Botanix held a webinar to update the market on the commercial launch of Sofdra.

One of the key points I took away is that the number of diagnosed patients in the US is now thought to be 7 million out of 10 million people suffering axillary hyperhydrosis. Botanix previously had this at 3.5 million diagnosed. If correct that means there are twice as many patients who are aware of their diagnosis and open to trying a new product. 

This may also increase the number of patients able to access Sofdra with no out of pocket expenses. If an insurer requires a patient to have already tried an alternative treatment before authorising Sondra, it seems having a larger cohort of diagnosed patients increases the number of patients who have already tried a competitor and be eligible for $0 out of pocket coverage. This could bring forward the customer adoption rate and accelerate sales.

Where to from here?

So far so good. I’m bullish on the prospects for Botanix, to the point where I’m asking myself: what am I missing?

There is execution risk: it’s possible that all these plans don’t work, or the product doesn’t work, or the customers try it and just switch back to competing products.

The thing is it’s not actually a new product and has been successfully sold in Japan (though a different formulation). So it probably does actually work. We’ll have to see how many patients try it and stick with it. Maybe it’s better than the alternative but not that much better? 

If these commercial plans come off the upside is significant. I’d expect low multiples of the current share price and then up from there if customer retention is good. 

So why does it appear to be overlooked? There’s no revenue yet, so the stock probably doesn’t look attractive on traditional metrics. You have to understand what is in motion. I also wonder if it suffers a bit from being in a less glamorous market: they aren’t curing cancer. This is OK with me but maybe makes it less exciting to follow for some.

The share price has had a good run up over the last 12 months, and I’m weighing up whether to buy more. I’m suffering from some price anchoring here - I bought it earlier when it was cheap, but if I do believe the price remains significantly undervalued then the current price is attractive with less risk than when I purchased previously. I probably will buy more but be patient. I don’t think there’s going to be anything in the next few months to cause a price inflection.

From Stockhead: Click here

Alive and Kicking: No sweat as Botanix readies for US launch of its hyperhidrosis treatment

Health & Biotech

 Tim Boreham

Alive and Kicking is renowned biotech journo Tim Boreham’s new daily wrap covering morning movers and shakers of note in the ASX Healthcare sector, Monday through Thursday.

• Botanix plans a US launch of its anti-sweating treatment in the March 2025 quarter
• Pacific Smiles shareholders have a new offer to get their teeth into
• Bubs Australia enrols its 400th and final infant for US clinical trial

Botanix Pharmaceuticals (ASX:BOT) says it will launch its approved product for excessive sweating in the US in the March quarter of next year, targeting 10 million sufferers of the common but little-known primary axillary hyperhidrosis (PAH).

In June the US Food & Drug Administration green-lighted its topical gel Sofdra, a “novel, safe and effective solution for patients who have lacked treatment options for this socially embarrassing medical condition.”

PAH is sweating over and above what is required to regulate the body’s temperature. We’re talking about shirt-drenching sweat, not something that can be ameliorated with an extra spray of Brut 33.

It’s the third biggest dermatological condition behind acne and dermatitis.

At an investor update this morning, the company said it had recruited 500 patients via the International Hyperhidrosis Society – yes, there is such a thing – with 18,000 to follow.

Meanwhile, the company has hired 27 sales reps across three regions to kick-start the sales and is wooing the small number of physicians – 4500 or so – who prescribe PAH treatments.

The company says seven million PAH patients have been diagnosed over the past 10 years, while three million remain undiagnosed. Given the US population of 336 million, that’s an incidence rate of a not insignificant 3%.

The company stresses that Sofdra will be eligible for reimbursement, with no out of pocket costs for most patients.

Initially, Botanix focused on developing synthetic cannabinoid treatments for skin diseases including acne, atopic dermatitis and psoriasis.

But results were patchy and in May 2021 the company obtained the rights to the sofpironium bromide (renamed Sofdra).

Unlike antiperspirants, Sofdra addresses the underlying problem by suppressing underarm receptors. Technically, Sofdra works by inhibiting M3 muscarinic receptors in eccrine glands at the application site. 

Found throughout the body, these receptors induce a ‘fight or flight’ response, including sweating and salivating, lactation and even urination. 

The excessive sweating comes in three iterations: primary axillary (under the arms), cranio-facial (head and face), palmar (hands and palms) and plantar (feet). The company has FDA approval for the first. 

