Biotech

Todos Medical (TOMDF) The Ultimate Pandemic Stock

  • Monkeypox Following in COVID’s Footsteps: Possible Back-to-Back Pandemics

Todos Medical (OTCMKTS: TOMDF) is the ultimate pandemic stock because they win no matter how an investor games the scenario.  TOMDF is uniquely positioned to benefit from an extension of the pandemic and the “Let it rip” strategy or an aggressive plan to limit the spread and squash the outbreak. Adding to the possibilities is MonkeyPox, which appears to be the rising new pandemic threat.  The only losing scenario for Todos is if the United States government finally attains its goal of herd immunity, which hasn’t been possible with COVID-19 yet. Provista Diagnostics, Todos testing subsidiary, has multiple revenue streams in a pandemic situation and has diversified the business to include normal screening tests like UTI and respiratory infection.

Increase in PCR Testing  

Home tests are no longer paid for by the federal government beginning on September 2nd, and this means that people will still need to be tested, but they will require insurance to pay. In January, the Biden administration promised up to 500 million free at-home antigen tests for Americans from companies such as Abbott Laboratories (NYSE: ABT), iHealth Lab and Roche (OTCMKT: RHHBY). But Congress has yet to renew funds for further federally funded testing, so the burden will now fall on insurers. That means getting a PCR test instead of at-home rapid antigen tests. The bright side is that PCR is much more accurate; the FDA recently recommended multiple antigen tests taken at home, days apart, to prevent false negatives. The reality is that a quick antigen test is nice, but people (and their insurance companies) want to know for sure with one test whether they have COVID or not. It’s highly unlikely that insurance companies will pay for multiple antigen tests instead of a single PCR test.

The CDC currently provides PCR testing for various groups such as K-12 schools and under-resourced communities. The free testing supply is also drying up from the CDC at the end of December this year. The burden of testing will fall on different parties, most likely PCR providers like TOMDF.

Return to Lockdowns to Control Contagion

If the disease got more contagious or deadly, the government would desire a test that was able to identify the virus sooner to quarantine the person before symptoms presented themselves.  TOMDF had been working on that type of test that is sensitive enough to pick up infection 1 to 3 days after exposure.  The ratio is nearly 70 protease needed to make 1 virion.  Since there are way more protease than virion in the early stages, it easier to detect than the virus.   It’s called a Tollo Test and reads out when a virus is actively replicating.  It’s arguable a much better test than PCR because it also tells you when you are over the virus.  It essentially measures infectivity and could be a game changer in controlling the spread of the pandemic.  

MonkeyPox: Managing The Second Pandemic

MonkeyPox has started to spread into pediatric populations and schools.  When these situations occur, it’s not just one test it could mean testing the whole school, usually hundreds of students, multiple times to ensure it didn’t spread.  TOMDF is one of the first in the nation to have a validated saliva-based test and targets local schools.  It is the only public company with a validated saliva and lesion test.  Applied DNA Sciences (NASDAQ: APDN) is still waiting for the red tape to clear on their validation in New York, and when it does, it will be for lesions only.  TOMDF’s salvia-based and lesion-based tests are extremely sensitive and require as few as 1.2 viral copies per reaction.  MonkeyPox reproduces slowly, and often, symptoms show up three weeks after exposure, which is why multiple tests are needed to ensure that the disease isn’t latent inside an individual. 

The number of MonkeyPox patients has been growing exponentially, which means its airborne, and contrary to CDC guidance, its spread through close personal contact.  For forty years, MonkeyPox has been endemic in Nigeria ping-ponging between rats and humans, and during this time, the primary means of transmission is airborne.  It’s not like the CDC hasn’t made a mistake or two during the pandemic. Last week TOMDF over double the current capacity of 80,000 stated by the CDC which is only doing lesion testing which will do little to nothing to curb the rate of spread by getting to the infected quicker and quarantining them to prevent further spread.  TOMDF has a first mover advantage and has the best validated test on the market.    

Signs of Rising Mortality

If hospitalizations start to increase in COVID-19, Todos is positioned with an antiviral that took death off the table.  In Israel they have Tollovir still has regulatory hurdles to cross. Still, the answer concerning its superior efficacy over remdesivir has already been answered in a randomized controlled clinical trial and a prior observational study that showed similar results. There is a growing concern in pediatric patients that is showing a rising hospitalization trend.  Even if hospitalizations don’t increase significantly, we know that Long-COVID is a major problem even for those with asymptomatic cases of COVID. TOMDF’s subsidiary 3CL Sciences also has a potential therapeutic that they are preparing clinical trials for, and it also incorporates a Long COVID Panel that is very extensive. This ensures the company can identify who has Long-COVID and correlate biomarkers with recoveries.

COVID-19 Becomes Endemic

Many think COVID is here to stay and endemic, but this is a best-case scenario whereby a new therapeutic like Veru Pharma’s (NASDAQ: VERU) sabizabulin gets regulatory approval for the late stage. Then they come to find out it works in the early stage. There were a lot of problems with the Veru trial design, and because of this, their approval is a real long shot.  In addition, their trial showed COVID mortality in the placebo arm to be much higher than normally measured for the patients they recruited. If Veru’s mortality data were compared against placebo data from similar trials, the drug would show little-to-no effect. Placebo data like Veru’s raises eyebrows, and regulators might wonder if the placebo mortality was sandbagged to make the drug look like it worked.

The worst case scenario is that COVID waves continue to hit the world hard.

 

When looking at the data, it’s clearer that COVID is here to stay as a flu-like virus with a much higher death rate than the flu and can cause long-term disability. While cases, deaths, and hospitalizations are all trending low compared to some of the waves of COVID the U.S. experienced over the past 2.5 years, the chart looks primed for another wave. After all, COVID is an RNA virus that mutates or recombines, and another variant is all that’s necessary for the world to see another big wave. This means testing and antivirals will be needed in the long run.

Investment Summary

Regardless of the pandemic scenario, TOMDF has a test or a treatment capable of monetizing the outcomes. In biotechs, the results are often binary, where you win big or lose big, but in the case of TOMDF, they are huge winners regardless of the circumstances. They have testing for two epidemics—COVID and MonkeyPox. They have an antiviral for hospitalized COVID that seems very close to getting a EUA in Israel. They’re working on a treatment for Long-COVID. The Achilles heel or potential downside risk is funding, but any boon in the testing business could alter their balance sheet in a very positive way. In Todos Medical’s last interview the CEO explained that one of their customers that refused to pay had a business that eclipsed $1.5 million daily during the Omicron variant surge. They repossess the equipment and set it up, so the capacity is there.  Given the profit margins, it would take little time to generate enough cash to continue the expansion of Provista without having to raise any additional funds.  The bottom line is TOMDF is the stock to own if you feel the pandemic is being mishandled or if you think COVID is over.  With a $50 million market cap, the company is cheap relative to its biotech peers and should be trading near the billion-dollar mark.  

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Disclosure: Insider Financial and its owners do not have a position in the stocks posted and have posted this article for free without editorial input. This article was written by a guest contributor and solely reflects his opinions.

Todos Medical (TOMDF) The Ultimate Pandemic Stock
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