A CFA with an MBA from Texas A&M and an MA from Tulane University, Mr. Vandermosten is a Senior Analyst for Zacks Small Cap Research where he covers a galaxy of small-cap biotechnology names.
Streetwise Reports asked Vandermosten if he has a set criteria when looking for a small cap with big upside.
“I look for opportunities where the company is addressing an unmet need,” Vandermosten told Streetwise Reports. “And for companies that are chasing large markets, that don't have a lot of other competitors.”
“An example of that market opportunity would be Alzheimer’s disease,” continued Vandermosten, “There are no disease-modifying therapies that have been approved in that space. And it's a huge space. So any company developing a drug that could provide help for Alzheimer’s patients, that would be something that I'd be interested in.”
Achieve Life Sciences (ACHV:NASDAQ) is a $74 million clinical-stage pharmaceutical company focused on the global commercialization of cytisinicline for smoking cessation and nicotine addiction.
Tobacco is responsible for more than eight million deaths worldwide and nearly half a million deaths in the United States annually.
More than 87% of lung cancer deaths, 61% of all pulmonary disease deaths, and 32% of all deaths from coronary heart disease are attributable to smoking and exposure to second-hand smoke.
“Achieve Life Sciences has a product that was sold in Poland, East Germany, Russia, for smoking cessation, but it didn't go through the normal kind of Western approval process. But it’s been used for a long time,” stated Vandermosten.
“One of the things that we always need to do with drugs, is to make sure they're not only effective, but safe. How does the drug affect people over long periods of time? We know all that. And that's a big piece of the puzzle”.
On March 10, 2022, ACHV announced Q4 and year-end 2021 financial results and provided an update on the cytisinicline clinical development program.
Recent Business Highlights for ACHV
- Initiated ORCA-3, the second Phase 3 trial, in 750 adult smokers at 15 clinical sites in the United States
- Announced last subject and last follow-up visit in the Phase 3 ORCA-2 trial of cytisinicline for smoking cessation
- Entered into a $25 million loan facility with Silicon Valley Bank
- Facilitated Key Opinion Leader virtual roundtable on smoking and e-cigarette cessation
- Received U.S. Food and Drug Administration (FDA) acceptance of Investigational New Drug (IND) application for cytisinicline as a prospective treatment for nicotine e-cigarette/vaping cessation
“We are eagerly anticipating topline results from the Phase 3 ORCA-2 trial in the coming months as we enroll smokers in the recently initiated Phase 3 ORCA-3 trial at 15 clinical sites in the United States,” stated John Bencich, CEO of Achieve.
“Additionally, our cash position remains strong with funding into 2023,” added Bencich, “allowing us to execute on the final stages of clinical development needed to support an NDA for smoking cessation.”
“Achieve is conducting their second of two required Phase lll trials that need to be done before they can submit for approval from the FDA,” confirmed Vandermosten. “They've started fully enrolled trials in January. They need to find out if a 24-week program is more effective than a 12-week program”.
Tenax Therapeutics Inc. (TENX:Nasdaq) is a $19 million company focused on identifying, developing, and commercializing products that address cardiovascular and pulmonary diseases with high unmet medical need.
“Tenax has two drugs that target pulmonary arterial hypertension (PAH),” stated Vandermosten. “There are five different groups of PAH. There are only drugs for Group l, and that's a rare disease.”
“The interesting thing about Tenax is that they have a candidate for each one of those groups of PAH. The current drugs only treat the symptoms. They relax the blood vessels and allow more blood to go through. But they don't solve the problem.
Tenax has a drug that is potentially disease-modifying. And the drug is actually well known. It was used for leukemia a long time ago, so it's off patent. But Tenax may be able to do a trial using a reformulated version of the drug, gaining significant patent protection.
“Tenax’s second product that they're advancing is called levosimendan. It has a long history of use in Europe for right-chamber heart failure. It's been used in millions of people in Europe, but not approved in the U.S.
The drug basically allows your heart to pump more blood and for your arteries to take on a larger capacity of blood. It's an untapped market. An extreme unmet need. We expect to see a Phase lll trial start next year,” added Vandermosten.
On March 31, 2022, Tenax reported financial results for the year ended December 31, 2021, and provided a business update.
“With the advancement of our proprietary formulation of oral imatinib, TNX-201, we believe Tenax is poised to fundamentally change the treatment landscape for PAH,” said Christopher T. Giordano, president and CEO of Tenax Therapeutics. “In our view, the time we have spent further refining the formulation of TNX-201 will lead to better safety, tolerance, adherence, and ultimately better treatment outcomes for patients.”
