Amplia is a sleeping giant.
Daily the news is of bear markets, COVID, Ukraine, inflation etc. In the long run it won’t matter for ATX. Current investors have intuited that Amplia has huge potential, and that its current market cap fails to value that.
Biotech valuation is notoriously difficult. Risk adjusted discounted cash flow is one way of making a valuation.
This year 62,210 Pancreatic Cancer diagnosis in the US, almost all (>90%) receive chemotherapy.According to the American Society of Clinical Oncology, a six-month course of Gemcitabine, the chemotherapy drug typically used to treat advanced pancreatic cancer, costs about $23,500. Adding the drug Erlotinib, which might increase survival time slightly, adds more than $16,500, for a total of more than $40,000.
How much could AMP945 charge per patient course? If significant effect is shown, then conservatively $10,000 USD (more or less depending on effect).
What are the chances of success for a phase 2 drug?- 23%.
We have more than one indication (and more than one drug) so the risk is lower.
Idiopathic pulmonary fibrosis has an estimated prevalence of 13 to 20 per 100,000 people worldwide. About 100,000 people are affected in the United States, and 30,000 to 40,000 new cases are diagnosed each year. Current direct acting drugs pirfenidone (Esbriet®)$25,000 for a 12-month period (extensive side effects)OFEV (nintedanib) may cost up to $96,000 per year or $8,000 per month. Both these medications only slow disease progression. AMP495 is again conservatively worth $10000 per annum to achieve similar or better results.
There are further indications (breast and colon cancer, other fibrotic disease eg NAFLD) that would make revenue exponential if successful, justifying the “Amplify” derivation for Amplia Theraputics.
Obviously clinical trials take time and money. Amplia are fortunate to be led by a solid board and have partnered with the Garvin Institute. Amplia have some institutions and Alan Moss AO (via entities) as major shareholders and what appears to be a supportive retail base. Success in phase two will likely lead to partnerships with larger pharma groups (for a single indication) that can help accelerate clinical trials and approvals. Orphan designation will also speed the process.
I’ve put in conservative numbers into revenue calculations and risk discounted the chance of success in Pancreatic ca and Pulm Fibrosis to 23% (the average phase 2 drug % that reaches approval) and a 5% for other indications (see chart). Reducing success chance ten-fold to 2.3% still delivers a risk adjusted 18M annual revenue expectation, a conservative PE (15) accounts for the duration of patent.
https://www.toptal.com/finance/valuation/biotech-valuation
https://www.baybridgebio.com/drug_valuation.html
Please add to the conversation, add your valuation method and references.
DYOR etc
