TapImmune Inc (NASDAQ:TPIV) has been a pretty tough stock to hold over the last year or so, with the company having declined from a little over seven dollars a share to current levels around four dollars a piece. Against the backdrop of share price decline, however, we have seen a number of fundamental developments that have reinforced a longer-term bull thesis, and sort of fly in the face of the market capitalization deterioration. We believe that – as we enter into the latter half of the first quarter of 2017 – the company is at an inflection point. In turn, we think that this year should be a strong recovery year for TapImmune, and that the company should finally start returning value to shareholders. For those that as-yet don’t have an exposure, of course, this means that current prices may be a nice entry point ahead of some upside momentum.
So what is behind our thesis?
Well, for those not familiar with this one, the company has developed a platform with which it can create proprietary cancer vaccinations. The lead of these vaccinations right now is a drug called TPIV200, and is currently under investigation across a range of oncology indications, but primarily ovarian cancer and breast cancer. The drug is a peptide vaccine containing five immunogenic peptide epitopes of the human folate receptor 1 (FOLR1; FR-alpha), with potential immunomodulating and antineoplastic activities. Basically, upon introduction, the company is trying to demonstrate that the peptide can stimulate the immune system to target and attack cancerous cells associated with the two above-mentioned cancers. Immuno-Oncology is a real hot topic in the cancer space right now, and this approach is a novel (but seemingly very effective) application of the concept.
TPIV200 has both orphan drug designation and fast-track designation, which should serve not only to speed up the pathway to commercialization, but also bring about a number of exclusivity and tax related benefits as and when said commercialization becomes a reality.
So why are we looking at this company now?
Well, it is all about timing. To put it simply, TapImmune has basically spent the last three years getting to the position in which it finds itself today, and it is from this position that we see the company finally starting to add value. A number of phase 2 trials are in place, and funded, and over the coming quarters, we should see data hit press from these trials. If the data supports the conclusions drawn from earlier stage investigations into the efficacy and safety of TPIV200, then there is some immediate and considerable upside on offer.
So, specifically, what are we looking for? As mentioned, the two lead indications right now are breast cancer (specifically triple negative type) and ovarian cancer. The latter is broken down into two subcategories – platinum resistant and platinum sensitive (these just relate to the efficacy of current standard of care in early-stage treatment.) There is a collaboration with pharmaceutical giant AstraZeneca plc (ADR) (NYSE:AZN) being conducted at the world-famous Memorial Sloan-Kettering Institute that is investigating the impact of including TPIV200 as a combination with AstraZeneca’s checkpoint inhibitor, durvalumab.
As and when the data hits from these studies, we should see some strength based on the efficacy implied by the results, and also the implications for a phase 3 protocol in the respective oncologic indications.
This company reverse split late last year, but did so in order to facilitate a NASDAQ listing. As such, sentiment was temporarily weakened, but the listing should serve to strengthen market perception of the company on aggregate, and reinforces a bullish bias throughout 2017.
Much of the clinical activity is funded through various collaborations, but an equity raise to fund operational activity is not out of the question, so investors should bear this in mind before committing to a position. With that said, the number of catalysts set to hit press this year means any negative impact of an equity raise should quickly dissipate if the data comes out as positive.
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Disclosure: We have no position in TPIV and have not been compensated for this article.