@turbo, I think you are spot on, however I think the benefits...

@turbo,

I think you are spot on, however I think the benefits that accrue to Cogstate are even greater than you have stated (I am basing this on Lecanemab gaining approval)

Clinical trials - As the only FDA approved cognitive endpoint in an AD therapeutic this will make Cogstate's battery the gold standard for AD clinical trials. This will drive a lot of AD business to our door and there will be a lot more business given this result.

Healthcare - The benefits could flow fast in this area, Lecanemab could be approved as soon as 6th January 2023. This means it could be given to first patients within weeks of that. The market will need to triage hundreds of thousands of people very quickly, in order to determine suitability and monitor their progress on drug. There are only 2 companies capable of servicing this market, Cambridge Cognition and Cogstate. Cambridge Cognition has no US partner or healthcare presence , and it would take at least 18 months to set up the infrastructure that Eisai has already put in place. Furthermore, if as a healthcare provider looking to administer Lecanemab has the choice between using the cognitive assessment that underpinned the drug approval or an alternative (assuming no significant price differential) why would you choose the alternative. Overtime this may change, and I suspect you will see Lilly or Roche back the Cambridge Cognition tests given the links between Eisai and Cogstate. But that probably gives Cogstate and 18 month to 24 month head start and that is more than enough time to grab and hold a dominant market share.

The numbers on healthcare are going to be interesting, and we need to keep an eye out for the US pricing for the Cogstate test when launched and this launch will need to come very, very soon. But what we know is that we have a low double-digit royalty; I reckon the tests will come in at about US$ 60 to US$ 80 per test and we will get something like US$ 7.5 to US$ 10 per administered test (90% gross margin), it is not hard to see how you could get to a minimum of say 1.5 to 2 million tests per year by 2025. If these numbers are even in the ballpark Cogstate will have a $10+ shareprice