TCDA Update

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Hi Everyone,
Questions came up on Tricida (TCDA), so I thought that I would post my answers for everyone. TCDA makes a non-toxic polymer that absorbs stomach acid without increasing the salt in the chronic kidney disease patient’s bodies, a super important benefit. For you chemistry people, it is a polymer that converts an amine to a quaternary ammonium chloride moeity in the presence of acid. This would be a critical therapy for CKD patients, and there is no alternative.

FDA NDA Goal Date: 8/22/2020

Key Patent: US 9,205,107 Expires June 23, 2034

Peak Sales Estimate from S-1: $1.5B

Current Market Cap: $1.4B

Approximate Purchase Value: $11.2B Typically companies sell for 8X peak sales estimates.

Key Results: With 93 person legs, 4 placebo patients died from CKD, all treated patients lived. 10.8% of placebo patents lost kidney function > 50%, while only 4% of VEVERIMER patients lost kidney function > 50%. For all of the thousands of people that have CKD, this seems like a small test to me.

TCDA has passed a small Phase 3 test. They believe that they will initially have around 550,000 patients. Importantly, TCDA is a one trick pony. Their drug VEVERIMER (aka TRC101) is their only product.

Key Question: Why hasn’t their stock price moved??? This stock has done nothing, even with the positive Phase 3 results. I have no idea why this is the case.

This seems like a tremendous value. Typically, one trick ponies get purchased by larger pharmaceutical companies.

Things that could go wrong.

  1. The polymer adversely affects the gut microbiome.
    I would think that the Phase 2 and Phase 3 testing would have to establish safety with respect the microbiome, but I have not found anything related to this.

  2. There is a manufacturing concern.
    This is not a biologic, so manufacturing is probably a lower risk proposition than those technologies

  3. The benefits seen in the smaller phase 3 results do not materialize with a larger population. Becuase this drug is based on such a primitive and well known chemistry, I would be shocked if this doesn’t work. The idea of taking a nontoxic antacid pill, that completely absorbs the acid, and leaves in the patient’s poop, seems straightforward to me.

The price recently dropped due to a convertible notes offering. From the press releases, the company is staffing up in preparation for selling this drug. I would not be surprised if TCDA is purchased at any time.

Best Regards,

bulwnkl

PS I picked up on this off of the Biotech board, although this is not a biologic treatment. I think Fuma is the one who first highlighted this company.

PPS Long TCDA 3.4%

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Thanks Bulwnkl for the update on TCDA. I appreciate your coverage of these opportunities in Biotech.

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I imagine TCDA will move at some point, and its going to be rather suddenly.

The other thing to remember is that this is the CEO’s 3rd dance with a one-trick pony for kidney disease. He sold off two other companies prior to starting TCDA.

In the mean time, this company just keeps racking up positive data. Everything from patient oriented quality of life studies (ie, walking up stairs more, ability to walk further without getting as winded, etc), to lab value tracked (bicarb levels / metabolic acidosis levels improved), to a more prolonged time to dialysis and possibly a mortality benefit. PDUFA date August 22 2020. The problem is launching in the current environment - can TCDA actually do it?

There is also Kidney Week - the American Society of Nephrology annual meeting this fall, though I doubt it will happen in person. Plus the post marketing trial due with results in mid 2021.

Its a personal opinion not weighted much in fact, but I would be surprised if TCDA was still on its own in late 2021. Which means some dawdling between now and a sale. We’ll see what the summer brings.
I dont believe we’ll see an 8-12b sale, maybe 40-80% of the stock price on the day of announcement; whether it slowly creeps up until said day, who knows. My own WAG is a 3.5-5b sale price.

3.3% TCDA.

ps- I wonder if this will work its way into other metabolic acidosis usages off label - DKA, sepsis, etc. Just musing on that one, and its not a big market.

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Also some recent direct purchases by the CFO at street prices, and heavy ownership by Orbimed who is, IMO, the best biotech group around.

Very much long, and for a relatively long time.

Cosmid

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