Vital Therapies

Vital Therapies, Inc. is a clinical-stage biotechnology company focusing on the discovery, development and commercialization of cell-based therapies capable of transforming the management of life-threatening conditions. The Company's initial product candidate, the ELAD® System, or ELAD, is a human-cell-based, bio-artificial liver which is being developed to improve rates of survival among patients with acute forms of liver failure.
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The ELAD System are expected to improve rates of overall survival and transform the management of acute forms of liver failure. Therapy with ELAD consists of a single, up to five-day treatment session, during which a patient’s blood plasma is passed continuously through four cartridges containing approximately one pound of VTL C3A cells. These cells, which are grown by Vital Therapies from their proprietary cell banks, are human, liver-derived cells, which have been shown to retain a large number of the liver’s synthetic and metabolic functions. During therapy with the ELAD System, the VTL C3A cells infuse the patient’s plasma with beneficial proteins, including growth factors, cell survival proteins, and anti-inflammatory proteins, and also remove certain harmful substances, such as endotoxin, all of which may better allow the patient’s own liver to recover and regenerate, thereby potentially improving patient survival. The ELAD System has been granted orphan drug designation by the U.S. Food and Drug Administration, or FDA, and the European Commission, for the treatment of patients with acute liver failure, including alcoholic hepatitis. 

As part of ELAD’s clinical development program, over 250 subjects have received treatment with the ELAD System through prior clinical trials and a compassionate use program. Although VTI-208, our Phase 3 clinical trial evaluating ELAD in sAH, failed to reach either the primary or secondary endpoints, data from pre-specified and post-hoc analyses of this study has shown trends that may indicate a potential to increase survival rates in certain subsets of subjects with liver failure due to acute hepatocellular insult and alcohol use.

Based on our analysis of VTI-208 subsets, Vital Therapies is pursuing a new phase 3 clinical trial in sAH, referred to as VTL-308. VTL-308 is a phase 3 randomized, controlled, open-label trial, designed to evaluate the ELAD System in subjects with severe alcoholic hepatitis who meet criteria based on learnings from pre-specified and post-hoc analyses of the VTI-208 clinical trial. The Company enrolled the first subject in VTL-308 in May 2016 and expects data in third quarter 2018.

​Vital Therapies, Inc., a biotherapeutic company, focuses on developing and commercializing a cell-based therapy for the treatment of acute forms of liver failure in the United States. Its product candidate is the ELAD system, an extracorporeal human allogeneic cellular liver therapy that is in Phase III clinical trials helps in enhancing the rates of survival in patients with acute forms of liver failure. The company was formerly known as Vitagen Acquisition Corp. and changed its name to Vital Therapies, Inc. in June 2003. Vital Therapies, Inc. was founded in 2003 and is headquartered in San Diego, California.
​(Summary) (Company) (Chart)

20 May 2018
Price $6.40
1yr Target $9.00
Analysts 1
Dividend $0.00
Payout Ratio 0.00%

1yr Cap Gain 40.62%
Yield 0.00%
1yr Tot Return 40.62%

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PEG ---
Beta 4.32
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EPS (ttm) $-1.32
EPS next yr $-1.25
Forward P/E ---
EPS next 5yr 15.50%
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Market Cap $266.43 Bil
Revenues ---
Earnings $-52.10 Mil
Profit Margin ---

Quick Ratio 5.70
Current Ratio 5.70
Debt/Equity 0.00
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ROA -65.10%
ROE -73.00%

My Path Forward

While I find most of my investments by scanning hundreds and thousands of companies every day and every week, I actually found this company while scanning options opportunities. And that's how I'm entering into this position. I'm selling options with the expectation of keeping the premiums and potentially owning these shares later this year. Based on my understanding of the future of the company, success or failure rests on this new phase III trial of the VTL-308. The trial will continue throughout the summer and is expected to announce results in September. Therefore that's where the risk to the shares elevates.

This third quarter risk of trial success or failure has caused the Sep Puts and Calls to elevate their amount of premium built into the options. So for me, this is all about the options. I believe, and it's only a belief, that while the company had very little success with VTL-208, they've gone through the data and now have a better idea of how to segment the population into that area that may benefit from VTL-308. So to me there should be an increased chance of this phase III trial being successful. So I'm willing to start a small position to see just how well these shares increase over the next four months. 

I am currently selling Puts and intend to buy shares in the near future. The expectation of a 40% return over the next 12 months is very appealing. Especially if I'm buying those shares with money received from selling options on these shares.