You are right about BNC 210 GAD trial. Just went back to review the November 2016 CEO address presentation to the AGM that year. There was indeed a lot said about the success of the Phase II GAD trial and then in a blink of an eye the discussion moved straight to PTSD.
I seem to recall that the reason for not going forward with Phase III GAD trial was the size, duration and cost. It would have been beyond the financial capacity of the company and would potentially have meant licensing sooner but for a lower value deal.
I believe (if memory serves me correctly) that the reasoning for going into the Phase II PTSD trail was because it would potentially expand the possible indications for BNC 210, and that it would be a smaller scale, quicker and more affordable trial.
So, the potential increase in the valuation of BNC 210 would be increased by significantly more than the cost of the PTSD trial - assuming success. The Board obviously made the call that the odds on success with PTSD warranted the decision to spend the money - which is what they did.
I stand corrected on the history on GAD but think that the above explanation is correct.
What I think it means is that BNC 210 may be able to be licensed for two indications and not just GAD. If the PTSD result are good, then getting FDA approval could/would require a smaller and cheaper Phase III trial for PTSD - but if approved, could be used "off label" for GAD sufferers.
Again, I stand to be corrected, but that is my take on the logic for moving quite quickly from the GAD Phase II to the PTSD Phase II trial. It certainly makes sense to me.
A second successful Phase II trial for BNC 210 should therefore increase the licensing value of BNC 210 as you point out. I will need to check the Edison Research report again, but suspect you are also correct in that they may only have attributed a value to BNC 210 for use in PTSD and NOT placed much or no value for its use in GAD. Just checked - no value for GAD in the Edison Research report!!!
This explains why they only got a valuation of 87c and (as I have suggested previously) there is significant blue sky that can be added to the valuation. The value of the GAD market is in fact significantly smaller than the PTSD market! Refer to Slide 9 in the recent KOL presentation in London.
(I don't know how to past stuff into HC comments - otherwise I would have included it - becasue it is quite a breathtaking slide in terms of the theoretically addressable markets for BNC 210.)
Despite the smaller dollar value for the GAD market, it is still a multi billion dollar opportunity!
Waiting for the readout is indeed nerve wracking but exciting - but all the signs are pointing in the right direction.
My amateur's technical analysis suggests that the stock should break above 63c pretty soon and then we will see it trade in mid to high 70c range pretty quickly..............
Cheers and thanks for the correction.
GLTA
BNO Price at posting:
61.0¢ Sentiment: Buy Disclosure: Held
