as I used his previously published calculations as a template for this. You can find a link
.
I am not religious and am a cybersecurity nerd, so long weekends like this are a chance to ponder. Therefore I have spent some time productively producing some figures that demonstrate why I am such a firm believer in the LONG TERM potential of Paradigm, and why OA is an untapped gold mine of potential revenue and better patient outcomes.
I am using the World Health Organization, the United Nations, and estimates for 2030 as the basis for this work.
According to the World Health Organization (WHO), osteoarthritis is one of the most common chronic joint conditions, affecting millions of people worldwide. The exact number of people suffering from osteoarthritis globally is difficult to estimate due to variations in how the condition is diagnosed and reported in different regions of the world.
The WHO estimates that approximately 10% to 15% of adults over the age of 60 have some degree of osteoarthritis, and the condition affects people of all ages and races.As of 2021, the United Nations estimates that there are approximately 1.03 billion people aged 60 years or over worldwide, which represents around 13.5% of the global population.
So I am going to focus entirely on those aged over 60, despite the fact that OA does not discriminate against race or age.
According to the United Nations, it is projected that by 2030, there will be approximately 1.4 billion people aged 60 years or over worldwide. This represents a significant increase from the estimated 1.03 billion people aged 60 years or over in 2021.
Using the World Population Ageing 2020 report published by the United Nations, there were an estimated 671 million people aged 60 years or over living in low- and middle-income countries in 2020. This represents around 65% of the global population aged 60 and over.
Therefore it is my assumption that in 2030, this number will remain proportionally the same, being that 35% of those over 60 years will be living in countries not considered low-middle income (given that the population is growing fastest in India and China, it could be argued this percentage should come down 10%, but it's my numbers, so I'll do what I want haha).
So to put on a conservative cap, I am looking only at the number of over 60s by 2030, in countries where access to treatment is likely affordable to the majority.
There are a lot of variables that can be changed easily and are hard to estimate. The total addressable market, the royalty percentage, the AUD/USD exchange rate, future share dilution, the price of the drug, and the multiplier applied to the share price once revenue generating.
Here are the numbers, which I will break down further below. If there are mistakes, ignore them and imagine there aren't, as I won't be able to edit it.
I am not accounting for inflation, time value of money, the fall of capitalism, WW3, or the ultimate rise of crypto over fiat or our new overlord AI.
All scenarios are assuming trial success and FDA approval. I am also not a financial advisor or analyst, so take it all with a pinch of salt and skepticism. These are the musings of someone in their 30s who doesn't work in finance or biopharma.
Lowball scenario:We partner with a big pharma for a nice upfront payment, and agree to a 10% royalty. The drug is not a DMOAD, and we therefore get USD $3000. The company has issued a number of shares (70m) to get through to the end of Phase 3, resulting in dilution to shares. We are only successful in achieving a TAM of 5% of the 16m Hip and Knee OA patients in high income countries. The exchange rate remains unchanged, and we only trade a 5 times multiplier.
So by 2030, we are only valued at
$5.21 a share. A 300%-400% return over 7 years, which averages to lets say 40% per annum. Seems good to me (though I am not rich, so it's not life changing given my initial investment) but is a market beater that's for sure.
Reasonable (in my eyes) scenario:We partner with a big pharma for a decent upfront payment, and agree to a 15% royalty. The drug isn't DMOAD, but due to it's success, still fetches USD $4,000 and is not used as a prophylactic. The company has issued 60m more shares to get through the end of Phase 3, resulting in an acceptable (in my eyes) dilution to shares. We achieve a 10% TAM, of the 20m Hip and Knee OA patients in high income countries. The exchange rate remains unchanged, and we trade at a fair 10 times multiplier.
So by 2030, we are only valued at
$53.66 a share. A 4400% return over 7 years, which averages to lets say 628% per annum. Seems good to me and would make me a millionaire, so I'm happy.
Now for the fun one, the dreaming scenario.
Dreamin' (but not impossible) scenario:
We partner with a big pharma for a massive upfront payment, and agree to a 20% royalty. The drug is the first in the world to achieve DMOAD, and due to it's success, it fetches USD $6,000 and is also used as a prophylactic. The company has issued 50m more shares to get through the end of Phase 3, resulting in an acceptable (in my eyes) dilution to shares. We achieve a 15% TAM, of the 24m Hip and Knee OA patients in high income countries. The exchange rate remains unchanged, and we trade at a fair 15 times multiplier.
