$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.

While arguably smart, it's also a little sneaky. Botanix won't be coming out of their trading halt as there will be a capital raise. It will be very interesting to see the details around this. I'm not goint to lie though, I'm disappointed not to see the pop in the share price this morning.

$BOT has announced approval of Sofdra.

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

FDA A{{ROVAL GRANTED

Good Luck to all who hold!

Held i

$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]

Another Analyst firm E and P has started covering BOT with a price target of 0.55c. I won’t share full report but Botanix has shared this with investors. Check their website.

I think the Euros Hartley report is extremely conservative.

Let me preface this with the fact I hold.

If we consider the insurance coverage (meaning significantly higher $$$), the ability to advertise (market) broadly, the ability to use tele-medicine for repeat scripts and the size difference of the market in the US we can assume growth and its use will be faster than Japan.

I am wondering if EH simply didn’t want to publish figures that even had me repeating my calculations because it just seemed to unbelievable.

Of course one needs to temper their enthusiasm, but even using a ridiculously low 5000 sufferers x 12 monthly supplies at $500 USD/m = 30m USD in sales.

With millions of sufferers and BOT providing a viable alternative to current treatment methods it’s hard to believe the target revenue / profit timelines will not he brought significantly forward.

The FDA June announcement will be an interesting one to watch. A positive announcement de-risks the stock and might open the flood gates to significant price appreciation.

Until then speculating makes for interesting times.

Ecclock numbers are up. 44% increase and Kaken’s largest % increasing product. This adds further weight to the recent details and likelihood of uptake in the US as there has been very solid growth in Japan. Kaken predicting further increase in sales for FY 2024.

$BOT have sent existing shareholders and everyone on their mailing list the updated Euroz Hartley report following last weeks Commercial. It is a thorough and well-written report, so I have put screenshot below in this straw.

Its gives a valuation of $0.33, and clearly seems to encourage the pre-FDA SP uplift short term trade. (Not for me)

I prefer to focus on the long term investment proposition in the success case.

Before reading, be aware the EH supported $BOT in the recent capital raise. It is also likely based on my reading of the disclaimer they have been engaged by $BOT as their defence adviser. EH have been paid by $BOT in shares for the advisory services they've provided. So although EH have certified that this is their own opionion, it is clear that it has been prepared benefiting from the EH collaboration with $BOT management and board.

So when I read it, I read it more as the view of $BOT management than of an independent analyst. So, I wanted to make that clear up front.

You can read the report yourself, but I wanted to highlight a few points.

FDA Approval

The imply a CoS of FDA approval in June as 90%

Benchmarking ASX FDA Knockbacks Leading to CLRs

They compare recent ASX companies that received a knockback at FDA approval (listed in Fig 3. on page 4). Of the 7, 5 were finally approved, one withdrawn, and one under review.

However, what is important, is that none of the sample group received knock-backs purely for label/patient information data. All were some combination of safety, efficacy of manufacutring, with one (later approved) not providing details.

%BOT's CRL was was labelling and patient information. The corrected labelling led to 100% compliance in the human factors study.

Therefore I think 90% is a reasonable CoS, and perhaps given $BOT reports of having high confidence of approval following engagement with the FDA in recent weeks, it is hard to understand the basis for a rejection. Should a rejection occur it would be a shock.

Revenue Profile

Figure 8 on Page 7 provide revenue projections. The growth curve looks reasonable. However, to my eye it looks conservative give the gap in the market that SOFDRA addresses. The projection is to only penetrate 1.0% of the market by 2033 - 9 years after launch.

As ever, the drug will only suit some sufferers, and not everyone will respond. In any event there is certainly upside to this if the drug is well-received by the market.

Cautioning my own enthusiasm, I note that the analysis has considered the progress of the drug in Japan in developing their projections. $BOT reported that Kaken have sold 350,000 units in the last 12 months in Japan. The valuation forecast projects the US taking 5 years to get to this. So following launch (assuming approval) it will be instructive to follow the early US profile compared with the experience in Japan. There has to be a bull case to do much better than the EH profile.

Valuation

Of EH's valuation of $0.33, $0.26 comes from SOFDRA and $0.06 from the development portfolio.

My Quick Valuation - Bull Case - SOFDRA is approved in June with minor risk adjustment

I think the EH sales profile is a prudent forecast, and I base my valuation solely on SOFDRA.

On the basis that $BOT achieve an EBIT in 2029 of US$104m, carrying no debt, and applying tax at 30% and USD:AUD 0.67 give 2029 NPAT of A$109m.

With 1,575m SOI, although $BOT will be highly cash generative quite soon, I'll allow some dilution due to share based compensation, so assume SOI of 1,800 in 2029.

That gives a 2029 EPS of $0.061.

I'll deal with the uncertainty via the P/E ratio, ranging from 25 to 45 - probably very conservative for a high growth pharma company.

I'll add a risk premium to the WACC, and discount at 12%.

My unrisked valuation range is: $0.88 to $0.1.56 (but including a margin of safety in the risk premium)

So, now I am going to apply my 90% CoS, and assume that in the 10% failure case

1. There is a net 5% chance that there is a subsequence approval on what ever the residual issues are, and that the profile gets pushed out by another year, leading to a further discount and a further dilution of 10%.
2. There is a net 5% chance that the drug is withdrawn amd the value of the business is $0.06 of the development portfolio.

Boiling all this up together, and I get a risked valuation of: $1.13

What do I have to believe: 1) SOFDRA gets approved some time in the next year, 2) the telemarketing strategy is successful, 3) the product gets some traction over 9 years with 1% of the potential market.

Not a long bow to draw for a Bull Case.

Now at the start of this straw, I speculated that EH are $BOT's defence advisor. If their valuation is truly $0.33 that clearly cannot be true, because as my analysis shows, if you believe the forecast, and had deep pockets, you'd happily put in a takeover offer today of $0.50 to $0.60. The board should send any acquirer away for anything south of $0.60 or even $1.00 IMHO, given the upside which I haven't even attempted to assess.

So there is a lot of risking being applied to the EH analysis, unless I am missing something!

(I note that my fellow $BOT bull @Nnyck777 is at $1.92 ... I'm slowly getting there :-)

Disc: Held in RL and SM

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

Botanix has successfully raised $13.5m via institutional investors in preparation of approval and a launch of their 'Sofdra' product in the USA.

Unfortunately management have made no mention of a retail shareholding placement. I always find such scenarios ridiculous and speaks of the arrogance and contemptuous of management towards their retail investors when capital raising aren't also offered to them. While personally this won't affect me as I already have my fill and would not have participated myself, I feel others in my position should have been offered the opportunity to obtain more shares at the discounted rate. Currenlty the share price is still hovering around $0.15 while institutional investors accessed a price of $0.13.

