Trillium Therapeutics: Runup Expected For This CD47 Player Ahead Of Midyear Update

Summary

• Shares have risen by 21% since my January article.
• Signs of monotherapy efficacy for lead programs, even at low doses, point to differentiation versus competitors.
• Acquisition of Forty Seven for $4.9 billion in cash and presence of an additional interested party are proof of interest in this lucrative space.
• Midyear (ASCO) and year-end (ASH) data updates provide us the "needle moving" catalysts we search for in such a difficult market environment.
• Trillium Therapeutics continues to be a Buy, and I suggest accumulating dips in the near term ahead of mid-year update.
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Shares of Trillium Therapeutics (TRIL) have risen by 21% since my January article recommended scooping up shares of this "fast follower" in the potentially lucrative CD47 space.

With shares trying to break above the 50-day moving average ahead of what I call a "needle-moving" catalyst, I'm looking forward to update readers on this innovative, small-cap oncology player.

Chart

Figure 1: TRIL daily advanced chart (Source: Finviz)

When looking at charts, clarity often comes from taking a look at distinct time frames in order to determine important technical levels to get a feel for what's going on. In the above chart (daily advanced), we can see the stock already has gone up multiple folds since the bottom established in Q4. Much of this move was due to the impressive showing of competitor Forty Seven at the ASH annual meeting in December (what we call a "sympathy run"). Additionally, a corporate update showed that new management has taken steps to wisely reduce cash burn and refocus efforts on progressing key assets forward to important data readouts in the near term. With the stock basing at the 50-day moving average and trying to break above, I believe this is a good time to revisit this one for readers.

Overview

Our updated thesis for Trillium Therapeutics can be summarized in the following points:

• I continue to believe that this CD47 player is significantly undervalued, considering that front-runner Forty Seven was acquired by Gilead (GILD) for $4.9 billion. New CEO Jan Skvarka hails from Bain Capital and has moved quickly to streamline activity in the clinic and reduce cash burn. It was also a green flag that the company raised $117 million in an oversubscribed public offering, with key institutional investors such as Boxer Capital and New Enterprise Associated taking significant positions. Interestingly enough, two General Partners at NEA (Paul Walker and

Analyst’s Disclosure:I am/we are long TRIL. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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