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Stock's Action

A friend asked for my opinion since MNLO has been dropping. Based on years of experience with biotechs, MNLO's drop is not even an event in my opinion -- a non-event. I wrote to him: I don't care I didn't sell at 2.30- I'm not selling at 1.63. Been through these roller coasters too many times with too many stocks, to worry, and I am very confident about Menlo.


Reverse Split should follow ARNA's path (300+% gain)

ARNA was heavily manipulated before the Reverse Stock Spit (RSS). Same story as MNLO. Lot of negativity posted to deter people from the stock while some entities quietly accumulated. After the RSS the stock tripled. Dr. Joe wrote me today that he observes a smiliar pattern in the intra-day chart of MNLO:

Notice in the current day's trading graph of MNLO the unusual geometric trading patterns.    This was last seen with ARNA when the price was being driven down prior to their reverse split.   I don't know if this is the connection here but certainly it appears that a robot is in charge of the price movements.

                (Blue "S" depicts Reverse Split)

Someone wrote about the potential:

As per statistics released by American Academy of Dermatology, approximately 50 million people in the U.S. have acne. Out of these 50 million cases, around 15% population have moderate-to-severe acne that results in scarring on the skin. Thus the need for acne treatment is increasing at a rapid rate that is further expected to surge the demand for moderate-to-severe acne therapeutics in the country."

So, 7.5M potential users for AMZEEQ. If MNLO got just 10% it would be 750,000 @ $485 or total revenue of  $365M .   What would MNLO share price be worth then? AND the Rosacea market is another

$1B   in just the U.S. with no very effective treatment on the market. So Zilxi could be another revenue blockbuster.  AND the company has about  $130M    in cash to take these products forward. ALL ABOARD!


Seems like Leo Pharma owns no acne drug also nothing in their pipeline against acne. They want to be a dermatology leader and grow their US business. Is there a better way than acquiring Menlo? They will get 2 products and a potential third one and the technology of Foamix to make even more. They will also save some money because after acquiring Menlo they will never have to pay royalties for Finacea Foam again. Their headquarters in USA are just 30 mins from each other. And just recently a lot of sales people switched from Leo to Menlo/Foamix. Maybe they already know more than we know.

MNLO UPDATE -- Reverse Split / Price Target


Price Target. I got a question about 3-5 year price target.

As you know analysts go max 12 months. I haven't thought about 3-5 years but I'm with Cantor on their $15 target. I think MNLO will not exist 3-5 years from now -- it'll be a division of Johnson & Johnson or so -- so we have to predict buyout price. I'd say $20.


Somone wrote:

"This is not about whether or not there is a reverse merger, or even what the share price is going to be in 30 or 60 days. Here's what it is about: "As per statistics released by American Academy of Dermatology, approximately 50 million people in the U.S. have acne. Out of these 50 million cases, around 15% population have moderate-to-severe acne that results in scarring on the skin. Thus the need for acne treatment is increasing at a rapid rate that is further expected to surge the demand for moderate-to-severe acne therapeutics in the country." So, 7.5M potential users for AMZEEQ. If MNLO got just 10% it would be 750,000 @ $485 or total revenue of $365M . What would MNLO share price be worth then. AND the Rosacea market is another $1B in just the U.S. with no very effective treatment on the market. So Zilxi could be another revenue blockbuster. AND the company has about $130M in cash to take these products forward. ALL ABOARD!"


Reverse Stock Split (RSS)

Reverse split will be very beneficial for MNLO stock. They're not doing it to stay listed. I think they'll do it to be eligible for investment by big funds; to lower size of float; to weed out penny flippers; etc. I am looking forward to it. 7 to 1 at today's price makes the stock $16.30. And Cantor's $15 will be $105. My buyout target price will be $140, and if scrips get real traction and Corona gets out of the way, and successful launched into Rosacea market in Q4, that target price can be a lot higher. IMHO.


Stock's Action/ Info From MNLO Market Maker

Large trades at the close / AH are mostly market maker which is transferring the shares it bought to the client. One of Menlo's market makers I talked to said the offering was multiple times over subscribed. He also explained when someone wants to buy a lot of shares they can manage it. He said they buy little by little at right times, and sell it to the customer. He said the transfer to the customer comes at the close / end of the day. So I think that's what these blocks are. And it's bullish. Another thing going for MNLO retail longs is the low institutional interest which means our shares are wanted by institutions. They know the tricks to take shares out of retail hands. I'm holding tight to my shares, in a CASH ACCOUNT.



Over subscribed means there was more demand for number of shares than there were shares available for sale. He told me the entire enchilada plus the green shoe was filled instantly. He explained it as something like an over the wall. I have to find my notes. Which means basically they had all the investors lined up, and when it kicked in, they handed the shares over the wall. It wasn't a process where they had to wait for more investors to come in to fill the demand. And there was far more demand than supply.

I asked about quality of investors. He implied because there was a big demand they could be choosy, and picked the top quality investors (like Perceptive).

Also I should add about the price, that sometimes in after-hours you see a price that's below the close price, with a big lot. I believe that is an average price where the big order is handed to the client. He said they used to mark it up but now they just charge commission -- which I think is around 3000 bucks for 100,000 shares at that brokerage. Big institutions don't get this zero commission stuff we pay at the retail brokers. They pay commission because to fill big orders the broker has to work had (I guess sometimes manipulating the investor psychology to get the best price -- but perhaps that's done by more dodgy places. than the respectable firms that ran our books. I can imagine a sleazy hedge fun employing bots, fake big bids and offers, and other tactics they know work on retail investors to create greed or fear (depending which side they are in), to work it in their favor.

