I agree more with insto influencer Charlie Aitken's "Neuren has the best risk reward of the biotech world" and "NEU could well be a multiple billion dollar company over time" call contingent on trial success. Note he said that prior to both phase II results! Based on recent M&A in the orphan space, big pharma pay multiples of revenue for companies after phase III success. Importantly, phase III success is statistically 65% not bell potters 25%?! In terms of the two successful phase II markets Fragile X alone is a 70,000 patient market in the USA alone and at say even $50,000 per annum per patient that would be a $3.5bn end market and there is no drug that treats the disease at the moment. Rett is a 16,000 patient market and at $100,000 pricing would be a $1.6bn end market. So in those 2 core products alone ignoring concussion, traumatic brain injury or the fact it is the only company I can find globally who has derisked the entire autism spectrum (prevalence 1% of population = 3,000,000 patient market USA at even say $1,000 would be another say $3bn end market). I cannot find orphan companies with phase II success and having derisked $5.1bn of revenue in end markets and possibly excess of $10bn+ for $200m market cap. In fact the cheapest comps are much closer to $1bn range. So in short, if we waited and did the trials we have two 65% chances of getting a 1.6bn and/or 3.5bn valuation, or likely with a sweetener given the potential across 3,000,000 plus autism spectrum disorder sufferers. With that in mind, I think it is a fair bet this will get taken out prior to phase III's commencing given the attraction to big pharma is too strong. If I were them I would pay market price for Retts and Fragile X phase II then get the synergistic value add of running a bunch of phase II's across ASD's in parallel, which they could do easily with their multiple billions of dollars in cash reserves! Wake up Bell Potter, 3cps uplift is not equivalent to the qualitative commentary around it being a major derisking event! ;-)
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