Ann: Race releases video of 2019 AGM presentation, page-32

I'll be interested in what Dr Tillet has to say, however ...

Lifestyle companies are typically those that go through a near endless cycle of not progressing assets in a way that delivers any meaningful upside for investors. They might flip and flop from one asset to the next or just churning away achieving nothing whilst burning shareholder cash ( mainly on excessive management salaries ).


To assess value there are a number of key questions to ask:

1. What is the potential upside?
   • this will ultimately be driven by potential sales to drive revenue growth and possibly takeover
   • if there is not much potential for significant upside then why take on investment risk
2. What is the clinical risk of the treatment or is it both safe and effective?
   • It is a big step for a treatment to go from success in the lab or animal trials to be both safe and effective for use in humans
3. What is the probability that the treatment will progress to approval by regulatory authorities?
   • Is it safe?
     • What are the side-effects and are they manageable?
     • Are there any particular characteristics that are show-stoppers for approval?
   • Is it effective?
     • A new treatment is unlikely to be approved if there is no clinical benefit
4. What is the commercial risk?
   • does the treatment have a strong patent position
   • does the treatment have a long period of commercial exclusivity
   • can the treatment be successfully manufactured at commercial scale

Weigh up all these things to assess value and hence whether a particular Biotech is undervalued or overvalued. Use assessment at 1 to determine upper-limit on value based on potential sales (aiming to arrive at estimated revenue or preferably profit after tax) and then use your assessment of 2, 3 and 4 as risk factors if you want to determine a risk-weighted share price valuation. You also need to consider dilution from the spend required to progress a treatment through development stages.

When looking at speculative companies I like to think 3 to 5 years down the track and determine where they are likely to be on a revenue perspective (or for Biotechs progress through Phase 2 trials as this is the point at which takeover is most likely to occur if the treatment shows promise ).


Use this drug development lifecycle to provide context assessing progress and risk ( a graphical tool that you can markup to assess and weigh-up risk ). You can copy/paste the diagram into PowerPoint or similar software and then use graphic drawing tools to annotate.



as I have done for RACE and Bisantrene:



My earlier thread here on risk is perhaps helpful:

https://hotcopper.com.au/threads/pr...n-pre-approval-biotechs.5085979/#.XfITuJMzZZ0

I'm going to find it pretty hard to invest in other Biotechs, just because of how I think Race and Bisantrene ranks from all the key perspectives:

• sales/market (huge sales potential),
• clinical risk (huge dataset of historic trials points to success,)
• probability of approval (previously shown to be safe and effective, previously approved for use in humans)
• they can manufacture it
• commercial ( patent and commercial exclusivity )