Tyme: Undercovered Growth Story In Pancreatic Cancer

Summary

• TYME has a molecule targeting pancreatic cancer.
• The stock is moving on COVID-19 related news.
• However, cancer therapeutics is a more stable potential for the company.
• Looking for more investing ideas like this one? Get them exclusively at The Total Pharma Tracker. Get started today »

Tyme Technologies (TYME) is developing a line of cancer therapeutics, and I covered it in September last, when it was trading a little shy of a dollar. In February, the company went up to $5 after languishing at the $1 level for 6 months. The reason: It got a new patent approved covering its COVID-19 treatment. That sounded like a spurious reason for a stock to quadruple. Then in a matter of three days, it launched a much-needed $100mn stock offering, and went down to $2, at which it has remained since. That, too, sounds like a spurious reason to go down.

The quadrupling sounded spurious to me because the market has never reacted this positively to TYME’s “actual” portfolio, its late stage solid tumor candidate SM-88 which is currently in multiple phase 2/3 trials in pancreatic and other cancers. Indeed the market has mostly neglected this company, and it has languished in solemn anonymity, with very little cash to even push its programs forward.

Then it gets a new patent covering an early stage COVID-19 hopeful called TYME-19 and the stock quadruples? That makes little sense to me.

Even more, this company was in need for a cash reserve to push its programs. Like a responsible biotech, it did not try to raise cash when the stock was trading low. Then there was this huge upswing, and it launched a much needed $100mn offering at a discount to its top price, and even then the stock fell all the way from $5 to $2? That makes even less sense to me. It appears that the market prefers an early stage, data-less program just because it has the words “COVID-19” in it, rather than a much more validated program with late stage data in pancreatic cancer, and a novel mechanism of action.

This patent is U.S. Patent No. 10,905,698, and is directed to methods for treating COVID-19. The theory goes like this:

Unlike immune therapies that depend upon the structure of the external virus coat of COVID-19 where the therapy directs its attack, we believe TYME-19 is agnostic to this structure and any mutations to the viral coat. Like other TYME agents, TYME-19 affects cellular metabolism. It constrains viral replication after a virus has inserted its genetic blueprint into an infected cell by inhibiting the ability of the virus to use the cells synthetic apparatus to make viral proteins and lipids. As a result, we believe that TYME-19 diminishes the ability of COVID-19 to hijack an infected cell. TYME intends to initiate the appropriate clinical trials to substantiate the safety and efficacy of TYME-19.

This is a nice sounding theory, but they have not even started a trial, so it is just that - a theory. In theory, here, the treatment is going to be structure agnostic, meaning, in theory, the drug will treat any virus strain. Last year, in its corporate presentation, the company promised to complete proof of concept trial of TYME-19 by the second half of 2020. But there’s no clinical trial registered for the molecule. The company says there’s been preclinical data that showed that “TYME-19 repeatedly prevented COVID-19 viral replication without attributable cytotoxicity to the treated cells.” However I could not locate this specific study. The following two studies were referenced by the company, but they do not relate to SARS-COV-2:

• Yang, X, et al., Activation of autophagy by unfolded proteins during endoplasmic reticulum stress. The Plant Journal (2016) 85, 83–95

• Umut Ozcan, U., et al., Chemical Chaperones Reduce ER Stress and Restore Glucose Homeostasis in a Mouse Model of Type 2 Diabetes. Source - Sciencemag.org.

So the mechanism is novel and interesting, and certainly it can pique some market interest, but I would have preferred that to happen when they had some data.

Now, coming to the $100mn they raised through a dilutive offering; this money is going to be utilized to put their programs through the approval process. The company had only about $13mn in cash at the time of the raise, so they direly needed cash. Why should the market be interested? If you read my previous coverage - available to TPT members - you could see why.

"There are no FDA approved third-line pancreatic treatments and there are no active therapies recommended in the ASCO or National Comprehensive Cancer Network guidelines. If commercialized for third-line pancreatic treatment, the competition for SM-88 would be physician choice of therapy, supportive care and/or clinical trials." (from 10-K)

TYME has modest expectations for commercialisation, which makes it more realistic. Given their current valuation, they have a realistic potential of achieving double-digit million dollar figures in the first couple years in this one indication alone. Their data has been good, and we can expect approval sometime in 2022.

Bottom line

Obviously there’s a lot of market interest for their mechanism of action, just not for third line pancreatic cancer. The stock will remain depressed, moving only with more COVID news, until regulatory updates like a PDUFA date are available. These depressed prices may be buying opportunity.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. 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.