And they're patient. A relationship manager at Credit Suisse in Monte Carlo, where they had many ultra high net worth individuals (UHNWI) told me when they want to buy or sell, they're always patient, and do it little by little to prevent the price from running up or down. I think that's what's happening with MNLO : accumulation of big number of shares by big parties. Little by little. But if other buys step in, sometimes it gets out of hand, and they compete for the same offers, and it becomes apparent, and one bids it up, and meanwhile anybody foolish enough to be short panics, and it gets out of hand for prospective buyers and they have to buy at much higher price. I totally see this happening with Menlo in the weeks/ months ahead, pushing the stock to over $4 if Corona, and other macro factors don't hurt us. And that's without catalysts.

Add to it potential catalysts like EMA /Swissmedic filing, partnerships, buyout, etc. etc., and this baby could rocket up closer to average analyst target, over $5 or Cantor's $15 target.

I was an investor in AVNR which was manipulated like hell by scums like Martin Shkreli (with whom I had direct contact and called out his lies, deception...). That $2.xx stock was bought out for $17.xx per share not long later by a Japanese Pharma -- a 7 bagger for the investor who was willing to wait another year. Will MNLO be a 7 bagger? It's possible. 6 bagger puts us at Cantor's recent reiteration of $15 target. IMHO. I'm not giving investment advice. Just sharing my ideas / research.

PS -- I like this price projection chart someone posted:


Letter to some analysts, etc.

Dear All

Menlo "MNLO" (ex-Foamix) has had a number of key news in last days. A brief note on each, FYI:

  • Second FDA Approval - Zilxi was approved (topical minocycline for rosacea) -- big under-served market; utilizing same sales force, same prescribers, as Amzeeq. Launch in Q4.
  • Positive Phase 2 data for FCD105 - moving to phase 3.
  • Good prescription numbers - Amzeeq sales are strong, scrip trends is very positive.
  • Secondary - based on feedback I received the secondary was multiple times over-subscribed, and went to top quality investors. It was a wall-over deal that instantly filled.
  • Analyst upgrades - several analysts have issued upgrades/notes following FDA approval. E.g.:

    • Cantor Fitzgerald analyst Louise Chen said she views the approval positively and believes it sets up the company for a potential "successful" launch of its second FDA approved product in the fourth quarter of this year. Chen, who continues to believe that the peak sales potential for Menlo's products and pipeline are being "underappreciated," keeps an Overweight rating and $15 price target on the shares.

    • Menlo price target raised to $3.50 from $2.50 at H.C. Wainwright H.C. Wainwright analyst Oren Livnat raised the firm's price target on Menlo Therapeutics to $3.50 from $2.50 and keeps a Buy rating on the shares. The analyst increased estimates for the company with Amzeeq volume already up 50% over the last four weeks as shutdowns start to lift. Amzeeq is bouncing back from COVID-19 faster than the analyst expected.

    • Menlo price target raised to $6 from $3.50 at Northland Northland analyst Tim Chiang raised the firm's price target on Menlo Therapeutics to $6 from $3.50 and keeps an Outperform rating on the shares. The analyst believes Amzeeq and Zilxi will lead to "meaningful revenue growth" for the company. The recent approval of ZIlxi (adds a complementary product to Menlo's dermatology arsenal, Chiang tells investors in a research note.

A couple of guesses (see discussion on these here:

- sings indicate the company may change name, or get bought out.

- Menlo will probably do a Reverse Split (which will be good for the company.

- Menlo is a ripe takeover target. My best guess is Leo Pharma right now -- or Johnson&Johnson.

This is a good overview article (8 June)

Best wishes

Réza Ganjavi, MBA


Notes on Reverse Split & secondary.

Menlo (MNLO), in their latest filing mentioned possibility of Reverse Stock Split (RSS). Here's my 2 cents on the topic based on experience:

Reverse splits are usually bad if the company does it to stay listed. That's not the case here. Our fundamentals are strong. I think RSS will be very good for MNLO. Smaller float. Higher stock price. Those institutions who don't buy stock under $5 will be able to buy. The stock is taken more seriously (I know some veteran investors who don't consider such low priced stocks).

Also it weeds out penny flippers who like low priced stocks and riding it up and down is easy with small capital. Doing so with a stock that's 10 times the price is much harder for them.

Most Stock Splits are not successful because most of them are used for companies under $1 to stay listed. When a stock goes that low, it usually means trouble, and RSS will not fix troubles.

But in other cases, RSS can be very successful. One example is ARNA which did one when it was around $1.50 and it became a $15 stock. Now it's in the $60 range.

Another similarity I see between ARNA and MNLO is that ARNA did a secondary recently at around $50. Soon after the stock was over $60 because of demand.

MNLO just did a secondary (to close today) at 1.85. We know the demand was very strong (as per the book runners), and that makes sense given the prospects for the company and the ridiculously low stock price. So I anticipate MNLO will do well post secondary and go much higher. Right now it's suffering from uncertainty about how many of people in the secondary are going to sell for 10-20 cent profit. I think not many, since the bankers / company selected top quality investors, as per one person in the know I spoke with.

Also see excellentnew article:

As always do your own research.


Hi Folks. Menlo has had 3 major events. I wrote a bunch of notes that I didn't have time to share. So here they are, below.


First, Hot Info (based on my own research / talks with investment bankers / market makers in the know):

The shares in the offering got grabbed like hotcake. Institutions "multiple times over subscribed, including the green shoe" -- lot of potential buyers didn't get shares (so they're potential buyers in open market).  As result of such a strong demand the book runners selected the top tier investors who buy and hold a stock, and not suckers who are in for a quick short-term profit.

Obviously a bunch of institutions share my belief that MNLO is grossly undervalued. The stock is now at the per-offering price.

