Member Info for RMM3383

Tuned in this morning at 0730, no RNS. Tuned in again mid morning and suddenly we're down 18%. Put 2 & 2 together when I saw the red dot and made 5. Must be one of the biggest stop loss raids we've seen in a while. Time to tune out again until we get the real RNS.

Hi Krone - thanks for posting the tweet. If only the BBC had name checked us.... Regarding Sierra, have Stocktwits got the date wrong?

I don't normally participate in the positivity/negativity debate but I am more than a little p'd off at some of the misinformation doing the rounds. First of all, consolidation was a legal exercise. The only people making 'fat fees' were the lawyers and the regulator. The brokers (PH and Hybridan) had nothing to do with this as this wasn't a placing or anything related to buying or selling shares. Secondly, people may have noticed that there's a sh*t fight going on in Europe and we are not the only stock that is down. Yesterday's EGM was up against serious distractions for people not invested here. I remain focused on what's in the pipeline rather than the ups and downs that the MM's use to 'create a market'. Enough from me, its back to watching the rain fall (that's today's downside) and buying a new pair of trainers (that's today's upside!). GLA

Covid: Quite definitely waiting back stage once 1801 goes into the clinic. It might have helped in some respects by opening up the URI option but it’s also a distraction in terms of hype and the impact the pandemic has had on the industry. Add this option into the ‘data pack’ for 1801 and the value really does start to mount up and make for a compelling case to licence or acquire.
The SP slide, PH, NASDAQ and the next 12 months. Not directly addressed (apart from NASDAQ – emphatic, no joint listing) but the message was clear, with what’s in the pipeline they clearly think that value will be restored. I think it will come in phases – 737, then 1801 and after that the door opens for strategic options (licence or sell). Tim’s comment that risk is being reduced (for 1801), Parker’s comment about the positioning beyond a penny share to raise the company profile (it was Parker who a couple of years made the comment that it wasn’t a cost he wanted to pay, so what’s changed? Well, they now have the money and it’s an indication they are thinking bigger and end game) plus Tim’s comment that ‘we now have enough money to be choosey about who we work with’ sums up what can only be an enticing next 6-12 months. It won’t be at warp speed but in line with steady scientific deliberation. If you want a roller coaster white knuckle ride then Sar may no longer be the share to invest in. Calm steady progress seems to be the message. Oh, and by the way, I think the Tox results will be fine! GLA

....... the problems being experienced by the TYK2/JAK2/3 versions ‘do not read through to our molecule’. Body language at this point was relaxed and mildly excited (for which read ‘we definitely have something here!’). A while back I had wondered if the issues plaguing this class of drugs was making the analysts twitchy. If they’d been in the room today they would have seen someone confident in their safety and excited about their potential.
Onto 1802: Based on what was said today this will accelerate as 1801 goes into the clinic. John was clearly excited about 1802’s potential as first in class in cancer and I got the impression that with 737 leading the way there could be multiple options in terms of combos. Getting 1801 into the clinic will mean that 1802 has fewer hurdles to overcome because of what has been learned about 1801. However, my read is that once 1801 goes into the clinic and the data starts to flow then we may not see 1802 through trials as the pharmas wake up to the opportunity. I still think that once in the clinic we will be heading towards the end game.
737: They are now talking openly about when and not if 737 will go back into the clinic. The anticipation is there and we only need confirmation from Sierra. I was slightly surprised not to see a PARP combo but I suspect this is somewhere in the pipeline and Dilly will keep this up his sleeve for a later announcement. Having announced his Momo success he’s going to drip feed good news to keep the momentum going rather than dump it all in one go and watch interest fade away. A good strategy that Tim and co should take note of? The immediate milestones might not be huge but the overall value is very significant and takes us into a whole new price point if it goes the distance (even without TYK2).

