Bee man, I had a look around but the details on CU6 and TLX are light, so my confidence to make claims on them is low. Maybe a trip to Omaha is in order.
BOT certainly have made sufficient details public though - and I see it as very hard for either of the above (or their counterparties) to have topped the value that has been created here (for BOT holders that is).
From equity raised in Jul 2023, BOT paid US$8.25M to Fresh Tracks Therapeutics (FTT), plus say ~3% in transaction fees, in exchange for extinguishing all future financial obligations owed to FTT from Sofdra.
A few scenarios below, which include views on revenue per my current model. Key model assumptions:
80k scripts in first year (note Kaken did ~94k)
Max penetration rates (at end of patent life in ~2040):
25% TAM 1 (3.7M seeking prescription via derms)
10% TAM 2 (3.3M extra diagnosed targets)
1% TAM 3 (3.0M untreated patients)
Starting weighted average net price of US$693/script. Degraded over time for competitive pressure and changing insurer negotiating positions (subject to volume, tiering etc.). Weightings per views on each TAM's sales channel volumes (distributors/wholesalers/telemedicine). AWP of US$1,161/script used as a starting point (published publicly by multiple PBM's) and conservative discounting for the various intermediary buyers assumed
Scenario 1: Sofdra launched in the US only and for underarm treatmentonly Payments to FTT avoided (Present Value (at Jul 2023), 13% discount rate):
US$3.6M for FDA Sofdra approval (occured Q2 24)
US$98.1M from various net sales milestones (net sales ranging from US$75M to US$1.8Bn p.a. (assumed to be incurred flat across Q2 25 to Q1 30))
US$2,099.5M from a 16% royalty on net sales (mid point of 12-20%)
Total avoided: US$2.2 billion
Result: ~A$1.0 billion in market cap added (assuming a 45% EBITDA margin and 30% tax rate). 287% IRR. 919x money multiple
Scenario 2: Sofdra launched in the US only, but for both underarm andpalm treatment Payments to FTT avoided (Present Value (at Jul 2023), 13% discount rate):
Per Scenario 1, plus...
US$2.3M for approval of Sofdra in another indication (palm approval assumed in Q1 28)
I think palms are the most logical next Sofdra expansion, which make up ~25-30% of the total US hyperhydrosis TAM
An extra US$879.1M from a 16% royalty on net sales
Note net sales milestone payments brought forward marginally
Total avoided (Scen 1+2): US$3.1 billion
Result: ~A$1.4 billion in market cap added. 304% IRR. 1,309x money multiple
Scenario 3: Sofdra launched in the US and UK, for both underarm and palmtreatment Payments to FTT avoided (Present Value (at Jul 2023), 13% discount rate):
Per Scenario 1+2, plus...
US$1.8M for marketing approval of Sofdra in another country (UK approval assumed in Q1 30)
I think the UK is the most logical offshore Sofdra expansion - large 67M population, similar healthcare infrastructure and relatively wealthy
Note all UK countries are fairly unified by NHS operations and NICE governance, so a simultaneous launch is fairly common
Note US/UK hyperhydrosis incidence rates are very similar (probably largely due to similar lifestyles, diverse genetic and ethnic compositions, high healthcare awareness and subsequent diagnosis)
An extra US$359.6M from a 16% royalty on net sales
Note net pricing reduced by 30% for different market dynamics (often the US/UK difference for relatively new and innovative drugs)
Total avoided (Scen 1+2+3): US$3.5 billion
Result: ~A$1.6 billion in market cap added. 304% IRR. 1,479x money multiple
Note the result figures are just from the extinguishment of the payments otherwise due to FTT.
As you can see, this was an absolutely cracking deal that added a huge amount of value for shareholders if you were bullish on Sofdra, which obviously we/Management are.
I imagine Vinnie putting down the phone in the golf club lounge, stepping outside, lighting up a Montecristo, and hitting the finest hole in one with a driver I'd have ever seen after this one.
BOT Price at posting:
37.0¢ Sentiment: Buy Disclosure: Held
(20min delay)