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: Buy, $15 PT)

    February 11, 2019– Aerpio recently amended its expected timeline to release Phase 2b results, moving the date up to March 2019, from the prior projection of 2Q19, as a result of completing patient dosing in January. The Phase 2b trial is the epitome of a binary event, as is so often the case for micro-cap biotechnology companies, and we wanted to describe our view of how the stock could react based on either outcome.






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

    November 9, 2018–Yesterday, Akebia reported 3Q18 financial results and provided an update on operational and clinical developments. Akebia reported cash of $390M at quarter’s end, enough to fund operations into 2020, per our projections.






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    Assembly Biosciences, Inc. (ASMB: Buy, $70 PT)

    November 8, 2018– Assembly released 3Q18 financial results and provided clinical and operational updates, reporting a cash position of$233.9M, which includes $155M raised through a public offering in July.






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

    November 15, 2018– Avenue reported 3Q18 results and provided clinical and operational updates. The company reported $4.8M in cash, which when combined with the expected $35M from InvaGen in 1Q19 and the additional $7M potential line of credit, is sufficient to fund the company into early 2021, in our estimate which importantly is when the company should have fulfilled the requirements for its full acquisition.






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    AVEO Pharmaceuticals, Inc. (AVEO: Neutral)

    January 31, 2019– This morning, Aveo announced it “had accepted” the FDA’s recommendation not to submit a New Drug Application (NDA) for tivozanib for advanced or metastatic renal cell carcinoma (RCC). This recommendation was based on the disappointing overall survival (OS) results from the Phase 3 TIVO-3 trial, which failed to dispel the FDA’s previous concern regarding possible negative OS trends. We view this as the only viable move on the company’s part, as going against the FDA by filing the NDA would prove to be fruitless, in our view.






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    Checkpoint Therapeutics (CKPT: Buy, $18 PT)

    November 2, 2018– Checkpoint reported 3Q18 financial results and provided clinical and operational updates, reporting a cash position of$29.6M at the end of the quarter, which should comfortably fund the company into late 2019, as per our projections.






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

    Feruary 22, 2019 — Heron announced 4Q18 financial results, reporting $28.8M in net chemotherapy-induced nausea and vomiting (CINV)
    franchise revenue ($5.4M of Sustol and $23.4M of Cinvanti; up 187% YoY and up 46% QoQ), resulting in EPS of $(0.63). Heron ended 4Q18 with a strong cash position of $332.4M, which is enough to fund operations to profitability, as per our projections, and reiterate its 2019 net revenue guidance, from only the CINV franchise, of a range of $115-120M, which we find to be conservative and therefore have modeled about $133M in CINV franchise revenue. We model HTX-011 sales to beging in 2Q19, with the drug becoming the dominant revenue line item in 2020. Given that HTX-011’s clinical development is now complete, in our view, we have reduced R&D spend about 20% for 2019 versus 2018.






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

    January 30, 2019 —  This morning, Eyenovia announced positive results from its Phase 3 MIST-1 trial, which examined the safety and efficacy of MicroStat for pharmacologic mydriasis (pupil dilation).






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    Heron Therapeutics, Inc. (HRTX: Buy, $42 PT)

    January 8, 2019–  Yesterday, Heron pre-announced 4Q18 revenue of $28.1M ($23M from Cinvanti and $5.1M from Sustol), a 42% increase over 3Q18 for its chemo-induced nausea and vomiting (CINV) drug franchise, and guided 2019 revenue from its CINV franchise to be in the $115 – 120M range, a 53% increase over full year 2018 CINV franchise revenue of $76.7M.






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

    November 14, 2018– Yesterday, Innovate released 3Q18 financial results and provided clinical and operational updates, reporting a cash position of $8.1M. Given that Innovate plans to fund its Phase 3 trials of larazotide for celiac disease by securing non-dilutive funds from licensing larazotide in non-strategic countries, the current cash plus the anticipated non-dilutive funding should be sufficient to fund the company until the trials conclude. In the absence of receiving non-dilutive funding, Innovate could do a bona fide capital raise or utilize its ATM facility.






