I was not surprised by the massive fall in MTFB, it was inevitable that there would be a huge fall if it was not approved at this stage. Unfortunately I did not have the courage to pile in when I saw it at just under 5p, which was a shame as it closed on Friday at over 10p.
There will now need to be a further fund raise, as I expect the FDA will require a much larger trial to confirm that there are not toxic effects on the kidney, as those are known to be encountered with Vancomycin, which is the current treatment of choice for ABSSSI. So unless the success rate is much better or the toxicity demonstratively improved (statistically significant difference in the number of side effects between Iclaprim and Vancomycin) it will be challenging to get any new drug to market.
The question here now really, is how much longer further trials will take. This will depend on what the FDA say they need to see and the company will not be meeting with the FDA for at least a month by the looks of things. It will also depend on how things go in the other trials that are currently ongoing or planned into other treatment areas such as hospital acquired bacterial pneumonia (HABP), including ventilator associated bacterial pneumonia (VABP).
The other possibility might be that MTFB gets taken over by an existing pharmaceutical company. Pharmaceutical companies in recent years have concentrated their research into more profitable areas, hence one of the reasons for the current crisis with antibiotic resistance. I think it is about 20 years since there was a totally new antibiotic, hence the fast-track approach being used now.
With regard to my own holding, I shall probably sell at a loss to offset some large gains made earlier in this financial year. I shall probably then re-purchase in the next tax year (avoiding the 30 day rule). I’m not sure how much information the company will give after their next meeting with the FDA because that might give us a better clue about timescales for another submission, so I may wait for some clarity on that.
This was always a two-way bet at this stage, the price would (hopefully) have soared if it had been approved. However, all is not lost as the application was obviously not rejected out of hand, so it all depends upon your investment time scale or timing your entries and exits if you are trading it. As always you should DYOR.
With regard to Dr M, he’s probably fine, but he is refusing to engage with me after our disagreements over Lloyds and Vodafone. I no longer have positions in either of these companies.