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hofno2003 182 posts  |  Last Activity: 1 minute 10 seconds ago Member since: Jul 7, 2005
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• 0 users liked this posts users disliked this posts 0 Reply Strong Investment Case at RXII with Win:Loss ratio of 6:1, a small math here:

hofno2003 by hofno2003 1 minute 10 seconds ago Flag

RXII will come up with phase 2 data soon. I think that the likelyhood for positive results is 75+%. But let us be prudent an just do first a small math with 50% likelyhood to check whether the actual situation is indeed a reasonable investment case.

How do I check this? I use a small and simple math together for all my investment decisions.

Case 1) The trial will be a failure. 50% probability. Share price falls to \$1.5; Loss of \$1.5 with 50% probability = statistically expectancy value for the loss situation = \$0.75 (\$1.5 with 50% likelyhood)

Case 2) Trail comes in with success. 50% probability. Share price subsequently rises to \$6.0 (within some weeks). Gain of \$3 with 50% probability = statistically expectancy value for the gain situation = \$1.5 (\$3 with 50% likelyhood).

Therefore the ratio for the win situation compared to the loss situation = \$1.5 : \$0.75 = 2:1.

If I do same math with my 75% probability for the "good case" then I will come in with a ratio of 2.25: 0.375 =
6:1 and this is an exceptional outstanding investment case. (\$3 gain with 75% likelyhood = \$2.25 expactancy value, \$1.5 loss with 25% likelyhood = \$0.375 expectancy value).

Thats the way I always make my decisions on all investment cases and this ratio ratio at RXII is good enough for a (very) strong investment case, because the subsequent upside furthermore is not limited with a share price target of \$6.

hofno, just MHO
Long position in LPCN, RXII, POZN, DSCI, ATRS, CONX;

I think too many in here are misrepresenting potential phase 2 results for RXII

by biotechpicklist 6 hours ago
hofno2003 hofno2003 17 minutes ago Flag

Maybe, but with a 50:50 change there is enough imbalance to the upside for an investment case.
Why?
Case 1) The trial will be a failure. 50% probability. Share price falls to \$1.5; Loss of \$1.5 with 50% probability = statistically expectancy value for the loss situation = \$0.75 (\$1.5 with 50% likelyhood)
Case 2) Trail comes in with success. 50% probability. Share price subsequently rises to \$6.0. Gain of \$3 with 50% probability = statistically expectancy value for the gain situation = \$1.5 (\$3 with 50% likelyhood).
Therefore the ratio for the win situation compared to the loss situation = \$1.5 : \$0.75 = 2:1.
Thats the way I make my decisions and this ratio is good enough for a strong investment case, because the subsequent upside on case 2 is furthermore not limited with a share price target of \$6.

hofno, just MHO
Long position in LPCN, RXII, POZN, DSCI, ATRS, CONX;

Given Androxal is approved: Price Target \$60, here a small math why....

by hofno2003 Aug 29, 2014 4:33 PM
hofno2003 hofno2003 9 hours ago Flag

- a partnering deal with some prepayment components for RPRX before resolution is very unlikely - no partner would accept this open issue and perhaps to end with nothing if the case gets lost and lasts years
- to make Dr. Fisch an offer before FDA approval makes also no sense, because the approval could be denied and some more years of research and trials could be needed - so the money spent on a deal with Dr. Fisch could be just waste of money.
So I think a resolution is possible, but will not happen in the near future and not before FDA approval of Androxal.
hofno, all MHO
Long position in LPCN, RXII, POZN, ATRS, CONX, DSCI;

DSCI: Share price target \$64 (long term) based on DSC127 (dermal stem cell growth factor) project, why?

by hofno2003 10 hours ago
hofno2003 hofno2003 10 hours ago Flag

A Phase II study of 77 subjects evaluating the percentage of diabetic ulcers completely healed over a 12-week period, among other outcomes, was completed in 2011.1 The subjects were randomized to receive 4 weeks once-daily topical application with 0.03% DSC127, 0.01% DSC127, or Placebo, followed by 20 weeks of standard care. Safety parameters among the intent-to-treat groups were comparable. Covariate analysis compared reduction in ulcer area, depth and volume from baseline, and reductions in the 0.03% DSC127 group were greater at Weeks 12 and 24. Placebo-treated ulcers healed in a median 22 weeks vs. 8.5 weeks for 0.03% DSC127 (p = 0.04).

