Reasons to buy.20 Jul 2016 08:35
From a respected source. Bits removed to protect the senders identity. Comments below are reasons to buy ONZ.
I think the drivers for the ONZ s.p. catalysed by N4 are (in a very rough chronological order – although as you know it’s all highly uncertain!):
-Further patent filings for other potential drugs that can be reformulated b N4’s platforms (although admittedly these will not be major share price drivers, these announcements will help to paint a picture of the range of revenue streams that N4 could enjoy in the longer term)
-Results on sildenafil PoC studies
-Securing a major pharma as a partner in bringing a reformulated sildenafil to market. Ideally we’ll see the partner entirely funding the development whilst taking a big portion of future revenue share. This process of seeking a partner for sildenafil was commenced three months ago
-Securing a major partner for the Cocrys platform as a whole
-Grant funding for Nuvac and/or Nuvec platforms (again staves off equity dilution to N4 (and thus to ONZ), something that private investors love). These two appear slightly behind Cocrys in terms of development
-Results on further testing of Nuvac/Nuvec platforms
-Securing a major partner to fund the further development of these platforms
-Announcement of next major product to be developed on the platforms after sildenafil
Beyond these specific catalysts, what I really like about the N4 story is:
-Nigel’s track record in the space
-Nigel’s belief in the potential of the platforms that he has created (as evinced by his share purchases in placings and on the open market)
-The business model (circa £3m in total per reformulation of a particular product, and the short time to market (2.5-3 years); which if successful can result in annual sales for any particular product of many tens of millions of £)
-The likely route to market via ONZ. An RTO is the very obvious move here, with ONZ enjoying a bargaining chip via its existing loan note (which will likely be made convertible at the time of RTO, along with the issuance of consideration shares for Nigel and a placing of new shares to fund the next two years of ops). I don’t think this will occur until news of a partnership with a major comes, at which point the RTO can be achieved at a materially higher share price
-The obvious takeover target that N4 represents (specifically, by Pfizer, given that sildenafil is N4’s first drug it is reformulating. I picture Pfizer taking out all of N4 and first and foremost using the reformulated sildenafil to simply ‘refresh’ its market leading Viagra brand (“Viagra XL”?!))
I’m also getting increasingly confident that a second (and potentially third) biopharma investment will be made in the near future.
The rationale for this is based on:
- our CEO hinting at increasing exposure to the space (in the Year End results);
- the creation of the two divis
Sign In
Follow the stocks
