Jaguar Health, Inc. (NASDAQ: JAGX) is a natural-products pharmaceuticals company focused on developing and commercializing novel, sustainably derived gastrointestinal products for both human prescription use and animals on a global basis.
September 29, 2017. The company announced the pricing of an underwritten public offering of 21,250,000 shares of voting common stock with a public offering price of $0.20 per share. The Company expects to receive gross proceeds of approximately $4.25 million, before deducting underwriting discounts and commissions and other estimated offering expenses. The offering is expected to close on or about October 3, 2017, subject to customary closing conditions. The Company intends to use the net proceeds from the offering for commercialization of Mytesi®, an FDA-approved human prescription drug product of Jaguar’s wholly-owned subsidiary, Napo Pharmaceuticals, Inc., as well as for general corporate purposes and working capital.
September 28, 2017. The company’s wholly owned subsidiary, Napo Pharmaceuticals, Inc., has filed a Chemistry, Manufacturing, and Controls (CMC) supplement with the U.S. Food & Drug Administration (FDA) for six-tablet bottles of Mytesi®, Napo’s FDA-approved human drug, in preparation for Napo’s planned national sample campaign.
September 25, 2017. Napo Pharmaceuticals, Inc., has entered into a Termination, Asset Transfer, and Transition Agreement with India-based Glenmark Pharmaceuticals Ltd. Glenmark is Napo’s primary manufacturer of crofelemer, the active pharmaceutical ingredient in Mytesi®, Jaguar’s and Napo’s FDA-approved human prescription drug product. The Agreement returns to Napo certain rights which Napo licensed to Glenmark in 2005 related to the development and commercialization of crofelemer for certain specified human indications in India and 140 other countries largely in developing regions.
September 20, 2017. The U.S. Food & Drug Administration’s Center for Veterinary Medicine (CVM) has indicated that the use of Canalevia™ for treatment of exercise-induced diarrhea (EID) in dogs qualifies as a “minor use”, per the requirements of The Minor Use and Minor Species Animal Health Act of 2004 (MUMS Act), which means that Canalevia™ is eligible for conditional approval for the indication of EID in dogs.
July 31, 2017. The merger of Jaguar Animal Health, Inc. and Napo Pharmaceuticals, Inc. (Napo) became effective July 31, 2017, at which point Jaguar Animal Health’s name changed to Jaguar Health, Inc. and Napo began operating as a wholly-owned subsidiary of Jaguar focused on human health and the ongoing commercialization of, and development of follow-on indications for, Mytesi®.
Mytesi® (crofelemer) is an antidiarrheal indicated for the symptomatic relief of noninfectious diarrhea in adult patients with HIV/AIDS on antiretroviral therapy (ART). Mytesi® is currently covered by Medicaid in all 50 states. It is also currently covered on 100% of the top 10 commercial insurance plans, representing more than 245 million U.S. lives. Mytesi® is not indicated for the treatment of infectious diarrhea. Rule out infectious etiologies of diarrhea before starting Mytesi®. If infectious etiologies are not considered, there is a risk that patients with infectious etiologies will not receive the appropriate therapy and their disease may worsen. In clinical studies, the most common adverse reactions occurring at a rate greater than placebo were upper respiratory tract infection (5.7%), bronchitis (3.9%), cough (3.5%), flatulence (3.1%), and increased bilirubin (3.1%).
Follow-On Indications Being Planned and/or Developed:
- Chemotherapy-Induced Diarrhea (CID) is a development priority for crofelemer. Based on completed market research with oncologists and oncology nurses, there is an unmet need and opportunity for new treatments for CID given the incidence of diarrhea with chemotherapy drugs/regimens, particularly some of the newer agents.
