I'm going to do one of these, just for a bit of fun. I'll do...

I'm going to do one of these, just for a bit of fun.

I'll do mine a bit differently though. I'll try to get a picture of what Paradigm's top line revenue might look for OA in 2030.

It's been a good week, and some parts of it have provided a look-through to results and excitement to come. For many, one of the main highlights was that Pain & Function results from a small cohort "which was not intended to be powered to produce statistical significance" produced statistical significance in 008 at Day 56. This result has given everyone a lot of confidence that Zilosul will pass Phase III Pain & Function trials (which, incidentally, very much will be powered to produce statistical significance) and become an approved treatment for Osteoarthritis. Personally, I put the chances of safely passing Phase III trials at over 90% now. However, i'll peg that back to 75% for the purposes of this post.

Here, i'm simply mucking around to try to find some 'ballpark' figures for Paradigm's osteoarthritis-only top line revenue in 2030, assuming this approval, and based on current expectations and assumed general likelihoods such as those above. Again, it's all just fun and a muck-around.



The above screenshot comes from PARs 8th November 2021 announcement to the ASX (Page 1 highlights below). It puts the market for OA at 120 million by 2030 (and growing) in some key pharma-market geographies - namely the US, EU5, Canada and Australia. These are the sites of our Phase III trials, and very much the primary markets for any Big Pharma suitor for partnership in this indication. I am ONLY going to use these geographies for my calculations. This discounts big markets, such as the rest of Europe, large Asian markets (which are increasing strongly into 2030), LATAM and Africa. These are massive discounts to the bottom line calculations in this post. As is disease-modification.


Metrics for use:

- Quantifying potential top line revenue in 2030
- US, EU5, Canada and Australia only
- Pain & Function success only (because of it's very high likelihood) therefore a price of US$2500 per course of treatment
- 8 out of 10 patients dissatisfied with their current treatment
- Zilosul offered to 50% of market (I will use 50% of only the dissatisfied market)
- Only 10% take-up by those offered (very conservative)
- 75% chance of passing trials for Pain & Function

Now, I know the OP said to be brave and that going conservative shows a lack of conviction. No offence taken or meant, but I really don't lack any conviction. I just want to take a different tack in my post, because I wish to show the kind of jaw-dropping numbers we can get even when we strip this thing down. I've previously pushed a potential case for $4000 per share on this forum, so hopefully that gives me some leeway for conservatism in this post. I will actually go more bullish on one component of my calculations - more on that below.

Without further ado, we have a growing market of 120 million sufferers across key markets. Knee and Hip are the most prominent forms of OA among this - but to acknowledge that they are not the only ones....i'm taking it down to 75 million as a key target market in key geographies in 2030. That's our starting point.

75 million sufferers -> 60 million dissatisfied sufferers -> Zilosul offered to 30 million sufferers -> Zilosul taken up by 3 million patients in 2030.

US$2500 x 3 million = US$7.5bn

....this leaves one main metric to consider. What share of the pie will Paradigm get? This is where I get a bit more bullish than others. To pick my figure, i'm going to refer to a Baker Young report from 2021:


If Zilosul is taken to, or to the cusp of, passing Phase III trials before a deal is struck - it is estimated PAR could command 15-35%. A deal "pending approval" is above 25%. I say we are in a privileged position with many suitors at the cusp of passing Phase III, therefore I am going to say that we get 25% after costs. I am also going to say that the marketing, sales, distribution, and royalties to Bene account for 25% first - before anyone gets any sales revenues.

US$7.5bn less 25% costs (US$5.625bn) at 25% is US$1.4bn / A$2.1bn in topline revenue for PAR in 2030.

- OA only (knee and hip)
- No DM
- No up-front payment for deals (although there will be)
- Only US, EU5, Canada and Australia!
- Low take-up (10% of dissatisfied patients)
- Forgets all other iPPS indications

In short, I am saying there is a 75% chance of achieving US$1.4bn in top line revenue in the year 2030 with our product.

With many costs of Zilosul sales in 2030 taken into account in this model already (almost US$2bn in fact), how this figure translates to NPAT depends heavily on PAR's other activity at this point. Do we have another asset to develop? Trials for other PPS indications? Say (again just for fun) we have annual costs of US$250m in this year for Paradigm activity....we still have US$1.15bn in NPAT.

Earlier this week Bell Potter's Adam White made a causal comparison between us and ASX biotech darling CSL:


From an NPAT of US$2.3bn, CSL have a market cap of A$138bn.

Therefore, could Paradigm anticipate a market cap of $69bn just based on our NPAT of US$1.15bn? Is that fair?

Fully diluted at 279 million shares on issue that would be a share price of $247.31 for $PAR in 2030.

2030 sounds fun, hey?