Objective Views on Lead product: BTX 1503 (Acne)

Botanix is developing BTX 1503 as a novel treatment for moderate to severe acne.

Phase 1:

• Botanix successfully completed a Phase 1b study of BTX 1503 during 1Q CY2018
• The study achieved all the BTX 1503 program goals, indicating that it has an excellent safety profile, is very effective at reducing the number of inflammatory and non-inflammatory acne lesions, and provided an improvement in patient rated satisfaction
• BTX 1503’s (on average) ~47% reduction in inflammatory lesions was greater than any other FDA-approved topical acne product for which data is available after four weeks of treatment

Phase 2:

• However, the phase 2 results showed the primary endpoint in reduction in inflammatory lesions did not achieve statistical significance (even when considering AUS v US).
• But, the secondary endpoint of reduction in non-inflammatory end points was statistically significant
• It is the inflammatory lesions that are important.
• Non-inflammatory lesions are simply comedones or pimples that have not yet broken through the skin are are not yet inflamed.

Ultimately, my outsider objective view is that:

• The phase 2 trial was not a success
• The market evidently agrees with me given the share price collapse
• Progression to phase 3 is not guaranteed.

I'm impressed with the caliber of management of this company, but I am not yet convinced by the BTX1503 product.

To the bulls, why are you confident that the trial will continue into phase 3? Why are you confident that the market is wrong and that you are right and that we will return to the highs of old? Has the market overlooked the results of the phase 2 trial?

Willing to be convinced to buy in for a speculative trade -- I can't consider this an "investment" on current data yet.

T.E.P.