Member Info for RMM3383

My view (and it is only my view) is that the Covid grant has raised the profile of TYK2 and those ‘conversations’ are now more focused but still dependent on the data pack that goes with any application for a trial. The real value will emerge in the next few months when the application goes in. Meanwhile we will have to put up with comments that the share is a dog, we’re all deluded and anything with numbers and facts is blatant ramping. GLA LTH’s

On Monday some people will sell and I suspect our background investor will vacuum up the shares at a bargain price. Nothing wrong in that. The drop on Friday was IMHO over done but I’m sure the MM’s will take every opportunity to max out on the margins they can make and after all that’s their job. From the LTH’s perspective very little has changed. 12 months ago FLT3 was sat on the shelf going nowhere with no residual value. Since then we’ve had £50k and progression if not success on the solubility issue. If it goes back on the shelf I won’t be particularly disappointed but it goes back on the shelf now with residual value. I get the impression that the solubility issue could be resolved at some point in the future by a pharma with deeper pockets. Let’s leave it there for the time being and concentrate on the real prize(s). As has always been stated by the likes of Thoth its TYK2 where the real value in this share lies. Multiple indications, two patented molecules that we own 100% and now there’s the Covid angle. I still think that Covid is the small play but it’s something we didn’t have 12 months ago, it could speed up negotiations (which we know are in play, they’re referred to as ‘conversations’ and no doubt wrapped in confidentiality clauses) and it could take us into yet another indication – if successful against Covid it’s more than likely going to have relevance to a number of upper respiratory conditions like pneumonia. The potential value of the two TYK2 molecules is large and I’ve put my calculations out in public for all to see and challenge. I see no reason to change anything other than to detune the amount I identified for FLT3 which in my model represents only 10% of what we could achieve. In negotiations this will not alter the amount that a pharma would ascribe to Sareum if all they want is TYK2. We know that preparations are underway to get 1801 into the clinic. MTD has been resolved and the data needed to get a trial underway is being collated etc. For the uninitiated getting MTD resolved is not just a matter of upping the dosage. The recipient rat/mouse has to die and you have to wait until the animal dies before data can be collected on dose and toxicity. With something like 1801 it simply wasn’t toxic enough to get the animal to die quickly and as Tim said, ‘It’s a nice problem to have’. Not receiving the 900k milestone for FLT3 is disappointing but in the overall scheme of things it would only have paid expenses for a few months. It certainly wouldn’t pay to put 1801 through trials. If funds are needed they will be for a good reason and it will mean progress on 1801. However, there’s the ‘if’ element. Getting a partner now would obviate the need for a placing. Getting a milestone or payment from 737 would change the landscape.

So, 1 out of 5 irons in the fire hasn't quite delivered. What a surprise. That wipes all of 12p off my 93p valuation..... except it doesn't. The molecule that was on the shelf 12 months ago has been moved on and the interesting part is that Tim et al are going to look at the data and consider a possible new partnering opportunity. Solubility 'difficult' but the molecule remains viable seems to be the message. It would have been nice to get the milestone but I'd prefer Tim and John to focus on the real prize and get it licenced - TYK2. They can play around with FLT3 once the big one is in the bag. GLA

According to the Guardian the Dept of Health is issuing guidance to hospitals that they should use Tocilizumab and Sarilumab with immediate effect on patients admitted to ICU's suffering from Covid. Both medications have side effects, not least for Tocil which can heighten blood pressure and Saril which reduces white blood cell count among other things. Both drugs have side effects that are relevant to the Covid patients most at risk (>60). With a lot of over 60's on statins this shows just how desperate the NHS is to reduce the pressure on the ICU's. Saving 1:12 deaths is a significant benefit. What the NHS ideally need is an immunosuppressant without side effects.....

Hi Thoth - Without ramping.... I can only dream of what might happen if FLT3 turned oput to be a vaccine adjuvant and 1801 a cytokine therapeutic. We'd have both ends of the spectrum!!!

They're down under participating companies in the 'Partnering Opportunities' section.

