Member Info for RMM3383

Hi Thoth - According to my records (and Morning Star) SAR 20351 is 1802? Lupus would be a very lucrative market - just 1% would double our current mkt cap and the compound growth rate is forecast at 7% pa.

Lupus - $2.3bn global market. 1802 now has even greater potential and data to support it.

58m volume, 12.9m sold and 23.3m bought. The MM's have built up a stockpile......

An appropriate warning but we're still at the bottom end of the range that Hybridan estimated as value for SAR. And that's value before news....

Krone - just a matter of time..... GLA!!!

As you say Potnak, if all 4 compounds were in trials it would be a different scenario..... We would also be in different scenario in terms of the overhead to manage the trials. If 737 gets on-licenced then we remain a passenger but to put Aurora and 1801/2 through trials means bringing in a different skill set. It might be possible to outsource or buy in the skills but that depends on getting funding agreed and even more importantly getting the trials correctly designed and populated. We've all seen compounds fail at P3 due to badly designed/recruited trials. Too much risk IMHO.

Potnak/Krone – What we have is a 3 product pipeline (Aurora/737/Tyk2) with multiple sub levels. Two tiers for TYK2 with 1801/2 and a huge range of indications (including various cancers and immune which includes respiratory/Covid). Rather than calculating an absolute value based on what SAR has in terms of a potential share of multiple indications what I’m basing my valuation on is the significantly reduced risk level in terms of SAR and its pipeline getting at least one molecule into licencing territory (or in 737’s case on-licencing). Any acquirer will look at the risk/return. Risk gets reduced in two ways in pharma – data - get to P2 and there’s a lot of data to base a valuation on so the risk is reduced but not completely. Discounting - at the pre-clinical stage there’s a lot less data and therefore much higher risk so to counter this the valuation goes down. Currently 737 is the least risky of all SAR’s assets but we’re not in control. The value for 737 is currently based on potential milestones which could put 3p on the SP overnight if they materialise. For TYK2 getting one indication licensed pre-clinical should add another 3p+ dependent on the size of the upfront. Originally SAR timelined one indication in Q4 2020 but with the current cash pot they now think they could get both 1801 and 1802 away so double that with another 3p. Then there’s Aurora. Get that resolved and another 1p goes into the pot. We’re now looking at 10p but that’s current value not future value. For a buyout you have to agree how many years profits/earnings are being bought and that’s a difficult one to square because it’s both trials and patent dependent. 8 years worth of profits would not be unreasonable for a product that gets to market (SP would be 80p) but the chances that all SAR’s products would get to market are low so discounts come into play and effectively that’s a negotiation. Assume that only 1 product makes it and that’s a 75% discount thus buyout SP = 20p. About a year or so ago I estimated a buyout SP of around 16p (different model). So, the question that might be posed before the next AGM is ‘would you accept somewhere between 10p and 20p as a buy out price now or do you want the BoD to continue down the milestones, clinical path with all the associated risk in the hope that you might get to an 80p or even higher exit?’ Big question. Dividends sound great as long as everything gets to market. Interestingly if you take SNG’s multi bag factor of 35 then the SP for SAR would be 19p. Food for thought. I’d take that! Of course none of the above takes into account ‘Investor fever’, an intangible factor that should be on our side given the interest in biotech but the ‘fickle factor’ is exactly that and as volatile as AIM. GLA LTH’s. All the above IMHO and certainly not to be taken as advice to buy/sell or hold. I'm now off to bed....

Floated on AIM 2004, so it only took them 16 years and without Covid 19 they'd probably still be down at 30p. I'm not decrying their spike as they'd put on some weight since early March however, they have a way to go in terms of sustaining the current SP. Good luck to their investors. If the market thinks its 35 bagger on just Covid then I'd hate to think what SAR should achieve with 4 possibilities in the pipeline of which one has Covid potential. Tick tock..... I'm with Thoth. GLA LTH's

For those in or considering SNG this is worth a read:
https://www.sciencemediacentre.org/expert-reaction-to-announcement-by-synairgen-that-their-drug-sng001-has-had-positive-results-in-initial-trials-on-covid-19-patients/
GLA

Stoney - Re Aurora - I'd love to know 'who found who'. I suspect they found SAR!
Krone - We must be close to establishing MTD. Trading update?

Stoney - The Chinese are most definitely on the prowl and have been for some time. I would be very surprised if SAR isn't on someone's radar (forget the conspiracy theories about NDA's etc, conversations will have taken place). What I suspect they want (all pharma's not just the Chinese) is a tipping point in terms of data and that means sorting out a few things like MTD. Interestingly Moderna published the trials results of their Covid 19 vaccine yesterday and it makes interesting reading. Their headline is that its safe and produced an antibodies increase. At the lowest dose 50% of the sample reported mild adverse events. At the middle dose 100% of the sample reported mild adverse events. At the highest dosage 100% reported adverse events including one participant with a fever of 103.79 (that's borderline dangerous). According to Moderna the vaccine is 'safe'. Now put 1801/2 in context and we've yet to find a MTD. Now that is safe! Are you watching big Pharma? We might have something you want...... GLA

Aber - Don't forget that there's a Q10 from Sierra due before the next SAR Trading Update..... Just noticed that my filters have kicked in. Always a good sign!

