When I entered $TXMD calls this morning, I had a twinge of guilt. I felt almost as if I cut someone on line. All those 'patient' longs over the years who have been waiting for $TXMD to breakout... I feel like, in a way, I cut in front of them.
Yes those longs are likely sitting on some gains and/or have the same opportunity as me to purchase stock or options in $TXMD. But at least I didn't have to endure the trauma of the last 5+ years of set backs and dilution and bearish articles. The longs have paid the price. A now balding scalp perhaps. High blood pressure. Frustration. Perhaps some of the longs have even given up already and left, maybe even yesterday they sold out, thinking if this stock isn't moving higher now, it's never going to go up. And to think how close all that patience was coming to finally paying off ... How unfortunate.
And yet here I am, with my pick axe, buying calls, thinking what a great opportunity $TXMD is here under $10 a share. All the years the company has spent on research has finally come to fruition. I was thinking that this morning. I almost feel like this stock was waiting for me, or anyone else who is going long at these prices. It is finally on the cusp of breaking out. I guess no matter where you are on the $TXMD line, over the long term it's not going to matter who was in front of who when the rally started. And that is why I bought calls this morning, and why I am going to add calls along the way. I think the stock is on the cusp of breaking out.
There are quite a few research pieces on $TXMD. I'll share some links later, but I want to give my bring thoughts on the stock and why I think its going higher.
$TXMD came to life, not as a hyped IPO, but as a quiet reverse merger. Becoming publically traded through this route is just one a of a few things the bears have hung their hat on, and one of the reasons $TXMD has seen over 40% of its float short. The shorts have believed that this companies sole purpose is to enrich its executives through dilution. Yes dilution sucks. The most recent bout of dilution happened just a few weeks ago, and the stock got clobbered because of it. The company has yet, over the last 5 years, to post any meaningful revenue. FDA decisions have not gone their way. Possible approvals pushed back. Clearly a lot of negatives for the bears and shorts to hype. It's very easy to trash a company burning through cash and diluting its shareholders. Easy!
However the game has changed. The company just in the last few weeks has launched its very first product Imvexxy, which was approved by the FDA less than 3 months ago!
In October the FDA is set to possibly approve their TX-001HR, a one of a kind drug to treat hot flashes and night sweats.
You are looking at a company that is likely to start producing meaningful revenue early next year. And yet despite recent FDA approvals and product launch the stock has languished. It remains near the same price per share it was some 5 years ago!
I'd say, looking from this chart, that the market doesn't believe the company. However the recent FDA approvals and the key decision coming at the end of October are doing the talking. Imvexxy has launched. It's quite a peach:
TX-001 is coming. Getting in the stock now is like getting all the upside, without having to wait years for research and approval. It's like cutting the line.
The short bias and negativity have clearly weighed on the stock. There is a huge short interest betting on $TXMD going even lower. Look at that price history for $TXMD and a lot of the short positions are up perhaps $1 a share at best? Short positions opened at $5? $6?. Its not like $TXMD was a $50 stock and 25 million shares were shorted there. The stock has traded mostly in a $4-$7 range the last five years. To see over 40% of the float short with the game changing for $TXMD.... the shorts are betting on failure not downside. And recent FDA approvals show the company is succeeding.
If the stock can break $7.50 I think a move over $10 is the next step. At that stage the shorts will likely be very underwater on their short positions. Their borrowing of shares to sell, which likely has kept $TXMD's price per share low, will likely have the opposite affect when they buy those borrowed shares back in the open market.
Short squeeze or not, I think the breakout is coming. I wouldn't have bought calls otherwise.
I think over the next few years with the October approval of TX-001 this could be a $20 or better stock and I'm not alone. For now I am trading on a break of the long term wedge and a move over $10 into late fall 2018.
That $7.50 break will be the key
here is an excerpt from a great seekingalpha piece and the promised research links:
He gives a conservative valuation after an October approval of $18+ a share.
and the analysts are rather bullish too. They aren't giving 20-30% upside targets, more like 400-500%!
Here are some recent analyst remarks:
$20.00 TARGET and note Imvexxy early interest is STRONG
| TherapeuticsMD a 'rare early commercial story' in womens health, says Stifel | |
| Stifel analyst Annabel Samimy kept her Buy rating and $20 price target on TherapeuticsMD, saying her recent meetings with the management focused on its launch of Imvexxy for VVA. The analyst notes that its early metrics are strong with over 2.4K prescriptions filled within weeks, adding that the product has "multiple ways to win" thanks to its win-affordability, education, and superiority | |
$27 TARGET from Cantor
| Cantor raises TherapeuticsMD target to $27 on Annovera approval | |
| Cantor Fitzgerald analyst William Tanner raised his price target for TherapeuticsMD to $27 from $26 following the approval of Annovera, which he says "provides another leg to the TXMD stool." The company's acquisition of commercial rights to Annovera should appeal to investors, Tanner tells investors in a research note. He believes the product is "clearly complementary" to the emerging women's health franchise. The analyst thinks he next 12-18 months could be a period of positive stock performance if TherapeuticsMD executes on the commercial front | |
Imvexxy represent "significant" long-term opportunities.
| TherapeuticsMD initiated with an Overweight at JPMorgan | |
| JPMorgan analyst Chris Schott started TherapeuticsMD with an Overweight rating and $11 price target. The analyst believes TX-001 and Imvexxy represent "significant" long-term opportunities. He sees peak sales of $750M for TX-001 and thinks Imvexxy can gain 20%-plus of the severe dyspareunia market over time. Schott sees TherapeuticsMD as well positioned in the women's health space | |