Optifinancial Newsletter - Knowledge is power - Brad Mitchell
This is not financial advice nor recommendations. This is purely our own thoughts and opinions regarding the matter discussed below for entertainment purposes. This is not advice and is never intended to be.
Disclosure: We own BIOR securities/shares at the time of publication. This could affect my biases in my analysis.
Biora | $0.82
$2.5 Billion of estimated annual revenue unlocked by Biora through their Cytokine Profiling Study - Untouched by anyone and Biora owns it
RSS - Study - Proving again that they are technically mature
Cytokine Study shows value which market seems to be unaware of:
Conclusion from a study which I wrote about awhile back, they repeated the same information however, I highlighted below the bullet which should be raising eyebrows from analysts. Biora has funded a study which tested factors that create inflammation in the GI tract which cause Ulcerative Colitis (UC). Up until recently, it was unknown why 30% of the UC patients did not respond to the standard of care (anti-TNF - Humira).
Here is what they can do with this highlighted bullet above- they can keep the rights to intellectual property (IP) regarding to the solution of $2.5 billion in annual revenue and license it, or they can further develop a drug called tocilizumab.
Here’s a blurb on this and my personal research on this matter:
“I wrote a recent article covering their Abstract in plain language for the study of Anti-TNF and response of cytokines. They revealed in their study that they may have found a link to capturing more market with Isolating the cytokine that was responsible for causing some of the Ulcerative Colitis patients to not respond to Humira (Abbvie’s drug which makes about 9 billion a year from Ulcerative Colitis patients).
Interluekin 6 (IL6) was found to be extremely high in concentration in the body in the patients who had a high enough drug in them but still no response.
Remember that these cytokines send a message to the t-cells which cause inflammation and damage to the body. Humira suppresses a few of these cytokines, and that is why it is so effective in treatment.
From this finding of IL6, the next logical step is to figure out if anyone has created a drug to suppress this exact cytokine. After doing some digging, I found that a good drug to suppress this overactive cytokine is Tocilizumab
I believe that the doctors and researchers may embark on a journey to formulate a combination of Tocilizumab to help treat Ulcerative Colitis and Crohn's disease.
Currently, it seems that the medical field only thinks that tocilizumab has use in mainly Rheumatoid arthritis, but I think that will be changing.
Progenity’s DDS is capable of handling a liquid solution at which it can distribute this drug safely and topologically at the disease site. I think Tocilizumab would be an adequate and strong candidate for the future use of this.”
RSS - Study - Shows technical maturity and possible cash cow
Proof of the RSS working in practice shown to collect different samples:
RSS has the same localization technology used in the DDS: (LEDs and Sensors)
This means that, you guessed it, they are definitely leveraging their data across platforms! This is going to be very helpful for their machine learning algorithms that they use to localize and detect where they are in the GI tract. The DDS product which I think has the most blockbuster (revenue) potential can use the data to help it locate better in its future applications which is why I think this company will get closer to the 99% accuracy range in delivering drugs as well as sampling shown by the RSS.
You can see that they are able to get high percentage of their product working. This is very strong news.
Why is Biora still pursuing the RSS? It is because they can unlock revenue from companies and institutions that want to show another metric to the FDA or help unlock different treatment options by learning more about the gut.
I believe they could sustain their business if they were to make a deal to recur with a large pharma that would like to use their tech in topline studies to prove to the FDA and therefore reducing future risk to that company “takeda - cough cough” in their pipelines. This ultimately will be used as another way to mitigate risks for companies looking to spend millions on R&D.
RSS also could be used for detecting SIBO which is a disease that is estimated to be an annual market cap of revenue $220 million a year. Even this business avenue would unlock a strong revenue stream for Biora’s 16 Million a quarter cash burn. Yearly cash burn equivalent - $64 million
Biora Therapeutics is nearing critical mass. We will see extreme upside if they are able to hit upon their goals this year. (FDA approval for phase 1 trial for their DDS), (OBDS meets needs for the 3 concurrent collaborators), RSS could award the company with a large contract from a pharma as well.
Current Price: $0.82
1 Month Price Forecast: $1.25
The company at this stage will look very different from today. They will have established a dominance in the oral delivery market with a wide moat of research and patent protection. The partnerships that they are working on today will start to bear fruit during this time.
If Biora is not bought out, we should see them bloom like Dexcom. They have a medical device that will serve the needs of patients and give doctors the feedback that they will always want to have. It will be hard for doctors who prescribe drugs to not want to use a patient compliance mechanism such as Biora’s DDS or OBDS. Another note to make is that insurance will want to have this data in hand as well. Biora will most likely have many other drug candidates in their pipelines with funding from partners to validate their drugs.
Disclosure: We own BIOR securities/shares at the time of publication
All stocks talked about we have invested in, and do not intend to give advice nor recommend acting upon the information.
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Until next week,
and the Optifinancial Team
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