I recommended to management to do a reverse split. I hope it happens soon. It will put the stock on the radar of big boys/girls who don't touch low priced stocks. It'll also weed out the small traders.

Note the kind of secondary that was done: it was pitched to select group of investors who signed NDAs, it was prices, and overnight (over)subscribed... So in reality it's not "public" per se, but it is considered public -- it was a "Wall Cross" transaction.

Also note, Cantor was not a book runner, therefore, Dr. Chen's $15 target is not dithered by C.o.I.


Menlo released phase 2 data for its combo therapy (for acute acne which is expected to become the de facto standard of care), ahead of schedule, and the results were good.


Menlo received approval for its rosacea drug Zilxi. I consider Menlo a low risk investment for me, in a high risk / high return sector. I view it as low risk with high reward.


    Menlo set up for 'successful' Q4 launch of Zilxi, says Cantor Fitzgerald After Menlo Therapeutics announced that Zilxi has received FDA approval for the treatment of inflammatory lesions of rosacea, Cantor Fitzgerald analyst Louise Chen said she views the approval positively and believes it sets up the company for a potential "successful" launch of its second FDA approved product in the fourth quarter of this year. Chen, who continues to believe that the peak sales potential for Menlo's products and pipeline are being "underappreciated," keeps an Overweight rating and $15 price target on the shares.

    Menlo Therapeutics price target raised to $3.50 from $2.50 at H.C. Wainwright H.C. Wainwright analyst Oren Livnat raised the firm's price target on Menlo Therapeutics to $3.50 from $2.50 and keeps a Buy rating on the shares. The analyst increased estimates for the company with Amzeeq volume already up 50% over the last four weeks as shutdowns start to lift. Amzeeq is bouncing back from COVID-19 faster than the analyst expected.

    Menlo Therapeutics price target raised to $6 from $3.50 at Northland Northland analyst Tim Chiang raised the firm's price target on Menlo Therapeutics to $6 from $3.50 and keeps an Outperform rating on the shares. The analyst believes Amzeeq and Zilxi will lead to "meaningful revenue growth" for the company. The recent approval of ZIlxi (adds a complementary product to Menlo's dermatology arsenal, Chiang tells investors in a research note.


Menlo is settling a lawsuit from 2018 (way before merger with Foamix). We inherited that mess from the old Menlo. But it looks good and will be settled upon judge approval in upcoming hearing. I think their insurance company will cover about half of the settlement amount (seen this in past companies but it could be different). So it's not significant.


I had a 2 hour talk with one of my key investment buddies and activist investor. We've been through a lot together -- surviving / fighting years of incompetent Arena's ex-CEO, etc., and thank goodness we've done well. He bought FOMX / MNLO and has had a $200,000 gain so he was thankful to me and I to Dr. Joe who turned me onto MNLO (FOMX) -- he currently owns MNLO as well.

MNLO hit another homerun on Friday. News of approval of FMX103 (Zilxi) came mid-day because FDA posted it on their website then, so the company was obliged to issue the press release during the market hours.

It was a crazy day. Even before the announcement the volume was crazy high. MNLO traded 8 times normal volume, and some big blocks went through including a 1.5 million share block that sent the shares to the high of the day (2.88). The volume really picked up around 10:15 when shares went from 2.50 to 2.88, before the PR. I don't know what exact time the FDA announced the approval.

There were a lot of momentum players in the stock as is customary before any PDUFA, and especially more for low priced stocks which makes any Joe Blow qualified to pick up a few shares for a quick trade. I learned a long time ago not to do that because when everybody expects a certain movement in the stock, it usually doesn't happen. Same same here: news came and the stock retreated because the momentum players exited. Had absolutely nothing to do with the PR or its impact on Menlo. The PR was very positive.

Now Menlo has 2 approved products, low overhead, a phase-2 data set due by end of this month (and Dr. Joe thinks it will be positive), other sources of income, etc., and other catalysts I listed in my last message.

Insurance coverage for Amzeeq is really impressive, and Zilxi should get good insurance coverage as well.

I expect all the analysts who cover the stock to come out with statements soon and upgrade their estimates.

I expect institutional interest will significantly rise beyond the current 26%.

I don't expect it, and hope that the company will not do a secondary at this stage.

So I expect a lot of manipulation going forward, in trying to shake out the shares from Retail hands, into institutional hands. I also expect short covering. That's a double boost to the demand channel, and reduction of supply channel, which naturally means higher price.

The key risks, in my opinion are macro. Will Trump start a war? Will there be a Corona second wave?

We talked about this at length -- I also asked a few other friends who are in life sciences. My conclusion is, I'm not so worried about a second wave of Corona. Perhaps I'm too optimistic. In my person life, I DO follow social distancing, and think not doing so is unwise. But I have hippy friends who think it's all a conspiracy to whatever by whomever! No. Corona is very real.

A friend in Alabama who's in healthcare said dermatologist are open and are VERY busy. And the state's daily Corona new cases is about the same as in Switzerland (and Alabama is a lot bigger than the entire Switzerland).

I bought more MNLO on Friday. I'm planning to hold my MNLO shares and will try NOT to make a mistake I've made a few times before in my lifetime: selling too soon.

I really like the CEO -- best biotech CEO I've had in all my years of investing in healthcare. And the new CFO is top notch too. I think and hope they're prepping to sell the company, but another biotech CEO said good companies are bought not sold. But I still don't agree with standing in corner in a dance hall and looking pretty -- you gotta make a move.

I'm sure they're doing the right things: talking ex-US partnerships, etc. etc. I really like Menlo's product profile, and it's an easy match for many partners.

