Healthcare

Bankers

Jeffrey Sacher

Senior Managing Director, Healthcare Investment Banking

Mr. Jeffrey Sacher serves as the Senior Managing Director of National’s Healthcare Investment Banking Division. Previously, Mr. Sacher served as a Senior Banker at Goldman Sachs, Needham & Co, Aegis Capital and Brean Capital. In addition, Mr. Sacher was the Chief Financial Officer for ViaCell, a stem cell company sold to PerkinElmer. He is a graduate of Cornell University with a degree in Biology and Northwestern’s Kellogg Graduate School of Management.

Healthcare Sector Expertise

National has developed a unique area of expertise in the healthcare sector, drawing upon the deep knowledge base of our bankers, analysts and advisors as well as practitioners in major research and medical centers around the country. National’s healthcare banking team has a track record of successful financings of R&D and clinical stage biotech and medical device companies targeting unmet medical needs in significant markets including cancer, pain management, diabetes, cardiovascular, autoimmune, neurological, and digestive conditions.

Our retail and institutional investors benefit from our team’s ability to identify and finance private and public life sciences and medical technology companies through a wide range of transaction structures including straight equity, convertibles, and notes in Stage A raises, pre-listing bridge financings, IPOs, Follow-Ons, CMPOs, and RDOs.

Completed Transactions

Analysts

Dr. Jonathan Aschoff

Managing Director, Equity Research

Dr. Jonathan Aschoff is a Managing Director and Senior Equity Analyst covering the Biotechnology sector. Dr. Aschoff was a Managing Director and Sr. Biotechnology Analyst at Brean Capital, LLC from 2003 to 2016. Prior to Brean, Dr. Aschoff held positions as a senior biotechnology analyst at Friedman Billings Ramsey & Co., Inc., senior analyst at what is now RBC Dain Rauscher, Inc. and also served as an analyst at Sturza Institutional Research. Prior to beginning his career on Wall Street, Dr. Aschoff earned his Ph.D. in Molecular Biology and Microbiology as well as his B.S. in Biology at Tufts University.

    Healthcare Sector Coverage

    National broadly covers the healthcare sector but maintains a particular focus on micro and small cap companies developing drugs to treat cancer, microbial infection, and pain. We also maintain dedicated coverage of several medical device companies.

    Healthcare spending currently accounts for almost 20% of US GDP, higher than any other nation by a wide margin. The healthcare sector is expected to continue to thrive given increasing pressure on the FDA to accelerate its pace of drug application review, the JOBS Act, as well as ongoing political efforts to reduce the cost of healthcare. These dynamics have encouraged ever-higher numbers of micro and small cap healthcare companies.

    We believe that through our due diligence and increasing number of healthcare investment opportunities, investors can continue to find attractive investment option in the sector.

    Aerpio Pharmaceuticals, Inc. (ARPO: NEUTRAL)

    May 9, 2019– This morning, Aerpio announced 1Q19 financial results and provided clinical and operational updates, reporting a cash position of $53.4M, enough to fund the company through 2Q21, per our projections. The next milestone payment from Gossamer Bio is anticipated in early 2020, with data from that program potentially by YE19.






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    Akebia Therapeutics, Inc. (AKBA: Buy, $18 PT)

    May 10, 2019– Yesterday, Akebia reported preliminary 1Q19 financial results and provided an update on operational and clinical developments. Akebia reported cash of $168M, drastically lower than YE18 cash of $321.6M, still enough to fund operations into 3Q20, as per our projections. The large cash decrease reflects several one-time payments and the timing of R&D reimbursements from its partners, hence no change to our cash runway projection. Of the large $31.3M in COGS, we note that $14.6M was inventory step-up and $9.1M was amortization of intangibles (only $7.6M associated with 1Q19 sales).






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    Assembly Biosciences, Inc. (ASMB: Buy, $62 PT)

    May 10, 2019– The Phase 1a trial for ABI-H2158 in healthy subjects showed the drug was well tolerated and trough liver concentrations are projected to achieve exposures in excess of the in vitro EC50 (334nM) for cccDNA establishment with once daily dosing; a Phase 1b trial in HBV-infected patients is ongoing. The preclinical profile of Assembly’s third core inhibitor, ABI-H3733, showed increased potency in blocking cccDNA formation versus ABI-H0731 and ABI-H2158.






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    Avenue Therapeutics, Inc. (ATXI: Buy, $14 PT)

    June 3, 2019– Avenue released positive results from its second Phase 3 trial of IV tramadol, meeting the primary endpoint of an improvement in Sum of Pain Intensity Difference over 24 hours (SPID24) versus placebo in postoperative pain following abdominoplasty (p<0.001), as well as meeting all key secondary endpoints. By contrast to the first Phase 3 efficacy trial in bunionectomy, the abdominoplasty trial incorporated a 4mg IV morphine arm as an active comparator, to which 50mg IV tramadol was similar in efficacy and numerically better in safety. Key secondary endpoints versus placebo included Patient Global Assessment at 24 hours, SPID48, and total consumption of rescue medicine through 24 hours, as well as comparing the safety and tolerability of IV tramadol to IV morphine. Study completion rates were also similar among the 3 trial arms (88 to 93%).






