The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
For the avoidance of doubt: “we endeavour to be in a position to commence a Phase 2a study in psoriasis patients before the end of 2024.” - Sareum
Hi Basil - and just to add, recent RNS make reference to the SAD/MAD/food element of the trial and also P2a. No mention at all of P1b. Coupled with what they've told us regarding being able to reach concentrations in the blood where it could be therapeutic, we have a pretty nailed-on certainty that good news is on the horizon.
What makes the P2a study particularly interesting and exciting from an investment perspective is that whilst the average licencing deal for platform and discovery candidates in 2023 was $47 million and $55 Million respectively the average Phase 2 median upfront licencing deal in our sector was much higher at $310 million. Source JP Morgan. The link to the full report is below....
Good luck, Brighty
https://www.jpmorgan.com/content/dam/jpmorgan/documents/cb/insights/outlook/jpmorgan-dec-2023-biopharma-licensing-and-venture-report.pdf
The added bonus Brighty1 is that an RNS announcement that we have been granted clinical phase 2 approval will raise the SP more than we are entering phase1b.
Regards
Yes, a move from P1 to P2 would see the value of Sareum increase exponentially as it would be a validation that the topline P1a trial had proven to be a success. Don't forget that Sareum has already produced data showing that its lead candidate SDC-1801 is superior to Dexamethasone in a trial. This is the same SDC-1801 that we are awaiting data on.
Exactly. That's my point. The market would absolutely love a P2 trial RNS, especially if it was to be funded by a licencing partner in a multi million deal. The JP Morgan document posted on here regarding licencing deals in 2023 in the pharma sector indicates the kind of deal size we are looking at. $310 Million was the average P2 licencing deal last year.....
Good luck, Brighty
Brighty, thank you for your contributions to the board, especially in trying to put valuations on takeouts etc.
I, like many others, I'm sure would prefer a take out, lock stock and barrel. It removes the need to consider when to sell, something I am terrible at.
The only time I would prefer a licence is if we are offered enough $ up front for 1801 to enable a fast track like no other for 1802. However, I don't see John and Tim being able to fast track anything, apart from perhaps Priority boarding on an easyJet flight. Their way is slow and methodical. It serves a purpose, especially in getting clinical trials right. But a licence would only mean we have to wait 2 or 3+ years more for full value of all of our compounds...
I think we'd all like a buyout and as, I've said before, I'd be disappointed with anything less than £10 pound a share. I don't think we are anywhere near that kind of valuation. More importantly, I don't think our board can get us there in a timely manner whilst at the same time, delivering shareholder value. IMO the board have gone as far as they can with Sareum and the compounds. They've done a good job over the last 15 years or so but have been shown lacking in some areas in the last 2/3 years. It's time to on license and get some experts to push it forward. Get a good upfront, get 1802 into a similar position then maybe buy in a compound to develop while we wait. The above is litterally the Sareum business model and what all LTH invested in all those years ago.
Excellent posts this morning. I'm a bit like Benhowell in procrastination in selling. The takeout is cleaner if, of course, the price is right. 300 for a licensing deal in P2 is really good and is close to 12. Should times the current value of the company. I would not be surprised if Tim and Co. are already having on licence discussions with an interested and suitable party(s)should the results on P1a be successful as we hope and expect.
Close to 12 times themarket cap
Hi Pot, the Bod has led us down the path that potential partners need some proof of efficacy not only for a license deal but for shareholder value so if we are looking to license at the end of P1a now that would mean a smaller upfront compared to showing some efficacy in a P1b. So why change path now when we are only £500k short of the original RF full £5m drawdown and the advantages of continuing with the P1b in Aus, tax credits etc….
I completely agree Potnak.
Get a good licensing deal, with enough cash up front get 1802 into the clinic... and have a decent cash runway for a few years. Then let a bigger player take on the further development of 1801.
I have zero faith in the Sareum board at this point. Having a more experienced partner involved would be a massive plus in my opinion.
I disagree, the Sareum business model is, and has always been to license pre or early clinical. Unless externally funded, 2a pivots away from that model. They will need £10 million for 2a and running cost to get to 2a Sara readout. Plus they need cash for 1802 development. I can't see the sp going much above 50p until the risk of a raise has been removed because why would you buy now if you could buy cheaper in the autumn? The pivot to 2a means a licence is inbound IMO. And I support that, even if the upfront is lower. I'm here until end of p2 anyway.
I also agree a licensing deal is an ideal way forward, it aligns to strategy and as others have said can delivering the funding needed for stability and the development of 1802. Will also deliver some certainty. T/O offers at this point are likely to be low ball, unless MAD closure and something on 737 gives us a boost. Not sure why we would bring in a molecule though Potnak I would prefer us to try and solve the solubility issues on FLT3. GLA
Tim mentioned aquiring a molecule in either a proactive interview or investormeets Q&A. Can't remember which. It woukd be great if Aurora could be resurrected but the science is done now, it would need a third party to have look and all that woukd need is cash. Once 1802 is in clinics, then Tim and John will be just sat around waiting like the rest of us.
Morning Potnak .. regarding "...then Tim and John will be just sat around waiting like the rest of us."
Not bad though if you are sitting around for a few years being paid £200K PA ; A bit like a well paid footballer on the bench
All the more reason to find something to do, Aber.
Leggster, right at the end of this inte
Jeez, this site!
Right at the end of this interview, Tim mentions going shopping for a compound. https://youtu.be/h6zdOkooHzY?si=ngpBi-9TsgQY6it6
Whatever happened to the skil platform? or am I thinking of another company. Was this not consequential at some point?
Hi Blue - not to take anything away from SAR and the SKIL platform, kinase inhibitor libraries are fairly common and I'd imagine all the large pharmas will have their own. I guess the value is in how you utilise it.
Bluewhite- It doesn’t matter what happened to the skil platform. The reality is right now we have two horses in the race 737 and 1801 (oh and one in the stables 1802). If 1801 makes it to the finish line, nobody will care what happened to the skil platform including you. The single only one important question is can Sareum strike a good deal for 1801 - this is the existential question which could mean riches for those invested or the end of Sareum.
I agree a great opportunity to strike a deal after 1a complete and 737 news still to come. IMO this is still massively undervalued. Once the news flow starts this will.move at pace. GLA
The Risk/Reward pendulum has swung increasingly towards "Reward" during the current trial progress. There is no adverse comments and the RNS news consistently point towards this phase being successful. RF will be out soon unless they exercise their warrants - It will be interesting to see whether they are immediately sold down or held as an investment. Having successfully navigated the financial hurdles, nothing is in the way of positive updates and newsflow. You will have to decide for yourselves in which direction you think the sp will go.
''The single only one important question is can Sareum strike a good deal for 1801''
Well their track record ain't great when it comes to 'business decisions' (RF anyone!?) but I truly do hope so as I've just over £81k invested in this now and am still underwater by just over £60k!.
Time for Parker to finally earn his over inflated salary (IMO) and for once actually deliver what he's supposed to be here for?! 🤔🤨