CHM (ASX) valuation thoughts

Originally posted by dalts66: ↑

I like that spread sheet.

I try and look at CHM from two viewpoints.

Firstly, the type of cancer they that was chosen for the first trial, and secondly, by looking at the pathway of other CAR T drugs that have already been approved.

GBM. Its a really aggressive cancer. Less than 5% of patients with GBM survive more than 5yrs. Patients that have relapsed GBM really have no SOC option at present. From this I am guessing that if CLTX CarT works, we should get statistically significant data reasonably early on. As the number of arms receiving the drug increases, a good idea re safety should also occur. So where some cancer drug trials need to happen over years to get sufficient data, that may not be the case with CHM. Selecting GBM as the first cancer target, meets an unmet need in the market, and also ensures the shortest development timeline. This reduced timeline, increases the chance of a partner, a buy out or revenue, reducing the need for future capital raises and more dilution (if the drug works and accelerated approvals are given).

Car T approvals. Looking at the way the FDA has approached the approval process for CarT drugs, a phase 3 trial may not be necessary. The FDA has history (latest drug beginning of 2021) of giving approval for CarT drugs after a phase 2 trial. And the drugs they have done this with have shown CRs of above 50%, and some have had adverse events rates of as high as 79%. And I think this is important. As the patient in the cohorts for the use of these treatments have no other options, the FDA has granted approvals for the drugs use if it give a better than average chance of helping. When this is done, the drug is approved with a warning detailing the Adverse Event details.

CHM points of difference.

1. Its phase 1 trial started 4 months before CHM listed on the ASX. So the pre-clinical wait, normally need for a biotech start up is removed.

2. Although there are other trials underway trying to have CarT drugs treat solid tumors, there are no approved CarT drugs on the market that can do this yet. CHM is a first mover in this space if it works.

3. The SOC for GBM has a poor response rate. So any treatment for GBM is meeting an unmet need, this will help reduce approval times if it works.

4. The way CLTX CarT is administered is different to how normal CarT is administered. CHM are hoping this will reduce the adverse event rate, and help efficacy. So if CHM can have a CarT that has good safety, they will be a first mover in that space. This will help reduce approval times if it works. Interesting to see they are administering their treatment as a outpatient treatment at the city of hope hospital.

When we look at the spread sheet prospective market caps, we see that the FDA/EMA approval market cap is still below the Edison report estimated peak sales figure. Also remember that when deciding that peak sales figure, they were conservative in reducing the number of GBM patients that would benefit from CLTX. Remember that the SOC has a low response rate, so the addressable patient cohort should be much larger. Also look at what price point other Car T companies have been bought for. Once again multiples of these figures.

Until we start to see results that show the drug either works or not the share price is based really of optimism and guess. If we start to see results suggesting the drug does work, the share price should rise significantly and quickly. I say this as when shares from the top 20 holders and those in Escrow are removed from the SOI, only 125 million shares remain that will be traded. It is very difficult to buy a substantial holding without increasing the share price. This lack of liquidity also applies if someone wants to sell a substantial holding. So significant and quick price drops on bad news could also occur.

There is still a lot of risk with CHM, and that's why the market has decided on it trading range. But with risk comes the potential of reward. And that's why I like these startup biotechs. Especially when they have scientists and a BOD like CHMs.

Expand

all great points and really highlights what I feel is the right way to look at this company at this point.

great management team

well thought out approach with attacking GBM first up, strongly spoken to above

potential to go from phase 2 to approval can see a leap in MC

I tend to use conservative figures as shown by the 50% discount applied to Edison’s already conservative peak sales figures, the CR’s at only $0.25 SP, and the low multiple of 2.5 as a potential buyout valuation where others have achieved much better

all up my conservative valuation allows me to sleep at night knowing that I’m likely to be surprised to the upside.
again not without risks but therein lies the fun

I’m looking forward to the journey and sure to learn heaps along the way

No.	Vol.	Price($)
78	84735861	0.3¢

No.

Vol.

Price($)

84735861

0.3¢

Price($)	Vol.	No.
0.4¢	86304338	23

Price($)

Vol.

No.

0.4¢

86304338

No.	Vol.	Price($)
71	80251196	0.003
24	24996485	0.002
12	52464000	0.001
0	0	0.000
0	0	0.000

No.

Vol.

Price($)

80251196

0.003

24996485

0.002

52464000

0.001

0.000

Price($)	Vol.	No.
0.004	86304338	23
0.005	33049651	21
0.006	12474007	15
0.007	6512518	7
0.008	7317101	5

Price($)

Vol.

No.

0.004

86304338

0.005

33049651

0.006

12474007

0.007

6512518

0.008

7317101

(20min delay)
Last 0.3¢		Change -0.001(25.0%)		Mkt cap ! $6.045M

Open	High	Low	Value	Volume
0.4¢	0.4¢	0.3¢	$22.28K	6.311M

valuation thoughts, page-3

St George banks $5M from placement to ramp up Araxá Rare Earths Project

Rokeby, BHM, more: The 10 hot stocks HotCopper users watchlisted in Week 30

ASX Market Close: Fading miners drag bourse as iron ore price slumps | July 25

What is going on here? Watch out for DroneShield, Pure Hydrogen, and Nel ASA

Renascor produces graphite concentrate at Siviour, right on time to meet ex-China demand

Listen: HotCopper Wire Podcast 019 – Dreaming of the 9,000s

Friday's HotCopper trends: Renascor concentrate, Larvotto raise | July 25

Astute delivers high-grade lithium hits at Red Mountain

Firetail scoops up untested land around Excelsior – including juicy mineralisation target

Most investors will get this earnings season wrong. Will you?

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News

valuation thoughts, page-3

Top Stories

St George banks $5M from placement to ramp up Araxá Rare Earths Project

Rokeby, BHM, more: The 10 hot stocks HotCopper users watchlisted in Week 30

ASX Market Close: Fading miners drag bourse as iron ore price slumps | July 25

What is going on here? Watch out for DroneShield, Pure Hydrogen, and Nel ASA

Renascor produces graphite concentrate at Siviour, right on time to meet ex-China demand

Listen: HotCopper Wire Podcast 019 – Dreaming of the 9,000s

Friday's HotCopper trends: Renascor concentrate, Larvotto raise | July 25

Astute delivers high-grade lithium hits at Red Mountain

Firetail scoops up untested land around Excelsior – including juicy mineralisation target

Most investors will get this earnings season wrong. Will you?

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News