Yes but at what price?Bell Potter Val from July 24VALUATIONThe...

Yes but at what price?

Bell Potter Val from July 24
VALUATIONThe $121m capital raise @ $2.55 in March 2024 was multiple times over-subscribed. Applying US$250,000 (being the market price for a course of Pluvicto) per patient to the US market for men with BCR alone (i.e. ~110,000 patients at any given time) results in a TAM potentially valued in billions of US$ (i.e. comfortably exceeding US$5bn in annual revenues). We apply a conservative discount for clinical trial risk and assume conservative estimates for both market share and pricing across both therapy and imaging revenue models.First revenues from imaging are scheduled for FY27 and therapy in FY29. The model also assumes large increases for R&D activity and operating expenses in a theoretical model of a direct go to market strategy. Based on these assumptions and a WACC of 18% to the DCF yields a target price of $10.00.Based on recent transactions in the space (most notably the Novartis acquisition of Mariana, the AZ acquisition of Fusion and the BMS acquisition of Rayzbio) and in view of the relatively late stage of development for CU6’s portfolio and its superior IP position, our reasonable estimate of Enterprise value in a trade sale is ~US$3bn today (EV A$4.7bn after adjusting for cash) i.e. $15/sh.Being a biotechnology stock carrying significant biotechnology risk, our valuation is limited to 100% upside from the current market price. Revised valuation is $10.00/share and we retain our Buy (Speculative) rating.