“Furthermore, given the proven efficacy of oral imatinib in the PAH setting, we believe investors are appreciating that the TNX-201 clinical program carries a lower degree of risk than alternative programs where issues of bioavailability and tolerability in PAH patients remain significant unknowns,” added Giordano.
“I am very pleased to report that we have made significant progress with our oral formulation, to support the upcoming Phase 3 TNX-201 program. Based upon our current estimates, we expect our Phase 3 study to begin in the second half of 2022.”
Year-End 2021 Financial Results for TENX
- In January 2021, Tenax purchased PHPrecisionMed Inc., a clinical stage biotechnology company focused on pulmonary hypertension, reflected in the operating results for the year ended December 31, 2021.
- Research and development expenses for the year ended December 31, 2021 were $25.1 million, compared to $4.6 million for the year ended December 31, 2020.
- General and administrative expenses for year ended December 31, 2021 were $7.6 million, compared to $5.3 million for the year ended December 31, 2020.
- Net loss for the year ended December 31, 2021 was $32.5 million, a loss of $1.58 per share, compared to a net loss of $9.9 million, a loss of $.95 per share, for the year ended December 31, 2020.
- Cash, cash equivalents, and marketable securities totaled $5.6 million as of December 31, 2021, compared to $6.3 million as of December 31, 2020.
- Management expects that current cash, cash equivalents, and marketable securities will be sufficient to fund current operations through the second quarter of 2022.
“I believe Tenax is tremendously undervalued,” concluded Vandermosten.
electroCore Inc. (ECOR: NASDAQ) is a $41 million commercial stage bioelectronic medicine company dedicated to improving patient outcomes through its non-invasive vagus nerve stimulation therapy platform.
“What I like about electroCore is that they actually have revenues,” stated Vandermosten. “And that those revenues are growing rather rapidly. They’ve developed a device called gammaCore. It's a vagal nerve stimulator.”
The vagus nerve, sometimes called the vagal nerve, is the longest and most complex of the 12 pairs of cranial nerves that emanate from the brain. It transmits information to or from the surface of the brain to tissues and organs elsewhere in the body.
“electroCore has got a pretty good foothold in the United States and the UK. They also have a strong relationship with Veterans Affairs. This is actually their largest revenue generator. That's for headaches. And the VA has done a lot of work of vagal nerve stimulation in other areas such as traumatic brain injury (TBI)."
On March 10, 2022, ECOR announced Q4 and full year 2021 financial results and provided an operational update.
Fourth Quarter 2021 and Recent Highlights for ECOR
- Reported full year 2021 net sales of approximately $5.5 million, representing an increase of 56% over $3.5 million for full year 2020
- Fourth quarter net sales of approximately $1.5 million, an increase of 61% over the fourth quarter of 2020
- Net cash used to fund operations was approximately $13.6 million for full year 2021, representing a 32% decrease compared to full year 2020
- Cash on-hand as of December 31, 2021, totaled approximately $34.7 million
- Launched a new online shop in the United Kingdom for consumers suffering from menstrual migraine to purchase gammaCore Saphhire™
- Launched a new telehealth portal and e-commerce store in the United States for consumers to purchase gammaCore Saphhire™
- Received breakthrough device designation from the FDA for the treatment of PTSD
- Top-line data from three abstracts was presented at the American Heart Associations’ 2022 International Stroke Conference on the possible role of nVNS in the acute treatment of stroke
“Our fourth quarter revenue grew 61% year-over-year while we delivered 56% annual revenue growth for the full year,” stated Dan Goldberger, CEO of electroCore. “We continue to make our gammaCore therapy more broadly available around the world.”
“We are making select investments in cash pay initiatives that we believe will make our gammaCore therapy available directly to consumers through a growing number of physician prescribers in the United States, as well as through ecommerce platforms in both the U.S. and U.K,” added Goldberger.
“With a cash and cash equivalents balance of $34.7 million at December 31, 2021, we believe there is substantial runway to execute our plan into the future.”
“The device shows efficacy not only in headaches, but also Parkinson's, TBI, stroke, and PTSD,” concluded Vandermosten. “It requires some additional studies to expand dramatically what ailments they can sell this product for. ECOR already has distributor relationships throughout the globe.”
“With biotech, the science is important, and so is the market,” stated Vandermosten. “But I also look for management teams that have experience taking a drug through the regulatory process. It is a specialized skill set, and if you don’t have it, you’re not going to succeed.”
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