I thought the reason that the Aldox was supposed to be superior was that they could dose it at higher levels and for longer - with dox, there is a cumulative cap, so even if the drug is working, once you hit the cap, the patient must go off drug. If Aldox doesn't have that cumulative dose cap, maybe there is some hope, but nothing that is going to warrant big ticket pricing.
There is nothing "boilerplate" about this delay. Less than three months ago in their Q1 conference call the CEO said the bacteria panel would be on the market by early 2017. When an analyst on the call challenged him to identify any "hurdles" they needed to overcome in order to meet that timeline, the CEO said the risk to the timeline from the work they needed to do was low, but he could not place the risk on a potential delay in the FDA review. Three months later, they are saying they won't even FILE with the FDA until mid-2017 - how is that a "boilerplate" change in guidance.
Well, the answer to the Q2 revenue question has been answered and it is not good - 6 contracts closed. I think the stock could shrug off the Q2 miss, as well as the problem/disruption with the cartridges, but the delay of the bacterial panel will scare many investors - they tried to spin it as a minor delay, but they were previously guiding to an early 2017 filing and now they are talking about "mid-2017" - 6 months is an eternity for a company spending cash the way they are.
Where did you get that the FDA asked for another trial? The last word was that they suddenly were hung up on GI issues and the Crowley said they were going to try to extract some GI data from the current/ongoing trials. A "reasonable" path would be to at least provide conditional approval, subject to a new trial - no approval until a new trial is completed would be a kick in the balls.
Thanks for sharing the info - unfortunately, technical superiority hasn't been the problem for this company - they have had it for years - it is execution in the market. With Arun gone, maybe there is hope, but they simply moved the current marketing head up to CEO, so it is doubtful that he will shake things up dramatically?
The sad part of your analysis is that the $30M only "keeps us going for about 2 months" - with the cash on hand at the end of Q1 ($165M) and the $16M sold in April, that gets us out to probably mid 2017 - with revenue from Migalistat and reduced R&D when the P3 trial for Scioderm is completed, hopefully into Q3 of next year before cash becomes critical. Obviously, if Scioderm is approved by then, we won't have much of an issue, but if Scioderm is delayed and/or the FDA forces them to do another trial on Migalistat, it could get ugly.
If their next generation Pompe and Fabry ERTs show clear benefits over existing ERTs, I agree that we will eventually get bought out, My hope is that the FDA will provide a reasonable clinical path for Migalistat and the Scioderm P3 leaves no doubt about efficacy - that should get us into double digits and after that, anything else is gravy.
Your guess is as good as any and well thought out - unfortunately, as you describe, there are a number of factors and players involved with closing a contract, so to a certain extent it is #$%$ shoot. Hopefully, they will be reporting the results of the bacteria panel testing in Q3 - maybe that will provide some support. Does anyone know if the performance of blood culture in bacterial sepsis is as bad as it is with candida? If blood culture is in the 60% range and T2 is in the 95%+ range for sensitivity, then blockbuster status should be forthcoming in 2017+?
You're welcome - I actually hope Q2 will show a nice recovery, as continued softness may limit the company's ability to raise cash. They are in somewhat of a race to get the bacteria panel approved and on the market before their cash runs out. They are on pace to spend around $50M in 2016 and have about $60M on hand at the end of March. The approval of the bacteria panel should support a higher share price - the question is whether it will allow them to borrow money to fund the necessary expansion of the marketing effort or whether they will have to do an offering. If sales in the back half are stagnant and the share price dwindles, it could be painful for the company to have to raise money in early 2017?
Hard to imagine they could be worse, but I doubt they recovered substantially. The company spoke to the fact that it appeared that some prospective buyers were going to wait until the bacteria panel was approved before taking the leap - the bacteria panel is not expected to be approved until early 2017. This would seem to make sense in that they also described how transitioning the T2 system into the hospital's protocols for testing takes some time and so some hospitals would rather not go through a second transition next year. The one potential driver for the remainder of the year are the studies releases at ASM in June - hospitals that have already adopted are sharing glowing reports about how fast & accurate the test is (compared to blood culture), which is leading to savings on the use of expensive anti-fungals. These studies may prompt some hospitals to not wait until next year, but they did not come out in time to impact Q2 sales.