Timber Pharmaceuticals (NYSE: TMBR) is advancing clinical research evaluating novel treatments for rare dermatologic and orphan diseases with limited treatment options. Last week, the company completed a merger with BioPharmX Corporation, bringing with them an additional $20 million cash infusion that will enable the newly joined companies to advance a diversified pipeline of novel drugs targeting underserved and unmet market needs. With little known about this former private company, investors may be presented with a value-based opportunity from a strengthened balance sheet and a product pipeline that has broad potential.
Near-term catalysts for Timber may come from its late-stage clinical development pipeline, which includes two Phase 2b assets and significant advancement of a preclinical asset towards an IND, all targeting rare dermatologic conditions. Rare dermatology is currently one of the highest growth subsegments within the dermatology market. Looking longer-term, additional value is likely to be generated from each drug’s potential to treat multiple indications, bringing an inherent ability to expand into additional dermatology drug markets.
The company is positioned for growth and has already proven that its programs have value. Aside from its $20 million cash infusion, Timber Pharmaceuticals is one of only four companies in 2018 to earn an FDA Orphan Products Grant, and recently received the second tranche of its $1.5 million award.
Also, because of the company’s focus on developing orphan indications where no FDA approved treatments are available, they are well-positioned to receive a valuable Priority Review Voucher for their TMB-003, which have been valuable for sale on the open market.some .
Clinical Focus On Rare Dermatologic Conditions
An attractive feature about Timber Pharmaceuticals is that its three assets already in development have the potential to earn market exclusivity. The TMB-001 and TMB-002 assets are both Phase 2B programs targeting congenital ichthyosis and facial angiofibromas in tuberous sclerosis complex, respectively. Timber’s third asset, TMB-003, is a preclinical program initially targeting localized scleroderma, a rare autoimmune connective tissue disorder (CTD) that leads to inflammation and thickening of the skin.
Notably, these three clinical programs bring the potential for the expansion of each product’s treatment indications. These broader treatment opportunities not only lower trial risk but also increase the potential for partnership and licensing agreements with large pharmaceutical companies. However, it’s more probable that Timber will see these programs through to eventual marketing, noting that Timber Pharmaceuticals does have the runway to commercialize its assets and realize their full market potential. Leaders in the space include Novartis (NYSE: NVS), Johnson & Johnson (NYSE: JNJ), and Pfizer (NYSE: PFE)
Additionally, the company’s financial health allows for strategic options that can include broadening their clinical focus toward additional dermatological indications. Thus, Timber does control its pipeline destiny.
Approval Pathways From 505(b)(2) Filings
A key advantage to the Timber Pharmaceuticals strategy comes from utilizing the FDA’s 505(b)(2) pathway that allows for orphan designated drug trials to benefit from expedited approvals based on already established safety and efficacy data. The process saves both time and money.
Moreover, the 505(b)(2) pathway significantly de-risks the Timber product portfolio by inheriting already established clinical proof-of-concept, proven mechanism of action, and well-known chemistry, manufacturing, and control processes that acknowledge positive safety profiles.
Even as a young public company, Timber Pharmaceuticals already has multiple shots on goal from its two late-stage drug approval opportunities and earlier stage asset.. The market protection granted from orphan exclusivity, and the IP portfolio that the company is building may be able to deliver an inherent value that may not yet be recognized.
Although shares opened trading under some pressure, it’s likely that investors don’t understand the strength of either the pipeline or the company’s balance sheet. Timber Pharmaceuticals is ripe for investor consideration with multiple shots on goal, strong management, and a balance sheet that can advance its trials.
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