Tonix Pharmaceuticals Holding Corp. (TNXP) is developing innovative pharmaceutical products to address public health challenges. TNX-102 SL is in Phase 3 development and has been granted Breakthrough Therapy designation by the FDA for the treatment of post-traumatic stress disorder (PTSD). The company is headquartered in New York.
On March 29th, 2017, company announced that they would provide a corporate update and an overview of Tonix’s post-traumatic stress disorder (PTSD) clinical program at The MicroCap Conference on April 4, 2017 in New York, NY.
TNX-102 SL was recently granted break through therapy designation by the U.S. Food and Drug Administration (FDA) for the treatment of PTSD. This designation enables fast track development and review of a drug, which has potential for substantial improvement over available therapy.
As per management, Tonix is now in a strong position for value growth with Phase 3 development in a major medical indication i.e. PTSD including military-related PTSD. Moreover, Phase 3 HONOR study in military-PTSD is expected to initiate in 1Q 2017 & the interim analysis of the HONOR study is expected in the first half of 2018 and topline results are expected in the second half of 2018. Therefore, it is not too far from commercial operations.
To meet its incremental capital requirement, the company also announced a public offering of 1,800,000 shares of its common stock at a public offering price of $4.45 per share. The management intends to use the proceeds (around $8,010,000) from this offering to support the continued development of TNX-102 SL and other related activities.
Tonix’s business risk profile derives substantial strength through the series of positive developments in the recent past, which has been steadily encouraging for the company. Collectively, these developments suggest reasonably strong outlook for the company over the near to medium term.
However, notwithstanding these positive biases, it should also be noted that Tonix’s historical clinical trials have not been very successful/encouraging. Additionally, the company has raised significant equity in the past, causing dilution to its shareholders. Therefore, Tonix is substantially dependent on success of its present flagship product i.e. TNX-102 SL, and is exposed to the risk that it may not be able to commercialize the product.
Description & manufacturing set-up:
TNXP is developing innovative pharmaceutical products to address public health challenges. TNX-102 SL is in Phase 3 development and has been granted Breakthrough Therapy designation by the FDA for the treatment of posttraumatic stress disorder (PTSD).
Other development efforts include TNX-601 (tianeptine oxalate), a clinical candidate at Pre-IND (Investigational New Drug) application stage, designed for daytime use for the treatment of PTSD, and TNX-801, a potential smallpox-preventing vaccine based on a live synthetic version of horsepox virus.
Product Pipeline:
Source: Company presentation
Recent announcements:
- Announcements about TNX-102 SL: Tonix, will provide a corporate update and an overview of its posttraumatic stress disorder (PTSD) clinical program at The MicroCap Conference on April 4, 2017 in New York, NY. TNX-102 SL was recently granted Breakthrough Therapy designation by the U.S. Food and Drug Administration (FDA) for the treatment of PTSD.
In March 2017, Tonix dosed the first patient for the “HONOR” study, a 12-week placebo-controlled Phase 3 clinical study evaluating TNX-102 SL 5.6 mg, in military-related PTSD. The interim analysis of the HONOR study is expected in the first half of 2018 and topline results are expected in the second half of 2018.
TNX-102 SL Milestones – recent and upcoming:
- Announcements about public offering: Tonix has also announced a public offering of 1,800,000 shares of its common stock at a public offering price of $4.45 per share. The gross proceeds to Tonix from this offering are expected to be $8,010,000.
Tonix intends to use the net proceeds from this offering to support the continued development of TNX-102 SL for the treatment of PTSD, including the HONOR study in military-related PTSD, to further develop other pipeline programs, for working capital and other general corporate purposes, and possibly acquisitions of other companies, products or technologies, though no such acquisitions are currently contemplated.
About PTSD condition: PTSD is a serious condition characterized by chronic disability, inadequate treatment options especially for military-related PTSD, and an overall high utilization of healthcare services that contributes to significant economic burdens. The Protectic™ protective eutectic and Angstro-Technology™ formulation are essential elements of the proprietary TNX-102 SL composition for which a Notice of Allowance has been issued by the U.S. Patent and Trademark Office.
Important target population & market size: U.S. veterans need a medicine that works for this serious condition. The market size of PTSD is estimated to be about $3 billion. CBO data shows that four years of PTSD treatment would cost roughly around $10,000.
Potential risk factors & key stock Influences over the near to medium term:
Exposed to project risk along with significant dependence on TNX-102 SL: The Company is still under pre- commercialization stage and is not likely to generate meaningful revenue until successful commercialization of their products occurs. Therefore, it is exposed to the risk associated with pre-commercialization process. In fact, in the past, Tonix had to freeze development of its fibromyalgia drug failed in late stage trial. After this setback, Tonix shifted its resources towards developing TNX-102 SL.
Business, financial condition and results of operations of Tonix, may be materially adversely affected by any delays in, or termination of, clinical trials or a determination by the FDA that the results of trials are inadequate to justify regulatory approval.
Negative profitability & subdued liquidity: As with any pre-development stage company, Tonix has experienced net losses and negative cash flows from operations since inception and expects these conditions to continue for the foreseeable future. Therefore, to fund operations, it needs to raise money through capital markets and/or private financing.
If additional financing is not available in a timely manner, Tonix may be required to delay, reduce the scope of or eliminate its research and development programs, reduce its commercialization efforts or obtain funds through arrangements with collaborative partners or others that may require it to relinquish rights to certain product candidates.
Furthermore, if it issues additional equity or debt securities, shareholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of common stock.
Earnings Review:
Tonix had no revenues or cost of goods sold during the three months ended September 30, 2016 and 2015.
Profitability:
The net loss for three months ended September 30, 2016 was $7.6 million, compared to a net loss of $13.3 million for three months ended September 30, 2015.
Research and development expenses for three months ended September 30, 2016 were $5.5 million, a decrease of $4.8 million, or 47%, from $10.3 million for the three months ended September 30, 2015. This decrease was primarily due to the winding down of the development work related to TNX-102 SL, including formulation development, manufacturing, human safety and efficacy studies.
Liquidity & capital resource:
As of September 30, 2016, Tonix had working capital of $26.6 million, comprised primarily of cash, cash equivalents and marketable securities of $26.7 million and prepaid expenses and other of $2.5 million, which was offset by $0.9 million of accounts payable and $1.7 million of accrued expenses.
Management expects to incur losses from operations for the near to medium term & future capital requirements will depend on several factors, including the progress of research and development of product candidates, the timing and outcome of regulatory approvals etc.
The company will need to obtain additional capital to fund future research and development activities. Future financing may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms.
Stock Performance
On Friday, March 31st, 17, Tonix shares increased by 0.65% to $4.67 on an average volume of 1.11M shares exchanging hands. Market capitalization is $27.66 million. The current RSI is 47.62
In the past 52 weeks, shares of Tonix have traded as low as $3.3 and as high as $37.70
At $4.47, shares of Tonix are trading below its 50-day moving average (MA) at $5.04 and 200-day MA at $9.9.
The present support and resistance levels for the stock are at $4.21 & $5.64 respectively.
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