@GeoFiji,
Thank you so much for your reply. You may not be aware but I did have some difficulties loading the post on Sunday from where I was (i.e., out in the bush) and as such the calculation pertaining to the 1% market share was omitted. That said the calculation does equate to a potential IMU share price of $9.28, and hopefully I can clarify this point here and put to bed any confusion surrounding the issue.
Firstly yes you are right I am suggesting that were Imugene’s Vaxinia to succeed it has the potential to obtain 1% of a potential $901.27 Billion USD market and therein obtain annual sales revenue of $9.01 Billion USD. Keeping in mind as Imugene does not wish to take their products through to manufacturing and market (i.e., as stated by the company Chairman Paul Hopper), I am assuming the goal is to sell or license the drug to a Big Pharmaceutical firm. Recent sales of immunotherapy drugs suggest Big Pharma actuaries are paying close to 4 to 5 times peak sales for leading immunotherapy drug candidates (see Mercks 11.8 bn acquisition of Acceleron as but one example, Gilead Sciences 21 bn acquisition of Immunomedics as another). Vaxinia is patented to 2037. Were the existing Vaxinia trials (i.e.,commenced in mid 2022) to be successful and a registrational trial to commence in late 2024 with a view to fast tracking an FDA listing in 2025, that could give Big Pharma at least 12 years of revenue. That would include close to 7 years of blue sky for them having outlaid the initial purchase price of 4 to five times peak annual sales.
Assuming the actuaries at BMS, Merck, Roche or Pfizer (to name but a few) paid 4.5 times estimated peak sales for Vaxinia, what would that mean for the IMU share price, in terms of value? Well 4.5 multiplied by $9.01 billion USD would equate to a sale price of close to 40bn USD, or approximately 58bn AUD. Given the current market cap of Imugene is close to $1bn AUD at 16 cents per share, that would attribute a value of 58 times the current market cap, or 58 times .16 cents, that being $9.28 AUD per share.
Are these figures realistic? To be honest I believe they er on the side of caution, for a number of reasons. On the down side just because the overall solid tumour market size is estimated to be worth 901 BN USD in 2029, that does not mean sales revenue shall result in that figure. However 1% of overall market share would obviously equate to that amount. On the upside Keytruda (i.e., with whom Vaxinia is in combination trials) is yielding $17bn USD in annual sales revenue, in what is ostensibly a much smaller market than the solid tumour market. Keytruda does bring side effects along with it as well, whereas Vaxinia to date has little or no toxicity. Merck who owns Keytruda trades at a price to earnings ratio of 18.68, in other words over 18 times earnings. Given Databridge Market Research is forecasting this market segment to grow at Calendar Annual Growth Rates (CAGR) of over 20 per cent per annum, the price to earnings ratio (PE) of the future Vaxinia owner may well be above 18 times earnings.
Every time people speak of potential or prospective valuations for Imugene (IMU - ASX) the non believers hone in on these and suggest they are “pie in the sky” figures. And I am not for one minute suggesting you are. But I would make readers aware that if one or even two or potentially three of Imugene’s drugs are successful in their existing clinical trials, figures of 4 to 5 times peak annual sales are eminently achievable. For Imugene's drugs are safe, they combine well with other immunotherapy drugs, are non invasive, cost effective and require less ongoing treatment than existing treatment arms. Yes it is a competitive landscape, however Imugene’s drugs can extend the existing product life (i.e. runway) of existing therapies (e.g., Keytruda, tercentriq, Herceptin, Avelumab) and increase their safety in the process. Imugene’s value proposition for Big Pharma is a strong one, for a range of reasons.
Once again I would draw your attention to Chairman Hoppers recent Letter to Shareholders. As outlined in this well written letter Imugene has many many products in their arsenal. Were one, two, three or even four or five fail during this the clinical trial stage, there are still a number of shots on goal as it were. Hopper makes the salient point during his letter the market prices stocks, yet rarely values them. Once we do go down the IMU product valuation track, as I have hypothetically done in this reply to you, there appears to be an apparent disconnect between the current share price and the prospective future value of Imugene’s suite of products. This is understandable, as the trials are mid sentence, however from what we are starting to see there is definite efficacy associated with Imugene’s drugs, in addition to their safety. Databridge Market Research outlines the size of the market, it is now simply a question of whether Imugene’s drug(s) are a suitable form of treatment for those in this market segment. The three poster presentations last November highlighting results derived from the application of CF33 and CAR T drugs in concert with one another, suggest patients are to benefit from Professor Yuman Fongs oncolytic viruses. The recent CF33 TNBC trial announcements suggest patients can benefit from Professor Yuman Fong’s oncolytic viruses. If so, and indeed if the potent parental virus of CF33, Vaxinia, is successful in treating patients afflicted with solid tumours both here and in the US, the gap may close between the current share price, and the estimated product valuation provided herein. So indeed may the estimated percentage of market share attributable to the drug. What was that Professor Yuman Fong said about human therapy?
WMHB
DYOR - Seek investment advice as and where necessary - Opinions only
Nb. For those seeking precise calculations IMU has 6.421 bn shares on issue