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Post by magnus123 on Feb 11, 2021 14:54:03 GMT
I found this company yesterday and i see a lot of potential here. As a growth opportunity and a Covid19 opportunity.
The lead drug is XHANCE, an "exhalation delivery system" drug, designed to treat multiple nasal diseases. XHANCE has been already approved for Nasal Polyps in 2017, with commercial start in 2018. A phase 3b study in Chronic Sinusitis is also active, with results in H2 2021. The ramp up of commercial activities took a while, but in the last year, they showed impressive growth. Revenue rose from appr. $7m in Q1 20 to ~$10m in Q2 and to ~$15m in Q3, also negatively affected from Covid. It seems that they are finally successful with their commercial efforts. OPTN still burned ~$21m in Q3, down from ~$26m in Q2. If the growth continues, they should be profitable in Q3 or Q4 this year. Cash & Equivalents was $143m in Q3 which should be enough on the path to profitability. I think they need revenues per quarter of $40m +- to be profitable.
Another point is the Covid19 program, launched in June 2020. I have no details about it, but the device should be able to "clean" the nose from Covid to prevent the spread. I will look further into it.
With a market cap of just $247 million, OPTN looks very cheap. I bought my first position today.
I will write more about it later.
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Post by magnus123 on Feb 11, 2021 15:25:23 GMT
The average PT is $17, indicating a huge upside potential. Piper Sandler has a $19 PT, if i'm correct.
The great thing is that you have no binary events here. It all depends on commercialization and that looks promising! The potential Covid19 solution presents more immediate upside potential, but beside from that, this stock looks simply massively undervalued, when we look at the market in general.
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Post by JHam on Feb 11, 2021 17:01:57 GMT
The average PT is $17, indicating a huge upside potential. Piper Sandler has a $19 PT, if i'm correct. The great thing is that you have no binary events here. It all depends on commercialization and that looks promising! The potential Covid19 solution presents more immediate upside potential, but beside from that, this stock looks simply massively undervalued, when we look at the market in general. Thanks for sharing this one. It does look promising. I’ve only taken a quick look at the last 10Q. Lots of cash and they are brining in revenue, but $110M in debt? Do they have a plan to pay that off? I need to dig some more.
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Post by magnus123 on Feb 11, 2021 18:49:31 GMT
The average PT is $17, indicating a huge upside potential. Piper Sandler has a $19 PT, if i'm correct. The great thing is that you have no binary events here. It all depends on commercialization and that looks promising! The potential Covid19 solution presents more immediate upside potential, but beside from that, this stock looks simply massively undervalued, when we look at the market in general. Thanks for sharing this one. It does look promising. I’ve only taken a quick look at the last 10Q. Lots of cash and they are brining in revenue, but $110M in debt? Do they have a plan to pay that off? I need to dig some more. The debt is in my opinion not a big problem, if they can achieve the growth targets. If they burn another 60 million in the next quarters until profitability (A high number in my opinion), they still have a lot of cash and with a 85% gross margin or so, it should be no problem to gradually pay down debt. The market share of XHANCE is still very low, which represents a massive opportuntiy.
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Post by JHam on Feb 13, 2021 7:56:53 GMT
All right I looked more into this one a bit today. And yeah, I agree it is a pretty compelling investment from a current value perspective alone. You can make the argument that the revenue from the first 3Qs alone in 2020 would even justify the current share price. Estimated $104M for 2021, spiking to $321M consensus by $2024 makes it very appealing at this level. Especially since this is only revenue projections for nasal polyps for chronic rhinosinusitis. If they are successful in P2/3 trials for chronic sinusitis (data readout in 4Q21), and can get approved, then the potential here is off the charts.
Nasal polyps is about a $1B market, where as chronic sinusitis is $9B. Chronic sinusitis seems to be a tough nut to crack though, as 3 companies have recently failed in trials. Even if OPTN fails in P2/3 though, they still have the nasal polyps market. I know it isn't exactly this simple, but if you apply a multiple of 8 to $104M in forward-looking revenue for 2021, that puts you at a $16 pps. The same multiple applied to $321M would give you $49.
I am also now more clear on their debt situation. Debt payments don't start until December 2022, so even if cash levels have dropped to around $85M (based on current burn rate) the revenue estimate for FY 2022 is $182M. So no problems there. Apparently they can also draw down the remaining $20M from their existing line of credit if they have $26M in revenue by 2Q21 if they need it.
