I was listening to a podcast this morning that made me think...

I was listening to a podcast this morning that made me think about Neuren in a different way and given valuations are a hot topic (I am probably guilty of over contributing in this regard), I wanted to ask a hypothetical question of the group.

The podcast was about weapons and how certain rockets are designed for specific tasks. Some are for busting bunkers, others carry multiple warheads/payloads and can effectively split into mini rockets and so on. The guest made the point that in an ideal world, they he love a rocket that could do everything, but the material science does not allow that, so they have specific rockets for specific tasks. The interviewer then made an off-hand remark saying that it would be good if the science allowed you to develop the all-in-one solution and the guest changed his position slightly and I thought the response was interesting - he said practically yes, but from a commercial standpoint, it was profitable to have different product lines, so maybe you don't want an all-in-one solution. It was a remarkably quick pivot but was instructive, because I immediately thought about Neuren and 2591.

TBH, I have never thought about Neuren like this before, but it did make me think about 2591 and its potential across multiple indications and how it is an all-in-one solution (for lack of a better term). A drug that treats multiple different conditions, that have different pathologies, symptoms etc.

It then made me think about a hypothetical scenario - I wondered how a company would be valued if it had 1 drug already approved and on market under a licensing arrangement, 3 more distinct drugs that had passed 3 separate P2 trials and were currently under development towards P3 trials, whilst also having another 6 distinct drugs in pre-clinical studies for 6 other conditions. 6 is obviously just a random number less than 10.

What would the market think of that company? How would the market value that company? Would the market deem it to be more valuable than having 1 drug doing all the above? If so, why/why not? Would the market consider a company with 10 different drugs for 10 different conditions to be more valuabe than 1 drug for 10 conditions (and possibly more)?

I know what my answer is but the market does not currently seem to share my view, and I do wonder whether the podcast guest was onto something - maybe the market sees a company with 10 different drugs for 10 different conditions as more valuable than what we have. A deep pipeline, with diversified risk and opportunity to charge different prices for different products may be more appealing than 1 product that is charged at a flat rate for multiple different conditions. I am not saying 2591 will be charged at a flat rate across different conditions, but I would find it hard to argue that you could charge $375k p/ain one condition and $250k p/a in another.

I thought it was an interesting thought experiment, and I wondered how we would be valued in the above alternate universe.

Interested in the thoughts of others.