I've been in SNT/PXS for a very long time, I think back until about 2018. I was holding it when BI had licensed one of the drugs for NASH and Diabetic Retinopathy I think it was. From memory, the share price was at 28c the day we got the verdict from BI that they weren't going to pursue future development for one of the two indications. Can't remember what the SP dropped to, but it wasn't pretty. Then the news came it wasn't being pursued for the other indication. The share price took a massive hit from these 2 updates. I think the reason they weren't continuing was due to side effects. Oddly enough, this is the drug now being touted as possibly effective in treating neuroinflammation and will be heading into the clinic in 2025 for this.
After these two readouts, the company was just burning cash with the mannitol/bronchitol business, so it just kept on sliding and sliding. I think the company was in a spot where they thought the BI trials would progress to Phase 3s, which would then support development of other in house drugs through milestone payments, but this didn't eventuate. Truthfully, I didn't pay too much attention to SNT until this year, and i was earmarking it as a stock for me to sell to offset gains in NEU. But now, the tune has changed.
From what I can see, SNT-5505 is well on the way to being approved. Although we got a small sample size, the results are really good. Once we get the updated data in March and August, this should add confidence. I'm thinking the FDA only have TSS as the sole primary endpoint, which is fine. SNT-5505 with a JAK inhibitor should blow a monotherapy arm of just a JAK inhibitor out the park not only with respect to side effects, but also efficacy. It has the potential to actually modify the disease and be a long lasting treatment that helps patients improve over time, instead of destroying them with side effects.
I think Gary was managing expectations when he said the phase 3 would be 300-350 patients. I'm thinking its closer to 200 with a 2:1 ratio of the combo vs JAK monotherapy. This will cost a fair bit of money which is fine. How SNT choose to proceed is another matter. Do they bite the bullet with further dilution and raise say $50M to do the phase 3 alone, or do they go for a partner which then limits their upside on approval? Or do they look to license it in ex-USA markets, and then keep the rights to the USA for themselves? I have no idea.
Going off the current landscape though, there isn't much out there for mylefibrosis so we are in the box seat. Takeda dishing out $300M upfront for a drug only addressing one side effect is crazy. Thats about 2-3x our current MC. Other acquisitions have been shown on the SNT slide decks, but all of them have been at least after a phase 3. But these were all for JAK inhibitors - a class of drugs that could well be inferior to SNTs drug. Whether this is enough to compel big pharma to look for an asset to strengthen their pipeline without phase 3 data I do not know. But, the cheapest acquisition (for Pacritinib) was for $1.7bn USD. This equates to $2.73bn AUD. If you value SNT at $126M at the current SP of 8c, this extrapolates to the insane SP of $1.73 (assuming no further dilution).
I definitely do not think we could command a premium of such an amount, but the point is, our relative valuation is way off the mark using just the recent Takeda license as proxy.
Throw in other trials that other posters are very upbeat about (skin scarring), these will add further value to SNT.
Our biggest risk is the long time between trial results usually causes share prices to drop when nothing is happening. But even then, just off the data so far, we should be at $200-$300M market cap.
Right now given the size of the company, it may only appeal to smaller funds for investment because a big fund with billions of dollars under management would unlikely spend time doing due diligence because a position in the company would be so small. Whereas a fund with say $100M AUM would spend enough time doing DD as a position of $5M would represent 5% of their AUM. Even a position of $1M or $2M would move the market significantly, and I feel with enough roadshows and presentations, it will garner interest from these types of funds who will see the value in it.
I've noticed a pattern with the trading - the share price shoots up one day, then it cools off for a bit before another leg up. I think big buyers are active, and they are tactically taking their positions trying to get shares cheaply, before upping the range in which they want to operate.
I do see this stock getting back to 20-30c in 2025, which after my significant averaging down in cost basis this year, would be great.
Probably a lot of confirmation bias in my post but ah well. Those are my thoughts. Keen to hear others opinions.
Expand
