Tetra Bio-Pharma (OTC: TBPMF) (TSX: TBP)
Current Price (8/3/21) $0.20
Upside Potential Target: $10.00 Next 18 months.
Tetra Bio-Pharma (OTC: TBPMF), (TSX: TBP) has a robust clinical pipeline that targets markets valued at more than of $250B combined
TBPMF should be trading at $2.00+ right now based on typical valuations of companies in FDA Phase 2 trials which target massive market opportunities like pain management. Accelerated FDA clinical trials with Fast Track and Orphan Drug Designations could take TBPMF to $2.50 within next 6-9 months
FDA approval of QIXLEEF is potential catalyst to send TBPMF to $10.00 driven by QUIXLEEF’s commercialization potential as opioid alternative, and $70 billion market opportunity – in addition to “halo effect” driving market enthusiasm for rest of TBPMF’s pipeline
Pain management market valued at $70B in 2021 and expected to grow to over $77B by 2023 – TBPMF offers revolutionary alternative to opioid pain management, a desperately needed treatment option
Innovating the cannabinoid-based medicine market, with promising early clinical data in multiple indications positions Tetra shares to increase exponentially on upcoming milestones
Why high likelihood of success
Tetra Bio-Pharma’s shares have exploded recently on a stream of good news, up more than 100% from April into May. What’s the driving force behind this massive appreciation? The company’s announcement that it has initiated their REBORN1 Phase 2 study investigating cannabis as an alternative treatment option to morphine as well as accelerating its Phase 2 clinical trial of PLENITUDE for managing pain in cancer patients. If the initiation of Phase 2 clinical studies has already delivered +100% upside to the stock – chances are that positive data readouts can drive even greater increases in the stock price. At a recent price of just $0.20 – and potential upside of $10.00 in next 18 months – TBPMF represents an asymmetric upside potential of +50X. This is a highly compelling risk/reward ratio for investors who are comfortable with drug development risks.
Transforming Cannabinoid-Based Medicine
What really separates Tetra from the rest of the cannabinoid-based clinical research and drug trials revolves around the company’s experience in drug development executive leadership team and innovative science. The key differentiator of their products? Inhalation.
Cannabinoids have been leveraged by other companies to target pain management, but most developed orally delivered product candidates and all have failed. Oral medications provide low bio-availability, requiring more frequent or higher dosing to get the same effects. Oral dosing also has slower absorption and when you are in pain and looking for relief, you do not want to wait 30 minutes for the pill to pass into your GI tract to begin being absorbed in the body. Inhalation provides nearly instantaneous relief, high absorption, avoids the first pass of metabolism and comes with the convenience of not having to swallow a large pill.
Where is the Competition?
The medicinal cannabinoid industry is still in its infancy. There is little competition in the race for approval, especially in the pain management, ARDS and oncology sectors that Tetra is focusing. Even more favorable for Tetra is that nearly every company is developing oral therapeutics rather than inhalation-based therapeutics. Major CBD metabolites have been linked to high liver toxicity in humans when administered orally. GW Pharmaceuticals (GWPH) conducted a pivotal clinical trial of their oral CBD drug EPIDIOLEX where 13% of patients saw elevated liver toxicity enzymes at levels three times higher than the placebo. This was dose dependent as 17% of patients taking 20mg/kg a day had elevated liver toxicity levels compared to only 1% of patients taking 10mg/kg a day.
Another company Cardiol Therapeutics (CRDL) is currently undergoing a Phase 1 clinical study of CardiolRX, a high-concentration CBD targeting patients with acute myocarditis. Much like GW Pharma, Cardiol is utilizing oral administration. It is yet to be determined if they will increase the dosing up past 10mg/kg or not which may raise safety issues.
What you really need to know is, Tetra has demonstrated that the CBD metabolites inducing liver toxicity are significantly lower when administered through inhalation rather than orally. A stronger safety profile and 505(b)(2) approval pathway should accelerate Tetra’s approval timeline with superior safety profile with higher dosing capabilities.
In recent news, GW Pharmaceuticals was acquired by Jazz Pharmaceuticals in a $7.6 billion cash-and-stock deal that caused a +50% increase in share price following the announcement. GWPH generated over $500M in annual net sales in 2020 and is launching internationally, demonstrating the market potential that medical cannabinoids truly have. Cardiol on the other hand has an early stage clinical pipeline that is comprised of only three indications, one of which is COVID related. This is all while having a market cap greater than Tetra’s.
With a stronger safety profile and more robust clinical pipeline that targets higher value indications, Tetra Bio-Pharma’s stock is positioned to potentially move up exponentially. If the company executes well and hits its major upcoming milestones, $10 share price in 18 months is a possibility.
So Long Opioid Crisis
Tetra’s flagship indications lie within the pain management program. The company is undergoing Phase two different trials in Breakthrough Cancer Pain (REBORN Study of QIXLEEF & CAUMZ) and Uncontrolled Cancer Pain (PLENITUDE Study of QIXLEEF). Current pain management programs heavily rely on morphine and other opioid drugs to bring relief to patients. However, these treatments come with heavy costs.
