RE:RE:Same with the paragraphs I had in itRealistically, big pharma getting interested in buyouts usually happens once the risks are a lot less. There's nothing worse for someone in strategic planning to fail on a buyout. While big pharma (BP) has loads of cash to make acquisitions, they will happily pay up for drugs being fairly highly derisked but with the potential to expand usage. That's why Sort1 could be valuable, but not until it's shown to succeed in the actual hospitals.
My preferred path, and I hope mgmts (and definitely Soleus's), would be not to sell too soon (no need to) but to quickly move into more trials and expand both the cancers types, payloads, and cancer stage usage. Plan would be to get whatever seems to be the cancer with best response rates and efficacy into Stage 2 and prove up a completely new target that no one really knows much about. Also, to prove up that it can be done with a peptide. There are some novel aspects of this drug that would make BP take a wait and see approach.
If you think of it from THTX's perspective (and a shareholders), if you just get that one approval across the line, there is absolutely ZERO pressure for you to sell your company. You now have one successful oncology drug that will likely have a revenue line of something between $200mil on the low side for a small market cancer, to $1.5billion for one of the more prevalent cancers (TNBC, HER BC, Melanoma, Ovar, etc...). If you can announce a new toxin, siRNA bomb, a few new cancer Phase 2 or 3 trials, then you are buidling up a wildly exciting platform. The IMMU model showed that shareholders were smart not to sell to SeaGen early on for (I think) $1.5bil and developed more indications and solidified the first indication with oncologists in the hospitals so their market cap reflected that success and got up to tens of billions based on what the platform could do. They fought off (with the help of one activist shareholder) a too-early bid that undervalued what the science could ultimately prove. I mean, once you have proven the concept is 100% valid --the target works, your bomb explodes, it's helping cancer patients -- the model of a drug conjugate is that it is highly probably to work on other tumors where the gene expression is similar. So the risk is way, way lower at that time --just look at Enhertu. They can just methodically keep moving into other tumors with similar expressions and see how well they do. It's a literal goldmine for Astra and Daiichi Sankyo.
That's where I would hope they bring it to and then, if someone want's our platform, they need to pay up for the future that we've uncovered with the science and not just for what is commercialized. Really, we are in the hard part now and that's why all of us get so frustrated -- we are in the "prove it up" stage. Once things get derisked, there's a cascade of mammouth opportunity out there for them and we deserve the reward for that. BP doesn't deserve that unless they pay us for it. We suffered, let us enjoy the fruits!
At some point soon I will revist how some cancer analysts on the sell side analyze and value these type of oppportunities. The short of it is, they generally take a view on the revenue potential of the cancer indication --when it should start (usually 2 years from when P2 started), what the peak revenue potential should be (just simple (cancer pop x usage penetration x net drug price) kind of analysis. Then they put a multiple on that, a probability of success getting there (it will be low in a Phase 1, say around 15%, and then higher in Phase 2 iinto 3), then do an NPV on that and come up with what that should be worth on a per share basis.
I'll go back and see if I can find that post, but you can imagine a $1.5bil peak rev opportunity is probably worth around $15-20 today and a $300mil around $7-ish. At one point, I tossed out the idea that if it's anti-metastic property becomes something you use in combo with whatever your current regime is (all the way to line1-3 stage cancers) you could see $2bil in revenue or more just from that pre and post-treatment dose they showed that lowered tumors spreading by a huge amount (remember the mouse lung photos?). That alone could could be worth $30-40 a share. An exercise like that really shows you the value of just getting this POC behind us and starting to focus on what market size they may be able to attack with 2/3/4 successful indications if they get there. Of course, without POC or one working --this is all useless!
realitycheck4u wrote: Thank you for this Wino. So at the end of the day and thinking about the potential of the platform as well as other molecules which could be attached to their methodology other than TH 1902, what would be your low medium and high expectation stock price for a buyout.
Wino115 wrote: Sorry -easier to read. BTW, the 57% is on the paragraph right after Fig 2 charts.
In the past, we've asked the question about getting a quantitative measure of just how many cells in a tumor express Sort1. I think I found a small answer that pushes our understanding along a bit for ER+ and ER- breast cancer tumors. I know just enough to be dangerous, so take that as a warning.
I was reading the Univ Gothenburg paper that shows how Sort1 is associated with cancer stem cell proliferation and metastases in breast cancer and that if you "turn off" Sort1, the spread of the tumor slows. In it, they did a study for just Sort1 positive tumor cells and ran a gene expression study on 60 samples. It was for one specific breast cancer line called MCF7.
For 60 sample MCF7 breast cancer tumor cells, they found that 57% of the cells expressed Sort1. Given ER Breast cancer is one that is considered Sort1 "overexpressed" in 90% or so of the cases, maybe we can roughly conclude that the High-Expression group shown with the staining process in various THTX journal charts means around 60% or higher of the tumor cells express Sort1. I seem to recall they've said they think it will be very effective for those in the "very high" and "high" categories, so maybe that would mean where your tumor has cells where 50%+ show express Sort1. Both THTX and I are just guessing and at some point they will roughly find that number for each different cancer type as I'm sure it won't be the same for each. But maybe that's a good starting estimate. It could work with lower numbers too for all I know.
It's known that Sort1 is a prerequisite for cancer stem cell propagation. As a reminder, The UnivGothem guys overall conclusion was this:
"The fact that we could show that progranulin mediates sortilin activation resulting in CSC propagation suggests that sortilin is a key molecule that genuinely affects tumour progression and metastatic properties. Further studies are needed in order to define the exact role for sortilin in this context, but our results clearly support an important role for sortilin in CSC propagation."
This impact on cancer stem cells, VM and the like via engaging sortilin somehow just may be the unique MOA that propels this platform for us. The paper is here:
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6245804/