Tyme Technologies Offers Incredible Risk-Reward

Summary

• Tyme Technologies recently reported their Q2 earnings that revealed the company only burned roughly $5M in cash with about $97M left in the bank.
• The small-cap sell-off has pushed the share price to fresh 52-week lows. I believe TYME has an incredible risk-reward at these prices.
• I review some of the company’s updates and point out a few bullish highlights for investors. In addition, I discuss some of my lingering downside risks for TYME.
• I update investors on my strategy for managing my TYME position and how I intend to take advantage of the sell-off.

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Tyme Technologies (TYME) had a productive second fiscal quarter with the company moving forward on their key strategic initiatives. Tyme has a novel platform technology that has developed their flagship product, SM-88, which has verified activity in numerous cancer indications and is currently in a pivotal trial for pancreatic cancer. The company has several key milestones slated over the next couple of years that will reveal the company’s clinical prowess and commercial potential.

What is more, the company has an outstanding financial position that will allow them to execute their current strategy and potentially get them through SM-88's FDA approval. Unfortunately, the ticker has been roped into the small-cap sell-off that started at the beginning of November and is not showing signs of a rebound. I think this sell-off has provided a great risk-reward at these prices and is an opportunity to add to my position.

I intend to review some of the recent developments and upcoming milestones. Finally, I discuss the risk-reward and my plans for adding to the TYME position.

Figure 1: TYME Updated Pipeline (Source: TYME Presentation)

Company Updates

A great deal has happened since the company performed their comprehensive strategic review, which resulted in the company deciding to halt their TYME-88-Panc Part 2 clinical trial assessing SM-88 in third-line pancreatic cancer in favor of focusing on their second-line program. The company trusts the second-line indication is a better prospect with a promising ROI compared to the third-line.

Figure 2: Precision Promise Trial Details (Source: TYME Presentation)

Looking at Figure 2, we can see that the second line has over three times the incidence and roughly four times the market opportunity compared to the third line. Now, the company is able to focus its resources on pushing the Precision Promise study by doubling the number of current trial sites by the end of the calendar year 2022. The company believes these efforts will help accelerate enrollment and possibly move the study’s completion date closer.

Figure 3: Precision Promise Trial Details 2 (Source: TYME Presentation)

The Precision Promise trial has oral SM-88 as a monotherapy in advanced metastatic pancreatic cancer. The trial's design is a Phase II/III randomized adaptive trial that is considered by the FDA as a pivotal Phase III study. This trial has 2 stages, with the first stage having up to 100 patients and the second stage will have 75 patients. Tyme expects the first stage review will transpire by the second half of 2022. If the data is adequate, TYME anticipates using the results to support an NDA for FDA approval.

The company achieved a key milestone with their first patient being enrolled in their OASIS breast cancer trial for SM-88. OASIS is an open-label Phase II trial for advanced breast cancer patients, who failed 2 prior hormonal therapies in failed or their disease progressed after a CDK4/6 inhibitor agent. This trial is testing tumor response rates with the goal of demonstrating SM-88’s ability to be an effective, well-tolerated, full treatment before patients move on to chemotherapy.

Tyme has already produced promising antitumor activity in two studies that had HR+/HER2- patients having complete responses and partial responses. This is significant considering HR+/HER2- comprise around 73% of the breast cancer diagnosis in the U.S. If Tyme can reproduce similar results in the current OASIS trial, it would open the door to roughly 150K cases a year that equals a $7.7B market (Figure 4).

Figure 4: Breast Cancer Opportunity (Source: TYME Presentation)

SM-88 could be a major player in this market if it is able to show efficacy along with its impressive safety profile. Tyme is working with Georgetown University to run a trial, which the company expects the first patient to be enrolled in this quarter.

In addition, Tyme has been working hard to identify potential patients for their Hope Sarcoma trial, and they witnessed a significant surge in enrollment as a result. Now, Tyme is aiming to complete enrollment in the first half of next year. Thus far, the early efficacy signals for the company Phase II HoPES study are encouraging and Tyme projects SM-88 will be able to extend treatment duration and maintain a quality of life in this hard-to-treat population.