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    AVEO Pharmaceuticals, Inc. (AVEO:SELL $0 PT)

    May 9, 2019– This morning, Aveo released financial results for 1Q19 and provided an update on operational and clinical developments. Aveo reported a pro forma cash position of $47.7M at quarter’s end, which includes $24.2M in net proceeds from an April capital raise, and is enough to fund operations into 4Q20, as per our projections. The cash runway estimate excludes possible additional clinical trials that may be initiated, the remaining costs to prepare and file a possible NDA for tivozanib (we firmly believe that no such NDA will be filed), any related drug manufacturing and drug supply distribution, any precommercialization activities that Aveo may undertake, and receipt of additional milestone payments.






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    Checkpoint Therapeutics (CKPT: Buy, $18 PT)

    May 10, 2019– Checkpoint reported 1Q19 financial results and provided clinical and operational updates, reporting a cash position of $14.1M, which should fund operations through 1Q20, as per our projections, as we expect actual cash burn to be about $4M per quarter for the rest of 2019, offset by purchases of cosibelimab from its hematological cancer partner. Therefore, Checkpoint has enough cash runway to release updated cosibelimab clinical data, additional EGFRi data, and evaluate potential partnerships for one or both assets over the coming months. The cash decrease of almost $8M over 1Q19 was influenced by $6M spent on cosibelimab batch production, giving the company a 2 year drug supply and there will be no more large manufacturing outlays for cosibelimab for at least a year.






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    Exellxis, Inc. (EXEL: Buy, $42 PT)

    May 2, 2019 — Exelixis has consistently beaten earnings expectations throughout FY18 despite increased competition in RCC, especially ICIs, and it is well positioned by having established Cabometyx as the leading therapy across a variety of indications for RCC. The drug is now beginning to compete effectively in HCC. The NCNN’s Clinical Practice Guidelines make Cabometyx the only preferred TKI for aRCC for intermediate- and poor-risk groups in first-line treatment, and the only preferred TKI for subsequent therapy.






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    Eyenovia, Inc. (EYEN: Buy, $12 PT)

    May 14, 2019 —  Eyenovia recently announced positive results from its MIST-1 and MIST-2 Phase 3 trials with MicroStat, a product expected to target at least the estimated 80M annual US pharmacologic mydriasis (pupil dilation) treatments. The MIST-1 (n=64) primary endpoint was mean change in baseline pupil diameter at 35 minutes, where MicroStat showed a superior dilation effect compared to either of its 2 drug components (tropicamide and phenylephrine) given alone. MIST-2 (n=70) was a superiority trial over placebo with the same primary endpoint, and all treatments were delivered using Eyenovia’s proprietary Optejet dispenser. Eyenovia presented positive detailed MIST-2 results at the American Academy of Cataract and Retinal Surgery (ASCRS) meeting earlier in 2Q19. Once Eyenovia generates 12 month stability data for MicroStat, it should be able to file a NDA in late-2020, with approval and commercial launch expected in late-2021.






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    Heron Therapeutics, Inc. (HRTX: Buy, $37 PT)

    May 9, 2019–  Heron announced 1Q19 financial results, reporting $31.6M in net chemotherapy-induced nausea and vomiting (CINV) franchise revenue ($3.6M of Sustol and $28M of Cinvanti; up 173% YoY and up 10% QoQ), resulting in EPS of $(0.80). Heron ended 1Q19 with a strong cash position of $332.4M, which is still enough to fund operations to profitability, as per our projections. We view the 2019 CINV franchise revenue guidance of a range of $115-120M to be quite conservative and therefore have modeled about $148M in CINV franchise revenue. We now model HTX-011 sales to begin in mid-2020, with the drug becoming the dominant revenue line item in 2022.






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    Innovate Biopharmaceuticals, Inc. (INNT: Buy, $27 PT)

    May 13, 2019– With $19.5M in cash as of the end of 1Q19, inclusive of a raise of $8.7M in gross proceeds done in 2Q19, Innovate can currently fund itself through 2020. The company has registered over 100 trial sites for the Phase 3 CeD-LA-3001 trial, and we expect the ini tial patients to enroll near term. The Phase 3 program will be comprised of 2 pivotal trials, and a sufficient amount of larazotide for the Phase 3 program has been manufactured.






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    Inovio, Inc. (INO: Buy, $12 PT)

    May 10, 2019– Inovio will announce several clinical datasets over 2019, and we expect release of interim Phase 2 data for VGX-3100 in both vulvar dysplasia and anal dysplasia. We also expect to see interim efficacy (immunological impact, progression-free survival and overall survival) Phase 1/2 results for INO-5401/INO-9012/cemiplimab in newly diagnosed, post-surgery GBM (20 US sites now open; all 52 patients enrolled ahead of schedule). We also expect to see interim Phase 1/2a efficacy results for INO-5401/INO-9012/atezolizumab in metastatic bladder cancer (13 US sites now open; others recently opened in the EU), but Inovio said that enrollment into this trial was challenging. Additionally in 2019, we expect to see Phase 1/2a MERS vaccine trial results and Phase 2 MERS vaccine field trial results in 2H19, along with Zika vaccine trial results (safety, immune response and infection rate). Inovio’s dBTEs progress preclinically and its first clinical trial with a dMAb began in 1Q19.