Our friend thinks it's ripe for a takeover by likes of Johnson & Johnson. A Big Pharma with a huge salesforce can make a ton of money off Menlo's products. And the company is lean and easy to take over. But the price has to be right.

I like the idea of waking up one day to the news that MNLO was acquired for a big price. And increasing sales, global approvals...

Do your own research.

Best Regards
Reza Ganjavi


I suspect Leo Pharma will buy Menlo.

  • Already in partnership together.
  • Pays royalty to Menlo.
  • Co-plaintiff with Menlo - settled patent fight.
  • US office (Madison, NJ) 30 minutes from Menlo's.
  • Many Menlo employees worked at Leo before.
  • $1.5 billion revenue.
  • Focused on dermatology -- very strong synergy with Menlo.
  • Shoe in.  I'm willing to bet on this one... but, another big player could be in the picture to outbid Leo.
  • Already has pipeline for psoriasis - is not unhappy the old Menlo failed.
  • Leo's new CEO, Catherine Mazzacco, has a solid background in Dermatology.
  • Owner by Leo Foundation (loaded with cash), Denmark's largest commercial foundation, and does a lot of philanthropic work as well.
  • Leo's pipeline needs help and could absolutely use two FDA approved products and Menlo's phase 2 asset (data end of June).
  • Leo has a large European and Global presence (selling in 130 countries) and selling more Menlo's products is a natural for them.
  • Leo seems to likes to increase its revenue in the US market (and globally). It has a very aggressive growth plan which must be accommodated with acquisitions. Who better than Menlo?
  • Menlo has not significantly changed their website post merger -- still has old Menlo's irrelevant picture on the first page, etc. -- and Menlo seems to still use Foamix domain emails. So either they're going to change their name / relaunch a new image / new stock symbol -- or they're going to get bought out sooner than we expect. This summer perhaps after P2 data is out?!

Menlo's current value is around $300 million including a good chunk of cash. 100% premium is spare change for Leo ($5/share). But I think Menlo's board will demand more than that, maybe $10+?  I like and trust the CEO -- he's the best healthcare CEO I've known in years of investing in healthcare. So I'm confident he'll get the best price for us. 


Do your own research.
Best Regards
Réza Ganjavi


Looking beyond PDUFA:

  • MNLO fair price using pre-merger metric is $7.24 (see analysis below). Cowan has a $10 target. Current price: $2.50
  • Tuesday June 2, MNLO has a PDUFA date. I give it a 85% chance of an outright approval.
  • I expect EU and Swiss filing or partnership announcement soon.
  • I will not be surprised by news that Menlo has agreed to be acquired. In hands of a big sales organization, Menlo's goodies can generate huge revenues. Executives' emails are still Foamix. And Menlo site hasn't gone through a significant update that it absolutely should have. At least I think the company will change its name and stock symbol. Menlo's board is well stacked with solid background in acquisitions. 
  • Menlo's ongoing Phase 2 results will be out by end of June. As the saying goes, the big money is to be made with Phase 2 data (not phase 3).
  • Amzeeq scrips should get traction and recent news of increased insurance coverage helps.
  • FMX103 launch in Q4 will boost revenues, increasing Rx income, with minimal added overhead (same docs, same reps...).
  • I believe institutional interest will want to rise, for a number of reasons.
  • I believe for a number of reasons $2.50 is very undervalued. That by itself is enough to hold the shares. In 6 months, MNLO should be a LOT higher. I'm not going to blow this one (in the past I sold a few stocks too early). 



MNLO fair price using pre-merger metric:

If you held 100 shares of FOMX per-merger, and your cost basis was 4.30, today you own 180 shares and your cost basis is 2.40.

  • So 4.30 pre-merger = 2.40 today
  • and 4.50 = 2.50
  • and 4.10 = 2.28

Now, analyst average target for FOMX was $13.

Nothing has changed in the equation as far as I can see: MNLO's trials failed. FOMX got MNLO's cash and US footprint. So that $13 target is still valid. Translate that to post merger level (*.50 and +1.205...) that $13 = $7.24. However, Cowan upped that to $10. Today's price: 2.24. I think even a first grader can see MNLO is VERY VERY UNDERVALUED.

Also see new article:


Corona hurt Avinger a lot, but as the world goes back to normal, Avinger's sales should ramp up. This week AVGR filed a 510(k) with FDA for pre-marketing clearance of Ocelaris, a next generation chronic total occlusion (CTO) crossing system utilizing Avinger's proprietary image-guided technology platform.

Very interesting science. Dr. Joe turned me on to AVGR. He also owes shares. Lumivascular technology allows physicians, for the first time ever, to see from inside the artery during an atherectomy or CTO crossing procedure by using an imaging modality called optical coherence tomography.

I've spoken to AVGR's CFO. They're a very committed management team and are regularly buying shares in the open market.

Latest PR:


ADXS has a very advanced cancer treatment that extends the efficacy of the most widely used cancer drug (Merck's Keytruda). Dr. Joe turned me on to ADXS and he also owns shares. If the next couple of patients show the same positive response as the last two, ADXS's stock should do very well.

Latest PR:


ARNA is cooking. CEO Amit Munshi just cashed in around $3.5 million of stock options. Stock has gone to upper 50's due to a number of reasons including failure of competitor drug.

This is not an investment advice. Do your own research.

Best Regards

Reza Ganjavi


MNLO has been up with very strong volume. Up 7% a day last couple of days. Over 50% gain in a month.

June 2 is PDUFA date for FMX103.

I think it will be approved because:

  • It's the same drug as Amzeeq (but higher concentration) and Amzeeq is approved. Only thing higher concentration would cause is safety issues but data show no safety issue.
  • The underlying drug, minocycline has been in use for decades.
  • Moderate to acute Rosacea has no good treatment right now. Dermatologists use oral minocycline that has a lot of side effects. Topical form is MUCH safer.
  • Trials show good efficacy.

