It's sad to see people so psychologically affected by the recent share price performance when fundamentally we have mostly been adding significant value. There is no doubt that the market is valuing Daybue reduced sales guidance currently, a lot more than 2591 potential for sure. For me just another example of the market not taking the time to understand a complex stock, and the significant value under the bonnet.
With 3 positive Ph 2's under our belt, new indications to be announced, ROW income starting to come online in the near future, GI issues and dropouts being mitigated for Daybue, potential for simplified Ph3 and Ph2's for 2591 moving forward ,etc etc, the future looks bright.
The sp doesn't reflect this however.
I think for those feeling down about their purchase/holding it is worth remembering the following
- We know 2591 is efficacious. We know it has shown impressive animal model results to-date ("...outstanding efficacy results seen for NNZ-2591 in animal models..." 26 Aug 2020), even better than 2566, our currently approved drug for treatment of Retts. It has now backed these up with 3 clinically significant positive Ph 2 results. This is huge.
- We know it is better tolerated than 2566 with little/no severe side effects apparent in the Ph 1's or Ph 2's conducted to-date.
- We know it has replicated the results shown in 5 (possibly more?) animal studies, in 3 human Ph 2 studies, in debilitating diseases, that have no current treatment.
- We know the indications currently named for 2591 are deemed to be 5x the market of Retts. We know more indications are likely to be named soon.
- We also know Acadia is on track to earn $340-$370m in it's first full year of Daybue sales (5x this market would equate to $1.7B in sales, funnily enough, that is our current current MC). A PE of 40 applied to this (still low compared to other growth biotechs, I would say a minimum given our potential in other indications outside the 6 we know about) would see a MC of $60B. This is 35x our current SP (~$470).
I also know all of this seems like ridiculous pie-in-the-sky stuff when we have just dropped 40-odd% in recent months on mostly good news, but I can also tell you it has felt the same numerous times before. NEU dropped about 77% from Jan 2015 to September 2016 despite little change to it's long term potential. I never even considered selling. If you want life changing returns you need to understand what you hold and what the value is, knowing the stock market will weigh it's value eventually, while driving it to extreme valuations in both directions on a short term basis. I'm a poor short term trader so when I find something good I just hang on and add when I can.
Some will tell you to beware the positive vibe crowd - it sounds very smart when we are down 40%, but anyone that listened to them during the multiple significant reversals we've had on NEU over the last 15 odd years missed out on life changing returns. I do believe that given time, NEU has the ability to continue to deliver life changing returns even from here. This is my Amazon.
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