Topline Summary and Update
TriSalus Life Sciences, Inc. (NASDAQ:TLSI) is a device manufacturer focused on developing the commercial ground for their organ-targeted therapy delivery mechanism. While they’ve had devices launched for several years, the company is continuing to work toward getting a drug of their own that pairs well. As hype has deflated since my first coverage of the company back in January, it is worth revisiting the investment thesis to see if they are now more of a bargain.
Pipeline Updates
Nelitolimod (SD-101)
In my last article on TLSI, I went into some detail on the platform being marketed by the company, based on improving tumor uptake of standard chemotherapy agents in organ-restricted cancers, particularly those related to the liver and/or pancreas. There is particular optimism for this platform in the management of liver metastases secondary to uveal melanoma.
TLSI is also working on a TLR9 activator called nelitolimod (formerly SD-101). It is being assessed in various solid tumor contexts, including in the aforementioned liver metastases from uveal melanoma, as well as primary liver cancers like hepatocellular carcinoma and cholangiocarcinoma. A different system marketed by TLSI is being used to deliver nelitolimod in patients with pancreatic cancer.
The company had presentations at 2 conferences this year. First, at the Annual Meeting of the Society of Interventional Radiology, findings from the PERIO-03 study indicated that the pancreatic retrograde venous infusion technique was a feasible method to deliver nelitolimod in 5 patients with pancreatic cancer, with no immediate complications or evidence of vascular injury. No further safety or efficacy findings were made available.
The more exciting data update came at the ASCO Annual Meeting earlier this month. Findings from PERIO-02 showed that nelitolimod delivered by their pressure-enabled drug delivery (PEDD) platform was able to achieve disease control in 3 out of 3 patients treated so far, with biomarker and immune assessment consistent with activation of peripheral immune cells and shifting of the tumor microenvironment. No safety concerns were noted across the 23 patients who have been treated so far.
Financial Overview
As of their latest quarterly filing, TLSI held $13.2 million in current assets, including $4.0 million in cash and equivalents. They recognized $5.5 million in gross profit, offset by $11.7 million in operational expenses, or cash burn. After interest and change in fair value of a few liabilities, TLSI recognized a net loss of $13.2 million.
These figures do not consider the $50 million in financing they closed with OrbiMed back in early May, pushing their cash runway at the current rate to just over 1 year, not including the $25 million that they may have access to based on achieving certain revenues.
Strengths and Risks
Strength – An approved device with roots that are spreading
TLSI has continued to grow the reach of their systems, with rapid growth of sales being realized and helping to continue to fund their drug development efforts. This has bought them a lot of time so far while maintaining their operational expenses.
Strength/Risk – Early data for nelitolimod look promising, but we can’t read too far into it yet
We’ve seen a number of updates now for the nelitolimod clinical story, and it’s about as encouraging as you could hope for coming out of such small patient cohorts. No major safety concerns to date, with some very preliminary evidence of efficacy, are good signs, but I would caution anyone against getting too excited about these findings we’ve seen so far.
Risk – Cash is very low, even after taking steps to shore it up
Even though TLSI has managed to secure debt financing, the cash runway remains relatively short at just a hair over 4 quarters. Quarterly sales year over year have more than doubled, which could help offset the cash burn rate, but TLSI is still working on borrowed time, now with interest payments to contend with.
And as the company finds its footing with nelitolimod, the clinical trials are not going to get cheaper to conduct. It remains to be seen how long they’re able to make this cash stretch. It is worth noting that management has guided a 50% growth in sales for the year.
Bottom Line Summary
TLSI has experienced a substantial decline from the highs running into 2024. Now at a market cap of around $150 million, they are starting to look much more like a bargain, considering they have 2 marketed devices that are generating growing sales. Cash remains a pretty major concern, however, and the recent financing is unlikely to buy the company enough time to settle the issue completely. Clearly, there is a scenario where the market values TLSI’s technology at almost double the current share price, which is where I would have a personal near-term target. That suggests that this equity should remain a “Buy” for now.
However, it is important for any would-be buyer to consider the risks present here. First, TLSI is pushing a drug development approach focused on very “hard-to-treat” tumors, which have an extensive history of failing to make progress despite early promise. Second, cash is an open-ended concern that has not been dealt with yet, and this can create more headwinds as the company seeks some kind of catalyst.