Neuren Media and Analyst Coverage, page-1201

In support of Hottods last post I see a huge difference between any kind of future valuation models where some type of percentage success term has either a close to binary all or nothing outcome (eg clinical trials/FDA approval) or just results in a reduction in hoped for revenues (eg launch of a new product that ends up selling less units because of an event that was given x% chance of occurring).

If you were told you could bet $5 billion on a toss of a coin where heads is $20 billion and tails is nothing you might think harder than if heads was $20 billion and tails was $3 billion. I know this is very much an oversimplification of the situation but it's the basic reasoning why I can see a huge difference in buyers willing to pay a much bigger number after progressing further down the clinical development pathway when such substantial downside risk is reduced. If you put 2591 to the side, Reata's drug isn't as impressive as Daybue but Neuren only owns 10% or so now. 2591 adds billions but there would be much greater confidence in success for any indication after phase 3 compared to the current small non-blinded phase 2s.

Interestingly for 2591 its potential as a multi-indication treatment with an excellent safety profile to date must be very appealing. Failure in a future phase 3 trial doesn't rule out success in another and it would really be an as yet unknown safety issue that would make a buyer most nervous as this would be a cloud over pursuing any future indications.

Certainly interesting times ahead and this is just how my head is thinking about the current situation. The potential of 2591 is enormous but still far from a guarantee so I can understand the $50+ today but $100++ down the track. I'm youngish enough and confident enough to wait but I don't have a large enough holding to matter. As with all things time will obviously tell.