Brighty - let me clarify why I would be so upset if SAR replicated the HEMO deal with Lilly. Lilly come to SAR and say they would like to offer Gemcitibane for further trials with SRA737. They will supply Gemcitibane for free. There are no upfront payments or even any milestones. In 2 years time when the trials have been completed, at SAR's expense, Lilly have the option to licence. I really can't see how that would move SAR's SP any way other than down - possible jam in 2 years? I can hear the screaming hit record levels! I don't for one moment think this is what Tim would do, even the Aurora deal proves we can get money out of what we thought was a dead product. What would please me considerably is that 737 gets on-licenced, milestones are paid (possibly even renegotiated higher as we now have data) and the SP hits 3p overnight and stays there. We then have a bedrock for what's to come with TYK2. I posted a couple of years ago that a buyout price for SAR was probably in the region of 16p. However, unlike Hemo we have over 3bn shares in circulation compared to their 434m with a Market Cap of £38m. Hemo peaked in April and even with yesterday's revelation they are not even close to matching the April spike. We're all here to make money but to catch a spike you have to sit here all day with your trigger finger poised and hope that you can actually sell when the spike comes. Alternatively SAR could do a deal that re-rates and allows LTH's to exit profitably over an extended period of time. It's just my opinion. I'm not being critical if all you want is a spike but at this point in time my view is that a Hemo type deal would be to sell us short and undermine what's to come from TYK2.All IMO GLA

Brighty - from what I can see Lilly have simply offered up a 'supply arrangement' and the Hemo SP has jumped on the fact its Lilly and what it might mean. However, Lilly have not put up any cash from what I can see and have an 'option' to take a licence only if the research goes anywhere. All the risk sits with Hemo. If SAR did something similar I would be very, very upset.

... meanwhile the media are finally waking up to the fact that therapeutics might be more relevant in the short term and cancer hasn't gone away. Both work for SAR. I'll be happy to see 5% a day over the next few weeks which would take us back to 0.9 and a great place for news. The sun is out and no bad news.... GLA

Thanks Basser - They (Hisun) do seem to have been active in the FLT3 area. Might be just a coincidence.....

A danger of 2+2=6 but the Chinese manufacturer of Favilavir (anti flu drug repurposed for Covid 19) is Zhejiang Hisun Pharna, a pharma listed on the Shanghai exchange (remember that Aurora has gone to a Shanghai listed company). Hisun has an interest in antibiotics/antivirals and cancer. It also has a R&D division:
http://www.hisunpharm.com/en/rd.html?PHPSESSID=9642b8d5d5d98bbcb588e098b1e1b8fd#rd3
'Our product pipelines include recombinant proteins, mAb, recombinant vaccines, antibody-drug conjugated, that cover multiple therapeutic areas such as autoimmune disease, cancer, diabetes and blood disease.'
Still a strong possibility IMO that the Chinese will look at SAR.... GLA!

As Thoth would say, 'this is way above my paygrade' but maybe someone out there would have more success than me in finding a Pharma with an interest in antivirals, particularly fluoroquinolones, as well as an interest in TYK2/JAK1 inhibitors. It would appear that our friends in Russia are having some success with antivirals. If I'm understanding things correctly they are using a RNA inhibitor to suppress the reproduction capability of Covid. However, by suppressing the virus's ability to reproduce it stimulates the cytokines and in some cases (as we already know) it creates the cytokine storm which then requires a TYK2/JAK1 inhibitor. Apparently the Russians are seeing 60-70% success with the RNA antiviral but that leaves a big gap. However, if it really is working then the antiviral route looks a lot more immediate than a possible vaccine (although we're probably going to need both). Interesting article at Anvivogen which caught my attention because of the RNA/IL-6/TYK2/JAK1 interactions:
https://www.invivogen.com/spotlight-covid-19-predicted-immune-responses
Now, if a pharma was already looking at us, here's the smoking gun for a a reduction in the investment risk and if the pharma isn't already looking at us but has an interest in antivirals then here's a reason to consider another look. Forget the ramping, lets provoke an auction! GLA

Krone/Potnak - My view is that Covid enhances the value of TYK2. Any partner/licencee of 1801/2 now has another factor that could offset the risk of investing in a preclinical asset. Many years ago when I first looked at Sareum I judged it on the basis of a multi asset biotech (Aurora/737/Tyk2/SKIL). The risk was much less than other options with one drug in the pipeline. The options with TYK2 have improved immeasurably over the last few years and covid has added to the list (respiratory). What is a hot sector has now taken on further heat. However, a £50k or even a £5m grant is as nothing compared to what the package is worth hence my view that we should not allow Covid to divert the strategic focus. What could help to spark an auction is that pharma's not previously interested in TYK2 might now have a reason to reconsider. GLA

The next Sierra Q10 is due out around 6th Aug which means that Stephen Dilly is most likely drafting it now for approval later this month. My take is that he’s still in the honeymoon period and it will be a cut and paste of the last Q10 ie very little that’s new. However, the next quarter (report due November) will be a big issue for him and he will have to start to reveal his strategy. It’s now make your mind up time on 737. Clinical data is there for him to use in the shop window and I’d be surprised if he wasn’t touting it with a view to on-licencing (it shores up his balance sheet and retains an interest if all goes well). Gut feel says he’ll try hard to retain a stake and we’ll get an update in September at the latest. Meanwhile TYK2 is now fully funded to get through pre-clinical. The focus in my opinion is that this is where all the effort should be made. Ignore grants for Covid, they will be peanuts compared to the big prize. Let someone with deep pockets make that call. Again my gut tells me that we’ll get news before the AGM along with an update on Aurora. The MM’s can play all the games they like but the reality is that without volume they won’t make any money and volume goes up exponentially with a rising SP. With everything in the shop window (1801/2, 737, Aurora) and no bad news its only a matter of time before good news breaks. September to November will be the crux. Now, as to a SP forecast…..