What the approval means to Menlo is: Same sales force, same prescribers, so no significant additional overhead to take to market = Cash.

Deal with China is inked. I believe next is Europe/Switzerland/RoW. Same partners can take both products.

Analysts are very bullish. Merger is just settling in. Initial scrip data was very good. On par with other drugs in this space means big sales. If Corona is tamed, and life gets back to normal, scrips should grow nicely. Institutions will pile in when they smell the cash. Counting 103, a third product is back in the market as well which will contribute to revenue.

To me MNLO is a revenue star in making. Cowan's recent $10 price target was not arbitrary.

I'm not giving investment advice. Just sharing my research.

If I would give you one advice, don't trade the PDUFA. This is not a stock to trade for short term gains. It's about scrips and incremental capturing of a nice chunk of a huge market.

Best Regards




GREAT NEWS from a respectable analyst. Source:

  • The analyst's $10 price target leaves room for shares to skyrocket 609%
  • the average price target puts the upside potential at 382%

Menlo Therapeutics Inc. (MNLO) 

Menlo’s recent rough going has certainly sounded the alarm bells for some investors, with it now going for only $1.41 per share. The company, which develops foam-based products to treat dermatologic conditions, recently announced that it will be discontinuing serlopitant development after the therapy failed to meet the required endpoints in two Phase 3 trials in Prurigo Nodularis Itch. However, several analysts are standing firmly behind MNLO. 

Cowen’s Ken Cacciatore notes that the June 2 PDUFA date for its FMX-103 candidate in rosacea is keeping him optimistic about the biotech’s long-term growth prospects. Based on the almost perfect clinician overlap, FMX-103 can leverage the infrastructure put in place for its Amzeeq product in moderate-to-severe acne.  

Expounding on this, Cacciatore said, “...our clinicians continue to highlight their even greater enthusiasm for FMX-103, given that rosacea – although a smaller overall market than acne – has very limited treatment options. Taking the likely lower penetration of Amzeeq into the massive acne market, combined with the likely high penetration of FMX-103 into the smaller rosacea market, we continue to believe that these opportunities could eventually each exceed $250 million-plus in peak sales, which is clearly not reflected in the current valuation.”  

Additionally, Cacciatore points out that Amzeeq’s initial release was impressive before COVID-19 took hold of the market, with “the launch was progressing as well as – and if not better – than any recent launch in acne.” Total prescriptions hit the 2,150 mark for the week ending March 13, indicating a revenue run-rate of about $20-$25 million.

“We are encouraged by the initial response to Amzeeq, and believe it bodes well for the likely re-acceleration that will occur following the normalization post the virus pause,” Cacciatore noted

As MNLO has enough capital to establish both FMX-103 and Amzeeq, it’s no wonder Cacciatore left an Outperform rating on the stock. The analyst's $10 price target leaves room for shares to skyrocket 609% in the next year. (To watch Cacciatore’s track record, click here

All in all, the analyst community echoes Cacciatore’s sentiment. Only Buys have been assigned in the last three months, 6 to be exact, and thus the consensus rating is a unanimous Strong Buy. At $6.80, the average price target puts the upside potential at 382%.



Excellent news: Menlo Therapeutics and Cutia Therapeutics Enter into Exclusive License Agreement for AMZEEQ and Approved Topical Minocycline Products in Greater China Transaction provides non-dilutive capital including $10M up-front.

What's next? A partnership in Europe. I've already checked with some dermotologists ex-US who've said they're very interested in prescribing Amzeeq.

Given the smooth approval of Amzeeq in the US, I anticipate ROW approval will be easy. China needs its own test on Chinese people, which our partner will conduct.  EMA and Swissmedic approval should be granted on the basis of FDA data, and with that follows South America, some of which has ties to Swissmedic & EMA and approva after they approve.

All this means an expanded target market. I anticipate Menlo will be a very lucrative cash generator. No stock manipulator can stop this train.

I anticipate Big Pharma will realize this soon and after the second FDA approval in June, will start its due diligence (if not already) to make an offer to buy Menlo out.

Cutia Therapeutics would not have paid $10,000,000 up front without due diligence and liking the story.

MNLO / FOMX  9 APR 2020

Just posted update notes for $MNLO , $FOMX (9 April 2020)

FOMX shareholders have started seeing new shares of MNLO in their account. Nice to see share count more than double :-) The float is also going up, but cash is coming in, so the merger is like a capital raise plus other benefits.Old Menlo is FINISHED. The new Menlo is the old Foamix + old Menlo's cash, legal footprint (US based), net operating loss that helps the new Menlo save a lot on taxes, expanded analyst coverage. I, as a FOMX shareholders am very optimistic that the stock will do very well, and eventually rebound far better than pre-merger levels.

New price targets as of 8 April 2020 (for the new-MNLO which has a larger float, and more cash).

  • Barclays: $2
  • Cowen and Company: $10
  • H.C. Wainwright: $2
  • Piper Sandler: $5

That's an average price target of $4.75 - price is trading at $1.10 -- 4 bagger from here. I believe smart money is a buyer here. That includes myself, haha -- I also bought this week.

If you take Serlopitant out of this presentation it doesn't change much. Amzeeq is vying for a share of a $5B market and FMX103 will soon be vying for a share of a $1B market:

MNLO / FOMX  7 APR 2020

Folks, here's a back of the envelope calculation of MNLO's price target following the old Menlo's bad phase 3 data. Remember, Foamix (FOMX) merged with Menlo for several reasons: they wanted to use Menlo's US legal etc. footprint to become a US-based company. That happened. Synergies are irrelevant since the old Menlo's officially dead. % ownership of the new merged company is now clear: Old FOMX shareholders get 82% and old MNLO holders 18%. Basically old Menlo's science is dead. We (old FOMX) give them 18% of the company for their cash.

