Ann: 2018 Bioshares Presentation, page-11

Hi all looks like a bit of a quiet day on the IMU forum
and lots has happened i.e dilution, IP  buy-outs and directors buying shares
so I though it was about time I updated this thing of mine
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Imugene Epilogue:

The following epilogue has been written IMOHO and is for those who are new to IMU that are arriving daily on this forum, if that’s you? Then to you I give a warm welcome.

Although my following views are intended to be helpful they do come with a few words of warning;

If you’re a holder in IMU: It’s going to feel like forever for the reward to come, and you had better have a good stomach to handle the highs and the lows of this roller coaster share.

If you’re not a holder in IMU: Although I’m sure that in many years’ time IMU will still be a great company to invest in, for you, it’ll feel like no time at all, before the opportunity of getting in at a ridiculously low valuation has passed by.

Although by no means exhaustive I have set out below 10 reasons why and as a long term holder (and with a bit of crust in the sandwich) take a positive long term view of Imugene.

1: Humble, yet highly renowned board of directors (including a strategic partnership with Vienna medical university) and highly experienced competent management team, with the original developers and deal makers still holding significant stakes in this technology.
In addition during a recent entitlement offer the executive chairman Paul Hopper picked $78,909 worth of shares and then later another 500,000 shares at a cost of $12,625 shares on-market.
Mr Hopper now owns 75,678,722 shares and 827,281 options.
The managing director, Leslie Chong, also participated in the entitlement then also bought more on-market..

2: The creation of a method to manufacture what is considered to be the world’s first commercially viable polyclonal “B cell” cancer Vaccine (Her-Vaxx) and a B cell Mimotope technology platform.

3: Mimotopes are peptides that mimic the effects of specific B-cell epitopes in stimulating an immune response. Immunization with such mimotopes would be expected to induce a B cell immune response directed at the target disease related antigen. As such they have great utility as potential immunotherapeutic approaches for various cancers in much the same way as HER-Vaxx is being used to stimulate an immune response to the tumour antigen HER2 in breast or gastric cancer. In addition to Her 2 vaccines Imugene also has other mimotope vaccines in development including what could prove to be a superior B cell PD-1 Blocker.

4: Outstanding IP: Worlds first vaccine to be designed by artificial intelligence (AI). The Method of producing these B cell Mimotope peptide vaccines has been patented; competitors need to find an alternative method to manufacture their B cell peptides. Recently The company also undertook a $20 million licensing deal to acquire a family of 16 patents from the Ohio State University and Minnesota’s Mayo Clinic, a deal which basically ensures its position as at the forefront of mimotope B cell development.
5: Imugenes B cell Mimotope vaccines are Polyclonal and are considered to be considerably more potent than the monoclonal T cell vaccines which they replace. Imugenes polyclonal mimotope B cell vaccines invoke one’s own B cells to make your own antibodies therefore they have less chance of triggering autoimmune diseases, as is the case with the existing synthetically produced monoclonal T cell antigens. To date all trial results, whether done in vitro, on animals or in humans have all performed well.
6: This technology allows Imugene to add to and grow its own platform; in part IMU could do this by mimicking many other existing monoclonal antibodies and make polyclonal equivalents of them (these could include drugs such as Opdivo (marketed by BMS) and Keytruda (marketed by Merck). Sales reported for Opdivo and Keytruda in 2017 were USD4.95b and USD3.81b respectively and have double digit annual growth, for example by year 2022 Opdivo is expected to reach sales of USD10b).

7: Potentially disruptive Technology- Imugenes polyclonal antibody response is expected to be considerably safer than T cell drugs, therefore the T cell drugs which it replicates  are likely to have greater restrictions applied to their use, or be pulled from market.

8: Technology like this has potential for many billions of dollars in sales. Typically licencing agreements pay the developer an upfront payment and/or at a later date milestone payments, and more importantly depending upon the size of those payments, make yearly royalty payments which are typically agreed at a figure of between 10% and 20% on sales, (in some cases I have heard of royalty payments to be as high as 60%).

9: Of that revenue generated a Biotech Company’s management decide how much to keep for administration and R&D with the balance remaining usually returned to shareholders. In this sector costs (compared to revenue) are typically low so shareholder pay-out ratios are often high (typically in the 80 to 90% range).

For example: a typical biotech company selling $1b of product under licence could earn the following:
$1Bilion of sales at a 20 % royalty = $200 million revenue pa.

Then that $200m might be distributed at follows;
20% of the $200m = $40m pa to administration & R&D (= sustained growth!)
80% of the $200m = $160m pa for a dividend distribution
that $160m is divided by issued capital (IMU has almost 3.6 billion shares) = 4.44 cents


That’s 4.44 cents per share dividend for each 1 billion of product sales alone! additional to that there could also be upfront, and milestone payments down the track too, for example (before deducting company running costs) an upfront or milestone payment of $500m equates to an additional 13.88 cents per share.


10: With each $1b of royalty sales potentially generating around 4.44 cents in dividends, it’s easy to see how someday $10b (or more!) of sales could potentially generate shareholders around 44.4 cents (or more!) per share in dividends, while at the same time making a large and positive difference for a lot of patients.