Sareum12 Oct 2020 18:09
Potential strategy in COVID-19
The pandemic presents Sareum with an unexpected opportunity to test its lead TYK2 inhibitor, SDC-1801, in COVID-19. Such a move would require external funding, but this could accelerate clinical development timelines and catalyse a substantial increase in value for the company. Meanwhile, the recent £1m fundraising allows Sareum to advance SDC-1801 towards trials for mainstream autoimmune conditions.
Sareum intends to make grant applications to explore the activity of SDC-1801 in COVID-19, where the aim would be to reduce the immune system over-reaction that has been seen in the later phase of the infection. If such grant applications are awarded, SDC-1801 could join a group of drugs – including a number of JAK inhibitors – that have been fast-tracked into trials for COVID-19 As a dual TYK2/JAK1 inhibitor, SDC-1801 could be more effective and/or better tolerated than these similar compounds in treating COVID-19.
Meanwhile, Sareum has raised £1m via an equity issue that allows it to advance SDC-1801 into clinical trials for autoimmune disease, consistent with its original business plan.
While QuotedData’s model does not ascribe a value to the COVID19 opportunity at present, the estimate of the TYK2 assets’ current value has been increased to $30-50m. After modest assumptions for research and development (R&D) spending, QuotedData has assigned a fair value for Sareum in the £25–45m range (0.76– 1.38p/share), with the interest in SRA-737 representing upside to the investment case that may be realised in a deal involving the licensee Sierra Oncology.
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