Although ANP has so far kept the pharma who is doing a advanced stage licensing due diligence on ATL1103, Pfizer is definately fitting the bill as the most logical pharma interested in ATL 1103 for Acromegaly as ATL1103 could potentially be the direct competition of Pfizer's own Acromegaly drug, Somavert.
In addition, by lodging the patent application of Combined Therapy with Somavert, ANP has the most direct link with Pfizer to date.
ATL1103 for Acromegaly has also been compared with Somavert in all of ANP's investors presentations, incluidng today's in BIO CEO investors conference in NYC.
In highlighting the advantage of ATL1103 over Somavert and that ANP's desire to continue its development to Phase 2 on its own, Pfizer may feel more urgency in offering something reasonable before Phase 2 funding is finalise to in-license ATL1103 either as a partner or taking over ATL1103 Acromegaly entirely just like they did with Excarlliard's EXC001.
With Excalliard, another antisense biotech, being taken over by Pfizer as a subsidiary, Pfizer would have inside knowledge of Antisense technology and its likely success in trials. This would help in the due diligence part if Pfizer is indeed looking at ATL1103 in an advanced stage.
Of course Mark Diamond has reiterated a few times that the management will get the best outcome for shareholders. So we should expect that if a deal is worth having, the management will take it.
How much could a deal be for ATL1103?
The market value of Acromegaly is estimated to be worth $500m per annum to ANP. This value is similar to Mipomersen when it was licensed in 2008 after Phase 2 for $325m including $125m earmarked for development to approval. As deal such as that may not be the MO of pharma recently, a phase based payment, option to license and future royalies would be a most likely outcome. This would be the same structure as the Biogen Idec deal made with ISIS this year on SMA.
As such, I would expect nothing less than an upfront payment consist of all the past development cost plus a sweetener, the full payment for Phase 2 development cost, option to license after Phase 2 with another payment, milestones payments and royalties payment after commercialisation.
Here is what I think would be a good offer: A sweetener of $15m plus a past development (7 years) of $7m, a Phase 2 cost of upto $35m would make it an offer of $57m up front. I think that would be a reasonable offer after Phase 1. The option to license after Phase 2 should be a much larger payout and the quantum can be locked in now in favour of the Pharma doing the deal early.
An offer now after Phase 1 could see the SP gapped up above 7c if a deal is announced before Phase 2 trial starts prior to June this year.
Alternatively, which I think if Pfizer is the pharma, a take over deal similar to Excalliard or the Original Somavert with Ohio University could be the preferred way for Pfizer. To take over ATL1103 outright, it would need a bigger one off payout, milestones payments and royalties and most likely after Phase 2a.
The only question is, will Pfizer wait till then and take the risk of letting another Pharma get hold of ATL1103 that could directly in competition to its Somavert? I think not.
GLTA
JIMO. DYOR
ANP Price at posting:
21.0¢ Sentiment: Buy Disclosure: Held