I was tempted to post with the headline, ‘Full Steam Ahead’ but I think that might be a little too much as the mood of the meeting was guardedly positive, possibly because I was the only investor in the room and the danger was that things might become a little too cosy! So, the bottom line is that there was no bad news. There was good news (which I’ll come to) and the consolidation went through by a big margin. The Chairman was also at pains to point out that this move was purely to re-position the company beyond the penny share ‘tag’ which is not helping to attract bigger investors. There wasn’t even a hint (spoken or in terms of body language) that this was a precursor to further rounds of dilution, as some people have alluded to. In this respect Tim was very clear in his comments that they have enough money to get 1801 into the clinic and to get 1802 ready for the clinic. All the extra spend has been in R&D, not in overheads.
Onto the specifics: 1801 – From the questioning and debate it’s clear that we will get a RNS when the final report is signed off. What we won’t get is full disclosure of the data and in that respect I wouldn’t expect that. What is key and possibly missed, was the comment by John Reader that they are ‘confident in the therapeutic window’. In other words there is nothing in the Tox report that states they can’t trial at levels that might be effective in human trials. For those who remember Tim’s comment that failing to get to a max dose is a ‘good problem’ to have, this is now clarified. Now I’m afraid I’m going to jump about a bit but I think this makes for a clearer understanding of where we are. I questioned Tim and John on ‘slippage’ against self imposed deadlines in getting 1801 into the clinic. It was at this point that Tim became quite animated and made some very useful comments. In his words the closer we get to CTA and the clinic the lower the risk of not meeting deadlines. Furthermore, to get the CTA underway we do not need to have the capsule fully resourced in terms of manufacturing. If there are any delays in getting manufacturing underway they won’t delay the CTA, nor will they impact trial design or the recruitment of participants. We should also not underestimate the fact that they are using an outside agency to advise on trials design AND they are cognisant of the value in designing trials with indications that have big commercial interest (ie large international pharmas). In conclusion I think we can be very confident that 1801 will go into the clinic as scheduled and against an indication with big £ signs attached.
A question I also had lined up but was put up via the on-line forum also allowed John Reader to provide some very robust detail around why we are best in class (and for 1802 first in class). John was very clear on why we are different to BMS and why ours should not have the same black box warnings that are plaguing our competitors. In his words.......

As the man in the room I’ll be posting my thoughts this evening should Southern ever get me home. However, the technical difficulties were nothing to do with Tim as it was the in-house laptop that died. Both Tim and John did their best to work around poor technology.

Just thought I'd pop in for a little review. Almost everything on my watchlist went red today including the big boys (Barclays down 5% ) and the not so big boys (Avacta down 16%). Looks very much like the analysts have woken up to the opportunity to put through a 'correction' based on the turmoil over the Ukraine so that they can pump it up again when things calm down . From one headline I saw today the bombs could start dropping tomorrow. However, with Biden in the Dementia Clinic (sorry the White House) and Europe tearing itself apart over gas supplies, security issues and who pays for, well anything, Mr Putin appears to have a strong hand in this poker game. I'm far from convinced that Mr P will start a shooting war tomorrow as he's cosy'd up to the Chinese who won't take kindly to him raining on their Winter Olympics parade. On that basis we have a window of opportunity for the diplomats to agree just how much we are going to pay for gas and where NATO can park its tanks away from the Ukraine while he parks his tanks just outside the Ukraine before he sends them off to sit on the border of Kazakhstan which has some very valuable resources that unlike gas have a big future. Meanwhile the markets will go up and down. All very unpredictable, a bit like when SAR will release news. As far as I'm aware not a lot has changed with SAR apart from the fact that it would be nice to have some tox results. If they'd released them today I fear that they would not have had the impact they deserve so fate may have been on our side. But if they release them this week and the bombs don't fall then we may be in for a bit of blue. Anyway, must get back to watching the Russian skater who's tested positive for performance enhancing drugs but that's OK because she's under 16. Perhaps the analysts should watch more of the Olympics and less of the so called 'news'. GLA (all the above IMO and firmly tongue in cheek apart from that bit about Kazakhstan.....)

Yesterday Novartis declared they were stepping away from this indication following problems with their JAK program. Today J&J have announced that they've written off $610m against their attempt to collar the market. Global spend on this condition is currently around $8.9bn and forecast to hit $13.6bn by 2026. The analysts still see this as a big opportunity. It's certainly something that I'd have my eyes on if I had a candidate without side effects. GLA

Much has already been said about the toxicity issues associated with JAK inhibitors and today Novartis have announced that they are exiting their pan JAK program as the risk/benefit did not stack up. They had hoped that their topical therapy for atopic dermatitis would avoid the safety risks associated with this class. However, it hasn't worked out. If and when SAR announce their tox data and its as good as we believe then we become one of the very few players in this highly attractive sector and that's why I hope to see news very shortly. GLA

And so it begins…..!!

I think we can now safely say that 737 won't be coming back. In Dilly's position and with this success under his belt he can now open up the pipeline. Possibly one of the reasons Tim was getting a bit excited this morning!!!

Hi DP - For me SAR have always played the long game. Tim and John are not the scientists to knee jerk onto a particular bandwagon (please excuse the mixed metaphors!) just because its in the headlines. Covid was an opportunity for the pharma sector to accelerate a range potential drugs but the politicians put all their faith in the vaccine. Now we have them telling us we've got to live with it (could have told them that 2 years ago) except they haven't facilitated the therapeutics we need to achieve that. From my perspective the medical world is now in a complete mess. People aren't dying from Covid to the same degree but the waiting lists are longer and full of people who will die not from Covid but other treatable conditions. In 1801, 1802, 737 and even the SKIL platform we have something very special (I'll keep clear of the anti-ageing angle just for now!) which in my opinion means that we quite rightly skip missing the ferry boat that was Covid and wait for the Super Tanker that is Cancers, Immune and URI's.