$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

BOT with two recent announcements. I can’t help but wonder if those that sold out are either impatient to wait for the share price to recover or fearful that there would be no recovery. Is this an example of the modern ability for retail holders to sell at the touch of a button? Is it a sign of the desire to want to 2x or 3x at all opportunities.

The recent announcements indicate it’s full steam ahead as they wait for resubmission of the required information in late 2023 and then approval in mid 2024.

17/10: FDA approved SOFDRA as trade name

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02726116-6A1174479?access_token=83ff96335c2d45a094df02a206a39ff4

24/20: BOT partners with TeleHealth provide UpScript.

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02729138-6A1175835?access_token=83ff96335c2d45a094df02a206a39ff4

Note: Held IRL started a position after the recent price drop due to the labelling decision. Seemed like an irrational decision. @mikebrisy post regarding FDA labelling issues helped further my conviction that this is a potential early Xmas gift opportunity.

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.

The completion of capital raise to buy out all remaining payments to Fresh tracks from Botanix.

This means Botanix will now keep all profits and have no more milestone payments due.

6A1160149_BOT.pdf

6A1159413_BOT.pdf

Presentation at upcoming biotech conference this week.

For completeness:

The ultimate research question is why Brickell Biotech sold Sofporonium Bromide to Botanix if the drugs is a) so great b) so potentially profitable? Why wouldn’t they take this drug through FDA approval themselves. 

I think both Botanix and Brickell needed something from each other at the right time. 

Botanix needed a commercial product to add to its pipeline – I think COVID added a legitimate time delay to Botanix’s original pipeline plans. 

A faster pathway to revenue generation would help the market to regain faith in Botanix and hopefully increase the share price and investor returns. A commercial drug plus a phase III and multiple phase II drugs is a much more attractive buyout target for big pharma than just a clinical company. 

Brickell Biotech was a small US clinical stage company. Brickell listed on the NASDAQ in 2019. Prior to this it was valued between $50 to $100 million privately in 2015. 

Brickell underwent 5 funding rounds totalling $33.5 million. The biggest investor were Amorepacific Ventures, Charlie Steifel and Pallisades.

2010 Funding Round 1 - $6.2 million

2013 Funding Round 2 - $7.0 million 

2014 Funding Round 3 - $2.2 million

2015 Funding Round 4 - $10 million

2021 Funding Round 5 - $8.1 million

Bodor Labs licenced SB to Brickell and in 2015 Brickell licenced SB to Kaken for Japan and parts of Asia. Brickell got upfront payments and milestones and tiered royalties which were undisclosed. 

2015 also saw Brickell expand its drug offerings into Posoriasis and Auto-immune disease. In 2019 Brickell acquired Vical for its DNA delivery tech for an undisclosed amount. Needless to say Brickell was a clinical stage company relying on funding rounds and small licensing revenue for SB from Kaken. 

Nasdaq listing was successful and saw Brickell Biotech’s (BBI) SP soar. Positive Phase IIB results for 15% SB impressed the market and the stock hit $3.39. COVID affected biotech badly. In October 2020 the stock price was down to 0.56c and in Nov 2020 the Brickell CFO resigned. 

Final funding round in 2021 for $8.1 million kept Brickell afloat. In Sept 2021 Brickell bought another drug DYRKA program in clinical stages.

The stock price dropped again and by May 2022 it was as low as $0.29c. The problem was that SB would take too long to get FDA approval so there was no immediate revenue possibility. I speculate that with Brickell collecting immunology assets and inflammatory assets that it needed to offload the most advanced sellable asset to inject some enthusiasm back into the share price and to fund the rest of the pipeline. 

However the sale of SB to Botanix  for $9 million upfront and $168 million in future sales and milestones did little for the Brickell share price. FDA approval would be 12 months plus away and so there would be a lag before any future revenue or milestone payments were achieved. 

On June 30^th 2022 it looks like the Brickell Board made a decision to do a reverse stock split 1-45 in an attempt to lift the minimum share price bid back above $1.00, as per NASDAQ compliance requirements.

After the stock split BBI returned to NASDAQ compliance in July of 2022 but that was short lived and Brickell again faced delisting in August, 2022. It was in September this same year that Brickell rebranded and announced a strategic shift into immunology and inflammation fields and away from dermatology. 

I feel like as a clinical stage company Brickell was struggling financially during COVID like most of the market and BOTANIX came along at the right time with a chunk of cash and a possible injection of life back into the stock price which was ailing around and below the $1.00 minimum bid price.  

I suspect Botanix ultimately ended up with the better end of the deal. 

Botanix is now 2-3 months away from potential FDA approval and transition to a commercial pharmaceutical company. All just speculation on my part but I think we will look back at this time as a very strange era in biotech history. I think Vinnie was there with a nice price at the right time and Brickell looks like they needed this. 

Competition to SB

Specifically I have dug into THVD-102. 

I think with any investment research it is important to understand a drug’s potential future revenue and any drugs that might eat potential future market share.

To understand THVD-102 lets follow its journey. There are some very illuminating outcomes and familiar characters. 

THVD-102 was initially developed by TheraVida Inc in 2016. TheraVida developed a proprietary patent protected product for the treatment of hyperhidrosis. The company ran a small phase 2 trial combining Oxybutynin (muscarinic receptor antagonist) and Pilocarpine (muscarinic receptor agonist). Importantly this combination of drugs was a possible step forward in hyperhidrosis treatments. 

Phase 2 trials found that Oxybutynin + placebo treatment performed similarly to the combination therapy of Oxybutynin and Pilocarpine, however there was a statistically significant improvement in associated dry mouth symptoms for patients on the drug combined with Pilocarpine. 

The severity of dry mouth side-effects stopped people wanting to take the Oxybutynin alone. 

This was a desirable outcome, the combined THVD-102 drug was thought to be a potential oral treatment for hyperhidrosis and a competitor to Allergan’s Botox injections.

Enter Roivant Sciences Ltd a self-described next generation “big pharma” company proclaiming that its competitive advantage is that is adaptable and nimble.  With a NASDAQ (ROIV) listing and current shareprice $9.70, Market Cap $7.4 Billion and 758.43 million shares on issue.

Roivant’s Mission statement:

“To improve the delivery of healthcare of patients by treating every inefficiency as an opportunity.”

Roivant’s Goal:

“To identify novel or clinically validated targets and biological pathways in areas of high unmet medical need. Then seek to acquire, in-license or discover promising drug candidates against those pathways or targets.”

