Which believe it or not at 12c is still very much a ground floor entry level.
Two platforms we have " are both pretty much game changers and are likely to eclipse and re define standard levels of care" .... That just sums it up perfectly.
So if that holds true we will have multiple products that will naturally eclipse the current sales of blockbuster synthetic drugs like Herceptin, Keytruda, Opdivo, Tecentriq and others. Safer, less side effects, far more effective, much cheaper to make.
What does it take to be valued at $10 ??
A very quick spreadsheet calculation of 4 products, ( HerVaxx, Pd1 Vax,CheckVax, and Vaccinia) all starting at sales of $1billion in year 1, ie. Very low percentage of market share , then growing to $2b, $4b,$8b in the first 4 years then staying at $8b until 2037 , using a discount rate of 15% , and a sales royalty rate of 15% to Imugene, gives a Net Present Value of A$2.43 per share.
The Npv of the full 100% of sales, ie. what Big Pharma would be eyeing off if they want to own everything outright , works out at US$10 per share or A$13 per share.
So effectively at the current share price "the market" is valuing that outcome at a 1% chance of success, and therefore a 99% chance of failure . That is simply not warranted based off HerVax trial success , the closeness of Pd1Vaxx saftey reporting, and the pre clinical success of CF33 , the trial success of other "lesser OV's" , eg Replimune, which CF33 can outperform.
If the market assumed that outcome above a mere 10% chance of success the shareprice should look more like $1.30 now .
Time will tell. Trial Data generated from here across the pipeline will build further confidence and enormous value.
We have recently seen Big pharma deals valuing forecasted peak sales of $4 billion per year at US$21 billion in take over value. So even if the sales outcomes were half that of the example above, sales on 4 products maxing out at only $4b per year each , the conservative NPV is still $6.50.
So yes, it is very early days still and a lot more proof needs to be seen, and no doubt there will be obstacles along the way, but week by week, month by month, the evidence is accumulating and the likelihood of success is being defined. But the share price, despite gains over the previous 12 months, continues to lag behind as the market struggles to believe in the proof of concept already demonstrated so far and the enormity of what is on offer in the entire breadth of the pipeline.
Sum of the parts is far greater than 20c even now.
If the success seen in HerVaxx so far is replicated across the pipeline , these "outrageous numbers" people talk about could fall into place easily as the likes of Merck, Roche, Gilead, Glaxo decide how much they're prepared to pay to be at the forefront of immuno oncology. And importantly, how much they're prepared to pay to prevent the competition from having access.
A multi -multi bagger opportunity for those playing the long game, peanuts and chips for those lacking in vision.
IMU Price at posting:
11.5¢ Sentiment: Buy Disclosure: Held
