By Nigam Arora
MANE is long from $84.88. It is trading at $146.95 as of this writing, representing a gain of approximately 73% for Arora members.
The stock is jumping following positive clinical trial results. Short covering may also be contributing to the rally.
Buyout Target
MANE is a buyout target.
To date, 232 Arora Portfolio companies have been bought out, producing large gains for members who routinely invest in buyout targets. This performance is better than that of firms that charge $50,000 per year and provide buyout advice. With The Arora Report, you get so much more.
First New FDA Approved Oral Hair Loss Treatment In Nearly 30 Years?
If approved, VDPHL01 could become the first new FDA approved oral treatment for male pattern hair loss since Propecia was approved in 1997.
There is an important difference between the two drugs.
Propecia, or finasteride, works by reducing DHT, a hormone responsible for male pattern hair loss. VDPHL01 uses minoxidil, which promotes hair growth without interfering with hormonal pathways.
Minoxidil has been available for decades as a topical treatment, and some physicians already prescribe generic oral minoxidil off label.
MANE’s approach is different. Its proprietary extended-release formulation is designed to maintain drug exposure while reducing the high peak concentrations associated with conventional oral minoxidil.
If approved, VDPHL01 would give physicians an FDA approved, nonhormonal oral option backed by large clinical trials.
Bull Case For MANE
The latest trial results strengthen the bull case for MANE.
- About 50 million men and 30 million women in the U.S. experience pattern hair loss. Many do not seek prescription treatment. There is room for MANE to expand the market, not just take business away from existing treatments.
- Many patients do not like applying topical minoxidil every day. Others avoid finasteride because of concerns about hormonal side effects. VDPHL01 could appeal to both groups.
- MANE has reported positive results from two registration directed studies involving more than 1,000 men. The latest data show that twice daily treatment can continue producing additional hair growth over 12 months.
- The company is also developing VDPHL01 for female pattern hair loss. Results from its registration directed trial in women are expected in the first half of 2027. Success would significantly increase the potential market.
- Hair loss treatment is generally a long term commitment. Patients who see results are likely to want to keep using the treatment to maintain them. This could lead to a steady stream of recurring revenue.
- MANE has patents and patent applications covering its proprietary formulation, with the earliest expiring patent term in 2043. This could help protect the business from generic competition.
- With approximately $798 million in cash and marketable securities, the company has sufficient resources, based on management’s projections, to fund development and prepare for commercialization without an immediate capital raise.
One of the most attractive parts of the bull case is the opportunity to bring new patients into the market.
Millions of people are unhappy with their hair loss but do not use prescription treatments. Some are concerned about side effects. Others find topical treatments inconvenient or have not seen satisfactory results.
If MANE can offer a pill that produces visible hair growth, is well tolerated, and is easy to take, a meaningful number of these people may decide to seek treatment.
There is also considerable potential for physicians to prescribe the drug to patients who are dissatisfied with their current treatments.
The combination of a large market, recurring prescriptions, patent protection, and the opportunity to treat both men and women makes MANE interesting over the long term.
There are risks. FDA approval is still required, long term safety will remain important, and inexpensive generic treatments are already available. There is also the question of how much patients will be willing to pay for MANE’s proprietary formulation.
After the sharp rise in the stock, expectations are higher, leaving less room for disappointment.
Earnings
MANE reported a quarterly loss of $21 million compared to $20.1 million a year ago. Earnings are inconsequential at this stage.
The company ended September with $798.4 million in cash and marketable securities. Management expects this to fund operations into 2030, including preparations for a potential commercial launch.
Trial Results: Strong Hair Regrowth After 12 Months
MANE reported positive 12 month results from its Phase 2/3 trial of VDPHL01, an extended release oral formulation of minoxidil for male pattern hair loss.
The study enrolled 519 men with mild to moderate hair loss.
Here are the key results:
- Patients taking the drug twice daily gained an average of 43.9 non vellus hairs per square centimeter after 12 months, compared with 29.7 for those taking it once daily. Nonvellus hairs are the thicker, visible hairs that contribute to hair coverage.
- Hair growth continued to increase between months six and twelve with twice-daily dosing. The once daily group maintained its earlier gains.
- 89.1% of patients in the twice-daily group and 79.8% in the once daily group reported visible improvement.
- 68.0% of twice daily patients and 48.4% of once daily patients rated their hair coverage as improved or much improved.
- The drug continued to be well tolerated, with no new safety signals or discontinuations due to adverse events during the additional six months of treatment.
The 12 month results matter because hair loss requires ongoing treatment. It is not enough for a drug to grow hair over a few months. Patients need to maintain their gains over time.
The results also build on positive findings from the earlier placebo controlled portions of the company’s clinical trials.
Risks
MANE is a biotech. Biotechs are inherently high risk, high reward investments. Future trial results may disappoint, and the stock can gap down by a very large amount, resulting in major losses for anyone buying right here.
Please read the sections about biotechs and speculative stocks in the Trade Management Guidelines by The Arora Report.
What To Do Now
The trial results are encouraging and strengthen the long term bull case for MANE.
However, the stock has already moved sharply higher. Investors need to distinguish between the long term potential of the drug and the risk of buying the stock after such a large move.
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Nigam Arora
Nigam Arora is known for his accurate stock market calls. Nigam is a distinguished master of the macro. He is a popular columnist with over 100 million page views, an engineer, and nuclear physicist by background. Nigam has founded two Inc. 500 fastest growing companies and has been involved in over 50 entrepreneurial ventures. He is the developer of Theory ZYX of Successful Change Management and is the author of the book on Theory ZYX, as well as the developer of the ZYX Change Method for Investing.