Please do your own DD, I think DSCI offers an outstanding good reward:risk ratio, big upside and moderate downside risk. For sure the share price appreciation should unfold in steps and not without some volatility. Nothing for momentum traders and not for everybodies investmentstyle.

hofno, just MHO
Long position in RXII, LPCN, ATRS, POZN, DSCI, CONX

DSCI: Share price target \$64 (long term) based on DSC127 (dermal stem cell growth factor) project, why?

by hofno2003 10 hours ago
hofno2003 hofno2003 10 hours ago Flag

... continued from previous post.....:

Whats wrong with this math? I think nothing is wrong when you try to anticipate a future potential of a company this way. The reward:risk ratio is outstanding (big upside, limited downside).

From DSCI: The advanced wound care market includes products directed to the 50% of wounds that become stalled, chronic and non-healing, and thus require specialized care and expertise. The global advanced wound care market is ~\$5 billion and is growing at about 10% per year. Growth is being driven by an increasing number of people with diabetes and vascular diseases, along with longer life expectancy and, in the U.S. and other western countries, a growing population of the aged. The typical advanced wound care patient is a diabetic over the age of 50.

Derma Sciences is developing DSC127, which provides a way to help the body utilize its own stem cells more productively for wound healing. DSC127 is a patented analog of a naturally occurring peptide, Angiotensin. This analog has been designed to promote wound healing without the blood pressure effects of angiotensin. In laboratory studies, it has been shown to increase keratinocyte proliferation, increase extracellular matrix production, and increase vascularization. Additionally, histological examination in animal studies has shown that DSC127 accelerated collagen deposition six-fold. All of these activities help to accelerate dermal tissue repair. One potential mechanism of action is the up-regulation of mesenchymal stem cells (MSCs) at the site of injury. MSCs originate in the embryo and are considered to be multipotent — a type of stem cell that has not yet adopted a specific cellular phenotype. Such cells have the ability to differentiate into various types of cells found within the body, including fibroblasts, adipose cells, muscle cells, bone cells, and skin cells.

....will be continued ....

Hofno, just MHO
Long position in RXII, LPCN, ATRS, POZN, DSCI, CONX

• 2 users liked this posts users disliked this posts 0 Reply DSCI: Share price target \$64 (long term) based on DSC127 (dermal stem cell growth factor) project, why?

hofno2003 by hofno2003 10 hours ago Flag

DSCI is with its lead late stage pipeline product, DSC127, in an ongoing phase 3 trial with a 1,055 patient, five-arm study. If the results of phase 2 are again confirmed, DSC127 should become a game-changing treatment option and provide upside potential as a pharmaceutical product for diabetic foot ulcer healing. From DSCI public material and presentations we can learn that DSCI could be an very interesting investment case. What are the facts and public informations?

Derma Sciences estimates that the worldwide peak sales potential for its lead drug candidate DSC127 targeting above specialized wound care market could reach \$900 million annually (to read on its company fact sheet).

DSCI enterprise value as of today (market cap minus cash on hand) is just about \$120 million, the revenue from its diversified wound healing product portfolio about \$80 million and there is no significant debt on its balance sheet. Cash on hand is about \$80+ million, all facts together are well suited to support the actual share price and to keep the downside risk low.

But what is the upside – given that DSC127 repeats in the ongoing phase III trial the good phase II results? The co states the DSC127 potential with \$900 million. We have 25 million shares outstanding (per yahoo finance). A fair price tag for DSC127 would be 3 times peak revenue = \$900 million x 3 = 2.700 million divided by 25 million shares = \$108 per share. That’s quite a lot and all based on a successful DSC127 development and only minor dilution (if any), therefore we should discount this target, e.g. cut by half = 54 usd per share and add the actual business which should be valued with about \$10 per share. In the end we get a price target of \$64 with a lot of further upside, but a limited downside risk at a share price of \$8 as of today.

Hofno, just MHO
Long position in RXII, LPCN, ATRS, POZN, DSCI, CONX;

…. will be continued with further facts and informations about DSC127……

No hype here. Phase 2a study RXI-109 1301is the bellweather. Huge impact on stock with positive results.

by tene1961 14 hours ago
hofno2003 hofno2003 11 hours ago Flag

Well said. Positive results will again confirm the delivery technology as well as the right molecular design for the right target - CTGF, for a lot of indications, some with urgent need and possible orphan status (e.g. retinoblastoma). September with data read out and topline results will be groundbreaking for the company. Just the same situation as for LPCN - thats the reason I like both co's short term and on the long run.
hofno
Long position in LPCN, RXII, POZN, DSCI, ATRS, CONX;

Forward Analysis

by medchipvestor 18 hours ago
hofno2003 hofno2003 12 hours ago Flag

Perfect summary. Perfect reward:risk ratio at LPCN too.
hofno
Long position in RXII, LPCN, POZN, ATRX, DSCI, CONX;

Given Androxal is approved: Price Target \$60, here a small math why....

by hofno2003 Aug 29, 2014 4:33 PM
hofno2003 hofno2003 19 hours ago Flag

Concerning your patent dispute for Androxal active component - yes, you are right. This is really a big grain of salt in the soup as long as it is not resolved. I think that a deal on this matter is possible for sure - why should Mr. Fisch not cash in some millions and to keep up with pure opposition as soon as RPRX makes a reasonable offer? Everybody will take some million windfall profit - keeping his opposition gives him nothing than the risk to lose the case and to end with empty hands.

