Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
For me, 1801 was, always going to be the loss leader. Even the psoriasis indication is the path of least resistance to market. Almost every milestone that 1801 passes, validates 1802 to the point that a successful 1801 p1a means 1802 can go straight into paitient. The translational studies will incorporate all data learned so far. To the point that 1802 could be licence ready within months.
My questions yesterday re indications that overlap the two TYK2 compounds. I was asking this for a reason. If Company A were thinking of licencing 1801, then surely Company A would be looking at 1802, now patented for some immune indications. However Company B, a cancer-led pharma really wants 1802. This could cause a bidding war where a TO is the most cost-effective way of tying it all up or at the very least drives the value of the compounds higher.
It would be impossible HBD. They'd be on an NDA, defo no posting here and only through approved channels. So effectively just like the IR person now but holding shares that would have to be declared to market.
I'd say the answer is more nuanced. The Board does have some experienced deal makers in Owen and Parker but I don't think they have done any deals outside or with SAR since joining the board. The other issue is the lack of funds. SAR are always short of funds, it is the nature of being an AIM minnow. It's like having a Royal Flush in poker but not having enough cash to stake yourself in the game. We will always have to blink first. The last factor is the AIM drag. We all know that AIM minnows struggle with fair valuations. We'd probably be valued in the hundreds of millions already on NASDAQ. There is nothing we can do about it now as I'm sure there are many hoops to jump through to get a listing. Now imagine Tim M and Parker rocking into a meeting with some really good 1a data but only enough cash in the bank to see this t
year out and undervalued before even starting negotiations. They know the value of our compounds but beggars can't be choosers. IMO, we'll get a licence with good backend milestones and a decent upfront that is enough to keep the lights on and push 1802 into clinics and hopefully a bit left over so the 1802 negotiations can be more productive. IMO 1801 could be worth up to £800 million in milestones but they will all be p3 and commercialisation. for 1802, depending on the indications we could be looking at double the 1801 milestones. It's all bio bucks until phase 3 but if 737 is in play, then you are looking at 2 billion just for getting to the end of trials. Double or triple that valuation if they get approved for market. I doubt any of us will still be here for that but the market will work out a valuation for us while we wait.
Most trials are 1 then 2. Think the board originally chose 1a,1b because the value of deals would have been higher with good 1b data. This resulting 2a pivot is another reason I think a licence is inbound. No reason to do a 1b if you have the cash to go straight into 2.
If anything was to trigger a TO, it's the similarities in 1801 and 2. It would make sense to buy up both, to lock in all indications. If SAR do on license 1801, then 1802, if it goes elsewhere may become a competitor and it gets messy. I don't think the TO scenario is likely but the chance to cover dozens of indications, immune and cancer must be on some radar somewhere.
Hi SOG or anyone who has, an opinion. With the latest patent news covering 1802 for immune too. Does that make it more or less likely that the TYK2 compounds could go to separate partners? Also, does that mean that 1801 could cover some cancers?
Silver, just sell at £3 when we get there? I know this is a big if but if 1801 and 2 are good. £300 million is nowhere near enough for two tyk2 and a 27% share in a 737. Frankly, if 737 comes good in p2 combo trials. You've got your £300 there.
Yes, in terms of total time to trial 2a skips over a fair bit. It's a good move IMO, and I think the board are using the likes of Sotyktu as validation to skip to 2a. I'm hoping, if we are in licencing talks that the fact BMS paif $4 billion for Sotyktu warrants a decent upfront for Sareum.
The 2a trial has already slipped in terms of timescales so will probably start at the end of this year. Based on that we'll be lucky to get a data readout before the end of 2025. Hopefully, funding aside, 1802 will be in trials too plus 737 news? The company have been very clear that funding is needed for 2a. Take that out of the equation and punters will start buying again.
How does the company keep afloat until 2a data readout? Could easily run into 2026. How do they push 1802 along? They need 18 months, minimum of trial and operating costs. Between 6 and £10 million. Even with a licenced funded trial, we'd still need £3 million to cover running costs, salaries, etc.. Why do you think buyers have dried up? My number 1 rule for AIM investing is checking when the last raise was and looking when the next one is needed. The wrap and all the extra 40 million shares only gets us to the end of this year. The board could try and cherr the sp to a pound then raise but the discount would still be huge. So anyone buying around a pound could be 20% or more underwater after a raise. The board need to solve the funding problem and An on license now is really the only sensible option.
Firstly, for those that haven't. You should read the report in full.
I think this paragraph is a nod to what is happening. And the socond paragraph shows that the report is commissioned and paid for, based on a note issued by Sareum.
Should data continue to be favourable and contingent on Sareum securing further funding (we expect the company is likely to seek non-dilutive funding in the form of a partnership), the company expects to start a Phase IIa study in psoriasis patients (n=24) before end-CY24.
This report has been commissioned by Sareum Holdings and prepared and issued by Edison, in consideration of a fee payable by Sareum Holdings. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note
I honestly don't see how Sareum could raise enough for 2a trial. They'd need £10 million to see them through to getting a deal on 2a data. The market would want a massive discount and we'd be back at 10p with 200 million shares in issue. IMO, where the Edison report says non dillutative funding. That is code for on licence. An on license doesn't dillute the shares. We pay Edison to write those reports by the way.
Depends what you mean by good deal. IMO, they should and I personally think they are looking to licence on 1a data. If the dosing results suggest a high dosage then based on early pre clinical work, we can at least compete with more established drugs. But a 1a deal will definitely mean a lower upfront with bio bucks type milestones as it progresses to market. If the upfront us enough to put 1802 in trials and keep the lights on then, I'd say that a good deal but it does mean another 2 to 3 years before the real value shows. We're heading for a transitional period. The dillution has allowed some to massively build their holding whilst others are still massively under water. If we are talking takeover, The balance will have shifted. Where as once the LTH were united in what they would accept. Some can accept much lower offers and get out with what they wanted. I still think, if all goes well, Sareum are heading for a £2 billion valuation so I'd be really disappointed if we got less than £10 but, post dillution that's a £1.1 billion mc now. However, the deal is the deal. We'll have to wait and see what the board thinks is fair value.
Jeez, this site!
Right at the end of this interview, Tim mentions going shopping for a compound. https://youtu.be/h6zdOkooHzY?si=ngpBi-9TsgQY6it6