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BioVie & General Motors

Optifinancial Newsletter - Insights worth sharing! Hello again! We have news regarding our own business and have now opened up a way to donate to us. For the member who sent us this idea. We thank you for your help. If you find that you’d like to support us, we’d be happy to accept it. It will go back into reinvesting into better content and more tools that we’d like to add in the future.


Last week's letter here


Vinco Ventures (BBIG): Rose from $4.20 to a high of $5.40 a share last week. We think this is mostly due to a rise in the interest of gamma squeezes (a large spread in call to put ratios where if the stock rises above the call strike price the market makers are forced to cover and create new options strikes above) which some projected. We do not think this is a strong long term opportunity until a more clear picture of the NFT (non-fungible token) business is presented. We think it has potential but are wary due to the transient popularity this blockchain technology seems to have.

This Week:

  • BioVie - Recently acquired a proven Alzheimer’s drug (moved 11% up on the news) and is working on a drug to treat liver ascites.

  • General Motors - Rising due to the interest due to the interest in electrification and overall growth in the company



1. BioVIe $18.00 : BIVI


This company is currently working on getting 2 drugs to market. They are entering into the Phase 2 trials for their liver ascite drug, and then recently acquired (not on the stock exchange) Neurmedix’s drug which has recently granted approval to go through a phase 3 trial on an Alzheimer drug. This is very important for this company’s growth and share price. BioVie headquarters is located in Santa Monica California and has over 3000 employees. They seem to be solid on cash for the next 12 months. They had 12 million in cash in their Q1 and burned 3 million. BioVie normally burns around 700-1 million a quarter however, this increase in cash burn was due to buying Neurmedix’s durg/research and expanding their business potential. We will talk about both drugs below and what they mean for the potential future and how they could affect the stock price as BioVie goes through its clinical trials for their Liver Ascite drug and their newly acquired Alzheimer drug.


Liver Ascites drug BIV201: Liver ascites is a very difficult disease for patients and the current outlook once diagnosed of this disease is gruesome. It is where the cells have too much water around the cells in the liver and can no longer filter. This excess fluid in the abdomen can cause damage to the liver and ultimately needs to be treated. Ascites spawns normally from 3 different illnesses such as NASH, hepatitis and alcoholism. It is caused by cirrhosis of the liver which means that the liver has too much scarring and cannot function properly. Liver ascites is where the liver clogs and is unable to filter blood efficiently enough. This usually causes 50% mortality in patients and the only two treatment options are jabbing a needle through the patient to drain the liver (temporary relief) and liver transplant. This is where BIV201 comes in and helps reverse or treat this clogging by constricting the blood vessels in the liver and correcting the function of it by allowing blow to be filtered through. Some bonuses to the reliability of this drug are that it has been used almost everywhere in the world except the US and Japan. Hundreds of scientific papers have been published on this drug. We think the risks may be known and that it is a matter of execution for BioVie to get this drug through phase 2 and 3 trials. They have already completed a part of the phase 2 trial by doing an open label study with 6 patients and have shown efficacy and safety. They must complete another Part to phase 2 evaluating more patients and retrieving more data to help the FDA with approving the drug. They also have an orphan designation to their drug here in the US which means that they have the monopoly 7 years after the potential FDA approval of their drug. They are also seeking patent extensions of 20+ years as well which the FDA must decide on as well.


The total market in 2023 and beyond starts at $2.83 Billion a year. We think BioVie may be able to capture 10-30% of this market annually. This means that they could make $283-840 million annually respectively. Their current market capitalization is lower comparatively at $252 million. We think the market confidence is slowly growing and we should see the share price double on more good news about their P2 trials, effectively doubling the share price to $36. (This is without their new Alzheimer drug discussed below)


Neurmedix’s Alzheimer drug:

Recently, we discussed a few publicly traded Alzheimer companies that were looking very promising. We spoke about Biogen (BIIB), Cassava Sciences (SAVA) and Annovis (ANVS) here. The share prices of these companies have been exploding due to the need and promise of these drugs to help treat Alzheimers.