Yesterday's conference call had very good info. First and foremost, Amzeeq sales are good. They had 18000 TRx=NRx in first 10 weeks despite the challenging times. Scrips went up last week compared to the week before despite Corona. They're readjusting their approach to sales calls. Of course a lot depends on this damn Corona getting contained.

So what is the new MNLO worth? These are off the top of my head:

- Pre-merger, analysts had avg target of $14.25 on FOMX

- MNLO is worth only its cash (thus the 18%). 82% owned by former FOMX.

- FOMX value before the merger was 60m shares x 4.2 = 250m value -- Analyst target of 14.25 = 855m valuation.

Post merger - after failed old-Menlo trials, shares outstanding will rise to ~130m, former FOMX holders will get more shares to make them 82% holders (~1.2 more shares per share the owned). Cash from MNLO offsets the 18% -- so net should be even. And that 855m target value should remain. Since float is increasing, new target should be $6.50 instead of $13.

That makes MNLO target value $6.50 / share. It's trading at 1.14 right now.

Example: If you had a 1000 FOMX shares pre-merger, in about a week you will get about 1200 more shares of MNLO in your account.

I hope they change the company name, and drop the history of that stupid company we should have never married with. But our management was smart and put in the provisions to protect us, so they didn't gamble with the data. This drop is short term, until the last of uncertainties are resolved. I'm very optimistic about MNLO's future. We have one approved drug, one approval hopefully coming in June. Partner restarting supply/sale of another revenue generating product for us. We have a new CFO who seems very good. If he can massively contain the costs, and make us a lean company, and if Corona is contained (which I think it will be -- remember bird flue SARS etc. -- all were supposed to be the end of the world but went away).

Do your own research - this is not an investment advice.

Take care and reduce your exposure to wireless radiation - it damages DNA, causes cancer. Set yourself up with WIRED INTERNET.

Reza Ganjavi, MBA


Interesting note I saw, from before the merger. Keep in mind due to the increase of share count from taking over old-Menlo's cash, the old references to FOMX price don't apply any more.

-Amzeeq potential conservative sales of ~100 million p/y (300k scripts at $400 each)

-FMX103 potential conservative sales of ~ $50 million p/y (200k scripts at $250 each) Compare to Oracea at $750 a month, topicals are generally sold in a three-month supply

-Earnings per share for these two drugs alone are $2.45 (150 million  / 61.25 million)

-A P/E of 20 makes this a $50 share by the end of 2021 assuming approval of FMX103 and patient uptake of both drugs

-FCD105 could have similar earning to Amzeeq, though they could be competing against each other, estimated value unknown

MNLO / FOMX  25 MARCH 2020

Good news: MNLO got a new US-based CFO who is a "heavy weight" in biotech, and even has dermatology experience, and has successful M&A experience.

Menlo Therapeutics Appoints Andrew Saik as Chief Financial Officer

"will be responsible for leading the Company’s global finance operations, including, financial planning and analysis, investor relations, accounting, tax, treasury, supply chain and information technology."

"Previously, he was CFO at Auxilium Pharmaceuticals, Inc., where he helped lead the execution of Auxilium's growth strategy culminating in the sale of the company for $2.6 billion at an 85% share price premium. Prior to Auxilium, he was Senior Vice President, Finance and Treasurer at Endo..., global consolidations of M&A transactions."

“His experience includes ... leading successful M&A transactions, ... and investor relations."

Mr. Saik said “Menlo is positioned to be a market leader in therapeutic dermatology, and I am thrilled to be joining at this exciting time. We have a differentiated commercial-stage product in acne and a compelling portfolio of late stage dermatology assets. Having had previous experience with dermatology products I recognize that companies such as Menlo, with differentiated offerings and the ability to commercialize multiple products in the near-term, can help lead successful consolidation in the sector. The Company has shown a commitment to serving the needs of dermatology patients and I look forward to applying my experience through the next phase of growth.”

Mr. Saik holds a Master of Business Administration from the University of Southern California and a Bachelor of Arts from the University of California, Los Angeles.

Stock price is very undervalued and still reflects "settlement" of the transaction. I anticipate MNLO will be trading in double digits by end of the year, assuming Corona calms down.

UPDATE 28-Oct-2019

- A number of analysts cover FOMX. 4 have recently restated their position. Looking at these estimates, esp. given they include research not connected to doing business with the company, and based on my experience, I expect these price  targets will become a reality. This reminds me of past situations where an ultra low price stock (like FOMX) was bought out at above the average analyst estimate which at the time seemed extremely higher than the current price. So I have a hunch, for the  reasons stated in the notes below, that with some patience, FOMX will pay off handsomely for me. You do your own research.

UPDATE 23-Oct-2019

- A new survey of Swiss dermatologists indicates a strong inclination to prescribe Amzeeq when it becomes available. Doctors interviewed indicated they would welcome topical minocycline which has a cleaner side-effect profile than the oral. Swissmedic is expected to approve Amzeeq as smoothly as FDA did, given the strong data package.

- It's wonderful that Foamix owns the worldwide rights to Amzeeq. The field is wide open for inking partnerships in rest of the world (ROW), or launching it directly in Europe. I anticipate we will see a series of partnerships announced in various Ex-US regions.

- While the company is focusing on kicking off Amzeeq's launch in the USA, I wouldn't be surprised to hear about regulatory filings with European Medicines Agency (EMA), and Swissmedic fairly soon.