Initially, the FDA rebuffed the company because of concerns about the wording of instructions in the Sofdra packaging, but these issues proved surmountable. 

However the March 2025 timeline is a slippage from the originally envisaged mid-2024 launch.

Immediately after approval, Botanix raised $70 million in an institutional placement, so it is well placed to lob its first US underarm delivery.

Botanix shares closed one cent higher at 42 cents, ascribing a meaty $770 million market capitalisation.

$BOT have posted the presentation for their Commercial Webinar later this morning at 10:30am.

Presentation

Good clarity on the timeline and how different US market segments will be accessed.

The Feb-25 HY report should give comprehensive (??) feedback from the Patient Experience trial, as well as the initial progress on IHhS (18,000) and Targeted Patient Lists (1 million).

The Feb report will be very significant, as it will provide decent real world commercial sales data from which forecasts will be updated. I expect there will be huge divergence that early in the s-curve, given the conservatism of current forecasts! That is, unless the product bombs!

Very much looking forward to the next 6 months.

Disc: Held in RL and SM

Some back ground info regarding suffers of Hyperhrdrosis from the International Hyperhrdrosis Society Website (sweathelp.org).

It’s quite eye opening to see the impact this can have on one’s life.

Key Facts About the Hidden Costs of Hyperhidrosis

• There are approximately 15.3 million individuals living with hyperhidrosis (Hh) in the U.S. (Archives of Dermatological Research 2016)
• Hyperhidrosis' impact on quality of life is equal to or greater than that of psoriasis, severe acne, Darier's disease, Hailey-Hailey disease, vitiligo, and chronic pruritus. (Eur Med J Neurol 2001)
• The prevalence of anxiety and depression is significantly higher in those with Hh than those without Hh (21.3% vs 7.5% and 27.2% vs 9.7%, respectively). (J Am Acad Dermatol 2016)
• 20% of hyperhidrosis sufferers report problems using computer keyboards, a computer mouse, mobile phones, and touch screens.  (Health and Quality of Life Outcomes 2017)
• 80% of Hh sufferers say they are dissatisfied with their abilities at work; 42% say that Hh prevents them from following a particular career path; 30% say they become frustrated with daily activities. (Brit J Dermatol 2002 & Dermatology 2006)
• Hh sufferers have a 300% greater risk of skin infections.  (J Am Acad Dermatol 2009)
• 60% of Hh sufferers report negative impacts on general health. (Archives of Dermatological Research 2016)
• 40% of Hh sufferers report physical discomfort. (Health and Quality of Life Outcomes 2017)
• 5% of Hh sufferers indicate they take antidepressants or anti-anxiety medications due to their sweating. (Brit J Dermatol 2002)

So $BOT announced today they are going to hold a "Commercial Day Webinar" on 17th September.

Apparently, the market values the statement "to provide a comprehensive update on its commercial launch plans and market insights for Sofdra™"  at $0.05 per share or $90m. Go figure.

(I'm not complaining, as I believe that once the market starts to get a 2-3 year view of the sales profile, there's plenty to more to come. However, the reaction to this "news" gives some insights into the potential choppiness of the ride ahead.)

Happy weekend all.

Disc: Held in RL (8.3%) and SM

informative article in end points https://endpts.com/next-gen-biotech-acquirers-find-ma-momentum-in-q2/

Take overs/ buyouts for 2024- looks to me like there is some room for Dermatology and Neurodevelopmental drugs - nothing on the list so far !

As @Strawman made special efforts to feed the "spreadsheet jockeys" on the call this morning, I thought it only fair to respond in kind.

Matt referred to the potential that Sofdra really takes off, being a case not at all considered in the E&P and EH valuations of $0.47 and $0.55. So I thought I'd have a go a putting some dimensions around that.

Assumptions (details shown in the spreadsheet below)

• Assume sales build to peak over 5 years according to the profile given
• 5% of diagnosed market captured in yr 5
• 2.5% of undiagnosed market capture in yr 5
• 12 scripts per year at 50% persistency (absolute, not progressive/cumulative)
• %GM 76%; SG&A grows at 20%; R&D at 10% of revenue; nominal DD&A (capital light)
• No debt
• SOI grow at 2.5% per annum
• P/E in 2029 of 50 (which is modest if this baby takes off)

Crank the handled and discount back at WACC of 10% and you get a valuation of $12bn, today.

