Currently the valuation of EPT is based on one phase i/ii trial and one iib trial by injection. Phase iii trials are not being progressed for the injection method of delivery. However, EPT will be permitted to sell Melanotan by injection for severe/orphan cases so therefore, the efficacy of the phase iib trial is valid.
Given that risk is reduced at the end of each clinical phase, it is argued that EPT has reached the conclusion of the clinical phase prior to commencement of phase iii.
However, because EPT is not continuing on to phase iii based on the delivery method used in the preceding phase iib trial, the market is heavily discounting the market value of the success of the recently completed phase iib trial.
The key to several re-valuations in 2004 should be triggered in the first instance of successful phase ib trials in Brisbane. The reason for this is that a successful phase ib trial will commercial validate the delivery of the undisputed efficacy of the action of Melanotan in the preceding phase iib sunburn trials.
The next major re-valuations will come (in no particular order) with successful efficacy of PMLE in Europe and IND approval by the FDA.
Although the IND is extremely significant with risk reduction, a valid indication of PMLE would increase the market penetration figures substantially and as such, the valuation model of estimated dollar figures of world sales of Melanotan.
This is because to date, market valuations of Melanotan are only being done with consideration to potential sales for the current clinically proven efficacy of “sunburn reduction”. PMLE is not factored in the present model as is Over the Counter use.
Currently analysts have worked out world sales based on Melanotan being approved as an ethical (prescription) drug for sunburn reduction as per the re-rated EPT had in August pre-phase iib efficacy results.
Importantly, a successful efficacy result in Germany, would triple if not more the current estimated world sales as PMLE is viewed as an “unmet” US$1 Billion market and there is no current cure or effective treatment available. What’s more is that PMLE fits the ethical profile for FDA approval.
Successful USA trials for Melanotan for sunburn will be mostly factored in prior to actual release of results. Similar to what occurred in 2003 in Australia.
The primary reason for this will be the publicity of the Germany trials, successful IND approval and most importantly, the anticipation of a an or several impending commercialisation agreements with big pharmaceutical companies bringing with it, EpiTan’s first positive income through milestone payments.
Other potential re-rating events in 2004 will be the planning of lotion trials using the Restorderm technology, as well as announcement of the novel slow release Biosilicon nano-technology feasibility (PSD just achieved a new patent recently for Biosilicon in the USA). Also planned for 2004, will be potential announcements for success with skin patch and pill delivery technology currently being progressed and researched at Monash University. In addition, new patent approval may be forthcoming.
An interesting time with regards to capital raising and phase iii trials could be lucrative in quarter 3. It is expected that EPT will receive royalty payments on total world sales, however EpiTan has announced on several occasions in the past years that it’s preference is to obtain equity (shares) of a big pharmaceutical company in addition to royalty.
Given this, and the commercial tension EPT could produce with successful PMLE trials in Germany, might lead to an unexpected windfall for EpiTan.
When should the stock start increasing? Stay tuned!"
CUV Price at posting:
0.0¢ Sentiment: None Disclosure: Held
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