Abbvie are pinning their hopes on a combo for Psoriatic Arthritis. Their blockbuster Humira comes out of patent in 2023 and will leave a big hole. The combo they are looking at is Skyrizi with Rinvoq, the latter being a CHK inhibitor. The combined sales of these two drugs could hit $20bn pa. Clearly there's plenty of potential in the immunology market with just one indication. I recall Tim saying at the 2019 AGM that all they needed was success in just one indication. Any one will do Tim just as long as its the right one!
https://endpts.com/abbvie-eyes-humira-matching-move-into-psoriatic-arthritis-for-immunology-follow-up-skyrizi/?utm_medium=email&utm_campaign=Wednesday%20January%206%20AMBER%20PLEASE%20USE&utm_content=Wednesday%20January%206%20AMBER%20PLEASE%20USE+CID_ca15f3f64d86e4ce83913bfbfc57648f&utm_source=ENDPOINTS%20emails&utm_term=AbbVie%20eyes%20Humira%20matching%20move%20into%20psoriatic%20arthritis%20for%20immunology%20follow-up%20Skyrizi

Hi Thoth - interesting read, particularly the involvement of IL-6 which our molecule targets. I was somewhat shocked(not surprising as I'm a bloke) to read that 10-15% of all women of child bearing age are affected by Endometriosis. That's 160-240m women. The current market size for Endometriosis therapeutics is £1.68bn. Not surprisingly most of the spend is in the US but the biggest growth sector is expected to be Africa. Yet another indication where a combo including TYK2 could be helpful, especially if the price is reasonable. The potential value of what we have seems almost endless.

Gauteng - its more likely a 'bed & ISA' with people using up their 2020 tax allowance. The broker will use the lowest price to allow the transfer of the maximum amount of shares.

Building on what Thoth found at the weekend….There are conflicting sizes for the Parkinsons therapeutics global market size (somewhere between £2.8bn and £4.6bn). I’ve gone with the lower estimate just to be prudent. Roche have achieved annual sales of around £278m with Madopar which equates to a 10% share. If one of our molecules was to perform similarly then the lifetime value would be over £2bn. Given the stage we are at a heavily discounted (90%) value would put 7p on the current SP. Get it into P1, with good data and this could easily rise to 21p. At the higher end of the global market estimate we’d be looking at 11.5 and 34p respectively. However, this tends to pale into insignificance when you look at the Covid therapeutics market (excluding vaccines) which was estimated at £13.2bn in 2020. Given the rate of mutation this could easily double in 2021. If TYK2 was to prove effective and gain a 5% share we’d be looking at sales in the region of £1.3bn pa. However, I think a lower P/E is required as vaccines improve and the industry gets on top of the virus. On this basis discounted value today would be 6p on the SP. Get it to P1 and we’re looking at 19p on the SP beyond that it gets serious. Combined value of TYK2 - my previous estimate was around 20p for where we are currently, add on Parkinsons and Covid and we have a SP in the region of 33p today rising to 60p. Then add in FLT3 and that probably adds another 12p minimum. 737 could add another 15p once it gets kick started in anogenital. Then there’s the SKIL platform which I understand to be worth 6p. Total value today in the region of 93p. On the basis that all the above figures are risk discounted should an offer be made for the company it’s possible that bidding would start at around 40p. IMHO our SP should at this point in time be in the 4-6p bracket but we’ve been suppressed. A 10 bagger should easily get us to 50p. More a question of time and options as to when real value will be achieved. A buyout would certainly get us there but if the pharmas hold out on paying sensible money then we head to P1 and poundland beckons. All the above assumes that 1801, 1802, FLT3 and 737 get to their respective next stages. Also none of the above takes into account AIM ‘frenzy’. Whichever way I look at it, a SP of 2.3p is a huge undervaluation. GLA

Hi Potnak - I'm not too concerned about the actual date as there are a number of caveats. Tim did also confirm that the 9 months deadline was not rigid. If they felt that the partner was close to a solution then there was the option to extend the deadline. My view is that with all the disruption to supply chain logistics any lab will have been subject to shortages and delays. More important is the fact that if they weren't close to a solution I think we would have heard by now. At the AGM they weren't prepping the ground for failure.