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

    February 4, 2019– We are initiating coverage of Inovio, Inc. with a Buy rating and a 1-year target price of $12, which is supported by a DCF analysis with a 15% discount rate and a 4 multiple of the terminal value for the projected 2030 EBITDA of $500 million. We base our valuation on US revenue from VGX-3100 in high-grade cervical dysplasia (CIN2/3), with any commercial success from Inovio’s other programs serving as upside to our valuation. The Phase 3 program for VGX-3100 is underway, and we project topline results to be released in 2020. We project an initial price of $10,000 for VGX-3100, FDA approval in 2021, and initial sales in 2022, resulting in 2030 US sales of $735 million, as per our projections.






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

    November 14, 2018– Mustang reported 3Q18 results and discussed clinical and operational developments, reporting a cash position of $41.3M, enough to fund company operations through 2019, as per our projections.






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

    February 12, 2019– We are initiating coverage of Pacira Pharmaceuticals, Inc. with a Sell rating and a 1-year target price of $15 supported by a DCF analysis with a 5% discount rate and a 4 multiple of the terminal value for the company’s projected 2025 EBITDA of $83M. We base our valuation on revenue from Pacira’s Exparel for post-operative pain, which was FDA approved in late 2011.






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    PolarityTE, Inc. (PTE: Sell, $5 PT)

    January 28, 2019– We are initiating coverage of PolarityTE, Inc. with a Sell rating and a 1-year target price of $5 supported by a DCF analysis with a 20% discount rate and a 4 multiple of the terminal value for the company’s projected FY2030 (FY ends in October) EBITDA of $126M. We base our valuation on revenue from PolarityTE’s regenerative tissue product SkinTE for acute burn wounds, surgical reconstructive wounds and diabetic foot ulcers, and from OsteoTE, an autologous bone regenerative product that utilizes the patient’s own bone for repair, reconstruction, replacement, supplementation and regeneration. SkinTE was registered with the FDA in calendar 3Q17 and OsteoTE is expected to undergo FDA registration and a limited launch in calendar 2019.






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    Progenics Pharmaceuticals, Inc. (PGNX: Buy, $11 PT)

    November 8, 2018–  This morning, Progenics reported 3Q18 financial results. Progenics’ partner, Bausch Health Companies, reported net Relistor sales of $34.5M, which translated to $5.3M in 3Q18 royalty revenue. Progenics reported a cash position of$148.9M, including $70M from a public offering in August and an additional $4.8M from ATM transactions.






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

    November 7, 2018–  This morning, ProQR announced 2Q18 results and provided clinical and operational updates, reporting a cash position of €113.7M, enough to fund operations through the end of 2020, as per our projections.






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

    January 31, 2019– SCYNEXIS announced positive interim results from its ongoing Phase 3 FURI trial, the goal of which is to evaluate the safety and efficacy of oral ibrexafungerp (a.k.a SCY-078) as a salvage treatment in patients with severe fungal infections and limited therapeutic options. The results of the interim analysis met this goal, demonstrating that oral ibrexafungerp was effective in treating mucocutaneous and invasive fungal infections that have not responded to other therapies.






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

    December 7, 2018– At the recent ASH conference, Stemline presented longer term pivotal Elzonris data, demonstrating that median overall survival (OS) has not yet been reached in the 29 first-line patients treated with 12 ug/kg/day Elzonris. Median follow up is now 23 (range of 0.2 – 41) months in a patient population that would otherwise have a median OS of about 1 year. Safety results were also updated, with no additional treatment related adverse events (TRAEs) despite longer treatment duration.






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

    January 8, 2019– This morning, UroGen released positive topline Phase 3 results from the OLYMPUS trial, demonstrating that UGN-101 (mitomycin gel) resulted in a 57% (35/61) complete response (CR) rate among the 61 evaluable patients at 4-6 weeks after treatment. Furthermore, all patients who achieved a CR, who were also evaluated at 6 months, remain disease free at 6 months; UroGen currently has 6-month durability data on half of these 35 patients. We anticipate at least some further details when management presents on January 10, such as treatment durability details..






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