If you want to read a good article about the patent dispute Dr. Fisch versus RPRS google with the following term to get the article - an interesting read.
"""""""Repros in patent predicament for oral testosterone contender Androxal – lawyers""""

hofno, all MHO
Long position in RXII, LPCN, POZN, ATRS, DSCI, CONX;

Given Androxal is approved: Price Target \$60, here a small math why....

by hofno2003 Aug 29, 2014 4:33 PM
hofno2003 hofno2003 19 hours ago Flag

For sure the FDA wouldn’t approve Androxal based only on this first phase 3 dataset. But we shouldn't forget that an identical phase 3 trial is ongoing with a data readout in october, 2014; The trial results from the first trial was statistically significant - and with a second trial and same (good) results there is no doubt about the quality of efficacy data, although each trial arm is only composed of 80 subject out of 2 phase 3 trials. What should be more a question mark are the safety data - as Clarus and LPCN both have long follow ups within their phase 3 trials to generate solid safety data too (up to 52 weeks overall) - and I think this might be necessary at RPRX also. If this unfolds as described, this setback will also be a hard setback for the share price back to single digits. On the other hand the RPRX active substance in Androxal is nothing new, has a lot of approved indications and is already generic in EU for some indications. But most of this indications are not long term treatments as Androxal for secondary hypogonadism is proposed to be – where the availability of long term safety data could be an precondition for approval, but we will not know this until the FDA gives us some light on this matter. So it is perhaps not necessary to worry too much about safety.
Altogether this picture is the reason why I keep away from RPRS either way, the risk:reward ratio for the next 6 months is just balanced at actual share price level - the upside equals the downside - so this is no investment case at current levels for me, but do your own DD. Nevertheless, if everything goes smooth, an NDA is accepted, Androxal is approved, then a share price target \$60+ is reasonable.
Just MHO.
hofno
Long position in RXII, POZN, LPCN, ATRS, DSCI, CONX

Proposed Deal is a NoGo! Net Earnings potential for the buyer is about 5 Cent/share, Should Give a Faire Share price of x 15 = 75 Cent

by hofno2003 Aug 28, 2014 10:02 AM
hofno2003 hofno2003 19 hours ago Flag

By not retaining Critchfield and Simpson the next "1 cent" earnings improvement did already materialize.
Another 2-3 cent short term earnings improvement are realistic, by either or a combination of
- further reduction of SG&A costs
- or by using the SG&A resource for selling the Organtec products in US
The growing potential of some products which have not peaked on international sales (AW, HA) or will have an imminent launch in US (HA) should bring another improvement of earnings and revenues - as always claimed by CONX in past.
Overall we have a new (merged) CONX with earnings potential of 4-5 cent and should get a multiple of 15, additional we have to get a consideration for the growing business and a premium.
Alltogether this sums up to 75+cent, all other proposal should be a reason for a lot of (unpleasent) lawsuits.
There is no legal viable argument to sell a public listed company below market value and based on share prices 9 months ago (!!!) - thats a material damage for all shareholders and cant get approval by shareholders and lawsuits at court.
hofno
Long position in RXII, LPCN, ATRS, POZN, CONX, DSCI;

52 week high for RXII is \$6.84. Stock price should exceed 52 week high with good Phase 2 data. Average price target is around \$10.00

by tene1961 Aug 30, 2014 1:05 AM
hofno2003 hofno2003 20 hours ago Flag

Yes and no. If you define filling a gap (from a pure traders perspective) as a short term event (1 trading day after a PR) - then for sure this "gap" won't be filled. I would like to have expressed that with good data we will see the old highs again - within a short period of time and subsequently we will build a new base a lot higher than today.....
hofno
Long position in LPCN, RXII, POZN, ATRX, DSCI, CONX