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    Mustang Bio, Inc. (MBIO: Buy, $21 PT)

    May 10, 2019– Mustang is addressing multiple large market opportunities with a broad array of CAR-T candidates. The current US market for MB-102 can be approximated by the more than 21,000 new AML cases for 2017, which at our projected $300,000 price per patient amounts to a $6.3 billion opportunity, a small slice of which would be meaningful to Mustang. Additionally, there is only 1 FDA-approved therapy for BPDCN. Although the disease is extremely rare, with just a few hundred cases a year, BPDCN has a poor prognosis and represents an area of high unmet medical need.






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    Pacira Pharmaceuticals, Inc. (PCRX: Sell, $15 PT)

    May 2, 2019– This morning, Pacira reported 1Q19 financial results and provided clinical and operational updates, reporting an end of 1Q19 cash position of $412.4M and debt position of $294M, but with current cash at $292M after having spent $120M upfront to acquire MyoScience, Inc. in April. Exparel net revenue for 1Q19 was $90.6M, a seasonally expected QoQ decrease of about $4M. GAAP EPS was $(0.07), with non-GAAP net income and EPS of $9.3M and $0.22. Pacira reiterated its prior 2019 financial guidance, but added $8-10M in iovera net revenue.






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    PolarityTE, Inc. (PTE: Sell, $3 PT)

    May 13, 2019– This morning, PolarityTE reported 1Q19 financial results and provided clinical and operational updates, reporting quarterly sales of $297k and a pro forma cash position of $73.4M that should fund operations for about a year, in our view. Given our financial model adjustments, including lowering what we consider to still be optimistic revenue forecasts, we are lowering our target price to $3 from $5. The company makes it difficult to compare its new calendar year results to its old October fiscal year results because it still has not restated its financials, but suffice it to say that lackluster is lackluster no matter how it is reported, and that the past is the least of PolarityTE’s problems, in our view. At least the Salt Lake City manufacturing site FDA inspection concerns seem to have gone away, with the agency classifying the inspection as Voluntary Action Indicated, or “VAI.”.






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    Progenics Pharmaceuticals, Inc. (PGNX: Buy, $8 PT)

    May 9, 2019–  Thus far, there have been 22 treatment requests by patients for Azedra, which involves the request, followed by avidity and dosimetry tests, shipment of the therapeutic dose and revenue recognition, and finally actual dosing of Azedra. Patient scheduling is ongoing at 12 activated treatment centers in the US, and Azedra has not yet been turned down by any payers. We expect the overwhelming majority of patients to take 2 Azedra doses, given that the 75% rate of receiving a second dose in the pivotal trial was in late stage patients less likely to tolerate a second dose. The addition of Azedra to multiple treatment guidelines should facilitate adoption by underscoring Azedra as the standard of care for this indication, and there is no competition on the horizon.






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    ProQR Therapeutics, Inc. (PRQR: Buy, $23 PT)

    May 8, 2019–  This morning, ProQR announced 1Q19 results and provided clinical and operational updates, reporting a 1Q19 cash position of €94M, down from €105.6M at YE18 but enough to fund operations into 2H20, as per our projections. R&D increased mainly due to initiating trials for sepofarsen (formerly QR-110) and QR-421a.






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    Scynexis, Inc. (SCYX: Buy, $6 PT)

    May 9, 2019– After completion of a 4Q18 End-of-Phase 2 meeting with the FDA for oral ibrexafungerp (IBX) for acute vulvovaginal candidiasis
    (VVC), SCYNEXIS began its Phase 3 VANISH program (2 trials; n=350 each; single 600mg dose vs. placebo) in 1Q19 to investigate IBX as a treatment for acute VVC, with Phase 3 top-line data expected in 1H20 and an NDA submission expected in 2H20. A Phase 3 trial (named CANDLE; n=350; 600mg dose once monthly for 6 months vs. placebo) for prevention of recurrent VVC is also on track with initiation expected in 2Q19.






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    Stemline Therapeutics, Inc. (STML: Buy, $31 PT)

    June 3, 2019– Today at ASCO, Stemline released updated positive results from its Phase 2 trials with Elzonris in previously treated CMML and MF patients. The results support Stemline’s decision to enroll a pivotal CMML arm as part of its ongoing Phase 2 trial, thereby hastening the pace of the drug through the clinic. Elzonris was already FDA approved in late 4Q18 for BPDCN, and the EU application for BPDCN has been granted accelerated assessment by the EMA.






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    Urogen Pharma LTD (URGN: Buy, $70 PT)

    May 9, 2019– This morning, UroGen reported 1Q19 financial results and provided clinical and operational updates, reporting a strong current cash position of $246.7M that should fund the company for at least the next 24 months, well beyond the expected US launch of UGN-101 in 2020.






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