Roivant Sciences Ltd has developed an agile “VANT” model. Vants are subsidiaries of Roivant’s Sciences Ltd. These Vants specialise in therapeutic areas including immunology, dermatology and oncology. 

Dermavant  founded in 2014 is Roivant Sciences -dermatology subsidiary. Dermavant’s mission is to advance clinical phase dermatology candidates and is willing to carry out preclinical work. 

Dermavant’s flagship drug is VTAMA (Tapinarof 1.0% cream) which gained FDA approval for treatment of plaque psoriasis in adults, in May 2022. Dermavant purchased all global rights to Tapinarof (except in China) from GSK in 2018. They also assumed the responsibility for all developmental milestones owed to third parties.  Roivant paid GSK US$330 million and agreed to run all phase III clinical trials for both psoriasis and atopic dermatitis. 

Dermavant paid GSK $198 million for the preclinical drug with a further $132 million in developmental milestone payments. 

VTAMA is also a potential treatment for atopic dermatitis in children and adults. The drug yielded positive phase III outcomes as a safe and effective treatment for adult and paediatric (non-steroidal option) for the treatment of dermatitis, in March 2023. 

Dermavant has a history of buying pre-clinical drugs and running phase III themselves (presumably to get the drug for cheap). This has proved to be a winning formula for VTAMA through to Feb 2023 the company had sold 100,000 prescriptions, written by 8,600 unique prescribers for plaque psoriasis. Net product revenue for the December 2022 qrt was US$9.2 million. 

Back to THVD-102 – In 2018 Dermavant bought the rights to TheraVida ‘s hyperhidrosis drug THVD-102 and renamed the drug RVT-504. This deal consisted of an upfront fee and milestone commitments of a undisclosed size. The plan was to run this oral drug through phase III trials and hopefully launch it as a competitor to Allergan’s BOTOX. 

Fast forward to June 2022 and Pfizer partnered with Roivant Sciences in a deal to launch TYK2 inhibitor Brepocitnib for the treatment of dermatomyositis and lupus. 

This was an expensive deal and meant that mothballing several Vant subsidiaries would be necessary. Dermavant lost half its dermatology program funding. RVT-504 for hyperhidrosis was cut. So this drug has not been developed any further. 

Now to the interesting part. Howie McKibbon Botanix Pharmaceuticals current Chief Operations Officer most recently served as Senior Vice President for world-wide commercial operations at Dermavant from 2017-2019. Therefore he would have been very familiar with hyperhidrosis market as he was present at the time of the Dermavant purchase of THVD-102. He had not doubt realised this competitor had mothballed their program and would be years away from being a viable competitor to the more advanced SB program. 

He would certainly be privy to Dermavant’s dermatological program and the fact that this company had a gap in both the acne and hyperhidrosis space. 

Roivant Sciences has certainly been known to partner/ licence and buy rights to pharmaceuticals including pre-clinical drugs. I found it interesting that during recent meetings with share-holders there was a huge stress placed on Botanix being very happy to go to market themselves. Perhaps this was a signal that they would not be willing to take a low offer for a preclinical drug from the likes of companies like Dermavant. They are likely holding out for the big offers once the SB has FDA approval and sales.  All speculation of course. DYOR. 

Pls note the one and only time I have shared this on another forum first. I wrote this in response to a poster's question elsewhere. I have included this on Strawman for completeness of any and all analysis on Botanix Pharmaceuticals.

Bot has just dropped below last credit raise price of 9c last month. This has stifled upward momentum it was finally achieving hitting 12c in the last month.

September is D-day for the FDA decision for its lead drug Sofporonium Bromide. This drug is a shoe in (famous last words)! The team leading this company are likely to have first sales rolling out of factories within a month of approval.

Similar to Neuren’s manufacturers Acadia, the team is very experienced who will be manufacturing the product. They have used the suppliers previously with other pharma companies that the team has been involved in.

Read previous straw re market opportunity. We are watching a replica unfold with Kaken’s product Ecclock in Japan.

This one leaves me scratching my head. I could end up with egg on my face but I am pretty confident about this one’s share price significantly rallying on approval.

Botanix has passed mid-cycle review with FDA de-risking Sofporonium Bromides chance of approval in September.

This is a new best in class alternative to surgery. Hence likely to take market share from incumbents on approval. Alternative treatments have a lot of side-effects. https://themarketherald.com.au/__trashed-2023-04-03/amp/

https://www.theaustralian.com.au/business/stockhead/after-neurens-success-which-other-asx-health-stocks-are-knocking-on-the-us-fda-door/news-story/725965da0628dfabb9f7f04833661d08

Interesting post FDA approval of Neuren there is a resurgence in interest of asx biotechs. One glaring omission is Botanix Pharmaceuticals which is awaiting the mid-cycle review for Sofporonium Bromide with the FDA in the next 6 days. There is strong confidence that this treatment for axillary hyper hydrosis will be approved q3 this year. It will be best in class treatment (see previous straws) and has already met stringent Japanese standards and has been approved.

This company has run foul of investors due to mixed acne results in 2019 and is still suffering from poor investor sentiment not unlike PXS.

Although not sub 1 cent.

https://stockhead.com.au/experts/tim-borehams-20-asx-stocks-that-are-primed-to-run-in-2023-part-2/?amp

#1 ASX Small Cap Biotech and potentially 3 phase 3 Products in 2023 #A US Pharmaceutical take over target in the making

This week Botanix Pharmaceuticals announced a successful phase 1b/2 trial of its Rosacea drug BTX 1702. The share price bumped 10% which given current market conditions was not a surprise. The only thing rewarded in the current market is profit and a well-controlled balance sheets. Speculative pre-revenue biotech stocks have taken a beating during the recent market cycle and this is likely to continue. However with mid to long-term time frames this may be a once in a lifetime opportunity to accumulate at share price lows. 

The latest Rosacea ASX announcement, clinical outcomes and study photos can found here (https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02581684-6A1115189?access_token=83ff96335c2d45a094df02a206a39ff4)

Rosacea is a socially embarrassing skin condition, where patients experience very red and blotchy skin. This has traditionally been incredibly hard to treat.

Botanix Medical Adviser Dr. Ira Lawrence comments on the success of the trial using Botanix synthetic CBD formulation BTX 1702 and the novel Permatrex delivery system:

“To achieve this level of inflammatory lesion reduction and improvement in both IGA and CEA within 8 weeks is very exciting, particularly with such an excellent safety profile. There is potential for even greater efficacy if the treatment period is extended to 12 weeks duration, especially if the efficacy continues to improve, as it did at each time point assess in this study, and could represent the possibility of best-in-class performance with BTX 1702.”