September is the month

by rihonnas 23 hours ago
hofno2003 hofno2003 21 hours ago Flag

The top line data and the FDA advisory meeting concerning the overall TRT topic are the key in September. Both events/milestones could bring a strong PPS appreciation, maybe beyond your \$12.50 target. I expect the FDA to keep its stance to TRT and CV issues unchanged, as there is no scientific evidence for increased CV risk and TRT (all cited scientific papers have argumentative gaps and are not conclusive concerning increased CV risk). Just MHO.
Hofno
Long position in LPCN, RXII, POZN, ATRS, DSCI, CONX;

52 week high for RXII is \$6.84. Stock price should exceed 52 week high with good Phase 2 data. Average price target is around \$10.00

by tene1961 Aug 30, 2014 1:05 AM
hofno2003 hofno2003 22 hours ago Flag

Good results would be read once more as proof of concept by the investment community. This would help to close the gap to \$6.84 or go higher on new instiutional interest.
hofno
Long position in LPCN, RXII, POZN, ATRS, DSCI, CONX;

New here and have a question

by oldsteve88 Aug 29, 2014 3:19 PM
hofno2003 hofno2003 Aug 29, 2014 4:45 PM Flag

Hi steve,
to my knowledge the company seems to prepare itself for a buyout. I think its reasonable to expect Sanofi - the partner for selling PA in US once approved - to make a bid instead paying royalties. But it doesn't really matter, the royaltie stream from PA, Vimovo and Treximet can be expected markedly beyond 2 usd in 2016 with further strong growth potential. The company distributes all cash in excess of operational need (which is very small as they try to get rid of all unnecessary resources) - so this cash stream from royalties will directed to dividends. In december 2013 the company made also a big cash distribution (return of capital) to its shareholders. They repeatedly stated not to start new projects without a partner who is willing to fully finance these.
hofno
Long position in LPCN, POZN, ATRS, RXII, DSCI (all strong buys IMHO) and CONX (hold).

• 2 users liked this posts users disliked this posts 1 Reply Given Androxal is approved: Price Target \$60, here a small math why....

hofno2003 by hofno2003 Aug 29, 2014 4:33 PM Flag

Given that Androxal is approved I think its reasonable that we can assume that RPRX will get a market share of 20+% of the \$2.5 billion TRT market in US, although (or because) Androxal is no TRT. Thats about \$500 million. A fair market cap for the co would be 3 times revenue = \$500 million x 3 = \$1,500 million. With about 25 million shares outstanding we get a share price target of \$1.500 million / 25 million shares = \$60 usd.

I did this math just to get a clue about the potential and risk:reward ratio, some times ahead in the future. An approval could happen end of 2015 at the earliest. The main downside risk in this math is a potential dilution in preparation of a commercial launch on its own at RPRX. This would need an additional cash runway for 2016 and beyond. But if RPRX share price continues to stay in the range of \$20-\$30 a dilution with 2-3 million new shares is jut about 10% of oustanding shares and doesn't change much on the potential \$60 price target.
hofno
Long positon in LPCN, RXII, POZN, ATRS, DSCI, CONX;

"Why I'm Still Long Rxi Pharmaceuticals After Recent Developments"

by biotechpicklist Jul 9, 2014 11:07 AM
hofno2003 hofno2003 Aug 29, 2014 3:59 PM Flag

again up 4%, third day with strong volume in a row.
hofno
Long position in LPCN, RXII, POZN, ATRS, CONX, DSCI;

"Why I'm Still Long Rxi Pharmaceuticals After Recent Developments"

by biotechpicklist Jul 9, 2014 11:07 AM
hofno2003 hofno2003 Aug 28, 2014 5:29 PM Flag

Strong volume again. RXI-109 phase 2 data release imminent, will go a lot higher on good data!
hofno

I think its a done deal

by arielsquarefour Aug 28, 2014 10:22 AM
hofno2003 hofno2003 Aug 28, 2014 11:10 AM Flag

There is no selling pressure. If I would be convinced that the deal is already done - I would sell anyway now and pursue other investment opportunities instead of waiting some months to get the cash on hand? Right?
hofno
Long position in ATRS, RXII, POZN, LPCN, CONX, DSCI;

Sentiment: Hold

Proposed Deal is a NoGo! Net Earnings potential for the buyer is about 5 Cent/share, Should Give a Faire Share price of x 15 = 75 Cent

by hofno2003 Aug 28, 2014 10:02 AM
hofno2003 hofno2003 Aug 28, 2014 11:09 AM Flag

There is obivously no selling pressure now - we have low volume. If I would be convinced that the deal is already done - I would sell anyway now and pursue other investment opportunities instead of waiting some months to get the cash on hand? Right?
hofno
Long position in ATRS, RXII, POZN, LPCN, CONX, DSCI;

Sentiment: Hold

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