It's really hard to see the downside here. It's a proven product that will continue to expand prescriptions as they continue to join health plans around the country. My biggest question is simply, why is it so undervalued and why does it have hardly any attention? Am I missing something big here?
Thanks again for finding this one Magnus. I'm strongly considering opening a starter position on Tuesday.
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Post by JHam on Feb 13, 2021 8:00:50 GMT
They had 2.68M in warrants outstanding, but 1.87M of those expired last November. So currently only 810K outstanding that expire in 9/2022 and have a $6.72 strike price. So not worried about that either.
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Post by JHam on Feb 13, 2021 8:25:37 GMT
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Post by magnus123 on Feb 13, 2021 9:39:08 GMT
You just did my job, Jham. Thanks I planned to write it down over the weekend, but you were faster. You can make the argument that the revenue from the first 3Qs alone in 2020 would even justify the current share price. Estimated $104M for 2021, spiking to $321M consensus by $2024 makes it very appealing at this level. Especially since this is only revenue projections for nasal polyps for chronic rhinosinusitis. If they are successful in P2/3 trials for chronic sinusitis (data readout in 4Q21), and can get approved, then the potential here is off the charts.
The studies for Chronic Sinusitis and Chronic Rhinosinusitis are definitely very important and nice catalyst. OPTN would have no competition in Chronic Sinusitis and CR. With the current timeline, they would be the first to hit this market, if all goes as planned. I am also now more clear on their debt situation. Debt payments don't start until December 2022, so even if cash levels have dropped to around $85M (based on current burn rate) the revenue estimate for FY 2022 is $182M. So no problems there. Apparently they can also draw down the remaining $20M from their existing line of credit if they have $26M in revenue by 2Q21 if they need it.That is very nice. Even without CS, they shouldn't have any problem with the debt. It's really hard to see the downside here. It's a proven product that will continue to expand prescriptions as they continue to join health plans around the country. My biggest question is simply, why is it so undervalued and why does it have hardly attention? Am I missing big here?
The market has been likely disappointed from the commercial start in 2018. But to be honest - i don't know a company like OPTN where the commercial start worked out as planned. The market lost the interest into OPTN and very fast, you have such a low valued company. Crazy is that the price didn't recovered yet, given the strong growth in the last quarters. Ultimately, OPTN is a typical buyout target in the long haul, specifically if they get positive study results in 2021. Finviz says that institutions are holding 94.50% of the company, but i'm not sure if that is correct. I see a fair chance the stock will react positive on another strong quarter. For me, it's a great turnaround opportunity, maybe at the exact right time to buy.
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Post by magnus123 on Feb 13, 2021 9:40:04 GMT
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Post by JHam on Feb 13, 2021 17:43:07 GMT
You just did my job, Jham. Thanks I planned to write it down over the weekend, but you were faster. You can make the argument that the revenue from the first 3Qs alone in 2020 would even justify the current share price. Estimated $104M for 2021, spiking to $321M consensus by $2024 makes it very appealing at this level. Especially since this is only revenue projections for nasal polyps for chronic rhinosinusitis. If they are successful in P2/3 trials for chronic sinusitis (data readout in 4Q21), and can get approved, then the potential here is off the charts.
The studies for Chronic Sinusitis and Chronic Rhinosinusitis are definitely very important and nice catalyst. OPTN would have no competition in Chronic Sinusitis and CR. With the current timeline, they would be the first to hit this market, if all goes as planned. I am also now more clear on their debt situation. Debt payments don't start until December 2022, so even if cash levels have dropped to around $85M (based on current burn rate) the revenue estimate for FY 2022 is $182M. So no problems there. Apparently they can also draw down the remaining $20M from their existing line of credit if they have $26M in revenue by 2Q21 if they need it.That is very nice. Even without CS, they shouldn't have any problem with the debt. It's really hard to see the downside here. It's a proven product that will continue to expand prescriptions as they continue to join health plans around the country. My biggest question is simply, why is it so undervalued and why does it have hardly attention? Am I missing big here?