I believe Botanix Pharmaceuticals is a hidden gem. With approval of its flagship drug for Axillary Hyperhidrosis Pending in 2H FY 23 and manufacturing preparations already underway, this is one biotech which has a strong possibility of transitioning to a revenue generating business by the end of next year. 

Botanix has no debt. On Sept 12 it completed a successful capital raise with AUS $7.5 Million worth of shares to sophisticated and institutional investors. The balance sheet is healthy with enough funds for Sofpironium Bromide FDA filing and manufacturing. As well as funds assigned for the BTX1801 anti-microbial drug Phase 2b trial and potentially the Acne BTX 1503 Phase III trial. 

See the table below to follow this companies pipeline. 

Current Product Pipeline 

There are 2 more Phase III studies pending  for FY 23 and there should be enough money for completion  of the BTX 1503 study. However with the latest Rosacea trial success it is more than likely that share-holders may see a further capital raise next year to push this drug through Phase III trials more quickly. I think this will be money well spent. 

The last 2 rounds of capital raisings that have taken place in the past 4 years have been filled quickly by sophisticated and institutional investors. Retail shareholders have not been given an opportunity to participate and have had to buy on market. It would be nice to allow current shareholders to access capital raisings at a discount to SP in the future as a reward for their patience. 

An alternative possibility to another capital raise to fund the Rosacea phase III trial will be to partner with a larger US pharmaceutical company. Vince Ippolito, Executive Chairman, has suggested a Botanix buyout is the ultimate goal however the timing of this is pure speculation. His last successful early stage pharmaceutical company sale to Pfizer had at least  1 successful FDA drug approved. So the earliest likelihood of a future sale would be following Sofpironium Bromide  FDA approval in the later half of next year.

The results look very promising for a stand-alone rosacea drug and a phase III trial next year. This recent clinical trial also helped to further prepare for the BTX 1503 moderate to severe acne trial which is due to start its phase III trial next year also. The safety efficacy of a stronger dosage of 10% synthetic CBD is now established. There were no adverse effects recorded with the new stronger concentration. 

Market Opportunity

*Projections from Euroz Hartley Report based on Kaken pharmaceuticals revenues where Eclock (Sofpironium Bromide 5% gel)  is already approved In Japan and being sold.

** Projections use Eclock prescription sales estimates and US nearest competitor QBrexa pricing (approximately US $540/ month) to estimate FY 23 potential revenue. 

In its latest Botanix report Euroz Hartley made a valuation comparison to another ASX listed company, Clinuvel (CUV). With its current maket cap of just under $1 billion and its estimated sales of US $45 million in FY 22. It currently has a share price of $18.41 per share.

With approval of Sofpironium Bromide 15% gel first year revenue projections of US $130 million+ makes a compelling case as to why investors may want to look at a little closer at Botanix Pharmaceuticals.

Cheers

Nnyck

Botanix Pharmaceuticals has just announced acceptance of its filing for Sofpironium Bromide as A NDA with the FDA. Botanix has a very experienced team that between them have successfully launched approx 40 dermatological products in the the US.

SB has already passed the stringent hurdles of the Japanese regulatory system and is generating revenue.

This will mean If FDA approved SB -Botanix will become an income generating pharmaceutical company by Q4 FY 23.

6A1111220_BOT.pdf

Interesting article highlighting some fan favourites PME included but also mentions Neuren Pharmaceuticals and Botanix Pharmaceuticals potential to be market giants if dominoes fall the right way. The elusive next CSL many of us are hunting for.

https://www.livewiremarkets.com/wires/is-another-csl-hiding-on-the-asx

#Botanix #FDA filing accelerated #2clinicaltrialsontrackforcompletionQ3

22/23 are shaping up to be pivotal years for this small Australian biotech. Currently sitting with a $68 million market cap and $17 miilion cash on hand. 

I am a strong believer in this company due to the proximity to revenue and the range of potential products. This I believe diversifies the risk of my investment. The conditions targeted are common problems that have lacked innovation for decades. Often competitors such as acne drugs can have severe side effects (e.g. roacutane and suicidal ideation and intolerance to sun exposure). So far synthetic CBD is proving to be incredibly safe in all clinical trials. 

There is a current Product Pipeline of 5 drugs for a range of conditions. 1 pending FDA approval and commercialisation. 

Table 1: Current Product Pipeline

(Source: https://botanixpharma.com/pipeline/)

This week’s announcement was very positive for Botanix Pharmaceuticals next step toward revenue generation. It’s new drug to treat PrimaryAxillary Hyperhydrosis (excess sweating) Sofpironium Bromide (SB) filling for NDA status with the FDA has been bought forward to this quarter. There is a very high chance of FDA approval given that 85% of patients who used SB experienced clinically meaningful improvement in their condition during the Phase 3 trial. Plus SB is already approved and currently being sold in Japan. 

If successful SB will be Botanix' first product to market. 

Botanix announcement confirms commercialisation preparations are already underway. Vince Ippolito President and Executive Chairman released this statement:

“over the coming months Botanix will commence the process of preparing for inspection of its contract manufacturing site and other FDA pre-approval activities.”

Furthermore Rosacea (BTX 1702) Phase 2 Clinical Trial is fully recruited and underway. This clinical trial is crucial in advising synthetic CBD dosage that will be used in upcoming Phase 3 Acne trial. 

The canine dermatitis pilot study (BTX 1204A) is also fully enrolled and due for completion in Q3. This will advise whether future human dermatitis trials will be pursued and provide another quick to market commercialisation opportunity if successful in the veterinary market. 

Recent Broker report released by Euroz Hartley. Taking in to consideration the latest SB drug for HH. Lifts price target back to 0.25c. Still rosacea, atopic dermatitis and anti-microbial platforms to factor in.

https://botanixpharma.com/wp-content/uploads/BOT_13May22.pdf

Huge news for Botanix more details to follow. Management taking strides to purchase commercial ready products to fund business.

https://www.globenewswire.com/news-release/2022/05/03/2435013/0/en/Brickell-Biotech-Announces-Sale-of-Sofpironium-Bromide-to-Botanix-Pharmaceuticals.html

Botanix Pharmaceuticals released a very positive announcement today and didn't go red! Trust me you would get it if you held. The company is certainly demonstrating its salt with its ability to navigate the FDA maze.

BTX1801 - Anti-bacterial product had received previous FDA fast track status for post surgical infections. Matt Callahan and the team revealed a slight change in tactic late last year - with a pivot toward bloodstream infections in haemodialysis patients instead. It was clear that this approach would be more clear cut for designing trials, there was a significant need and essentially no registered competition.

