E Therapix Biosciences: Small IPO With Big League Potential

TM editors' note: This article discusses a penny stock and/or microcap. Such stocks are easily manipulated; do your own careful due diligence.

A small biotech by the name of Therapix Biosciences (TRPX) completed an IPO on Tuesday night to little fanfare. The company has a promising synthetic cannabinoid headed towards late stage clinical trials. 

The sector has several comparable stocks that provide attractive valuation comparisons. The lack of details and buzz on this IPO might provide an opportunity to scoop up a bargain before the market figures out the story. 

IPO Details

Therapix Bio sold 2 million shares at an IPO price of $6 per share. The company previously traded over-the-counter (OTC) under THXBY and will now trade on the NASDAQ under the ticker TRPX. The new listing will provide more exposure for the stock. 

In total, the company raised gross proceeds of $12 million in the public offering. The small biotech will only have 3.1 million shares outstanding after the IPO with insiders controlling 60% of the stock. An over-allotment of 300,000 shares could add additional gross proceeds of $1.8 million. At the IPO price, the market valuation is only roughly $18 million. As discussed below, other cannabinoid stocks trade at significantly higher valuations. 

Promising Drug Pipeline

The benefits of medicinal use of cannabis and derivatives is well established now. Therapix Bio proposes using synthetically sourced cannabinoids over the complexities of botanically derived sources. As well, the biotech will utilize an FDA-approved synthetic THC, the main active ingredient in marijuana, called dronabinol. 

The initial indications are that treatments for Tourette Syndrome (TS) and mild cognitive impairment (MCI) such as Alzheimer's offer the most promising therapy options. Tourette Syndrome has limited approved drugs and the existing ones have horrible side effects while MCI has no FDA approved treatment despite a large population impacted by the disease. 

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Disclosure: No position. 

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