Aber - The timeline is not up yet. The contract was for 9 months on receipt of the data package. As the data package wasn't sent until April the clock is still ticking. Given the current circumstances I'm not expecting any news until the end of January. However, when I questioned Tim some months ago he did confirm that the 'partner' could deliver early.

The timeline is also interesting - received 27/9, accepted 30/11, published 11/12. They took 2 months to analyse and review the findings so this is not something that has been rushed through. It's clearly been complex in respect of the sample profile, data collection, the findings and the analytics. This could open up a whole new chapter in respect of treatment of severe respiratory conditions.

The Sierra 8k mentions only the change in premises. There is nothing about drug prioritisation. Other companies pedalling news about Sierra have been lazy in rolling out a description of what Sierra does. For onging reference if any material mentions SRA141 then you know immediately that it is out of date. SRA141 was handed back to the licence holder many months ago. At the moment we await news on just what Sierra intend to do with 737 and the speculation (quite rightly) is why they have moved near to Gilead. I suspect we will get clarity early in 2021.

Useful article from Yale that refers to the broader association of immunotherapies to both Covid and Rheumatological diseases. Even without Covid the sector is currently worth £53.77bn ($67.21bn) and forecast to grow CAGR 4.46%. My benchmark has always been to target a 1% penetration of a market and once established things tend to go from there. At 1% we could expect a revenue of £537m pa from just 1801. With a P/E of 8 the drug would be worth £4.3bn if it got to market. Should it be effective as a therapeutic against Covid then I wouldn't rule out a 5% penetration or equivalent which would make it a blockbuster with a market valuation of over £21bn. It's eye watering but supports Thoth's view that even on it's own 1801 could be worth £'s. Of course this valuation is based on it getting to market but in the meantime it ups the anti in terms of any pre-clinical deal. Currently we're high risk but even when discounted by 90% it's still a big figure and 28p would appear to undervalue just 1801. And then there's 1802 etc..... Seat belts on everyone.

Two interesting insights - Rinvoq is the drug they were hoping to unseat with Filogotinib. Sales of £15bn - mega! Even more intriguing is the that the side effects of Rinvoq are essentially the symptoms associated with Covid - Fever, Cough, Nausea. over here Mr O'Day, over here....

Thoth - I so agree! Respective governments moved heaven and earth to get a vaccine to stop infection. Why not do the same for something that will prevent death?? Citigate may well be active in the B2B sector but lets get the media behind therapeutics. Nothing like a bit of media pressure to get a politician's attention and ease the purse/regulatory strings while forcing the pharmas to get busy.

Mafuta - You have to hand it to the MM(s). They are working very, very hard to keep a lid on this!

Savvy - I made the mistake of listinening to the BBC News over lunch and it was depressing to hear of the 'lockdowns' and variations thereof now taking place across Europe (combined with Tier 3 for London tomorrow). Surely someone in Government must be thinking that we need therapeutics now as much as we need a vaccine? It simply beggars belief that we might have something in 1801 that can't be fast tracked. Results in H2 2021?? Now, lets put our feet up and think about that......

Having been present at last year's AGM and listened in today I think it's unfair to comment negatively on the Chairman reading out the legal notices and the BoD's lack of ability to demonstrate the full potential for 2021. The webinar format kills any chance of dialogue which is what made for such an informative session last year. However, I'll be interested to see the full list of Q&A's when they appear as no doubt everyone else will.... and we can then dissect, intepret and re-interpret every word, phrase and nuance to our hearts content. For me the clarity I would like to see is with regard to 737's runway which we were told very clearly we have no control over, a much more specific timeline for getting 1801 into the clinic and similar for 1801 in getting POC for Covid. Yes, we have Covid to thank for delaying things but too much is woolly and open to slippage. Tim has been re-elected as a director and I now want to see some sense of urgency from this executive position. Other companies I have looked at have gone from inception to exit in 4 years or less. Tim, take note.