The FDA clearly agrees. Results for the study are expected by the end of the year.

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02514465-6A1088574?access_token=83ff96335c2d45a094df02a206a39ff4

No doubt many of us are finding it harder to find decent returns in the current markets. I know as someone heavily invested in health care and the tech space my IRL portfolio has seen prettier days.

With the health care index tipping as low as -12.68% compared to the benchmark S&P ASX 200 you can be forgiven for looking away and going to the pub.

However there are some bright spots in amongst the carnage. Kalkine media has just released an article highlighting the best year to date returning healthcare stocks https://kalkinemedia.com/au/amp/news/stock-market/from-imc-to-ala-healthcare-stocks-with-best-ytd-returns

It will be no surprise to current Strawman holders some of the better performing stocks these include:

IMC

Neu

LCT

BOT

ALA

I currently hold Neu and BOT IRL and on Strawman.

Neu has had multiple major milestones over the past 6/12. Its major lift was toward the end of last year however positive momentum has continued in 2022 with YTD returns of 7.96%. Share holders are patiently waiting for the second company inflection point in June this year. Shareholders are optimistic of FDA approval of its drug Trofinetide for the treatment of Rhett Syndrome after a successful Phase 3 study. I am keen to stay invested for this as well as a possible rest of the world deal for this same drug- this could be announced anytime.

BOT has seen even better YTD returns of 41%. Management has been actively recruiting and made recent high caliber hires to join its Board to help with upcoming commercialization. A new Non-Executive Director position has just been filled by Danny Sharp - who has 30 years experience in commercial banking with specialties in healthcare and technology. He also currently sits on the Board of Alcidion (ALC).

The CEO and President of BOT have been hitting the pavement at recent roadshows eluding to a likely upcoming commercial deal with an expanded product line involving their patented skin delivery system Permatrex. They are actively seeking assets to acquire that can quickly and easily utilize the delivery system and be ready for immediate commercialisation. This may provide a revenue stream much quicker than shareholders had been expecting.

It is nice to hold stocks with plenty of cash in the bank and further upcoming inflection points.

Biopharm magazines have frequently mentioned the number of cashed up pharma companies that are looking to buy startups with progressed assets. In an inflationary world that is becoming increasingly difficult to get access to capital, I see the biopharm sector as being a promising anomaly.

Botanix Pharmaceuticals has just received a $2.75 million R & D tax incentive. Adding to its already strong cash position of $16.8 million. Renewed interest in this stock and impending readouts across multiple phase studies and products has seen a nice SP rise for holders in the last few months.

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02503247-6A1083605?access_token=83ff96335c2d45a094df02a206a39ff4

#Botanixbigyear2022  #Upcominginflectionpoints #Interviewsharecafe

Biotech investing can be a long, drawn out, high risk, exhilarating and frustrating endeavor. It certainly isn’t for everyone. Botanix Pharmaceuticals has been one of my most memorable stocks. I have been invested in and out since 2018.

As small cap investors we can get caught up in a story. Early biotechs especially – often have no revenue and will come cap in hand to investors, time and time again. As early entrants you will witness first-hand how often cash can magically be transformed to smoke – it is amazing to watch.

However, investors can keep coming back attracted to a story – the allure of the unicorn, the cancer cure, the miracle breakthrough, it can keep you hooked. Other times biotechs attract people who have been personally affected by whatever ailment a company is attempting to fix, hoping that the drug will give relief to loved ones or lengthen or improve quality of life.

Unlike other biotechs that I have been invested in Botanix has not asked for anything from me as an investor, other than time, patience, a strong will and cast iron stomach. Since I have been invested there have been no on market capital raises and there are not currently any plans for one in sight.

Botanix is in the unique position of having $17 million cash on hand. Given the current macroeconomic headwinds in the biotech space the past year – this is nothing to sneeze at.

The cash burn has been very well managed (refer to reports and previous straws). Botanix raised $40 million at $0.20c a share from US investors in 2019. This has kept the company ticking along nicely.

Executive Director – Matt Callahan was interviewed on Share Café this week to discuss 2022 and impending inflection points for this company.

 Summary of Botanix Pharmaceuticals Position:

 Market Cap: $52 M market cap

Cash on hand: $17 million

Current SP: 0.054c

Shares on issues: 973,142,074

Matt Callahan has overseen: 5 drugs approved through FDA process

Vince Ippolito President and Executive Chairman of Botanix: 2 previous companies sold to big pharma for $2.6 billion and $5.2 billion.

Upcoming Milestones Summarised Nicely (share café interview slide)

Botanix planning to commercialize and market its own products in the short term. Add revenue to fund clinical pipeline a priority. Next 6-9 months expect announcements on immediate commercialization deal in the dermatology space.

Pipeline

Target Markets

No evidence of anti-microbial resistance with synthetic CBD in studies conducted so far!!!!!! - ground breaking (2021 paper released in https://www.nature.com/articles/s42003-020-01530-y.pdf Communications Biology

Further studies in antibacterial properties of synthetic CBD underway this year. Game changer.

No new products in the dermatology space with a new mechanism of action for 25 years. Synthetic CBD is safe in large dose testing so far. FDA very likely to approve drug due to safety.

Alternatives - oral antibiotics Roacutane suicide risk for teens (Matt believes FDA would not approve such a drug for acne in modern times). Alternatives have significant side effects - synthetic CBD no recorded negative side-effects.

During the interview Matt acknowledges the disconnect between the clinical development pipeline and the share price. Also mentions how incredulous the team were to announce positive antimicrobial trial data and to watch the share price drop. He believes the next few months will see SP growth back to 20-25c range. 

Hints: to watch this space with upcoming announcements next qrt on doggy dermatitis trial and commercialisation opportunities.

Matt states and I paraphrase ‘Vince Ippolito is a commercial animal and is raring to go.’

Dermatology products are a much easier to sell in the US then most other drugs. With 5000 Dermatologists keen to trial new potentially beneficial products for the patients. Matt sees a salesforce of 30-40 people on the ground as a future strategy to get potential products selling.

Disc: Held Strawman and IRL

Botanix Pharmaceuticals Management

24.09.21

 Botanix has announced the expansion of their Senior management team with the appointment of a new Senior Vice President of Pharmaceutical Development Dr. Jack Hoblitzell PhD. 

The nay sayers could potentially argue this is a sign of bloated management expenses for a company that currently has no revenue outside Australian Government R&D grants. However, it all depends on the calibre of the new recruit. Botanix has been reasonable with cash flow management and managers keep salaries low and opt for future options in their packages. 

