Thoughts on RNS yesterday13 Jun 2024 08:49
Having followed Sclp for some years and being a reasonably sized holder I had some thoughts on yesterday’s RNS.
Inanaco posted “that makes it £1.2b deals on mabs” and got ridiculed by some posters. Because obviously the RNS didn’t state potential future values.
But I believe that is a reasonable and indeed cautious statement by inanaco.
The reason I state that is because the £1m upfront fee is significant. It’s basically £1m just to have a “look”!
The last deal at over £600m didn’t have an upfront fee it had a £5m payment on the licence deal. That obviously locked out that asset.
In other words this deal is effectively a lock out exclusivity agreement to evaluate the mab over just 7 months. (I’d assume 7 months is also significant because as was suggested yesterday that’s been negotiated by Sclp to put pressure on exchange of the option deal). It’s a put up or go away initial £1m fee.
That to me suggests Lindy was correct in stating several pharmas were interested and this was the “best” deal. That then implies that exchange fee is also probably better than the Genmab fee. Indeed that fee was a little disappointing to me and I think that’s why Sclp had to raise some funds again. I can’t be certain what the next upfront payment on this deal would be but 5%,10% or even 15% plus seems reasonable.
Then if you assume the deal is “better” than the last one, because this was the “best” of a few offers, then it’s not unreasonable to suggest it’s a potential £1b deal or as inanaco suggested at least the same £600m plus.
And of course that is on top of where genmab are currently where further payments could be due soon. Indeed could it also be genmab on this second deal because they are ahead of others and already like what they see? We will see soon enough.
At this point let’s state that mabs are considered only 17% of Sclp value. But already we could have at least £1.2b of potential value.
So having listened to Lindy yesterday on her interview it’s obvious she is currently very confident. But how can Sclp fund phase further stage 2/3 trials without further funds? Maybe they already know? Because they know exactly where funds are coming from.
We are also about to get a scope trial update. I for one can’t wait. Having invested in many companies over the years I simply don’t think the market is working. Sclp are clearly sat on several assets that are being proven right now.
How do we know. Because deals are being done and we are being told. Yes maybe not as quick as some would like but there were several hints in the interview yesterday.
I know I’ll be shot down by the “astute” but I don’t think I’ve ever been as confident as I am now. And yes I bound to say that. But trading this share now simply isn’t worth the risk because the upside is huge and clearly something important can land at any point.
Anyway good luck all those that
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