I just received this via email.Makes compelling reading and...

I just received this via email.

Makes compelling reading and nice to see my personal view on the whole thing duplicated!

It's from Euroz Hartley's.

Botanix Pharmaceuticals Ltd (BOT $0.083) Speculative Buy Analyst Date Price Target Seth Lizee 17th August 2022 $0.25/sh. Sofpironium Bromide: Future Sales Look Through? Key Points Our analysis of newly published figures suggests BOT’s lead drug (Sofpironium Bromide) could potentially do A$130m of sales in the United States within its first year based on the number of prescriptions the drug is currently doing through its partner in Japan, a country which has a population nearly a third the size of the United States. This shown below: Key Points ·Sofpironium Bromide is the first and only new chemical entity developed to treat primary axillary hyperhidrosis, a medical condition which results in excessive and uncontrollable underarm sweating. ·The drug successfully completed two phase 3 studies and a long term safety study late last year, achieving statistical significance across all primary and secondary endpoints ·BOT is now looking to file for FDA approval this quarter (3Q CY22) – which if successful could see the drug approved in ~12 months’ time (typical timeline) ·Management is highly experienced and in a positioned to execute having previously developed, secured FDA approval for, and commercialised over 30 dermatology products Analysis – Significant US Sales Potential ·In 2020, Sofpironium Bromide (5% version) was approved and launched in Japan with an existing partner, Kaken Pharmaceuticals (TYO: 4521, $1.6 billion Market cap) ·Launched under the brand name ECCLOCK© Gel 5% (shown below), the drug was the first ever product approved in Japan for Primary Axillary Hyperhidrosis Source: ECCLOCK Website ·In 2020, the drug was listed on Japan’s National Health Insurance (NHI) drug reimbursement price list at ¥4,874/g (~US$36) per 20g bottle (2 weeks supply) ·Early this month, Kaken released its Q1’FY22 results showing the company generated ¥413 million of sales from Sofpironium Bromide in the first quarter, which is over ¥1.6 billion on an annualised basis ·Using the NHI reimbursement price and Kaken’s quoted Sofpironium Bromide revenues, we can backward out the number of monthly prescriptions of ECCLOCK© Gel 5% in Japan, as shown below: ·We estimate Kaken sold the equivalent of ~42,400 monthly prescriptions in Q1’FY22, which is nearly 170,000 prescriptions on an annualised basis ·Applying an equivalent US pricing we can extrapolate the revenues generated by this volume of prescriptions in the United States. ·We estimate Sofpironium Bromide could comfortably sell for ~US$540/month (Net) in the United States, based on the pricing of its closest competitor Qbrexza© (we believe Sofpironium Bromide has a superior efficacy and safety profile, as illustrated at the bottom) ·Indicatively, this implies Sofpironium Bromide could do in excess of A$130m of revenues in the United States based on Kaken’s annualised actual Q1 prescription volumes, and nearly $160m based on its FY22 forecasted prescription volumes ·We note this is also based on Kaken’s first year of unrestricted sales (Japan has 2-week prescription limit on new drugs for the first year) – typically sales will grow rapidly in the first 3-5yrs before peaking ·Additionally, this is based on Japanese prescription volumes, the United States has a population nearly 3x larger than Japan – which would suggest even larger potential prescription volumes and sales ·To put this all into in perspective – Clinuvel Pharmaceuticals (ASX: CUV), which has a ~$1 billion market cap, is forecasted to do ~A$64 million (~US$45m) in revenues in FY’22 US Addressable Market ·Hyperhidrosis affects upwards of 15 million people in the United States alone ·The treatments market is currently worth $1.6 billion and projected to grow to $2.8 billion by 2030 ·Sofpironium Bromide’s target patient population is estimated to be ~3.7 million people in the United States, equal to the estimated number of patients with severe axillary hyperhidrosis seeking treatment ·As stated previously, we estimate Sofpironium Bromide could comfortably sell for ~US$540/month (Net) in the United States, based on the pricing of its closest competitor Qbrexza© ·Even modest market penetration can translate into significant revenues ·The table below illustrates the revenues possible from Sofpironium Bromide in the United States Clinical Comparison: Sofpironium Bromide vs Qbrexza© (main competitor) ·The table below illustrates Sofpironium Bromide has superior efficacy (based on baseline reduction in sweat production), and lower incidence of treatment-emergent adverse events. ·Our research note from the 13th May 2022 provides a more exhaustive analysis Investment Case Botanix Pharmaceuticals Ltd (BOT) is a pharmaceutical company looking shake up big markets in dermatology and antimicrobials. The company has a mature development pipeline, with its lead product Sofpironium Bromide to file for FDA approval in Q3 CY22. This is in addition to a series of other programs in clinical studies, which leverage the unique properties of synthetic cannabinoid, in conjunction with a proprietary drug delivery system. We believe the market is pricing these programs as failures, or close to it, whereas our analysis suggest the opposite. The prize, should individual programs ultimately be successful, is huge. We anticipate the stock will trade up as we approach the multiple catalyst due this year, if BOT can deliver successful clinical and commercial outcomes, we believe the stock can trade above our price target, perhaps substantially. Development Pipeline shown below:
Botanix Pharmaceuticals Ltd (BOT) Share Price 0.083 A$/sh Price Target 0.25 A$/sh Valuation 0.25 A$/sh Shares on issue 1,042 m(dil) Market Capitalisation 86.6 A$m	Enterprise Value 72.2 A$/m Debt Nil A$/m Cash 7.3 A$/m Unpaid Capital 7.1
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