Turning Point Therapeutics (NASDAQ: TPTX) - American biopharmaceutical company, which focuses on the development of new drugs in the field of oncology. The company aims to overcome the key limitations of existing methods of fighting cancer, to expand the possibilities of therapy. The issuer's shares have been traded on Nasdaq since April 2019.
Where does the money come from
The company conducts research in the field of oncology and creates medicines to improve and expand treatment options.. Current developments focus on patients with lung cancer and solid tumors.
Portfolio of drugs under development. The company is currently developing four main drugs:
- repotrectinib is a breakthrough development for the treatment of non-small cell lung cancer and solid tumors;
- TPX-0022 TPX-0046 - preparations for use in the treatment of solid tumors of various genesis;
- TPX-0131 - a drug for the treatment of advanced non-small cell lung cancer.
In addition to major developments, the company has several research programs, which in the coming years may move to clinical trials.
What's wrong
Stocks lost almost 70% prices in less than a year. In February 2021, Turning Point Therapeutics' market capitalization skyrocketed, observed since March 2020, gave way to a noticeable drop in quotations: from the maximum in the area 140 $ the share price has now dropped to 42 $. Only 7 October shares fell by 23% per day - such situations can often be observed among biotech companies, when their presentation falls even slightly short of investor expectations.
Hedge funds cut their positions. According to Insider Monkey's summary, in the second quarter of 2021, the number of funds, who hold TPTX shares in their portfolios, declined from a high of 33 institutional investors a quarter earlier to 28. Such closing of positions is logically linked to a strong drop in the price of the issuer's shares over the same period., but at the same time does not add positive for retail investors in the market.
Long road to approval. Even the flagship drug repotrectinib is now only in the middle of clinical trials and is unlikely to be approved soon.: the company plans to discuss interim drug trial results with the FDA in the first half of 2022, and it looks like, that before 2023 issuance of the application, или NDA — New Drug Application, can't wait.
coming out, that all the potential for significant growth in shares lies in the medium and long term from three to ten years or more, when the company launches its first drugs on the market and they start bringing money systematically, - until this moment, Turning Point Therapeutics is more likely to be interesting only as a short speculative transaction.
What good
The company's valuation is normalizing. The ratio of liabilities to assets is scanty 0,03 item; multiplier P / BV, according to the latest quarterly report, from the meaning 5,34 dropped to imperfect, but much more acceptable 1,98, and equity is slightly more 1 billion dollars - the company is confidently on its feet, painlessly covers its obligations, and its share price may soon become attractive to value investors.
Large target market. According to research, Non-small cell cancer is the most common type of lung tumor: it accounts for more 80% cases. As for solid tumors, the company itself on the fifth slide of the presentation estimates the increase in the order 3,4 million patients annually.
The price dropped to acceptable levels. 1 October analysts at Simply Wall Street found the price 62 $ normal for company shares. Although at that moment the price slightly exceeded this threshold, current elevation in the area 42 $, according to the proposed method, shows undervaluation in 32% - Maybe, this is a good point of purchase for those, who is confident in the success of the business.
What's the bottom line?
Turning Point Therapeutics is one of the companies, who are at the forefront of humanity's fight against cancer and with their developments are bringing medicine ever closer to victory over cancer. But a positive moral character is not a panacea., and the main factor for investors in the market remains the profitability of the transaction and the ability of shares to make a profit. In this regard, the company's prospects cannot be called cloudless - at least until it has at least one registered drug., who will make money.
