at same price as generic Zyvox downside is $4.50/share showing limited downside. However, based on recent data, TZD is very differentiated from Zyvox--- better side effect profile, less drug-drug interactions, once daily dosing for 6 days vs 10-14 with Zyvox. Jeff Stein said from a pharmaco-economic standpoint, TZD may have additional cost savings vs. Zyvox or a generic Zyvox by getting patients treated and out of the hospital sooner. Each day in the hospital can be thousands of dollars. TZD is bacteriacidal vs bacteriostatic like Zyvox. This leads to less resistance and faster resolution and shorter course for treatment. MRSA is growing resistant to vancomycin and even Zyvox to a lesser extent. TZD has been able to treat resistant Zyvox MRSA strands. On a final note, Trius is looking to start more trials for bacteremia and pneumonia. We already know TZD has in-vitro activity for MRSA and reaches these sites of action, it's now just a formality of doing the studies and getting additional indications approved. Gyrase program will begin the beginning of next year as well.

        There are lots of things to be excited about in 2013.

    • The Shelf registration most likely will be executed several working days after the stock bounce from the ESTABLISH2 P3. Thats just my opinion but I have seen that scenario play out several times with other small cap Bios.


    • Another point after listening to the investor update again... Jeff Stein said after recent Infectious Disease conferences in both Europe and the US, additional partnership interests have come forward and they're evaluating and going forward with discussions, but will look strike more deals after they expect positive phase 3 data from ESTABLISH-2.

      Sentiment: Strong Buy

    • sounds much like my last girlfiend...very attractive until I found out she was a psychopath.