The market has been likely disappointed from the commercial start in 2018. But to be honest - i don't know a company like OPTN where the commercial start worked out as planned. The market lost the interest into OPTN and very fast, you have such a low valued company. Crazy is that the price didn't recovered yet, given the strong growth in the last quarters. Ultimately, OPTN is a typical buyout target in the long haul, specifically if they get positive study results in 2021. Finviz says that institutions are holding 94.50% of the company, but i'm not sure if that is correct. I see a fair chance the stock will react positive on another strong quarter. For me, it's a great turnaround opportunity, maybe at the exact right time to buy. No problem. And Boston Biotech did mine youtu.be/t8Gk8OuNXD4I read through the last 10Q and investor presentation as well, but I like that Boston Biotech used info from the 5 analysts that cover them. It had all consensus projections already itemized.
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Post by magnus123 on Feb 13, 2021 20:29:06 GMT
You just did my job, Jham. Thanks I planned to write it down over the weekend, but you were faster. You can make the argument that the revenue from the first 3Qs alone in 2020 would even justify the current share price. Estimated $104M for 2021, spiking to $321M consensus by $2024 makes it very appealing at this level. Especially since this is only revenue projections for nasal polyps for chronic rhinosinusitis. If they are successful in P2/3 trials for chronic sinusitis (data readout in 4Q21), and can get approved, then the potential here is off the charts.
The studies for Chronic Sinusitis and Chronic Rhinosinusitis are definitely very important and nice catalyst. OPTN would have no competition in Chronic Sinusitis and CR. With the current timeline, they would be the first to hit this market, if all goes as planned. I am also now more clear on their debt situation. Debt payments don't start until December 2022, so even if cash levels have dropped to around $85M (based on current burn rate) the revenue estimate for FY 2022 is $182M. So no problems there. Apparently they can also draw down the remaining $20M from their existing line of credit if they have $26M in revenue by 2Q21 if they need it.That is very nice. Even without CS, they shouldn't have any problem with the debt. It's really hard to see the downside here. It's a proven product that will continue to expand prescriptions as they continue to join health plans around the country. My biggest question is simply, why is it so undervalued and why does it have hardly attention? Am I missing big here?
The market has been likely disappointed from the commercial start in 2018. But to be honest - i don't know a company like OPTN where the commercial start worked out as planned. The market lost the interest into OPTN and very fast, you have such a low valued company. Crazy is that the price didn't recovered yet, given the strong growth in the last quarters. Ultimately, OPTN is a typical buyout target in the long haul, specifically if they get positive study results in 2021. Finviz says that institutions are holding 94.50% of the company, but i'm not sure if that is correct. I see a fair chance the stock will react positive on another strong quarter. For me, it's a great turnaround opportunity, maybe at the exact right time to buy. No problem. And Boston Biotech did mine youtu.be/t8Gk8OuNXD4I read through the last 10Q and investor presentation as well, but I like that Boston Biotech used info from the 5 analysts that cover them. It had all consensus projections already itemized. Thanks for the link. Never heard about Boston Biotech before. For those who prefer the written word, here is the SA article from Boston Biotech. OptiNoses Business Is Thriving While OptiNo....pdf (593.93 KB)
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Post by magnus123 on Feb 13, 2021 20:40:09 GMT
One really important thing about the ongoing commercial effort could be the co-promotion agreement with Kaléo that started on October 1st. This agreement could boost the revenue growth even more, beginning in Q4. "Under the terms of the agreement, kaléo will promote XHANCE to an agreed-upon audience of office-based healthcare professionals, rapidly increasing promotional reach and frequency. The audience includes nearly 6,000 prescribers about half of whom are outside of the current Optinose called-on universe of approximately 10,000 healthcare professionals." ir.optinose.com/news-releases/news-release-details/optinose-announces-xhance-co-promotion-agreement-kaleo
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Post by JHam on Feb 14, 2021 3:18:18 GMT
One really important thing about the ongoing commercial effort could be the co-promotion agreement with Kaléo that started on October 1st. This agreement could boost the revenue growth even more, beginning in Q4. "Under the terms of the agreement, kaléo will promote XHANCE to an agreed-upon audience of office-based healthcare professionals, rapidly increasing promotional reach and frequency. The audience includes nearly 6,000 prescribers about half of whom are outside of the current Optinose called-on universe of approximately 10,000 healthcare professionals." ir.optinose.com/news-releases/news-release-details/optinose-announces-xhance-co-promotion-agreement-kaleoThat is a great news and explains why analysts think sales will really start to pick up in the quarters ahead.