- The stock's drop post-approval is not a cause for concern for me. If anything, it's creating a buying opportunity while I believe certain entities are trying to take out stop-loss orders, and weak hands. I have faith in the management's ability to execute successfully in:

  1. a) A successful launch (which this management team has an excellent track record in)
  2. b) Moving the pipeline forward
  3. c) Inking strategic partnerships ( or negotiating and all out buyout of the company at an attractive premium)
  4. d) Conducting very active relationship management with investor community, by ideally hiring a full-time, dedicated, internal IR champion. I like LifeSci but they're spread way too thin for what Foamix needs at this stage. Experience shows companies with a strong internal IR champion, do better, in marketing themselves as an investment product, and thus, boosting the demand channel which naturally makes the share price go up. This is particularly for companies whose stock is being hurt by abusive short selling (artificial supply).
  5. e) Managing to positively surprise the market. Shorts hate surprises and have shown to be willing to pay a high price for "channel checks" and info that would mitigate surprises. Make the suckers run for cover. Then, artificial supply shrinks and real demand increases (a double-whammy that helps the stock go up).

- News just out: Amzeeq will be manufactured in Switzerland "Swiss quality" by contract manufacturer, ASM. And Foamix is eligible to tap into a $20,000,000 line of credit for commercial launch.

- Amzeeq's new website is up:

UPDATE 20-Oct-2019

- FOMX got approval on its AMZEEQ (FMX101) (topical minocycline) which should be a lucrative money-maker for the company given what we know about the market size, state, success of similar launches, etc.

. FDA accepted FOMX's application for FMX103 with a June 2020 PDUFA date. I think chances of that approval are very good given it's the same vehicle and medicine as FMX101 but different dosage.

. 50+ sales reps will get job offers shortly. Company launching itself directly to 6000 dermatologists who write the bulk of scrips. Kickoff in January, with Rx numbers rolling in shortly afterwards.

. What all this means to the stock is unknown. I've been buying since I believe it's very undervalued. Average analyst estimate is $15.

. Most physicians would not prescribe an oral medication (with severe side effects) to treat a severe skin condition when that same medication can be applied topically and has equal or better efficacy and far lower side-effects.

. Foamix is a ripe takeover target of a skincare pharma like Nestle/Galderma for example since AMZEEQ is posed to be a money maker. Foamix' proprietary tech could be used for other medicines too.

. What's a fair buyout price? $750m seems fair right now ($12.50/share) with much higher valuation with strong Rx numbers.

. FOMX is a good buy for me after approval since the science is derisked, and for a number of reasons I believe the price is still very favorable to buy post approval (I view anything under $5/share as a very good entry price -- some institutions got in around 6 a while back).

Foamix (NASDAQ: FOMX) Improving patient lives by offering groundbreaking innovations in dermatology

The following is not an investment advice. Do your own research. I'm just sharing my research.

My interest in Foamix Pharmaceuticals (Nasdaq: FOMX) was triggered by a tip from a PhD friend who's a senior principle pharmaceutical consultant. Two PDUFA dates are on the horizon, and the stock seems undervalued in relations to a number of analyst estimates. Here's a summary of my due diligence on FOMX.

It seems most of the hard times is behind for Foamix – years of research and intense capital need has flourished in solid sets of efficacy and safety data, two filed NDAs, and a launch plan that’s destined for success in capturing a ripe, ready market.

Keep in mind Foamix’s solution addresses a need which so far no other company has been able to address: An effective topical minocycline. Why topical? Because oral minocycline has severe dirty systemic side effect profile.

Acne is the most common skin condition in the world.

“The effect that Acne has on quality of life is equal of the effect of asthma on quality of life of an adolescent”. Dr. Christina Kim, Dermotologist, UCLA.

There are many stories about the well-known, nasty side effects of oral minocycline. One instance is documented in this video titled “Minocycline almost killed me”.

Novel Delivery Platform

The company’s Novel Molecule Stabilizing Technology (MST) Delivery foam has several key competitive advantages:

  • Stabilizes hydrophobic molecules
  • Surfactant & irritant free formulation maintains barrier function, improves tolerability and compliance
  • Natural moisturizing formulation
  • Low mechanical sheer enhances spreadability
  • Oil-based excipients instigates sebum dissolution
  • Targets delivery of minocycline directly into the pilosebaceous unit
  • Favorable resistance profile.

The first PDUFA date, scheduled for 20 October 2019, is for FMX101: 4% minocycline foam for treatment of moderate-severe acne.

The second PDUFA is expected in 2020Q2, for FMX103: 1.5% minocycline foam for treatment of moderate-severe rosacea.

The safety and efficacy of both products have been well established via multiple trials. Foamix is going into FDA approval with a solid set of data. I expect both products to be approved hands down by the FDA. I expect international regulatory filings to follow FDA approval and for these products to become the standard of care for mild-severe acne and rosacea.

Commercial Opportunity for FMX101

The commercial opportunity for these products is enormous. Skeptics could argue that generic minocycline is cheap. That’s true. However, Foamix enjoys a number of market differentiating factors, i.e.

  • Vehicle technology (see above list of competitive advantages)
  • Minocycline potency
  • Resistance profile
  • Systemic absorption

The size of the branded acne medication market in 2018 was 5.2 million TRx, $3.4 billion. 

Acne Market Size (according to Symphony Health)

$3.4 billion was spent when a cheaper generic alternative was available, but the branded alternatives are inferior to FMX101’s unique advantages. Therefore, Foamix has a very good chance of capturing a big chunk of that annual $3.4 billion (and growing) market.

Similar launches in the acne market over time have yielded positive first year uptake, averaging ~295k prescriptions. Year three average was ~564k. Again, if the past is any indication of the future, Foamix could fill around 300,000 prescriptions for FMX101 in 2020.