Botanix has made no secret of future strategies to add quick revenue streams. The following angles are being pursued:

1) BTX1204A for canines and 

2) Leveraging its exclusive lease of the ‘Permetrex’ delivery system (alcohol free system to improve penetration of drug molecules through the skin). 

A quick LinkedIn stalk and review of Dr. Hoblitzell (why is some random chic from Australia looking at my profile?) suggests that he is a very appropriate hire at this point for the company. 

Dr. Hoblitzell BIO

The press release promoted him claiming he has experience leading world class technical operations to deliver new product launches (tick).

Years of experience with regulatory submissions – wrangling FDA (tick).

Excellence in manufacturing and supply chain management. If anyone else was around for the great acne debacle of 2019 you would get this! CBD was a restricted drug in some states in the US and could not be transported across state lines…..nightmare. (so tick tick).

Experience supporting pipeline development and ACCELERATING the development and SCALE UP for commercial capabilities (tick tick tick). 

Dr. Holblitzell is a registered pharmacist.

Where has he come?

 I note a lot of Pfizer ties revealing themselves for Botanix Pharmaceuticals. 

Formerly: 

Snr Vice President Of Technical Operations at Assertio Therapeutics Inc. May 2020-June 2021 (not there long). Assertio Therapeutics has a $0.04 Billion dollar market cap. This company specialized in pain relief drugs: diclofenac potassium, indomethacin, oxycodone Hcl. 

Dr. Hoblitzell has a fairly long history of overseeing mergers of pharmaceutical companies. This is also a point that Vince Ippolito CEO has frequently addressed that Botanix is a likely buy out target with the number of product pipelines they are developing. Frequently, referencing Jazz pharmaceuticals buyout of GW pharmaceuticals for $7.2Billion for their CBD based epileptic medication. 

Of course everyone invested or researching Botanix Pharmaceuticals is well aware of our illustrious CEOs background. One of the main reasons I have stayed invested. He oversaw the Pfizer buyout of Anacor Pharmaceuticals dermatology platform for $4.5Billion. 

Dr. Holblitzell has also been Senior Director of Pharmaceutical Technology and Global Manufacturing Services at Pfizer. Here he is endorsed by several Pfizer colleagues. At Pfizer he was responsible for the integration of King Pharmaceutical products and processes into the Pfizer co-development and manufacturing supply networks. 

He was also Vice President of Technical Operations at Zyla Life Sciences for 5 years. 

He was endorsed by former colleagues from King Pharmaceuticals where he worked before a buyout by Pfizer. 

Lynn F Palmer Senior Vice President: Technical Operations of Pharmaceuticals at Osmotica Pharmaceuticals (Worked together with Dr. Holblitzell at King Pharmaceuticals) wrote:

“Jack is a practical and effective Pharmaceutical Development Executive. He has effectively  led the development of multiple formulations, and scaled them up to commercial scale. He has extensive industry and technical knowledge of formulation development, product stability, pharmaceutical packaging and equipment capability and setup. I strongly endorse him. “

Pfizer’s brief

 A pharmaceutical company that applies science and global resources to improve health and well-being at every stage of life. Pfizer has a $246 Billion market cap. 

Interesting to note Pfizer looks to “set the standard for quality, safety and value in the discovery, development and manufacturing of medicines for people and animals.” (synergy with animals here as well) 

Summary

He seems like a great get. 

A lot of tie ins with Pfizer for both he and Vince – is this the hope? A Pfizer buyout?

I am really curious as to why a po-dunk back water Perth company with a $64 Million dollar market cap, currently trading at $0.074 per share is attracting these recruits. I certainly have my thesis – the CBD molecule patents and FDA fast track approval status achieved for their anti-microbial platforms are certainly compelling. 

Announcement: Canine Atopic Dermatitis Program Launched 

29.09.21

Today Botanix Pharmaceuticals announced the BTX1204A proof of concept (POC) canine study for atopic dermatitis is underway. 

Pilot study results have been encouraging and this POC also has a two-fold goal of testing effectiveness of the treatment and testing a much stronger formulation which will likely be used in human trials of atopic dermatitis going forward. 

The canine study will be carried out in Aus and NZ. 

45 canines will be tested across 3 sites. The results of three study groups will be compared BTX1204A high dose, BTX 1204A low dose and Vehicle arm. Canines are tested twice daily for 28 days. 

Results will be rated on the Enhanced Pruritis Score (EPS) and Canine Atopic Dermatitis Extent and Severity Index (CADESI-04).

There is great hope that successful results will lead to a quick to market product in the canine space. There is an added benefit, as successful trials in dogs will be encouraging to pursue further human trials with these stronger dosage formulations (as dog and human dermatitis is biologically very similar).

Synthetic CBD studies so far have indicated huge potential anti-inflammatory and anti-bacterial properties of their products. 

There is a huge need and TAM for safe and effective products for dermatitis. 1 in 10 people will develop dermatitis at some point in their lifetime (31 million US figures). 

BTX1702: Update

1b Rosacea study – randomised double blind vehicle-controlled study has successfully started recruiting across sites in Aus and NZ. This study has an 8 week treatment period. 

BOT is looking for 120 recruits. 

Botanix is establishing itself as a multi-pronged product developer. There are now 2 development platforms 1) Dermatology and 2) Anti-microbial. Botanix Pharmaceuticals is pursuing effective, clinical based, FDA approved solutions for acne, rosacea and dermatitis. Plus hoping to be the first company to market with a new drug class of anti-biotic. This will be the first new type of anti-biotic class developed in 30 years. 

As a long suffering share holder I am excited about the smart pivot of management to pursue the canine option. This product if successful will be much quicker to get to manufacturing stage to provide this company its first revenue stream. I could see this happening within 12 months. There is plenty of money in the bank with +$21.56 Million not bad for a company with a $65 Million dollar market cap. Management is proving very wise to date keeping their cash burn low and taking massive pay haircuts during covid in exchange for future options. 

Founder led and large management holdings that have not been sold down on intermittent share price rices help me to keep the faith. 

I really like what this company is doing and feel its undervalued.  Its phase 2a results a few months ago were missed by the market and the shares have dropped since.  For results like that for a 2a trial it should be at about 18c and with future testing as the product evolves it should go up from there.

https://www.youtube.com/watch?v=C4vxn7gvws8

On Tuesday 2nd of Feb 2021 BOT went into a much anticipated trading holt for the release of results of its BTX1801 Clinical Phase 2a study. Preceding weeks had seen BOT share price peak at 18c around the 25th of January in anticipation of results. This was a far cry from the 29c the company reached on 2nd of August 2019 on anticipation of a less mature stage of the company without the anti-microbial drug potential in the mix. 