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Post by JHam on Feb 14, 2021 5:54:36 GMT
You just did my job, Jham. Thanks I planned to write it down over the weekend, but you were faster. You can make the argument that the revenue from the first 3Qs alone in 2020 would even justify the current share price. Estimated $104M for 2021, spiking to $321M consensus by $2024 makes it very appealing at this level. Especially since this is only revenue projections for nasal polyps for chronic rhinosinusitis. If they are successful in P2/3 trials for chronic sinusitis (data readout in 4Q21), and can get approved, then the potential here is off the charts.
The studies for Chronic Sinusitis and Chronic Rhinosinusitis are definitely very important and nice catalyst. OPTN would have no competition in Chronic Sinusitis and CR. With the current timeline, they would be the first to hit this market, if all goes as planned. I am also now more clear on their debt situation. Debt payments don't start until December 2022, so even if cash levels have dropped to around $85M (based on current burn rate) the revenue estimate for FY 2022 is $182M. So no problems there. Apparently they can also draw down the remaining $20M from their existing line of credit if they have $26M in revenue by 2Q21 if they need it.That is very nice. Even without CS, they shouldn't have any problem with the debt. It's really hard to see the downside here. It's a proven product that will continue to expand prescriptions as they continue to join health plans around the country. My biggest question is simply, why is it so undervalued and why does it have hardly attention? Am I missing big here?
The market has been likely disappointed from the commercial start in 2018. But to be honest - i don't know a company like OPTN where the commercial start worked out as planned. The market lost the interest into OPTN and very fast, you have such a low valued company. Crazy is that the price didn't recovered yet, given the strong growth in the last quarters. Ultimately, OPTN is a typical buyout target in the long haul, specifically if they get positive study results in 2021. Finviz says that institutions are holding 94.50% of the company, but i'm not sure if that is correct. I see a fair chance the stock will react positive on another strong quarter. For me, it's a great turnaround opportunity, maybe at the exact right time to buy. I see where others have talked about this and even said that the company has actually said that a buyout is the most likely exit strategy. Do you know when and where this was said?
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Post by JHam on Feb 14, 2021 6:20:32 GMT
They still haven't announced anything on their OPN-019 COVID-19 candidate yet despite saying they expected results back in November:
www.sec.gov/ix?doc=/Archives/edgar/data/1494650/000149465020000136/optn-20200930.htm
OPN-019
In June 2020, we announced the initiation of development of a new product candidate, OPN-019. OPN-019 will combine the Company’s proprietary nasal Exhalation Delivery System (EDS) with an antiseptic.
We have performed in vitro testing against SARS-CoV-2 with a candidate formulation in which a 4-log reduction (a 99.99% reduction) in virus count was produced. In addition, we are performing tests against other pathogens and expect results in November.
Because components of the drug-device combination product candidate, including both the active drug and delivery device, are currently commercially available in the U.S., we anticipate streamlined and accelerated development. Subsequent to a pre-Investigational New Drug (IND) submission we have engaged with FDA regarding an IND and clinical development pathway.
We are focused on supporting the initial stages of development within our current operating expense guidance and intend to seek grants, partnerships, and/or other sources of capital to fund future development.
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Post by magnus123 on Feb 14, 2021 15:18:22 GMT
They still haven't announced anything on their OPN-019 COVID-19 candidate yet despite saying they expected results back in November:
www.sec.gov/ix?doc=/Archives/edgar/data/1494650/000149465020000136/optn-20200930.htm
OPN-019
In June 2020, we announced the initiation of development of a new product candidate, OPN-019. OPN-019 will combine the Company’s proprietary nasal Exhalation Delivery System (EDS) with an antiseptic.
We have performed in vitro testing against SARS-CoV-2 with a candidate formulation in which a 4-log reduction (a 99.99% reduction) in virus count was produced. In addition, we are performing tests against other pathogens and expect results in November.
Because components of the drug-device combination product candidate, including both the active drug and delivery device, are currently commercially available in the U.S., we anticipate streamlined and accelerated development. Subsequent to a pre-Investigational New Drug (IND) submission we have engaged with FDA regarding an IND and clinical development pathway.
We are focused on supporting the initial stages of development within our current operating expense guidance and intend to seek grants, partnerships, and/or other sources of capital to fund future development.