In this scenario, they are writing 2m scripts p.a. in 2029. That's just double the rate in Japan after 3 years. With excellent marketing and execution, that's not inconceivable.

To be clear, this IS NOT my valuation. I am happy to leave my valuation at a "modest" $1.20.

The point is that if we see a strong revenue trajectory in 2Q25, 3Q25 and 4Q25, then this indicates the order of maghnitude change that could possible emerge - which is probably more in line with where Howie and Vince are thinking.

For sure, there is a lot amount of execution risk. But this kind of upside potential means that this morning I've added a further 20% to my RL holding at $0.335, and will align SM accordingly. I want to place a bigger bet here.

I wasn't around to get on the $PNV bus pre-revenue, but I'm damned sure that I'm on this one with a solid position.

I'll write a separate straw with some reflections on the SM meeting later today.

Disc: Held in RL (7%) and SM

The recording for today's meeting is up, but here are some notes:

Botanix Pharmaceuticals, founded in 2016, spent a bunch of time and money looking for suitable applications of the Permetrex drug delivery technology, and relatively recently hit upon an treatment for primary axillary hyperhidrosis (excessive underarm sweating) -- a product called Sofdra that has just got FDA approval and for which there are 10 million estimated sufferers in the US alone.

For those affected, there aren't a lot of good options (existing options range from antiperspirants to invasive procedures like Botox and nerve surgery.)

But this product, which needs a script from a dermatologist, and for which should have minimal cost for (insured) patients, has the potential to be a bit of a game changer.

The company is now looking to gear up to meet expected demand (FDA approval of marketing materials, distribution setup, and launching a patient experience program etc) and expects first revenues later this calendar year.

Targeting early 2025 for sales force deployment. The company is hoping to bypass a lot of traditional pharmacy challenges with direct-to-patient distribution. And aiming for minimal out-of-pocket expenses for patients through insurance negotiations.

BOT is projecting market share of 30% for diagnosed patients and targeting undiagnosed patients through digital and telemedicine efforts.

Focus is on the US market due to high pharmaceutical spend. But exploring partnerships for other markets (e.g., Japan, Australia, Europe).

The team behind the company appears to have serious form, with people like Vince Ippolito (Executive Chairman) and Howie McKibbon (CEO) demonstrating successful track records in dermatology product launches and exits.

Execution on current plans while exploring additional product opportunities.

Potential for expanding Sofdra™'s use to other body parts.

When asked about the potential financials, Matt provided the following insights:

• In the US, there are 10 million people with underarm hyperhidrosis.
• 3.7 million have been diagnosed in the last 12 months.
• A typical new product aims for a 30% market share of diagnosed patients within a few years.
• Targeting 1% of the remaining 6.3 million undiagnosed or non-recently diagnosed patients through digital and telemedicine efforts.
• Each patient using the product 12 times per year.
• A target net revenue of $500 USD per patient per month

In his words, that's a "very big number" -- if my math's is right about US$7billion per year (of which some will be taken by contract manufacturers and other counterparties.)

Matt referenced the following notable exits during the interview and expressed confidence in Botanix's potential to achieve similar outcomes:

• Anacor Pharmaceuticals (Vince Ippolito, the Executive Chairman of Botanix, was the lead commercial officer at Anacor) developed several products, and was acquired by Pfizer for $5.2 billion.
• Medicis Pharmaceutical (Vince was also a senior commercial officer here) was sold for $2.4 billion.

Matt said the team would be disappointed if they didn't achieve a similar outcome.

Of course, there's a lot of execution risk still present, but it does seem like the company is positioned well.

$70m at $0.30 for 233.333m shares - a dilution of c. 15%.

No SPP as suspected.

Use of funds focused on Sofdra.

Thanks to the loyal shareholders.

While it’s easy to be disgruntled, the big picture is that not too far down the track, this business is likely to be worth a lot more.

Overall, I do want this business to have a strong balance sheet, but I still don’t understand why they didn’t raise a few days down the track.

Will look at the price action at the open and see if I can sneak in some more. Unlikely though.

$BOT has announced approval of Sofdra.

(Just seen the ASX announcement come through as I board flight for 2 weeks holiday.)

