75-80% chance of a deal here., page-5

Racing to create investor value

RAC has shown it is willing to go the distance to get its once-forgotten chemotherapy drug back on the oncology radar. It plans to create value for investors in three ways:

1. Move Bisantrene towards FDA approval for adult AML, making it a valuable asset for potential acquirers.
2. Secure a saleable Priority Review Voucher (PRV) through a targeted paediatric development program.
3. Generate revenues through Named Patient Programs (NPP) outside the US to support RAC’s operations.

These three pathways for value creation are largely independent, giving the company its best chance of commercial success. Management intends to realise value on all three in the medium term.

In terms of successful trial results for AML therapies, there is already a list of lucrative success stories that set a precedent for the likes of RAC.

One example is Celator Pharmaceuticals Inc. (NASDAQ:CPXX) and its late-stage AML chemotherapy drug, Vyxeos. The company skyrocketed to a ~$780 million market cap on the back of positive Phase 3 data in AML in March 2016 (see chart below). This was followed by the company being acquired soon after by Jazz Pharmaceuticals in a US$1.5 billion cash takeover (a 70% premium to market price at the time).

Biotechs have been garnering significant attention on the ASX in recent weeks, and with plenty on potentially market moving news in the pipeline there’s every chance that RAC could be next in line for increased investor attention.

Whether investors get in early, or wait for the achievement of key milestones — including the first sale under the NPP, filing of the IND projected for first quarter 2019, commencement of the clinical trials and, lastly, securing FDA approval — is yet to be seen, but we have every reason to believe that RAC won’t continue to fly under the radar for long.



IMO ... these are some of keys to guide an investment decision ...

.