Agree the simple way to look at value of each of the pillars is to look at peer transactions.
Pillar 1 : FTO = Blockbuster or USD $21B with trial readouts (based on Immunomedics)
Pillar 2 : Breast Cancer = Blockbuster or USD $21B buyout with trial readouts (based on Immunomedics)
Pillar 3 : AML = USD $4.9B based on Forty Seven transaction
Combined a total of USD $47B.
That's indicative value of each pillar individually and combined, although I think even USD $21B each for Pillar 1 and Pillar 2 undervalues these pillars. For Breast Cancer they are chasing a massive segment of the market. About 60% of all Breast Cancers. In the FTO space RACE are planning to use Bisantrene to reduce resistance to PD-1 inhibitors ( for example Keytruda and Opdivo, which have 2026 sales estimates USD $24.9B and USD $11,6B respectively ).
That combined value USD $47B would imply a transaction up to $300 per share (
although I think this is unrealistic ). A more realistic top end is probably about USD $30B ( the current ceiling is USD $21B ).
I would be ecstatic with anything above $50 as it would more fairly value Bisantrene.
During H1 2022 I think they can show:
- value for Breast Cancer ( first readout should be within a few months of recruitment completing )
- value for AML ( first readout should be within a few months of recruitment completing )
- preclinical data for FTO ( and possibly trials initiating )
So if a transaction occurred early 2022, what do I think it would be worth:
- USD $2.5B for Pillar 1 FTO at preclinical stage (arguably higher with IND). That USD $2.5B is based on this post: https://hotcopper.com.au/posts/50911717/single
- USD $21B for Pillar 2 Breast Cancer (based on first readouts)
- USD $4.9B for AML (based on first readouts)
That's a total of USD $28.4B. Will they get there? Very hard to know at this point.
A partnership may be a more realistic path to such a high buyout. We would also need some US investor interest as that will help to prevent Bisantrene and RACE being sold for below what they are worth.