The share price leading into the anti-microbial BTX1801 announcement was also a much bigger discount to the Cowan investment of 20c per share made by the US company in 2019 in the lead up to BTX1503 acne results.

As investors are aware following mixed results of BTX1503 acne in 2019 the share price more than halved to 12c on October 25th. It continued its gradual decline to as low as 2c around March 2020 before a slow climb back to its recent 18c peak prior to the anti-microbial results. 

Results released on the 3rd  of February 2021 were excellent. Primary end points of the phase 2a study were met. The CBD BTX1801 gel and ointment formulations both successfully and safely reduced Staph infections in the nasal cavity of patients verse a vehicle control. A collective shareholder sigh of relief and anticipation was warranted.

Mr Market had a very odd response to this result.

Each clinical trial stage passage potentially de-risks the drug and improves chances of success and future commercialisation. This process is analogous to climbing each progressive rung of a ladder.  Share-holders would then rightly anticipate share price rises accordingly as each rung is passed in Biotech companies. However despite this result trading saw a closing price of 17c on the 3rd following the announcement and a gradual decline to 13c at close on the 8th of Feb, 2021. This price was near parody to the SP after the disappointing mixed results of the acne BTX1503 drug in 2019. 

The share price does not currently appear to reflect a successful 2a BTX 1801 trial outcome. 

Seemingly the market failed to acknowledge the passage up another rung of the ladder toward a potentially efficacious and safe new anti-biotic class with synthetic CBD BTX1801. This will be the first new class of antibiotics in 60 years. It was also the first human trial in the world to show that CBD can kill Staph aureus in 76% of patients after 5 days of treatment and that it has residual effects for up to 28 days. 

This was a phase 2a study so optimal treatment dosages and comparisons to other drugs on market was not the study design. Safety and early efficacy and formulation methodology are being established. Nothing more nothing less. Was it safe, tick, was it effective, tick.

The meeting of the primary end points of this BTX1801 study can likely be extrapolated to  provide further supporting evidence for the other drugs in the pipeline using synthetic CBD. Acne successfully kills staph aureus. Staph is part of the natural flora of the skin and overgrowth of this bacterial gets into pores causing acne. Ergo reduce bacterial load reduce acne. 

Hence the results are another rung or two up the ladder toward successful commercialisation of potentially 2 pipeline drugs.

Biotech investing is a complex game and one where opportunities can be found and advantages can be had for those with a scientific background. Scientific language seems to be the area of confusion where market price can be won or lost or confusion and games can ensue to the advantage of those who know how to play. What do the primary end points mean? What are p values? What sample sizes carry statistical significance. Market misreads are certainly not unique and hesitation of market responses can be used to traders and investors advantages. However it can also lead share-holders to sell when they should hold or buy more. 

Add to the complexity that traditional value investing rules do not apply when assessing a Biotech. Firstly there is rarely a commercial product producing income in early start up companies. R and D tax refunds are often the only revenue these early stage businesses rely on. Otherwise outside investment from bigger pharmaceutical companies or entities with a vested interest may produce some capital. 

So why would an investor take on the risk of investing in the Biotech? How does one even start to value or understand the market capitalisation of these kinds of companies when traditional metrics are out the window?

Each investor has their own reasons and motivations: some believe in the science or the potential life altering outcomes of the new therapeutic or diagnostic test being developed while others know that the biotech space is traditionally a high risk and high reward play. 

Biotech companies rely on their shareholders to provide working capital to progress from pre-clinical through to often costly phase 3 trials.

I believe value comes from novelty, the problem being solved, the need and the potential addressable market and the number of products in the pipeline of the Biotech. 

So rather than looking at balance sheet and revenue growth the incremental value increases occur with the rungs climbed up the ladder from the pre-clinical proof of concept through to the Phase 1 safety through to the Phase 3 results. All are significant milestones for these companies. 

90% of drugs fail to reach commercial products due to safety issues. Botanix Pharmaceuticals has a SAFE synthetic CBD product across all its drug channels: acne, anti-microbial and rosacea.

In a study of 640 phase 3 novel therapeutics 54% failed in clinical development. So even if a drug makes it to phase 3 less than half will be approved to commercialisation. 57% of those drugs will fail due to inadequate efficacy (Hwang T.J., Carpenter D., Lauffenburger J.C., Wang B., Franklin J.M., Kesselheim A.S. Failure of investigational drugs in late-stage clinical development and publication of trial results. JAMA Intern. Med. 2016;176:1826–1833). BTX1801 reduced Staph infections and destroys the bacteria through destruction of the cell wall. This drug potentially can be used without Staph aureus building resistance to it (lab tests only so far).

BTX 1801 anti-microbial once again has shown to be safe, tick, effective in 2a trials, tick. Given its tolerability and safety profile there are low drop out rates in previous trials and likely to be compliance of participants in trials moving forward. The management team also has experience with following FDA study guidelines given their vast experience at previous companies. Failing to comply with FDA study regulations are another reason trials frequently fail. 

I perceive the biggest likely hurdle for this company is not failure in trials due to efficacy, safety or not following FDA regulations. The biggest risk given COVID is recruitment and trial interruptions moving forward. Hopefully this can be mitigated or future trials can be continued in Australia and New Zealand as opposed to the US to ensure continued timely progression of the companies pipeline. 

Botanix pharmaceuticals is now a company with diverse and maturing product pipeline with a 2b Rosacea trial about to begin Q1 2021. This addresses a unique market in its own right and simultaneously provides an FDA building block toward Phase 3 BTX1503 acne the final phase prior to commercialisation. Further anti-microbial BTX1801 advancement should be fast tracked and phase 2b trials should also begin this year. 

Given this companies progression up the ladder I do believe it is currently significantly undervalued. Share-holders will stay and more will be added to the register to help fund future studies but reward is needed to incentivize new money into Biotech companies. That is the nature of the high risk high reward play. Opportunity costs can indeed be great if money remains parked in these companies without bouts of significant reward. 

It is obviously up to the each individual shareholder to assess whether the progression of the drug pipeline of this company has merit. 

Phase 2a Study Shows BTX 1801 Eradicates Staphylococcus Aureus

• Top-line data showed that two different BTX 1801 formulations (ointment and gel) were safe, well tolerated and successful at eradicating Staphylococcus aureus.

