TENX: Undiscovered Gem

By John Vandermosten, CFA

NASDAQ:TENX

READ THE FULL TENX RESEARCH REPORT

First Quarter 2020 Financial and Operational Review

Tenax Therapeutics, Inc. TENX completed enrollment of its Hemodynamic Evaluation of Levosimendan in Patients with PH-HFpEF (HELP) and announced that the last patient has completed their final visit as of April 9, 2020. The 37-patient open-label trial achieved an 84% initial response rate for screened patients and is expected to finish analyzing data and report topline results in 2Q:20.

We are very excited and optimistic about Tenax prospects for Levisimendan. Early evidence shows that Levisimendan can provide a statistically significant material benefit, shown by the 37 of 44 patients who achieved a reduction in pulmonary capillary wedge pressure (PCWP) of 7.8 mmHg, an average reduction in pulmonary arterial pressure (mPAP) of 4.8mmHg, an average reduction in right atrial pressure (RAP) of 5.3 mmHg, and an average increase in cardiac output (CO) of 0.4 liters/min. The improvements were generated during the open-label lead-in phase and achieved statistical significance, with the exception of cardiac output. Individuals with Group 2 pulmonary hypertension comprise a large population, many multiples greater than the $5 billion in revenue Group 1. We see a substantial opportunity for commercial success for Levosimendan as there are no other treatments available for this condition. While we are a long way from approval, the reward to risk is dramatically positive on a probability adjusted basis.

On May 15th, Tenax filed its 1Q:20 Form 10-Q with the SEC. No revenues were reported in the period and operating expenses totaled $2.7 million. Net loss per share was ($0.38). First quarter research and development costs of $1.3 million rose 178% from the $0.5 million spent in the comparable period reflecting screening and enrolling by the HELP trial. General and administrative expenses totaled $1.3 million, up 12%. Increased legal fees, investor relations costs and insurance costs were partially offset by other administrative fees. Net loss for the period was ($8.4) million or ($1.35) per share.

Cash and securities balance was $4.9 million as of March 31, 2020 and cash burn totaled ($2.7) million for 1Q:20. The company continues with no debt. We anticipate a decrease in expenses for the balance of 2020 as the HELP trial undergoes finalization, data lock up and data analysis and papers are drafted for conference presentation.

The HELP Trial

In November 2018 Tenax announced the activation of the first clinical research site for the PH-HFpEF HELP trial at Stanford University School of Medicine. In March 2019, the first of what would eventually be 37 patients was enrolled in the trial at 10 sites across the US. By March 12th 2020 all patients had been enrolled and by April 9th the final patient completed the final visit. Top line data is expected to be reported before the end of the second quarter as the company now finalizes the trial and conducts data lock up and analysis. Ample data were collected during the study which will provide fertile ground for researchers ro provide analysis. We anticipate publication at conferences in the latter half of the year. Tenax management will develop its own materials and Phase III trial design to present at the end-of-Phase II meeting with the FDA prior to year end. The HELP study reported zero drug-related serious adverse events. Two of the 37 patients did not complete the study.

A Phase III trial may begin in 2021, assuming the HELP trial results are favorable. Its design is highly dependent on the strength of signal generated by Phase II. A rough estimate of time, cost and size of the registrational trial range from 18 to 36 months, $30 to $50 million and 200 to 300 patients. While none of these estimates have been confirmed by the company, we believe they are reasonable based on the likely outcome of a successful Phase II.

Milestones

‣ Enroll First Patient – March 2019

‣ Full Enrollment – 1Q:20

‣ Last Patient, Last Visit – April 2020

‣ Topline data – 2Q:20

‣ Presentation of data at conference – Fall 2020

‣ End of Phase II Meeting with FDA – 2H:20

‣ Launch Phase III – 2021

SUBSCRIBE TO ZACKS SMALL CAP RESEARCH to receive our articles and reports emailed directly to you each morning. Please visit our website for additional information on Zacks SCR. 

DISCLOSURE: Zacks SCR has received compensation from the issuer directly, from an investment manager, or from an investor relations consulting firm, engaged by the issuer, for providing research coverage for a period of no less than one year. Research articles, as seen here, are part of the service Zacks provides and Zacks receives quarterly payments totaling a maximum fee of $40,000 annually for these services. Full Disclaimer HERE.

___________________________

1. The trial originally targeted 36 patients.