New valuation of PYC, page-22

Medicine Man, while I agree with you that PYC should be worth a lot more in 2030, I don’t agree with your calculations.

For 2026 you have VP-001 for RP11 already earning $1bn. That’s not going to happen.

VP-001 commenced clinical development mid- this year. The company has already suggested that Phase 1/2 will take 3 years and while there might be some overlap with a pivotal Phase 2/3 trial, I'm expecting a minimum of 4.5 years from commencement of Phase 1 until final results. One then needs to factor in NDA/BLA preparation (say, 6 months), FDA priority review (8 months in full) and marketing preparation. So let’s say VP-001 takes 6 years from commencement of clinical development until it reaches market. That would be mid-2029. Peak sales (estimated at $1bn) then takes time to reach - perhaps 3 years if the drug is very successful.

An example of development timelines that I’ve used here before is that of ProQR. Their first drug (an antisense therapy in the rare eye disease, LCA) was tested in a Phase1/2 followed by Phase 2/3 trial, similar to what PYC is doing. That program took 4.5 years from commencement until announcement of pivotal results.

Another example is Neuren’s current Phelan McDermid program. It commenced Phase 1 in May 2020 and Phase 2 results are due in December 2023. If Phase 3 starts mid-next year and completes in mid- 2026 (we have been told to expect at least 2 years), then allowing time for NDA preparation and review, if successful, NNZ-2591 in Phelan McDermid might be approved by late 2027, that is, 7+ years after commencing clinical development.

One other thing that I think needs to be taken into account when calculating future shareholding value is the impact of share dilution. Considerable funding will be required for PYC’s programs – I think Evans and Partners’ analyst estimated $100m for the VP-001 clinical development program alone. Inevitably, the company will issue more shares. Thus, in 6 years’ time, 1 million shares will represent a smaller slice of the PYC pie. To what extent is uncertain, but using NEU again as an example, a shareholding at the commencement of the Rett syndrome clinical program is now diluted by ~75% .