$BOT into a trading halt pending announcement of FDA Approval for Sofdra.

Looks like a pre-emptive strike to prevent any leaks ahead of them issuing an ASX announcement.

Watch this space.

Disc: Held in RL and SM

Just over a month ago Euroz Hartley published a short term price target for $BOT of $0.33, predicated on their assessment of the typical run-up in SP ahead of an FDA decision. Sure enough, with days to go, SP has passed this target standing today at $0.345.

I have absolutely no interest in short-term trading, as I am placing a 90% risked bet that this will be a much more valuable proposition. Much more over time. That said, it is interesting to watch the volumes and prices.

Last week's "non-announcement" appears to have given the market a little nudge, reminding the hot money out there about the impending FDA decision.

In the success case, on fundamental grounds, I expect the SP to go a lot higher. However, if there is a negative decision, this baby has pumped up enough that any correction will likely be hard indeed.

At time or writing there are still slightly higher volumes in the "BUY" queue (9m) than the "SELL" queue (7m), but things have evened up a little from this morning. But today marks the 3rd conseuctive day of higher than normal volumes.

tick-tick-tick

Disc: Held in RL and SM

Botanix have posted an update on their progress in regard to FDA approval for Sofdra:

• Botanix has submitted the last label materials to FDA for Sofdra, a treatment for excessive underarm sweating
• Labeling discussions are the final step for Botanix before anticipated FDA approval of Sofdra and have involved discussions with the FDA on product carton design and wording of information that is provided to patients and physicians about the product
• The materials submitted today included the Prescribing Information and Patient Information
• Approval of Sofdra remains on target for 21 June 2024

I was surprised that material is still being submitted this close to approval. I'm not familiar enough with the process to know if this is typical, or suggests more revisions were requested. My understanding is that FDA approval doesn't involve a lot of two way communication so it may well be part of the scheduled process.

A previous announcement mentioned June 20 as the target for approval, but today's announcement refers to June 21. Not sure if this is a change, a typo, or just referring to different timezones (June 20 in US, June 21 here).

[Held]

I attended the $BOT Commercial Webinar today.

Presentation

Obviously, everything hinges on the FDA decision slated for late June. However, that aside, the presentation gives a good indication as to just how advanced they are with their innovative, direct-to-cutomer via telehealth approach.

I have no experience of comparable case studies using this launch approach to be able to critically assess it. However, the team have approached all the Tier 1 payors, and seem to be getting a positive response. Manufacturing and supply chain is all set up.

Today's SP response continues a steady trend of buyers moving in following the confirmation a few months ago that their resubmission to the FDA represented a "Complete Response". That of course does not prejudge the approval decision, but the market is starting to position itself for an approval (as I indicated it would last year).

Clearly, an acquisition (i.e., being acquired) is very much on these folks mind ... a lot of the team has been there before.

Potentially a big upside here. Over to you, FDA. Let the countdown continue.

Happy to hold for a binary outcome, as the CoS looks high. But FDA approval is never a slam dunk.

Disc: Held in RL and SM

$BOT have issued their 4C.

Highlights

Cash holdings actually increased, thanks to exercise of options.

We're now two months away from the expected FDA decision on Sofdra - one way or another that will be a major SP catalyst, with anything but an approval a major surprise.

Accordingly, $BOT are making good progress in preparations for launch. They've focused activities on the US payers (insurers) and report"

"The Company has now engaged players that account for 80% of covered lives in the US and is pleased with the feedback regarding pricing and the relative absence of obstacles for patients to access Sofdra following planned approval."

So, if the approval is straighforward and goes as expected, then FY25 is going to be an important year!

Disc: Held in RL and SM

ASX Announcement

$BOT announcing this morning that the resubmission for Sofdra has been accepted by FDA as a "complete response" and that the timeline from resubmission in December to the approval decision is 6-months. So the decision is slated for June.

This is somewhat of a non-announcement, as that is what has been communicated previously and also what is understood by the market.

However, it is clear that $BOT are being careful to disclose everything around this key milestone to keep investors informed.

I also think it might address speculation by some that the FDA decision may come sooner.

@Nnyck777 posted a summary of the Euroz Harley report on $BOT earlier this year. I tried my usual trick of Googling "Botanix Pharmaceuticals Analyst reports" and bingo, scored the link to the April 2023 report (I don't know if there has been any update) buried somewhere on the Botanix website.

