A chance to pause and reflect on what a big week it just was , the share price rally many of us had been envisioning for quite some time . A chance to put it all into perspective and ask in layman's terms " How are we here?? Why are we here??, a US$1 billion market cap. What on earth is the market thinking???"
Will keep it short and sweet.
The market loves a growth stock.The market loves innovation. The market rewards excellence.The market is happy to pay a premium for quality. The market is happy to pay a premium for " disruptive" companies who can break into existing monopoly or duopolies, breaking the existing paradigms.The market recognises opportunities. ( DYOR on recent FDA moves to limit some Big Pharma pre approved Monoclonal antibody drugs being used for "off label" treatments, Why? They're not proving to be clinically meaningful over and above existing chemo only treatments) Massive door opening our way here.
The market is always forward looking and values a company on potential size of future revenue streams, weighted by probability of success. The market sees massive revenues in immuno oncology up for grabs out till 2037. US$20 billion a year and growing just for our two lead vaccines, HerVaxx and Pd1 Vaxx. 20 x 14 years = US$280 billion at stake , for a portion of our overall target markets. Double that revenue on offer for combination treatments or new vaccines from the mimitope platform targetting many more types of difficult to treat cancers.
The market is pretty savvy when it needs to be, can sniff a deal when a deal is in the wings. (And likewise, the market can quickly smell a rat when a rat turns up. )
In biotech, when all else is stripped bare, the data, "the beautiful data" , the proof of the science, is all that really counts to the market. And the money will always follow the science once proven.
If the market senses a chance of failure, set backs, threats and risks , we would certainly not be at 26c today. If the market smelt a dodgy rat we would still only be a 1c wannabe. You can't fool the market forever!
That implies the market now sees and believes enough "de risking" events have already taken place to justify the re rate of market cap.
The market looks at our pipeline and sees the overall total value does not equal the sum of the parts. If value appreciation is on offer , the market jumps on it. And continues to jump until perceived fair value is met.
HerVaxx + Pd1 Vaxx + Mimitopes + CF33 = Total Value
In my own mind, which may differ from the market, i now see the total current value of the sum of the parts conceivably and conservatively as: 20+10+10+15= 55c
Not based on wishful thinking or hoping for good trial outcomes, based on genuine conversations with members of our management and scientific team. based on data already produced, based on many recent market deals for other junior bio techs. Based on metrics paid for expected peak sales and given a better than 50% chance of success. Based on the "state of play" in ImmunoOncology, and the ever increasing pressure on Big Pharma to grow, to maintain and protect their market share and future revenues.Forever looking to dominate and obliterate the opposition. DYOR, Merck, GSK, Roche, Novartis, Gilead are ALL under pressure to fight and to innovate and to grow. To grow through M&A of bolt on technologies complimentary to existing pipelines.
Maybe i am just few steps ahead of the market. Maybe i am an optimist ,and very happy to be so, based on research and more research and based on listening to what our CEO is telling us and where she is leading us. Her experience and expertise is second to none in managing clinical trials and bringing new drugs from laboratory bench to patient bedside. We are truly blessed to have her leadership.
55c as a Sum of the parts total is conservative yet that is where we are heading as the market with all its traits and demands as listed above , digests everything that has already and is continuing to fall into place. That valuation sum will climb as we gather more data across the diverse pipeline. As our leadership executes its promise. As Big Pharma fights for the prize.
So at last the market has spoken, even raised its voice in no uncertain terms with a jump from 19 to 29c
Fair valued or overpriced at 26c?
We only have to ask ourselves: Is US$1 billion a realistic valuation on a company that has the revolutionary IP to change the course of cancer medicine, to become the standard of care across multiple cancer targets?? Answer: Emphatically No .
Is US$2.3 Billion (55c) a fair valuation for IP that has the potential to make redundant the existing toxic monoclonal antibodies dominating the market today, and to generate US$280 billion out to 2037 ??? Answer: No
No one therefore should be surprised why we are now here at 26c . No one should be surprised as the story continues to unfold and as the market sees what's on offer and the price continues to appreciate reflecting the magnitude of our IP and the magnitude of the future revenues and potential market dominance on offer.
The market has not just spoken this week, it has grabbed a megaphone and made a bazzing loud statement.
Conviction is a wonderful thing.
The market finally has caught some of it, and in a big way. Consistently large daily volume, and shallow pullbacks spell that out loud and clear .
Maintain conviction until the end.
A reminder of the famous words of Philip Fisher one of USA's all time great investors, and father of growth investing philosophy from his book- Common Stocks, Uncommon Profits - "If the job has been correctly done when a common stock is purchased, the time to sell it is – almost never. "
IMU Price at posting:
26.0¢ Sentiment: Buy Disclosure: Held
(20min delay)