• Eradication rates as high as 76.2% were obtained at Day 7 for BTX 1801 ointment, with eradication effects extending through to Day 28 of the study to 23.8%, despite no treatment after Day 5

• Botanix continues to assess the clinical utility of synthetic CBD for the treatment of a variety of infections and also develop its proprietary CBD analog assets

In the next 2-3 weeks Botanix Pharmaceuticals is about to reach a significant clinical milestone in its drug development program. 

Results of  the Clinical 2a Antimicrobial BTX 1801 program is just about due and this will be a huge potential inflection point for this company. 

Share price took a beating on mixed results for its acne phase 2b trial in 2020 seeing the Share price drop from a peak for 29c to lows of 2c. 

Investor faith in this company has waivered. However the Australian arm of these results were incredibly promising. The poor result from the US arm was due to complications in formulation consistency in this country, who was not experienced in the development of the carrier solution Permatrix or in the manufacturing of synthetic CBD used. This issue has since been rectified by sourcing a consistent manufacturing solution for future trials in the US.  

Botanix is developing simultaneous programs:

1)    Entering phase 3 Clinical trials for acne BTX 1503 in 2021

a.     Addressable market currently US$2.9 billion annually in the US

b.     Botanix addressable market estimated to be US $4.2 billion annually and US $7billion by 2024

2)    Completing Anti-microbial 2a testing and data readout Jan 2021

3)    Commencing Rosacea BTX 1702 1b trial in 2021 

a.     Addressable market US$2.6 billion by 2025

Multiple drug development programs I believe somewhat de-risks investment in this company.

Optimism in the antimicrobial  BTX1801 programs success is based on the efficacy of results in previous clinical phase 1 trials and new data recently supplied to the market. The mechanism of action of synthetic CBD has been identified. The drug effects the cell wall of gram positive bacteria allowing penetration and eventual cell death of the bacteria without any apparent development of resistance to the new anti-biotic. This has been shown to eradicate MRSA (Methicillin resistant Staph Aureus bacteria) in both Porcine and Human Invitro studies (human stomach skin harvested from recent abdominoplasties). MRSA has been found to be eradicated completely in a 24 hour period after application of the new formulation. 

Large groups of the population are known to carry MRSA nasally and anally. Self- infection is the route cause of most Surgical Site infections post-surgery. One of BTX1801s major target markets will be post-surgical site infections (SSI). The current anti-biotic most commonly used in SSI control is Bacitracin / mupirocin but it is increasingly ineffective and useless against MRSA. 

WHO (World Health Organisation) has forecast deaths due to anti-microbial resistance to hit 10 million p.a. by 2050. This will overtake expected deaths by Cancer at this point. Estimates suggest that SSI cost the health care systems globally around US$10 billion dollars annually. The addressable market for SSI is estimated to reach $US 5.9 billion annually by 2023. This is a huge market for any new successful anti-biotic to target. 

If successful BTX1801 will be a leading new drug in SSI. No new class of anti-biotics have been successfully developed in the past 30 years. This drug will have first mover advantage plus FDA fast tract QIDP status. Which means fast track of development programs to market plus 5 year exclusivity and a further 5 year protection of markets to competitors. 

Human studies have now been completed, where BTX 1801 was applied nasally over 5 day treatment period in healthy subjects vs a control. Patients were followed for 28 days to see if there was reduction or complete eradication of MRSA. Successful outcomes should see a significant re-rate and restoration of faith in Botanix Pharmaceuticals simultaneous programs. 

Investment in the Acne program alone saw US international investment at 20c per share in 2020. The additional anti-microbial programs success should see this price plus a significant increase based on the huge potential addressable market of SSI. Furthermore Anti-microbials will have other addressable markets – animal anti-biotics etc….. 

The incredible safety profile of this drug will also solidify its game changing status on a global stage. 

The current CEO Vince Ippolito has been responsible for negotiating significant buy outs of dermatological companies by Big Pharma. He was at the helm of Anacor pharmaceuticals when it was bought by Pfizer for $US 5.2 billion. There is a likely buyout potential for Botanix Pharmaceuticals on successful BTX1801 trials. Or at a future stage with further progression of its simultaneous Rosacea and Acne drugs. 

Phase 2a clinical trials imminent. BTX1801 anti microbial results are fast approaching. All participants recruited for 1 week double blind randomized control trial. Follow up data taken up to 28 days following trial. 
 

This is a potentially game changing anti-biotic which has been supported by in vitro studies on porcine and human skin samples. BTX 1801 was shown to effectively kill MRSA. This is one of the most prolific anti-biotic resistant gram positive bacteria. Successful treatment of this bacteria will save lives and safety of hospitals and surgeries world wide.

FDA has approved QDIP fast track development status. Paving the way for US trials and fast track development of BTX1801 following positive phase 2a outcome in OZ. 
 

If Botanix is successful this drug may become the standard of care, replacing Bactroban for post-op surgical site wound infection management. 
 

price at 10.5 c close of trade 13.11.20 seems incredibly cheap. Company is also commencing clinical phase 3 studies in 2021 for its acne drug. 2019 SP reached highs of 29c before the successful trials and data of BTX 1801. 

More waiting games for BOT holders. Significant market over-reaction and SP halving chance to average down. SP likely to return to previous highs with successful phase 3 FDA progression announcement for BTX 1503 by management in feb / March 2020. $40 million in the bank after capital raise, $7M tax break for R and D due. Multiple products in pipeline. Large retail ownership very unhappy with handling of phase 2 results announcement and panic sell-off due to strange and still unexplained large vehicle response in US arm of study (however not dissimilar to vehicle responses in competitive drugs which are sucessfully on market, with much worse safety profiles). However results show BTX 1503 significantly reduced inflammatory and non-inflammatory skin lesions in Australian arm of study with excellent safety profile. Given this medication aimed largely at teens the safety profile will be a significant competitive advantage if phase 3 is successful. Phase 2 clinical trials are focused on safety profiles of drugs which BTX 1503 has certainly met. 

Funds raised in USA will enhance exposure to retail and instos.  Now funds available to progress through phase 3 for 2 lead candidates -BTX1503 (due Sep 19), BTX1204 (due 4Q 19)

Botanix have just raised $40M from US investors to fund their ongoing phase II and III trials, and the resultant price drop gives a buying opportunity. BOT have recently released some very significant research data indicating the CBD, their main active ingredient, has the ability to kill a range of "super bugs" and does not suffer antibiotic resistance. The lead candidates are treatments for acne and atopic dermatitis which are currently undergoin phase II trials in the US. Management apprear to be very confident and looking forward to future psoriasis trials and the antimicrobial program. Great management team that is being  strengthened leading to commercialisation in the US.