RE: Share Price Decline26 Jun 2023 20:35
Seemed to have missed out this part.... plus amazing you can see data we have not had yet
'A significant addressable market: Scancell’s platforms are targeting over 10 types of solid tumours. If all
4 platforms were successful across the many multiple indications, this company could generate $12bn in
peak annual revenues by the early to mid-2030s. Even applying a 10% rate of success, this could be a
company which could generate over $1bn in annual revenues by the next decade. We believe the
market will begin to discount these prospects much sooner, as there are several value creation inflection
points through 2023 (detailed in the following point).
De-risked business model, with multiple shots on goal: Scancell’s business model has great appeal both
from a science and a business perspective for the following reasons: 1) With 4 distinct platforms,
catering to a plethora of indications in the solid cancer space, the company is de-risked from a business
perspective unlike peers that might be narrowly focused on only 1 or 2 therapeutic indications. As an
example, the Modi-1 vaccine is focused on 4 types of solid tumours (triple negative breast cancer,
ovarian, renal and head and neck cancers). The risk of failure (a way of life in the biotech industry) is
thus substantially mitigated, with Scancell’s business model. 2) The availability of real options – with
multiple platforms and multiple indications, Scancell’s management has real choices about which
products or indications it wants to pursue further, and which assets it wants to sell or licence out or
develop in partnership. This enables the company to raise cash (critical for development of future
assets) as also avoid dilution at low valuation levels.
Positive Catalysts: There are several value creation inflection points coming along in 2023: 1) Modi-1, is
progressing through a phase I/II trial targeting 4 tumour types with results through 2023. If the data is
positive for even 1 of the 4 indications (triple negative breast, ovarian, renal and head & neck cancer), it
could result in a substantial uptick in share price performance given the probability of success (PoS)
assigned will rise from 15% to around 25%; 2) SCIB1 is in a phase II study on malignant melanomas, and
3) The Glymab antibodies are generating interesting preclinical data – another deal similar to the one
with Genmab, but with probably superior economics, would be a fillip to the share price as the PoS will
(at the bare minimum) double to 10%.
Valuation: We view the current share price as derisory; reflective of poor market sentiment for biotech
stocks and the early-stage nature of the business, with management too focused on the science, rather
than medium- and long-term commercial aspects. If Modi 1 were successful across all 4 tumour
indications, it could deliver c.$2.8bn in aggregate profits
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