Launch of FMX101 is scheduled for January 2020, upon FDA approval on or before 20 October 2019. The company wants to launch the product itself, which makes sense, given the dermatology market is not a complicated one and reaching key prescribers is streamlined. Foamix has assembled a sizable salesforce (with offers going out right after approval is granted).

Recent acne launch highlights demand for new products. Sarecycline was launched in January 2019, and has had durable growth over time, which signals market need and acceptance of novel antibiotic agents. Its TRx grew from 1193 in Jan 2019 to 26049 in July 2019. This bodes well for Foamix.

The company has not yet announced pricing. It will probably be in the $200-$400 range.

Insurance Coverage

In terms of insurance coverage, since it will take some months to secure coverage, the company may provide synthetic coverage to help patients have minimum out of pocket, in the first months of the launch. However, payers have shown a favorable reaction to the target product profile (TPP) for FMX101. FMX101 is viewed as a novel route of administration and not merely a simple reformulation.

Payers like the lower risk of systemic side effects given the topical formulation and less exposure due to lower dose. Payers have also indicated FMX101 is clearly differentiated from other products that are hard to differentiate and which have price in excess of perceived value.

At the <$400 net price range, FMX101 would have access without highly restrictive PAs or step edits.

Commercial Opportunity for FMX103

The size of the branded rosacea medication market in 2018 was 1.3 million TRx, $759 million. Launches in the rosacea market over time have yielded and average of ~192k prescriptions in the first year. Year three ~312k. More than half of Acne targets will also be Rosacea targets.

Rosacea Market Size (source: Symphony Health Solutions)

The launch of FMX103 will leverage much of the infrastructure used to launch FMX101, reducing the need for additional investments.

Foamix is not just about FMX101 and FMX103. The company is moving forward an interesting pipeline (see details on

Analyst Opinion, Valuation

After the recent offering and milestone-based financing that's in place, Foamix is financially strong to take both FMX101 and FMX103 to market. Several analysts covering the stock have price targets averaging $15. Currently the stock is trading at around $3. In August 2019, Bank of America reiterated a price target of $11.

Recently I spoke with an analysts who covers the stock and has a $16 price target. I asked him about his opinion of Perceptive Advisors' engagement with Foamix.  Some investors were wondering if Perceptive would cash the shares they received in low 2's now that the stock is higher, or will they go for the big prize. The analyst said that Perceptive has a very good reputation for long term achievements and is not the kind of company, in his opinion, that would go for a 50% gain. They've been long-term investors in Foamix and I don't see that changing. The analyst added that he's looking forward to the FDA decision, and that:

There's nothing more validating than good benchmarked data on approved drugs...

... which we have in the case of Foamix, as demonstrated above. 

Most valuation models used by various analysts supports the average $15 share price.

H.C. Wainwright's Dr. Selvaraju has called FOMX

Substantially undervalued

Earlier this month, Cantor Fitzgerald issued an investor update in which they reiterated their Overweight rating and $15 price target. Louise Chen (Harvard MBA) wrote that a 25 physician survey supports her positive view on the market opportunity for Foamix's FMX101, and that if approved, FMX101 has the potential to address a significant unmet need in the treatment of moderate-to-severe acne, which remains a difficult condition. Cantor believes Wall Street is underestimating the uptake of the acne drug.

Today, 16 October 2019, Barclays issued a note to its investors reiterating a $10 price target, and an Overweight rating. Barclays  predicts a 90% chance of approval with a price target raised to $12 upon approval. 

Leadership Matters

I also asked the analyst about the CEO, David Domzalski, whom I've developed a lot of respect for. The analyst said he's met him and thinks very highly of him, and that he's very experienced in launching drugs in the past, which is very important.

I believe having a CEO with solid prior launch experience is an important factor. There are examples of poor launches where the CEO of the development company did not have prior launch experience and was overwhelmed by the dynamics. One example is Arena Pharmaceuticals (Nasdaq: ARNA)'s ex-CEO and founder, Jack Lief who did a very poor job of managing the launch of Lorcaserin post FDA approval with partner Eisai. Jack Lief should have given the helms to a seasoned CEO who had executed successful launches before, but given he  was the founder of the company, he viewed the company as his baby and this attachment (known in academia as Founder's Syndrome) deprived the company from having the kind of leadership it deserves: someone like David Domzalski. Jack Lief was later ousted by Arena's Board.

It takes a special calibre CEO to make a launch successful, and Mr. Domzalski seems to have what it takes -- he's been there and done that before.  

Takeover Opportunity?

The company has stated it is in partnership talks for Ex-US territories. It makes sense that it covers the US market itself. However, I would not rule out the potential for a buyout as the company’s MST technology can be used for delivery of a variety of drugs, and, the current targeted medical conditions are lucrative enough that an acquirer Big Pharma could easily recover the cost of an acquisition with a year or two of sales.

I will not be surprised to hear buyout news right after approval, in 2019 Q4. What would be a fair buyout price? I think the analyst average price is a good indication: $15/share (5-bagger from here).


No FDA approval is risk-free. Investors should consider this risk. However, for my own investment decision regarding FOMX, I consider both assets to be de-risked, due to very strong safety and efficacy data, and therefore anticipate both to be approved in October 2019, and around May 2020. Launching a new medicine also carries risks. But given the management profiles of Foamix, and state of the target market, I am confident about a successful launch. Macro risks are always there but my personal motto is, never bet against the US economy, since it's the hub of innovation and the economic engine of the world which has proven itself over the years to be very robust and resilient.  


Company’s latest presentation is very informative:

#FOMX #biotech #investing #acne #rosacea #mnlo #amzeeq




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