My bullish thesis on TNXP

Alright, let’s cut the bull****, Christmas time and early Jan have been rough so far, with a lot of red days. But as I went through my portfolio today, I took a good, hard look at it.

People love to call it speculative, and sure, it has its risks, but there are a few real reasons why I think this stock has some serious upside. If you can handle and stomach the wild volatility, Tonix could be one of those plays that really pays off.

Here’s an overview of the factors shaping its outlook, imho:

  1. Strategic Partnerships

Tonix has cultivated collaborations with respected institutions such as Harvard University, Columbia University, and other renowned research organizations. These partnerships enhance the company’s credibility, provide access to cutting-edge expertise, and strengthen its pipeline through innovative technologies.

  1. $34 Million in Government Funding

The company has secured $34 million in non-dilutive funding to advance its infectious disease programs, including vaccines for smallpox, monkeypox, and long COVID. This external funding reduces reliance on equity dilution and underscores confidence in Tonix’s research initiatives.

  1. High Trading Volumes

Trading volumes for TNXP have been significant, ranging from 40 to over 100 million shares daily, indicating growing interest among investors. This highlights the stock’s increasing popularity and could lead to enhanced price discovery.

  1. Diversified Pipeline

Tonix’s pipeline spans multiple therapeutic areas:

• Lead Candidate (TNX-102 SL): Currently under review by FDA for fibromyalgia, a condition affecting millions in the U.S., and targeting a global market of over $3 billion.

• PTSD: TNX-102 SL is also being studied for post-traumatic stress disorder, another high-need indication.

• Vaccines and Biodefense: Solutions for smallpox, monkeypox, and long COVID, supported by government grants.

• Other Areas: Focus on neurology, immunology, and rare genetic conditions such as Prader-Willi syndrome.
  1. Financial Position

Tonix has minimal debt and has strategically raised capital to fund its growth. While past dilution has been a concern, the company’s expected stronger cash position in 2025, coupled with its $12.5 million share buyback program and government support, reflects a more balanced approach to financial management.

  1. Revenue Potential for TNX-102 SL

The revenue potential for TNX-102 SL in fibromyalgia could be substantial:

• Market Opportunity: At least 3-4 million people in the U.S. are affected by fibromyalgia.

• Conservative Market Share: Even capturing a small percentage of this market could yield annual revenues of approximately $150 million.

• Profitability: With typical biotech gross margins of 60–75%, this could translate to over $90 million in gross profit annually from fibromyalgia alone.

This model does not account for additional revenues from other indications, such as PTSD, or other pipeline assets.

  1. Existing Revenue Streams

Tonix has already commercialized migraine products, generating over $10 million in annual revenue. This is a strategic move that helps prepare the company for broader commercialization efforts, including potential launches like TNX-102 SL, if approved.

  1. High Probability of Approval for TNX-102 SL

TNX-102 SL has shown efficacy in two Phase III trials, with estimated approval odds as high as 80–90%.

  1. Valuation and Upside Potential

Tonix’s current market cap appears undervalued compared to its pipeline potential. Positive outcomes from late-stage trials, new partnerships, or an eventual approval of TNX-102 SL could lead to a significant revaluation. The share buyback program further supports management’s belief in the company’s undervaluation.

Final Thoughts

When compared to other biotech and small pharmaceutical stocks within a similar market cap, Tonix really stands out for its diversified pipeline imho (and specially, having multiple phase II & III trials), government backing, and existing revenue streams (even though small for now). While speculative and risky because of Nasdaq compliance (>$1), potential RS, its valuation offers a unique opportunity for those willing to embrace the risks (and volatility most likely).

I appreciate any opinion/contribution to this post.

This is my personal opinion and not financial advice. Conduct your own due diligence before investing.