TCDA an Under the Radar Gem

Investment Analysis Clubs Saul’s Investing Discussions
1

All,
I’ve seen posts where Cosmid and Fuma mention Tricida Inc.(TCDA) and so I did some digging. Fuma lists TCDA as a stock he currently owns.

Tricida has developed a drug known as Veverimer (aka TRC101) is a polymer ingested to absorb acid in the stomach and pass it through the feces as a way to help treat Chronic Kidney Disease. I thought to myself wouldn’t an antacid do the trick, but this drug really seems to hit a niche where it absorbs a lot of acid and meets an unmet need. Here’s some highlights about Veverimer (that I hope I got right) from the S-1:

  1. Chronic Kidney Disease (CKD) kills more people than breast cancer or prostate cancer.
  2. 30,000,000 people in the US have Stage 3-5 CKD - 35% are diagnosed.
  3. TCDA believes that they have 550,000 potential patients.
  4. The mechanism of treatment allows for treatment of hypertension, edema, and heart failure.
  5. Excellent Phase 3 data:
    Veverimer: 4% patients receiving this drug had kidney function loss >50%, all 124 patients survived.
    Placebo: 10.8% of these patentients had kidney function loss>50%, 4 out of 93 patients died.
  6. There are no competing therapies.

I have no idea what TCDA will charge for Veverimer, but it looks like a HUGE market to me. The submitted a New Drug Application on 9/4/19 under the FDA’s accelerated approval program. Typically, accelerated approval decisions come in around 8 months.

TCDA is a $1.7B stock. It would seem like an opportune time for a larger pharmaceutical firm to gobble them up. TCDA had an investor day on 10/15, and it has popped about 10% since. This seems like a solid bet, so I picked up a few shares (2%) today. I think this is worth a look.

Best,

bulwnkl

20 Likes
2

Thanks bulwnkl. Sending this as email to you since this is OT for Saul’s Board. Do you see any options in TCDA that are worth considering?

-Gaurav
Benefited from FMI and ARNA calls

3

This morning I read that Needham initiated coverage on 5/24/19 with a $50 price target and a peak sales estimate of $1.5B in 2034.

Best,

bulwnkl

1 Like
4

Bulwnkl,

After reading your post I listened to their investor day presentation and was so impressed with the CEO Gerrit Klaerner, PhD and Medical Affairs Elizabeth Faust, PhD (most recently VP Medical Affairs at Kite) that I opened a starter 2% position. I’ve got some notes from the presentation. Disclosure: I’ve got no medical training.

I have no idea what TCDA will charge for Veverimer, but it looks like a HUGE market to me.

Slide 6 lists
Est. WAC price: ~$2,000 - $3,000/mth
Est. net price (~30% GtN) : ~$1,400 - $2,100/mth
Est. months on drug: ~8

Potential Peak US Revenue ~$14,000 revenue PPPY at midpoint
X~150,000 patients
Over $2 billion / year

https://ir.tricida.com/static-files/25b77963-4a7b-4118-8b25-…

They identified undertreatment of Chronic Kidney Disease (CKD) patients with metabolic acidosis as the key barrier to overcome for launch. Slide 43 shows 79% of patients go undiagnosed.

On their being no competing therapy it seems there is, sort of - not an FDA approved drug but doctors will prescribe diet change and bicarbonate of soda. In Q&A a doctor said this hurts their patients by giving them a huge sodium load. Slide 13 quotes from a study in the UK that said oral sodium bicarbonate appears to be ‘subtherapeutic and not cost effective’. Slide 44 says that in a 2019 study sponsored by Tricida, 15% of chronic metabolic acidosis patients are treated with oral alkali therapy. One of the doctors in Q&A said the sodium introduced is terrible for kidney patients and he also said to visualize putting bicarbonate of soda into a glass of vinegar and that gassy eruption is what happens in the patient’s stomach – very unpleasant.

They are taking steps now to address underdiagnosis and undertreatment. They’ve launched various educational and media plans. They’ll be active in conferences. They’ve got a website www.metabolicacidosisinsights.com with articles, videos, etc. and a link to their Neph+ app to predict the 2- and 5-year risk of kidney failure.

Slide 75 lays out a map and their plan to target 5000 nephrologists at launch with 2 Regional Managers, 10 Division Heads and ~85 Sales Representatives. They also have a team of 20 MSL’s (Medical Science Liasons).

Finally they support their view that their drug will save payers a lot of money.

Sounds good to me.

John

9 Likes