I have spent the last few days in a snowy Vienna, where it (IMU) all began. Aside from their prowess in B-Cell therapies, they certainly know their way around a schnitzel; Figlmüller Bäckerstraße is a must for anyone travelling here.
Anyway, back to IMU, it's coming up to 10 years of holding for me. To say it's been a hell of a ride is an understatement. Thanks for everyone's valuable insights recently. The threads have been considerably better than they were a few months back.
I thought I'd briefly share how I think about valuations regarding IMU. Ultimately, valuing any stock pre-revenue is always hard; with IMU, it's even more difficult considering the potential paradigm-shifting nature of its therapies, namely CF33. All of this to say, any valuation is, at best, a guess. But alas, they are important to set expectations and to help drive decisions. Any valuation also doesn't exist in a vacuum; any subsequent announcements have the ability to change any valuation up or down significantly.
The market size of HER-2 is circa $13 billion USD pa.
This market was previously dominated by Herceptin and will likely now be mostly dominated by Enhertu, which is an ADC (Herceptin + directed Chemo). It's unlikely HER-Vaxx will become the standard of care in this arena. However, I could certainly see it successfully added as part of combo therapy. Let's not forget that HER-Vaxx performed comparable to Herceptin in a similar patient population but without any side effects. Engaging the patient's own immunity is a big deal, and one I'm still confident BP is after.
Peak Sales estimate $250m USD pa Future value = 250m x Multiple of 4 = $1 Billion USD or circa $1.5B AUD
The market size of PD-1 is circa $30 billion USD pa.
Keytruda dominates this market, and Merck is aggressively pursuing alternative therapies to differentiate its therapy and extend its patent life. Again, though, I do not see PD1-Vaxx becoming stand-alone therapy, but as with HER-Vaxx in combo with other therapies. We are so early in the development of PD1-Vaxx and with very little data its not worthwhile putting a number on it.
The market size of CD19-directed CAR-Ts. Not sure.
There are ~150,000 cases of DLBCL worldwide each year, 60-65% of them treated with CD19-directed therapies, with 40% of them relapsing. IMU has already stated the sales for this could be circa $2.5 billion per annum. It's highly likely, if successful, Azer Cel could be approved for other indications in the future, as Leslie has pointed out, so this estimate could be larger.
Peak Sales estimate $2.5 Billion Future value = $2.5b x Multiple of 4 = $10 Billion AUD+
The market size of solid tumour treatments is $200 billion+ USD pa.
This is where the valuations can really make you dizzy. Consider that Keytruda targets the PD-1/PD-L1 pathways, which are prevalent in some, but not all, cancers. It's approved in around 13 cancer types (over 200 exist), and within those over 20 indications, mostly across melanoma and non-small cell lung cancer. Keytruda is expected to do $30 Billion in sales, making its intrinsic value to Merck at $100 billion+
Does CF33/OnCARlytics have the potential to treat a similar/larger portion of cancers?? I believe it does. Considering that's what it was designed to do and has achieved pre-clinically, it's not that farfetched. Mind you, designed to do versus does in reality isn't the same thing. But if you are reading this, you are interested in investing in highly speculative (risky) investments. The highly speculative part of that notion falls on exactly this scenario. So, on that basis, CF33 and OnCARlytics have the potential to be hugely valuable.
The higher Cohorts of the IT/IV arms will help add weight to the above, coupled with the outcome of OnCARlytics. But IF (yes, it is a big if) they prove to be successful (CF33 infects all/most cancer types and seeks out distant tumours and infects them + illicit said tumours to express CD19), then a $30+Bil AUD value for CF33 isn't out of the question.
The caveat to the above scenario is Merck didn't know Keytruda would be that successful; they mothballed the therapy. It wasn't until a competitor succeeded with the monoclonal antibody that they snapped into gear. All this to say, no one could/would have paid 100 billion for Keytruda at the time; it was built from a standing start. IMU, however, is already trialling CF33 in many different tumour types (not just melanoma), so it's possible IMU could be seeking fast-track approval on multiple cancer types quite swiftly. The Bile Duct expansion trial could commence by Q1 2024 and be as early as Q4 2024 when we know whether that trial is a success (not to say it'd concluded, but enough data readout). And, if so, likely accelerated approval and registrational (sales can commence) Phase II to follow.
Obviously a fair few things need to happen for the above to come to fruition, but again, if you have purchased shares in a clinical stage biotech you are by default an optimist.
Based on the above I am aiming my 'rose coloured glasses' valuation at $30+ Billion within 3 years or $3.5+ AUD (diluted).
With news that's already expected to drop, 2024 has the potential to get us well on our way to the above.
Anyway, that's it for me.
Merry Christmas everyone.
Cheers.
IMU Price at posting:
10.5¢ Sentiment: Buy Disclosure: Held
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