- Diarrhea-Predominant Irritable Bowel Syndrome (Phase 2)
- Acute Adult Infectious Diarrhea Including Cholera (Phase 2)
- Travelers’ Diarrhea (Phase 2)
- Pediatric Acute Diarrhea (Phase 1)
- difficile-related Diarrhea (Planning stage)
Canalevia™ is a lead prescription drug product candidate for the treatment of various forms of diarrhea in dogs. Canalevia is a canine-specific formulation of crofelemer, an active pharmaceutical ingredient isolated and purified from the Croton lechleri tree.
Neonorm™ Calf is a non-prescription product to help dairies and beef farms proactively retain fluid in calves; helping the animals avoid debilitating, dangerous levels of dehydration. Neonorm is a botanical extract derived from the Croton lechleri tree.
Equilevia™ is Jaguar’s non-prescription product for total gut health in equine athletes.
About Jaguar Health, Inc.
Jaguar Health, Inc. is a natural-products pharmaceuticals company focused on developing and commercializing novel, sustainably derived gastrointestinal products for both human prescription use and animals on a global basis. Their wholly-owned subsidiary, Napo Pharmaceuticals, Inc., focuses on developing and commercializing proprietary human gastrointestinal pharmaceuticals for the global marketplace from plants used traditionally in rainforest areas. Their Mytesi® (crofelemer) product is approved by the U.S. FDA for the symptomatic relief of noninfectious diarrhea in adults with HIV/AIDS on antiretroviral therapy. Mytesi® is in development for multiple possible follow-on indications, including chemotherapy-induced diarrhea; orphan-drug indications for infants and children with congenital diarrheal disorders and short bowel syndrome; supportive care for inflammatory bowel disease (IBD); irritable bowel syndrome (IBS); and as a second-generation anti-secretory agent for use in cholera patients. Canalevia™ is their lead animal prescription drug candidate, intended for treatment of various forms of diarrhea in dogs. Equilevia™ is Jaguar’s non-prescription product for total gut health in equine athletes. Canalevia™ and Equilevia™ contain ingredients isolated and purified from the Croton lechleri tree, which is sustainably harvested. Neonorm™ Calf and Neonorm™ Foal are Jaguar’s lead non-prescription animal products. Mytesi®, Canalevia™, Equilevia™ and Neonorm™ are distinct products that act at the same last step in a physiological pathway generally present in mammals.
Q2 Financial Review
Summary numbers: Revenues of $.90 million, Net Earnings of $-1.81 million.
Gross margins widened from 24.64% to 95.56% compared to the same period last year, operating (EBITDA) margins now -260.48% from -14,077.79%.
Year-on-year change in operating cash flow of 68.81% is about the same as the change in earnings, likely no significant movement in accruals or reserves.
Earnings growth from operating margin improvements as well as one-time items.
The company ended Q2 with cash of about $2.7M, and was burning cash at the rate of $3.1M in that quarter. The recent capital raise ($4.25M) may provide the company with cash to get through the near-term.
Stock Influences and Risk Factors
The market for the company’s products is on a growth trajectory;
The recent capital raise of $4.25 million should fund the company in the near-term;
customers and other third-party business partners may seek to terminate and/or renegotiate their relationships with JAGX because of the merger;
the attention of management may be directed toward the completion of the merger and related matters and may be diverted from day-to-day business operations;
current and prospective employees may experience uncertainty regarding their future roles with the combined company, which might adversely affect the ability to retain, recruit and motivate key personnel.
On Tuesday, October 3, 2017, during intra-day trading shares of Jaguar Health Inc. were at $.23/share. The stock ended the day 50.22% lower at 0.20. The share price has a 52-week trading range of $.17 – $1.53. The company’s shares are currently trading below their 200-day moving average of $.70 and below the stock’s 50-day moving average of $0.45.
On July 11, 2017 Rodman & Renshaw initiated coverage on JAGX with a “buy” recommendation and a target price of $2.00. The shares dropped significantly after the recent announcement of a stock offering. Now that investors have reacted to the dilution (-50%), these shares may be positioned to appreciate.
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