Broker upgrade, page-4

Thanks Titus.

Shareholders should read the detail of the report - there are quite a few useful snippets in addition to the examples you gave. For example, Edison notes " prospects of attracting a big pharma partner appear promising " and they note that VLA is attempting to build a solid data package to answer key questions from potential partners incl Merck, Bristol Myers Squib, Roche and Astra Zeneca. They also note the likelihood of further combo trials, possibly with Yervoy, Optivo, Keytruda or BRAF inhibitor ZELBORAF.

More combo studies will be initiated in the second half of 2015, per the report, so we may see some welcome news from VLA soon saying that we will be in cahoots with another big pharma as well as BMS....adding then to the chances of an auction developing (my guess only.) Interesting  to see that Edison has named four companies with potential for partnership...their guess, or some feedback from the industry?

Edison's valuation is a long way short of Roth's of around A$4 per share...but Edison say they will revise up as more data becomes available.  You can use your own estimate for some of the major variables that affect the valuation. For example, Edison assume only a 15% Chance that Cavatak will be successful against bladder cancer, and that if successful, it will command only 10% of the world market at US$10,000 per treatment. On this basis, Edison allows only 7c value per share for bladder cancer. More optimistic assumptions - say 45% COS, 25% market share, would bring the value of Cavatak in bladder cancer therapy to over 50c per share.  50% market share and you get to over $1 per share valuation....

We don't have to speculate about the big pharma interest in immuno-oncology....heaps of major deals being done almost every week. The following from Fierce Biotech of 14 August:

AstraZeneca offers $727M package to partner with Inovio on immuno-oncology
AstraZeneca's business development team is on a tear on the cancer front. The pharma giant's big MedImmune subsidiary has nailed down its third pact in 5 days, inking a collaboration with Plymouth Meeting, PA-based Inovio Pharmaceuticals on a cancer vaccine designed to generate a tumor-specific T cell response. MedImmune is handing over a $27.5 million upfront and up to $700 million in milestones for the deal while agreeing to also cover the research tab


Remember that Cavatak showed a six month Durable Response Rate of 21%, versus only 16% for T-VEC that will potentially cost Amgen close to US$1 billion .