Our Therapix Biosciences Stock Prediction in 2019 (Buy or Sell?)
The cannabis biotechnology sector is poised to provide a bonanza for investors in 2019 and beyond. But it’s also fraught with tiny upstarts that are doomed to fail.
Will Therapix Biosciences (NSDQ: TRPX) prove to be one of the winners or failures?
With a market cap of $13.6 million, Therapix is yet another in a growing number of micro-cap, clinical-stage cannabinoid drug companies.
As with most clinical-stage companies, Therapix has no drugs getting prescribed. Consequently, its future prospects depend on how its clinical trials turn out. If one of its drugs hits, the firm could enrich early investors. If its drugs fail in trials, Therapix is dead in the water.
Our Therapix Biosceinces prediction will examine the pros and cons of the company and what’s in store for the stock in 2019.
What Is Therapix Biosciences?
Therapix has four drugs in clinical development. THX-110 is a Phase II trial drug that treats Tourette’s Syndrome, Obstructive Sleep Apnea, and pain.
THX-130 is designed for mild cognitive impairment and traumatic brain Injury; THX-150 treats various infectious diseases; and THX-160 is for pain. These three are about to enter Phase I trials.
Therapix is taking a different approach than most of its rivals. It’s trying to develop drugs based on what’s known as the “entourage effect”. The human body actually has its own endo-cannabinoid system. Cannabinoids within the cannabis plant can affect the body in a similar way.
THC, or Tetrahydrocannabinol, is the well-known primary psychoactive constituent of cannabis. Its effect can be increased by using other cannabinoids or by terpene compounds, which are unsaturated hydrocarbons often found in certain plant oils.
Therapix has an entourage compound known as Palmitoylethanolamide, or PEA. The company thinks that combining THC and PEA may stimulate cannabinoid receptors, inhibit degradation in metabolism, and therefore increase THC absorprtion.
Bottom line: more effective oral dosing and fewer side effects.
How Has Therapix Stock Performed?
What is Therapix Stock History?
- Over the past 12 months, TRPX shares have fallen 32.5% whereas the S&P 500 has gained 0.3%.
- Over the past two years, TRPX shares have fallen 56.2% whereas the S&P 500 has gained 16.5%.
How Has Therapix Stock Performed in 2017/2018?
- In 2017, TRPX shares lost 40.5% whereas the S&P 500 gained 19.4%.
- In 2018, TRPX shares lost 41.8% whereas the S&P 500 lost 7.5%.
Who Are Therapix’s Rivals?
Takeda Pharmaceutical (NYSE: TAK)
Takeda Pharmaceutical, a $62.4 billion market cap firm, in 2018 gobbled up Shire Pharmaceuticals, maker of the famous drug Adderall.
Tourette’s is a neurological disorder characterized by repetitive, involuntary movements and vocalizations. Tourette’s is caused by irregularities among neurotransmitters such as dopamine, serotonin and norepinephrine.
Part of the problem with treating the disease is that different medications work for different people. Adderall is one drug that gets used because it can help with focus and concentration but it can increase tics.
Johnson & Johnson (NYSE: JNJ)
Janssen Pharamceuticals, which is owned by Johnson & Johnson, a $356.3 billion market cap firm, developed Haldol. It’s traditionally been prescribed as an anti-psychotic, but it’s also used for Tourette’s in conjunction with Prozac. In fact, Haldol has been the go-to for Tourette’s since the 1960s.
Haldol is available as both a tablet and a solution and effective even at doses as low as 3 or 4 mg/day for most patients. It has traditionally been effective even at 1 mg/day. A 1988 study shows a 78%-91% reduction in tics.
Alas, Haldol isn’t a cure-all because it causes significant side effects that include fatigue, weight gain, memory problems, personality changes, and sexual dysfunction.
JNJ is a global juggernaut with $52 billion in annual sales, over $14 billion in annual net income, free cash flow that runs between $15 billion and $18 billion annually, and $19 billion in cash. Good luck to its competitors.
Eli Lilly (NYSE: LLY)
A $121.2 billion market cap firm, Eli Lilly is the maker of Prozac. On its own, Prozac doesn’t have any effect on tic symptoms. When combined with JNJ’s Haldol, however, there are good results.
Eli Lilly is another formidable competitor to Therapix. LLY generates $23 billion in annual sales, over $2 billion in annual net income, free cash flow that runs between $2 billion and $4.5 billion annually, and $13.7 billion in cash. Eli also has one of the widest marketing and distribution infrastructures in the world.
The aforementioned trio of stocks pose fierce competition to micro-cap Therapix, but this list of deep-pocketed rivals is by no means exhaustive.
Will Therapix Go Up in 2019 (Should You Buy?)
The success of Therapix is entirely dependent on the results of its clinical trials. It has four drugs in development. If any of them hit, the company could become tremendously valuable.
However, if all of the company’s drugs fail in trials or even if one of them hits but doesn’t have the marketing to support it, your investment is likely to hit zero.
Therapix has no revenue. It has only $5 million in cash. Will it even be able to stay in operation long enough to finish its trials?
There is an argument to be made for the stock, though. The market cap is $13.6 million. The market basically thinks that the company isn’t worth much at all. That means any good news from clinical trials could significantly boost the stock.
In other words, no news is priced into the stock. And if — that’s a big “if” — any of these drugs does get approved, the stock could soar. Even a multi-million dollar milestone payment from a third-party marketer would mean wonders for the company.
This video describes the “profit catalysts” that possibly await the company.
Will Therapix Go Down in 2019 (Should You Sell?)
Make no mistake, there is more reason to sell or avoid TRPX than buy it at this point.
Wall Street gives TRPX a $13.6 million valuation, which suggests that the market has little faith in the company. The market has a good rationale for its pessimism.
Therapix has a single drug in Phase II. Only 30% of drugs make it through this phase, and only 25% of those make it through Phase III. That’s a very narrow window for TRPX to fit through.
The company has only a few million dollars on its balance sheet and there is a real risk that it runs out of money before these long and expensive trials are even done.
Overall Therapix Forecast and Prediction for 2019
When investing in the biotech sector, go with companies that have at least one drug on the market that’s making money.
Clinical-stage pharma stocks are akin to gambling in Las Vegas. The odds are against you.
The overall stock market presents so many better alternatives for your investment money; why bother with such excessive risk?
The marijuana biotech sector undoubtedly presents opportunities for outsized gains, but even aggressive investors should be leery of micro-cap, clinical stage drug companies that are trying to develop a cannabis-based wonder drug. Stick to cannabis drug companies that are actually generating revenue and profits.
Therapix Biosciences will only bring grief to investors.