BioVie rose $3 a share on news of this acquisition of the intellectual property. We think this company could see some run off from the hype around Alzheimers. The one interesting aspect that I like about the Alzheimer’s biotech industry is that if a competitor does well, you will see the others do well as many believe treating alzheimers will have to be a multi-targeted approach. After looking at Neurmedix, they seem to have a novel approach which is good because they could be a puzzle piece to helping treat the Alzheimer’s puzzle. Neurmedix’s approach to defeating alzheimer’s:

They believe that part of Alzheimer’s is a deficiency of getting sugar to the brain simply put. They have seen a link between the inflammation caused in Alzheimer’s which shuts off the insulin pathways for the brain to collect the necessary glucose (food) for the cells to function. This indeed is very important because if the brain does not have sugar, then the cells will die causing Alzheimer’s to progress. The Neurmedix drug aims to reduce inflammation of the insulin pathway and allow sugar to enter into the cells.


After looking deeper into this, I find this highly probable at helping the brain. We think this drug could be a very good cash generator for the company as well as a way to treat Alzheimer's disease. Not many know about this company and it is still quietly under the radar, but when the value of the drug is revealed, we think this catalyst could increase the stock price dramatically. An additional 200 million could quickly be added to this stock. Doubling the current share price (not including the Liver Ascites treatments discussed above).


Scenarios:

  1. Liver Ascites does well and Alzheimer’s drug does not: We believe the stock price will reach $36

  2. Liver Ascites does not work and Alzheimer’s drug does well: We believe the stock could tap into the $50 per share range due to the need to treat Alzheimer's and the current market environment.

  3. Both drugs do well: We think the share price could go to $76 a share. We think this is a likely outcome due to the science backing both drugs. We are assigning a higher probability to their BIV201 being passed by the FDA. Alzheimer’s historically has had a difficult time getting through the FDA. Recently, Biogen was the first company ever to get FDA approval for an Alzheimer’s treatment. We think others will follow. We should see the realizations of this outcome by mid-2023.

  4. Both drugs fail: The company will have to file bankruptcy or reduce operating costs to find alternative strategies. We are assigning a low risk to both failing because they are in the middle of clinical trials and have passed the hardest barrier to entry which is pre-clinical. (There are 4 total phases in getting the drug to market, many steps in between as well). Safety and tolerability have been shown as well as efficacy. It is a matter of execution and correctly delivering the story of their research to the FDA.


Forecast: This company should continue increasing in share price due to the news surrounding the company regarding their new Alzheimer’s treatment approach.

Price Targets:

1 Week: $20 - We think there is more upside as this company becomes more known in the Alzheimer’s space. We have seen an uptick in chatter on social media for this one.

1 month: $21

1 year: $26 - A rough estimate based on how the share price has dropped from its all time highs of 44, and thinking that this company will see more and more investors retail and institutional over time.

Final Thoughts on BIVI: This company seems to be under the radar at the moment. We think it could be a good time to look to this company as an appreciating investment.


This stock is a long term buy in our opinion, it is more so the amount of attention it is bringing.

Disclosure: We do not hold any securities of BIVI at the time of publication



2. General Motors: GM


We wanted to take a look at general motors again this week as we still believe it is one of the best low risk stocks with a great potential. We wanted to highlight a few things going on in the EV space. GM owns several well known brands: “These brands include Chevrolet, Buick, GMC, Cadillac, and Hummer.” We think GM has set up to be ahead of several other companies switching to EV. “General Motors is aiming to produce only EVs by 2035, with 30 new plug-in models arriving by 2025, a $27 billion investment.” While one of GM’s large competitors is now making a move to the world of EV. “Ford, which is investing $22 billion in EVs and announced that 40% of its vehicles will be electrified by 2030, generated excitement with the recent debut of the F-150 Lightning all-electric pickup.”


Price forecast: GM should steadily increase until we see some EV’s released

1 week target: $62.50

1 month target: $64.78

1 year target: $71.97


GM is not a stock we see just exploding but you will get some decent growth over time and it offers a lot of security. It has increased 114% over the last year and really doesn't look like it will slow down. As long as GM can follow through on the electric vehicles this stock should make it up past $100 a share as we get closer to the 2025 target they have set. Then by 2035 being fully EV could really cause the stock to increase to even higher. We would recommend starting to look at Ford:F as a viable electric vehicle option. With their new F150 Lightning truck they could be very successful.


General Motors reported the quarter one earnings back on May 5th and had consistent numbers. “Revenue of $32.5 billion Net income of $3.0 billion, and EBIT-adjusted of $4.4 billion” which is roughly what they produced last year in the first quarter as well. Just keep watching for this stock to continue to perform at a consistent level and the hype around EV’s will help drive the value up.


GM is a buy in our opinion!



Thanks for reading!

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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