In 2019, nearly 50,000 individuals in the United States died from opioid involved overdoses and nearly 30% of patients prescribed opioids for chronic pain misuse them. The abuse of prescription opioids alone creates an economic burden of more than $75 billion a year. Tetra Bio-Pharma may be the solution.
QIXLEEF is Tetra’s investigational cannabis medicine for use in managing uncontrolled pain in patients with advanced cancer. QIXLEEF is an inhaled proprietary drug formulation of a fixed ratio of THC and CBD inhaled through a vaporizer. Tetra’s PLENITUDE study is assessing how QIXLEEF may manage uncontrolled cancer pain in a four-week study and may continue to remain in the study for up to an additional 48 weeks.
Similar to the PLENITUDE study, REBORN will assess QIXLEEF in a head-to-head study against immediate release oral morphine sulfate in managing episodes of short and frequent episodes of incapacitating pain in cancer patients. Tetra hopes to bring a higher standard of care and desperately needed safe pain relief option to cancer patients suffering from extreme pain.
Outside of pain management, Tetra Bio-Pharma is also conducting clinical trials and IND-enabling studies in inflammation & ARDS (acute respiratory distress syndrome), ophthalmology and oncology.
With the global COVID-19 pandemic still wreaking havoc everywhere, the company has begun exploring treating the sepsis market. With an approximately $4 billion market size, sepsis drugs comprise of a large market that can target ARDS. Tetra is developing ARDS-003, a proprietary synthetic chiral cannabinoid to prevent cytokine release syndrome, potentially preventing complications from SARS-CoV-2. Having received positive feedback from the FDA in April, Tetra anticipates filing an IND for ARDS-003 in coming months.
Further, the company is initiating studies on ARDS-003 to investigate the drug in neuroinflammation and antiviral applications, opening the company to the more than $125 billion CNS market.
Leading the oncology platform, Tetra has its sights set on chemotherapy induced nausea and vomiting (CINV) through its Reduvo program. The company was recently granted a drug establishment license to distribute Reduvo soft gel capsules in Canada, partnering with a U.S. entity to become exclusive distributor of Reduvo in Canada. As one of the few approved cannabinoid-based drugs sold in Canada, this strategic partnership opens the company to begin receiving commercial revenues in the Canadian market in late 2021. Not only does Reduvo target CINV similar to Cestamet, Tetra’s drug is also approved to treat AIDS-related anorexia.
As of now, these programs remain in IND-enabling studies and have not entered clinical settings. Although early on, the ophthalmology market is valued at more than $35 billion and presents a unique opportunity for a disruptive treatment option to garner market share.
The real upside: Off-Label
Off label prescriptions of QIXLEEF represents the biggest revenue potential. QIXLEEF receiving FDA approval for uncontrolled pain in patients with advanced cancer, would be entering a more than $5.5 billion market that targets only cancer pain. When doctors see the effectiveness of QIXLEEF in prescribed patients, it will begin replacing opioids as the treatment option for pain in other indications. The pain management market is worth more than $70 billion annually. As opioids remain the leader in the space, finding an alternative to the addictive and highly abused current treatment option remains a priority for physicians everywhere.
Inhale Tetra, Exhale Profits
Just looking at Tetra’s recent news flow can almost be overwhelming. In a typical early- to mid-stage biotech you would expect press releases maybe once or twice a month. Tetra is letting the good times roll with a stream of positive news coming from all of the company’s programs. The best is yet to come.
With the start of clinical studies causing massive increase in the share price, the future looks nothing but bright. We are halfway through 2021, but the second half of the year holds all the promise.
- REBORN Phase 2 preliminary clinical data expected in 4Q2021
- PLENITUDE Phase 2 preliminary data expected in 4Q2021
- ARDS-003 Phase 1 study initiating in 2H2021
Aside from the clinical pipeline milestones, Tetra Bio-Pharma is on the verge of generating revenues that could begin funding clinical operations. With exclusive distribution of Reduvo in Canada, the company expects to clear all regulatory requirements in late 2021 to begin commercial operations and sales. With an addressable market size of C$80 million and only major competitor Cesamet, it is not out of the question for Tetra to quickly obtain a 10% market share.
Further, Tetra has partnered with DanCann Pharma to distribute its product candidates into Northern Europe. The agreement provides Tetra with C$1.5 million in upfront payments as well as royalties on net sales over the next 7 years valued at more than C$46 million.
Reduvo sales in Canada could add more than $300 million to Tetra Bio-Pharma’s market cap by the end of 2022 alone. Combining this upcoming revenue stream with the DanCann Pharma distribution partnership and the multiple clinical milestones in 2021, a $10 share price in the near term is not out of the question. As we look down the clinical pipeline towards FDA approvals, a single approval in pain management could take this stock over $10.