RE:RE:RE:RE:RE:RE:RE:Dear Paul Lévesque and TeamIf my info is correct, and I am really pretty sure it is, I expect the sponsored research report to be very well done. I have posted some of the wwork of this firm on Stockhouse previously and I ahve been recieving their reports for a quite a while now. They do really good work - far better in my view than anyone other than maybe Canaccord has done so far on THTX. And I agree, the main issue they will face will be how do they keep their target price down to a reasonable level if they take a fair view of the NASH and ocology opportunities. If they do any reasonable comparisons to others in both fields, the target price is going to have to be quite high.
If THTX only had NASH, how do you think the market would value that?
If THTX only had ocology, how do you think the market would value that?
We already have looked previously at the NASH comparables but it would be intersting to see what the oncology comparables might be too. How many phase I oncology programs have Fast Track status and what are the valuations ascribed to those companies?
As for the valauations being so high that people might disbelieve them, all I can say is I see investors believeing just about anything they are told, even crazy thnigs, these days. In this market, that should not be much of a problem.
Wino115 wrote: I'm curious on your view and other's view on that idea of "sponsored" research that was mentioned. There are a number of reputable research/PR type firms for specific industries and I've seen this done for small caps with limited coverage before. In the "old days", companies with little sell-side would sometimes bring those reports to meetings as a way to get a thorough view with forecasts and not fall afoul of any disclosure rules. It's an ok way to essentially get a full picture of a company when analysts aren't out there really going it --which is definitely the case here where NASH is only in one model at a 15% probability of success and oncology is literally no where to be seen in any financial model forecast.
So my question is, if a legitimate biotech/medical oriented research firm does the full monty on THTX, by which I mean they include various scenarios for success on NASH and for SORT1+ platform, based on my analysis they will get an eye-popping valuation by any reasonable standard of NPV analysis. My guess is they'll heavily discount the oncology given it's only Phase 1, but given the potential revenue market it addresses, it will still have some value and you can't say there's a 2% chance of success or that would be silly. Same for NASH. So the question is, if they come up with a valuation like $10 or $15 will that be so high as to make those who see it disbelieve the analysis?
If I were Leah and doing this, I would ask them to build a High/Mid/Low case on each of the 3 business lines (HIV, NASH, Cancer) and have something like a mix and match table to allow someone to use whatever chance of success they want for each strategic asset. It would be crucial for them to indentify the factors that they think would move up the probability of success in the pipeline assets so there is the ability to also know when to shift into those higher or lower case discounting levels.
But my overall issue is that I think an objective valuation done like what I'm seeing from some of the biotech sell side analysts and NASH analysts would actually give you a rather high valuation compared to current market cap even with punative discount and probability factors. So will such a high number cause them to create ways to lower it so that it's not laughed out of the room as a joke?
SPCEO1 wrote: While I sincerely do not believe you will need to use the pitch fork and torch, make sure they remain within your reach just in case!