Research/Valuation, page-285

Bell Potter have just increased there rating on clarity to $4 @ma420


HEALTHCARE Clarity Pharmaceuticals (CU6)First Complete Response67Cu SAR-bis-PSMA has achieved its first complete response in a late stage prostate cancer patient. One patient in the SECuRE trial has been reclassified as a complete responder (CR) according the RECIST criteria. i.e. no detectable lesion in the April 2024 CT Scan. In addition, there was no PSMA uptake in any lesion using 64CU-SAR-bisPSMA. The patient had received 2 doses of drug at 8GBq/dose – being one of the interim doses.Achieving a complete response is one thing, sustaining that response for >6 months is next level. The complete responder discussed here appears to have been cancer free for at least 6 months. This patient had failed on multiple lines of previous therapy and ordinarily would have been subject to palliative care or perhaps Pluvicto.The SECuRE trial is ongoing and is currently dosing cohort 4, being up to 4 doses of 67Cu SAR-bisPSMA at 12GBq/dose. Being a dose escalation study, recruitment takes time as patients are monitored closely for toxicity as each dose is administered. In addition, the period between doses may be up to 6-8 weeks. Assuming there are no toxicity issues, cohort 4 will be followed by a dose expansion cohort in up to 14 patients at the same dose (i.e. 4x12BGq). We expect a readout on the expansion study towards the end of the calendar year or 1Q CY25.Investment View: Retain Buy (Spec.), Valuation $4.00The announcement of the first CR is overwhelmingly positive news. Retain Buy (Speculative) rating, valuation raised to $4.00. Adjustments to earnings include upward revisions to FY25 R&D expense. The model had previously allowed for dilution from a capital raise. Shares on issue increase by 18% following the recent transaction to raise $121m @ $2.55. Following this transaction and receipt of the FY23 R&D Tax refund ($10.1m), we estimate cash at 30 April 2024 of ~$150m. CU6 has 7 clinical trials in progress with the priorities being CLARIFY (diagnostic imaging) and SECuRE – as discussed here. Next catalyst include further interim data from SECuRE. Disclosure: Bell Potter Securities acted as lead manager of the company’s March 2024 capital raise for $121m and received fees for that service. Recommendation:Buy-Spec(unchanged)Previous Close:$3.01Valuation:$4.00 (was $3.90)