DYOR. Analysis presented here is not intended as financial advice. You must do your own research, make your own assessment of investing risk and make your own investment decisions.The $5.4M raise funds the company for accelerating trial activities. The options are expected to inject a further $31.7M of funds over the next 12 months to well-fund activities through 2022 and beyond.
The result is that the fully-diluted share issue moves from approximately 162M to 171M.
My previous valuations were conservatively using 200M fully-diluted, however I think this new funding allows me to reduce fully-diluted estimate to 180M shares. This allows for a potential future raise if needed, although this is unlikely to occur until after 2024 or alternatively if a strategic investor later joined the register. This allowance of an additional ~9M shares helps offset potential fluctuations in the exchange rate used in my valuations.
The net effect is that previous valuations are lifted by approximately 10%.
So ...
... based on Leukeamia indications and buyout of Forty Seven = fair value for buyout $35 per share
... based on Breast Cancer indication and buyout of Immunomedics = fair value for buyout $151 per share
Using a risked NPV approach factoring probability of success of the 3 pillars, current risk-adjusted value is for a buyout is $93.
RACE still have a long way to go but they are entering the sweet spot for a transaction. Many M&A transactions occur during Phase I and Phase II.
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This is the current RACE activity timeline, as you can see RACE are moving trials into Phase I and II. These are designed to leverage the historic safety and efficacy of Bisantrene.
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I put price targets for potential partnership at $8 to $14 per share. This is roughly based on partnerships implemented by peers with strong efficacy.
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Calculations and assumptions for NPV analysis below. Although not shown in RAC's current activity timeline we are waiting for further data on Ovarian Cancer and Breast Cancer ( publishing of preclinical results in a journal ), for this reason I have included Ovarian Cancer in the NPV analysis.
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Peer analysis for partnerships.
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Analysis of peer buyouts, mapped to RACE Pillars.
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It is worth noting what happened with Synthorx. A transaction of this scale would have an implied value of at least $9 per share. Note that the transaction occurred early in Phase I and before the trial reported results.
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