Euroz Hartleys Report

I don't think it has previously been posted on SM so I thought I'd share it for those who are looking at trying to value $BOT.

Note the disclosure that the analyst owns $BOT shares and that Euroz Hartley has been involved in providing corporate advice, raising equity and has been paid for its services in $BOT equity. So clearly they have a lot of interest in the SP of $BOT, so the research has to be viewed with that in mind.

Ahead of developing my own view in the New Year, I was interested to see the market penetration and revenue build profile assumptions. It is curious to see the forecasts have Sofdra very significantly expanding the addressible market, given its price premium to existing treatments. I think understanding this further is important.

The 6-9 month timing delay of the FDA setback is not necessarily that material to the revenue build projection in CY24 assuming a July launch if they position themselve aggressively ahead of FDA approval, which they appear to be doing. Also, given the ability for sales and marketing to target the relatively small number of dispensing dermatologists, the build profile through 2025-26-27 is actually quite pedestrian IF the product proves to be a hit with patients. So maybe, there is an element of risking in the build? Definitely room for some scenario thinking!

The target SP in this report is $0.28, and with the passage of 9 months since the report and a delay of 6-9 months due to the FDA setback, its still probably a reasonable price target today, if you accept the numbers. As I said, I will have a go at this in the New Year, so I am not giving a view on this at this stage.

Disc: Held in RL and SM

$BOT report that they have resubmitted the NDA for Sofdra to the FDA.

ASX Announcement

The original timeline they were targetting when they first received the setback from the FDA in September was for resubmission in early Q1 CY24 aiming for FDA approval in mid-CY24, with immediate commercial launch thereafter.

Along that process and since that time we've received two positive updates.

First, on 4-Dec following meeting with the FDA where the agency confirmed that $BOT's approach to update the labelling and patient use instruction are acceptable.

Second, on 14-Dec $BOT announced completion fo the Human Factors study, importantly stating that ALL patients in the trial successfully "prepared and applied Sofdra in accordance with the revised IFU".

CEO Howie McKibbon said "Our focus now is firmly on preparation for commercialisation as we work with FDA towards Sofdra approval by midyear.”

My Analysis

Unless I am missing something, FDA approval of Sofdra is entirely derisked. (That said surprises do happen!) Provide that centre for the HF study was validated (surely it must be), then a 100% compliance result should remove any questions regarding adequacy of the instructions. I don't think it can be clearer than that.

So, today the clock starts on the FDA's 6-month review timeline. Given everything we've learned Sofdra should get approval in late June 2024, with almost immediate launch.

There has been a mild positive market response today, simply because $BOT is doing what it said it would do, and the emerging news is entirely positive.

They've certainly moved along apace. Even though there is a clear sequence in which things should happen, activities are clearly being driven assuming success. That approach will be applied to the commercial / launch activities as well.

I've added 50% to my position this morning in RL, although overall it is still a small holding for me (1.6%). I'm on holiday now, but will do some proper valuation modelling of $BOT in the new year. Approval and early sales within CY24 means there is a lot of potential upside ahead and I think the risk-reward probably justifies a significantly larger position.

According to Med Esthetics, the US market for treatment of axilliary hyperhidrosis reached $500m last year. Given the attractiveness of the gel applicator over injections (which is the second line of treat for those who do not respond well to other topical applications) if $BOT can capture 20% of the market, i.e., revenue of $100m, then its current EV of c. $240m could easily re-rerate to 2x or 3x or more.

For now, I don't think the SP is going anywhere until the next FDA milestone unless $BOT starts to pick up some more analyst coverage. According to Tradingview.com there is one analyst covering it with a price target of $0.3000. (Do any StrawPeople have that research?)

Anyway, it looks like having quite a low risk profile for a drug company at its stage of development.

Disc: Held in RL and SM.

ASX Announcement

Botanix has successfully completed the planned human factors validation study assessing revised Instructions for Use (IFU) for Sofdra

• All HF Study participants successfully prepared and applied Sofdra in accordance with the revised IFU

• Botanix will now prepare to resubmit the Sofdra new drug application to FDA, including the revised IFU, human factors validation study report, and other requested materials

• Submission of the final component requested for FDA approval of Sofdra remains on track for early Q1 CY2024, targeting FDA approval in mid-CY2024

My Analysis

This is an unequivocal and clear statement. All participants in the study successfully followed the instructions. 100%. No ands or buts.