CEO Miller said on the last CC that the results were as good as expected. But they want to push the program further only with grants or so to not hike operating costs. I think that they really want to push through break even. www.purdueexponent.org/article_1a806175-84f1-5056-9460-7d2d6e944112.html
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Post by magnus123 on Feb 14, 2021 15:21:28 GMT
You just did my job, Jham. Thanks I planned to write it down over the weekend, but you were faster. You can make the argument that the revenue from the first 3Qs alone in 2020 would even justify the current share price. Estimated $104M for 2021, spiking to $321M consensus by $2024 makes it very appealing at this level. Especially since this is only revenue projections for nasal polyps for chronic rhinosinusitis. If they are successful in P2/3 trials for chronic sinusitis (data readout in 4Q21), and can get approved, then the potential here is off the charts.
The studies for Chronic Sinusitis and Chronic Rhinosinusitis are definitely very important and nice catalyst. OPTN would have no competition in Chronic Sinusitis and CR. With the current timeline, they would be the first to hit this market, if all goes as planned. I am also now more clear on their debt situation. Debt payments don't start until December 2022, so even if cash levels have dropped to around $85M (based on current burn rate) the revenue estimate for FY 2022 is $182M. So no problems there. Apparently they can also draw down the remaining $20M from their existing line of credit if they have $26M in revenue by 2Q21 if they need it.That is very nice. Even without CS, they shouldn't have any problem with the debt. It's really hard to see the downside here. It's a proven product that will continue to expand prescriptions as they continue to join health plans around the country. My biggest question is simply, why is it so undervalued and why does it have hardly attention? Am I missing big here?
The market has been likely disappointed from the commercial start in 2018. But to be honest - i don't know a company like OPTN where the commercial start worked out as planned. The market lost the interest into OPTN and very fast, you have such a low valued company. Crazy is that the price didn't recovered yet, given the strong growth in the last quarters. Ultimately, OPTN is a typical buyout target in the long haul, specifically if they get positive study results in 2021. Finviz says that institutions are holding 94.50% of the company, but i'm not sure if that is correct. I see a fair chance the stock will react positive on another strong quarter. For me, it's a great turnaround opportunity, maybe at the exact right time to buy. I see where others have talked about this and even said that the company has actually said that a buyout is the most likely exit strategy. Do you know when and where this was said? I honestly can't remember... i will try to find it.
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Post by magnus123 on Feb 14, 2021 21:51:09 GMT
A few words about Lyra Therapeutics, mentioned by Boston Biotech as one potential competitor in Chronic Sinusitis and Rhinosinusitis. Only weeks after Boston Biotech published the research about OPTN, LYRA announced disappointing results of it's Phase 2 study in CS and CRS. They call it a "success", because the highest dose showed some significant improvement, but the stock crashed. Their chances of having success should be lower now, although they will investigate the highest dose in a Phase 3 study. But that is not a huge surprise. LYRA intends to start a Phase 3 trial at the end of 2021 - OPTN will get the results of their Phase 3 study by then already. They are years ahead of Lyra, even if Lyra is successful.
Does anyone know how long it takes expanding the label of an already approved drug with the FDA?
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Post by JHam on Feb 16, 2021 15:59:45 GMT
A few words about Lyra Therapeutics, mentioned by Boston Biotech as one potential competitor in Chronic Sinusitis and Rhinosinusitis. Only weeks after Boston Biotech published the research about OPTN, LYRA announced disappointing results of it's Phase 2 study in CS and CRS. They call it a "success", because the highest dose showed some significant improvement, but the stock crashed. Their chances of having success should be lower now, although they will investigate the highest dose in a Phase 3 study. But that is not a huge surprise. LYRA intends to start a Phase 3 trial at the end of 2021 - OPTN will get the results of their Phase 3 study by then already. They are years ahead of Lyra, even if Lyra is successful. Does anyone know how long it takes expanding the label of an already approved drug with the FDA?Good question. I’m not sure. I am now a proud owner of OPTN stock small position to start at $4.71. Will average down when I can.
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Post by JHam on Feb 16, 2021 17:11:51 GMT
Just doubled down at $4.58. Should have been patient at the beginning of the day, but of course FOMO kicked in, lol. Still have some room to add if it goes lower.
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