More signs of life! The lower trendline has been successfully tested and SP bounced up from 13.5c. SP might continue to go sideways but any thing from 13.5 – 15c would represent a 12 - 20% discount from the CR price of 17c.
The next jump could be anytime from now to June 30th:
·PYC might be included into the ASX300 index by late March;
·Large Animal Tox Result is slated for H1;
·Additional drugs in the pipeline to be announced once their IP is registered.
PYC is way undervalued!
Each new drug would add value to PYC. SP is mostly forward looking, if the certainty of the drug getting FDA approval is 50%, SP should reflect that by increasing its valuation by 50% of the commercialised value. For every US1b value @ 0.77 AUD exchange rate, divided into 3,170,926,103 PYC shares would mean a 41c increase in value (on top of current SP). For 50% certainty it would mean a 20c addition to the share price.
Let’s take stock of what PYC has in the pipeline:
·VP-001 Retinitis Pigmentosa RP11, commercialised in 2025 for US$1-2b, say 1.5b @ 50% certainty = 30c
·PYC-001 Diabetic Retinopathy & Age-related Macular Degeneration, in 2025 for US$5b, @ 10% = 20c
·VP-002 Autosomal Dominant Optic Atrophy, in 2025 for US$1b, @ 10% = 4c
·Total of these 3 drugs should be “worth” 54c all by themselves, not counting the valuation of the CPP Platform itself which should be worth at least US$1b if not 10b @ 100% = 40c - $4.00.
·So the current intrinsic SP should be 54c + 40c = 94c
·When the Large Animal Tox Result is out and proven successful, the % certainty would jump by say another 10%, i.e. +6c. At today’s 14.5c, it would shoot up to 20.5c.
Remember all these are projected annual earning, the addition to total valuation should be based on the P/E (Price to Earnings) ratio. Average P/E ratio for US Biotech is 15.93, say15 times. Therefore 54c of earnings = 54c x 15 = A$8.10. How did we end up with 14.5c ? The sooner PYC could list in NASDAQ the better.
My 4 favourite TA indicators:
·Thur11.02.2021, Fast Stochastic flipped to the upside again (Buy).
·Thur11.02.2021, MACD flipped to upside but below 0 (Weak BUY).
·RSInow at 50.4 which is just > 50 (Weak BUY). If it breaks above 50 with conviction, it would become a strong buy.
·Thur11.02.2021 Slow Stochastic flipped upwards while > 50 (Strong BUY).
·Overall, the TAs are pointing to a BUY rating.
Tailwinds for a brighter outlook:
·US Presidential swearing in ceremony has gone through without any riots in all states as threatened by Trump supporters ;
·Trump impeachment ended with his acquittal,another loose-end out of the road;
·US reporting season has started and so far the results are better than expected;
·Covid infection rate is abating in US, UK, Europe and Japan where mass vaccination has been rolled out;
·The Global Daily New Cases are also dropping.Right now, Covid is the biggest obstacle for the world economy to recover. It appears the tide is turning with the mass vaccination. For the 1st time, the rate of recovery is faster than new infections!
These are my analysis and TA thoughts, DYOR! If you would like more of these charts and analysis, please click the "Great analysis" button for encouragement.
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