Of course, the FDA will have to review the updated NDA dossier and see if they agree, but it sounds pretty clear.

This removes the sole remaining impediment to getting Sofdra approved. We just have to wait for the FDA review process to complete.

Good news.

Disc: Held in RL and SM

ASX Announcement

$BOT have issued the above announcement following their feedback meeting with the FDA following the failure to receive approval for Sofdra based on the need to clarify patient instructions.

The purpose of the meeting was to better understand the FDA decision and, more importantly, to confirm that the planned changes to be included in the resubmission address the issues. FDA indicated that the proposed changes will be "acceptable for the planned resubmission of the Sofdra NDA package." While that is not the same as saying that the proposed changes will be approved (they can't say that), it is a positive indication that this final hurdle towards approval will be cleared.

The next step is for $BOT to implement the changes and then test them in a "human factors study'. The new patient information and results of the study will then be resubmitted to the FDA early in the new year, with a decision by mid-year.

Predictably, the SP has bounced, now sitting only 12.5% below its recent high just before the FDA setback.

Disc: Held in RL and SM

$BOT is in a trading halt pending announcement of a capital raising.

Despite earlier assurances to the contrary, the 6-12m delay to the FDA approval of Sofdra was always going to strain remaining cash, so in my view it was a matter of when and not if.

Disc: Held in RL and SM

$BOT are holding their AGM today.

The AGM Presentation has no material new information, but it is a good overview of where they are at. Next milestone is meeting before year end to get FDA guidance on the labelling/PIL feedback that has delayed approval of SOFDRA until mid-CY24.

Presentation has further details on the sales and marketing strategy, including details on sales force, geographic focus and telehealth strategy (recent partnership with UpScriptHealth annoucned separately).

Disc: Held in RL and SM

6A1177772_BOT.pdf

A very good day for BOT holders:

increasing receipts from Kaken sales >$300k for the qrt a big increase from last qrt.

meeting A requested with FDA and hopefully a faster final approval in the wings.

Setting itself up nicely for M&A

I wanted to better understand the precedence around the FDA letter holding up approval of sofpironium bromide gel based on labelling and patient information deficiencies.

I found an interesting reference on the subject in JAMA (Sacks et al. (2014) JAMA 311(4) 378-384). The article is a little too dated for my liking, but the information in Table 5 is interesting. (below)

Of 151 drugs not approved in their first cycle, 71 were subsequently approved following resubmission, with 80 not approved during the lifetime of the study.

What is more interesting is that only 4 drugs (2.6%) were not approved first time for labelling alone, and all 4 of these were subsequently approved.

Although the median delay in the study was 435 days this includes the entire population which is dominated by drugs with safey, efficiacy, chemistry, manufacturing and controls issues, many of which would have required further clinical trials. There's no data on the delay for labelling ony.

So this provides some independent support for the CEO's confidence that the drug will be approved when the labelling feedback is addressed.

It is many years since I was a practitioner in the industry, so it is good to know that the 2.6% of labelling rejections aligns with my own intuition that, while not un precedented, a labelling-only knockback is unusual.

In his interview on Ausbiz yesterday Howie McKibbon said "It's something that we anticipated. If we were going to get any feedback from the agency, we would have that much earlier in the cycle. So we were quite surprised that this occurred," which reinforced my own expectation that label feedback is usually addressed in earlier communication between the FDA and applicant, prior to the final decision.

Thinking about this overnight, I think the reason that this didn't happen in this case, is that the instructions relate to the use of the gel applicator, that requires validation in a controlled environment. So, its not just a change to the label (as you might easily do for a pill or capsule) but a patient instruction that has to be validated by observation and requires a supplemental submission reporting the results. I think that is why a resubmission is required and makes me think that maybe Howie shouldn't be so surprised. (It also weakens any argument about conspiracies!)

Source: Sacks et al. (2014)

ASX Announcement

FDA approval for sofpironium bromide gel has not been granted. FDA requires changes to the patient information provided with the product.

There were no adverse comments regarding safety and efficacy, so $BOT believe the path to final approval is de-risked.

This requires $BOT to makes changes to the patient information in the leaflet and the package, to conduct a trial to validate that the instructions result in correct use by patients, and to resubmit to FDA.