Figure 5: HOPES Study Overview (Source: TYME Presentation)

Tyme also started pre-clinical work with Evotec, which is evaluating SM-88 and the company’s tyrosine-based analogs. Remember, the company announced that they have additional patent claims for Tyme’s technology platform for “targeted delivery of therapeutics to cancer cells” and to fuse the company’s “patented tyrosine analogs to a second therapeutic agent in a manner that creates a fusion compound that may allow targeted delivery to cancer cells in a novel manner.” So, Evotec could be exploring the possibility of adding new pipeline programs including combination therapies with some blockbuster oncology agents and helping develop Tyme's “Tumor Targeting Technology” platform (Figure 6).

Figure 6: Advancing Tumor Technology (Source: TYME Presentation)

Incredible Risk-Reward

The steep sell-off has ground share price down to a fine valuation, which I believe offers an exceptional risk-reward. At the moment, TYME's market cap is around $123M, which means the ticker is barely trading above its cash value. Indeed, the company is probably going to burn through the cash position, but that might be over two years away with the company potentially seeking approval in second-line pancreatic cancer at that time. What is more, the company could have their breast cancer and sarcoma programs into pivotal studies around the same time period.

Figure 7: Tyme Timelines (Source: TYME Presentation)

If approved, these indications could collectively bring in over $100M in revenue in a short period of time with the possibility of SM-88 eventually becoming a blockbuster drug. Considering the cash position and SM-88’s upside potential, I believe TYME offers an outstanding risk-reward profile that is hard to pass by. As a result, I'm willing to accumulate some more shares at this valuation in anticipation the market will ultimately recognize the opportunity and will price TYME at an appropriate valuation.

Lingering Downside Risks

Despite the fact Tyme has reduced some of the downside risks, I am still going to remain cautious about my TYME position because of some long-term financial concerns. Despite their current financial position, the company is probably going to need some supplementary funding to cover the expenses of hefty Phase III trials and pipeline initiatives. Another risk comes from a regulatory failure of SM-88 in pancreatic cancer. The company is going to need the pancreatic program to be successful in order to validate their platform technology. Failure would question the company’s CMBT candidates and crush the share price for an extended period of time.

Consequently, investors should continue to be attentive about these risks and govern their positions in view of that.

My Plan

Admittedly, I haven’t been able to take advantage of the sell-off thus far, but it is time for me to start finding indications of a reversal. I am on the lookout for signs of reversal before I pull the trigger. During a prolonged sell-off, I like to make 2-4 small transactions to ensure I am buying into a reversal and not just a quick bounce. First, I look for a bullish divergence in the RSI for my first buy. For my second buy, I look for a higher-low on the RSI and in the share price. For my third and fourth additions, I typically wait for a retest of support and/or a breakout above the formation.

Looking at the Daily chart (Figure 8), we can see the share price remains under pressure, but I am starting to see signs of bullish divergence in the RSI and share price. In addition, we could see a retest of the downtrend line with a potential higher-low at some point this week.

Figure 8: TYME Daily (Source: TrendSpider)

So, I think I am going to keep my finger on the trigger and will be prepared to execute at least one buy in the coming days and will look to accumulate about 50% of my target position size before year-end. Once I've got my fill, I will look to set a few sell orders around $0.90 per share to book some profits and attempt to get back to a “house money” position as soon as possible to hold for a long-term investment.

Thank you for reading my research on Tyme Technologies. If you want to learn even more about my method and how I discover these investment opportunities, please stand by because I am launching On The Pulse Analytics, a subscription marketplace service on Seeking Alpha in the near future and the initial wave of subscribers will be offered a lifetime discount. Further details are around the corner, so please keep an eye out and read my research.

Disclosure: I/we have a beneficial long position in the shares of TYME either through stock ownership, options, or other derivatives. 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.