I have attributed no additional value to the prophylactic and remember, these numbers are over 60s old in high income countries only.
So by 2030, we would valued at
$298.58 a share. A 27400% return over 7 years, which averages to lets say 3528% per annum. Seems good to me and would make me a tens of millionaire, so I'm very happy.
So whether we achieve a lowball, a reasonable, or a dreamin' scenario, the point of the matter is, we are likely to make a very good return should the Phase 3 trials be as successful as P1 and P2.
SummaryYou may say these are all pie in the sky numbers, and you would be 100% right. But there is no disputing that OA is a considerably large market, that affects a huge population of the world. To date the drug has proven to do wonders for Pain and Function, and is so far showing good indications that it may be the first ever in the world to achieve DMOAD status.
If all of the stars align, we are looking at potentially being a revenue pumping machine. This will scale to huge numbers. Everyone on every HC thread says, "well if it's so good, it could get bought out easily for nothing but it hasn't, so it must not be amazing". It's a fair point to make, but goes against how the world works in reality.
People want sure things. People want to run across the finish line and be part of the winning group. That goes for big pharma to. They don't want to buy a company when it's yet to prove beyond a doubt it is a game changer. They are not in the business of risking money for drugs that may end up being duds. I can't stress this enough though, this could end up being a dud, and the company could lose a majority if not all of it's value. That's where the risk lies, but with risk, comes reward.
Will we ever make it to $300 a share, probably not. Will we ever make it to $50 a share, I think it's a good chance. Will Paradigm crash and burn and delist, potentially. All the options are still on the table and comes with a huge amount of risk. Remember though,
the reward is there too.I want everyone to think for a moment. If the possible value of the OA market for Paradigm is $300 per share, when picking just over 60s and a TAM of 15%, what if it was a TAM of 65% like one drug has in HA? Better yet, what are the other potential markets that the revenue will enable the company to look into? Inflammation is linked to numerous diseases and conditions.
On that note, I want you to think about a single other condition, and the markets that could unlock, and the people it could help. This is a horrible condition that doesn't get enough attention.
There is evidence to suggest that Huntington's disease (HD) is associated with inflammation in the brain. Inflammation is a natural response of the immune system to injury or infection, but in some cases, it can become chronic and contribute to the development or progression of certain diseases. In HD, studies have shown that the inflammation is mainly localized in the striatum, a brain region that is particularly affected by the disease. This inflammation is thought to be caused by the accumulation of mutant huntingtin protein, which triggers an immune response and leads to the activation of microglia, the immune cells of the brain.
The inflammatory response in HD may contribute to the death of brain cells and the progression of the disease. In addition, some researchers believe that inflammation may play a role in the development of symptoms such as depression, anxiety, and cognitive impairment, which are common in HD. While the link between inflammation and HD is still being studied,
it is believed that reducing inflammation in the brain may be a potential therapeutic target for the treatment of HD.That's one disease that still has no effective treatments. That is one disease that Zilosul
could potential help. That's just one market that this drug could potential tap into after OA and MPS.
There is so much potential for this drug, and I for one am excited to see where it goes. I didn't buy in to sell below $50, so I don't particularly care if the share price went to 10c this past week, although I would be annoyed being told by my wife that I am not allowed to buy more. Plot twist, I did convince her in the end to let me put more in when it dipped to $1.22 (not the cheapest, but based on what you just read, do you think I care haha).
People have different timelines, different interpretations, different objectives. Mine are to hold and see it play out, and hope that the number of people we can help across a huge array of diseases and conditions can grow and grow just as much as the share price.
I hope for those who haven't crunched the numbers this has been a useful insight. I am confident the rest of the market, being the instos and sophisticated investors are going to start to see this unlock as it moves towards success. If it all fails, then that sucks, but that's the game we all play, and I for one am putting my eggs in the PAR basket, as skies the limit in my eyes.
Again: Not financial advice, may contain errors, number may be incorrect and I am not telling you what to do.
(20min delay)