$BOT expect to resubmit in 1Q CY24 and to receive approval in mid CY24. They state the effective delay to commercial launch is 3-6 months.

$BOT say they have sufficient funds to launch and will manage costs.

My Takeaway

While disappointing not to receive approval, the work required to address FDA appears straightforward and, with an absence of any clinical issues, approval in mid-24 is further de-risked.

SP Pullback on any disappointment may provide an opportunity.

Disc. Held in RL and SM

BOT enters a trading halt based on

"pending release of an announcement regarding US Food and Drug Administration (FDA) communication in respect of the Botanix New Drug Application"

I've been through a few of these over the years and this doesn't sound positive. I'm expecting this announcement to disappoint.

I sold out a week or two back so I'm hoping I'm the one that'll be disappointed and not those who have a position....best of luck.

$BOT responding to their ASX speeding ticket on yesterday's price action.

ASX Announcement

Yesterday's 14% jump was on the back of reasonable volumes just under 8m shares, indicating not a lot of sellers willing to get out ahead of the imminent FDA annoucement.

Given that the AGM was on Monday (with no online attendance option I am aware of), I wonder what Q&A took place and whether this led to some attendees to top-up. I wish online options were mandatory!

For example, I wonder if anything was said about discussions on the label, which could be a leading indicator?

One way or another, this one should see some further price action in the next week or two! If the result is positive, I'd like to double my initial holding, but buying discipline on price is important and I think I'll limit the order at $0.40, notwithstanding @Nnyck777's eye-watering valuation well beyond that.

Disc: Held in RL and SM

https://endpts.com/fresh-tracks-pauses-phi-atopic-dermatitis-trial-to-save-money-forge-exit-strategy/

Todays article sighting financial stress as a few of us have concluded. Even with Botanix recent capital Freshtacks may not exist in 12 months with the following stated:

”It appears nothing is off the table regarding the biotech’s exit plans. It is considering financing, mergers, company or asset sales, and licensing, among other options. It’s been mulling its next strategic steps since March.”

It seems to have tried to hold its dermatitis drug following successful phase I trials. However to get this drug through to any further clinical trials it will need a lot more money. Pharmaceutical companies obviously won’t pay as much for a phase I drug. Despite rebranding it doesn’t appear that things are too rosy for Freshtracks.

The big question mark I have around this one is why did Freshtracks agree to close out the licence aggreement for what can only be described as a steal for Botanix. At the time that Botanix bought Sofpironium Bromide they described it as a "Deal structured with minimal upfront payments, with most of the consideration payable in Net Sales milestones and royalties". The recent agreement to close out the licence royalties and milestone payments really doesn't make any sense if you were FreshTracks. FreshTracks were due to get $4m payment when/if the FDA approval is received in late September, so closing out all of the future payments (>$160M potential) for $8.25M seems ludicrously shortsighted by them. This makes me question why would they do this as presumerably there is a good reason. FreshTracks aren't flush with cash but they are also not desperate either and as of March 23 they had $10M in the bank which they said will cover them for the next 12 months. I am also wondering why no other large pharmaceutical company wanted to either buy the rights to Sofpironium Bromide or to buy the potential royalty stream from FreshTracks. I am a bit sceptical about this deal as it seems incredibly onesided in Botanix's favor. Given that until Botanix stumbled upon this drug in early 2022, and prior to that they were trying to develop skin creams from cannabis for achne and rosaca, which failed in phase 2 trials.

This all makes me suspicious that FreshTracks could be the better poker players, and they know/suspect something (as the drug developer) that could become problematic during its market rollout. They have accrued the development costs and are now effectively giving it all away for a total of $13.25m. I doubt this would have recouped their cost of the development of Sofpironium Bromide.

The final nail for me was reading the interview with Alan Kohler where the CEO described the phase 3 results of Sofpironium Bromide as "pretty highly statistically significant". Significance either is or isn't at a specific level, but can't be highly or slightly.

If the drug is legit and Botanix are able to charge $700/ month for the initial target of 300000 paitents with a 5-10% COGS then the financials look impressive and they should do very well, but I have an uncomfortable feeling that this isn't the most likely outcome or the full story. Good luck to holders but I think I will watch this one from the sidelines.

I am reminded by that saying that if you can't see the sucker at the table then it is probably you.