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TS03 Gives Investors an Early Christmas Present

TSO3
TSO3
TS03’s low-temperature 125 litre STERIZONE® sterilizer is designed for terminal sterilization of heat and moisture sensitive medical devices.

It may have taken four years, but TS03 has finally received FDA 510(k) clearance for its Sterizone VP4 Sterilizer.

The 510(k) clearance allows TS03 to sell their low-temperature sterilizer in the U.S., and should also galvanize the company’s ongoing partnering discussions. However, TS03 does not plan to delay the commercial launch while negotiating with prospective partners. It also announced its plans to initiate “targeted” commercial activities independent of partnering discussions.

The 510(k) clearance couldn’t come sooner for TS03 investors, many of which have patiently weathered the numerous FDA delays. The question now for investors shifts from whether the company will get FDA clearance, to whether the company can sign a partnership before needing to finance.

Clearly, initiating commercial activities independent of a partner will add some near-term costs. TS03 reported a cash (and short term investments) balance of approximately $7 million at the end of Q3. It is difficult to know how long the company’s cash position can sustain their commercial activities while negotiating with partners. That being said, its negotiating position would certainly seem stronger by pushing ahead with a launch rather than sitting back and waiting for a deal to get done. In fact, one could argue that the company’s negotiating position would be even better with a topped up balance sheet to further extend its independent commercial activity runway.

All of these partnering, financing, and launch scenarios for TS03 may prove irrelevant given that M&A is a real possibility. TS03 is basically a single asset company, and many potential partners may see an acquisition as the most logical strategy to access commercial rights to Sterizone.

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