Over the last few weeks there’s been a lot of comment on Peel, consolidation and SP manipulation. I feel its time to put a few things out there in terms of my perspective. First of all Peel. Within PH (and any other similar organisation) there are market makers, corporate brokers, researchers and analysts. The market makers are separate from the corporate brokers as are the researchers and analysts. Glass ceilings, Chinese walls or whatever you want to call them but separation is required by the compliance auditors and regulators. If you speak to the corporate broker they will tell you what they can within the rules of insider trading. The Corporate Broker does not tell the researchers and analysts how and when to do their job. Neither can he/she liaise with the market makers to force a price up or down. That would be very easy to identify and the compliance people and regulators would have shut PH down a long time ago if they did that. It may not be watertight but it certainly isn’t the sieve that some people think it is. Having worked in two industries that were both the subject of price fixing investigations (both of which were unfounded) I’m confident that PH are not rocking the boat. Having appointed them as Corporate Brokers to specifically bring on board institutions they are not required to publish the information they send out to prospective institutions nor how they are marketing to them. We simply have to wait. And I think there’s a reason why they are waiting.
SP manipulation: My personal view is that we’re watching the wrong SP. In the short term we should be watching Sierra. This week their SP has taken a bit of a bashing and bear in mind they are heavily institutionally backed. The SP bashing has come in the week when they announced they are accelerating Momo’s data. Either the data is bad and they want to get it out of the way or its good and its going to trigger a cascade of activity. I’m in the latter camp. If it was bad they’d be a lot further down because at the moment it’s the only focus of their pipeline. We also know from past experience that Sierra is a bit leaky. Meanwhile we (SAR) have in my opinion been marked down for not getting on with the Covid play, a play that I’ve always thought was a sideshow. One bit of good news, such as movement on 737 and we’ll recover the territory. So on that basis I’m watching Sierra like a hawk because if the news on Momo is good then they can turn to their investors and quite reasonably say ‘time to expand the pipeline.’ Which means that if I was PH, I’d be waiting on the news from Sierra before taking a compelling investment opportunity to potential institutions.
In conclusion I’m prepared to wait on PH because the exciting stuff in the short term is over the pond. And just to reiterate, nothing has changed in the last few months that gives me cause to review my valuations. GLA and all the above is IMHO.

Krone - Thanks for posting. This is big news IMHO. Get Momo out of the way and it opens the door for 737. The only reason you accelerate a timeline is if the data is good. GLA

Tier 3 – The elements that are neutral but come with a health warning. Peel first. Their appointment was a logical move and I had anticipated SP stability. What we saw was SP erosion but I’m far from convinced that they are the villains. The run up to the AGM and the content of the AGM provided an ideal opportunity for the traders to play their games. No possibility of 1801 and 1802 going into the clinic early, nothing tangible on 737, a wait and see on Covid/Agile plus the real Joker, possibility of a consolidation which always strikes fear into any PI. The SP was only ever going to go one way. However, the recent downward movement is not a reflection of future value. In terms of future value nothing has changed, in fact its easy to argue that much has improved but the City does not like uncertainty. And finally the dreaded C word. It’s a simple re-packaging to make the business more attractive to the institutions but in too many cases its been a prelude to dilution. In SAR’s case I believe that we will be the exception. There’s money in the bank to get 1801 into the clinic and I suspect that the money for 1802 is not far away. After that its game on as to who pays but I’m firmly in the camp that it won’t be the PI.
I’ve published my valuations in previous posts and see no reason to change anything. As an investor rather than a trader I’m disappointed to see the SP where it is (I think 7-8p would be a fairer value) but I’m anticipating changes (upwards) throughout the year. As Thoth says, nothing goes up in straight line. GLA and keep the faith.
And finally a word of caution to all posters – debating how you are going to exit, top slice etc is food and drink to the MM’s who will play you for all you are worth. It’s like a form of poker, debate but don’t declare! I’ve shared my valuations but my investment strategy is exactly that. All mine and mine alone!

Tier 2 – The elements that will add value or support ‘priced in’ value. Releasing the Tox data for 1801 I don’t believe has been priced in. The recent retrace in the SP is (again only my opinion) the MM’s pricing out Covid. The BoD were very clear that they will only pursue the Covid angle if it makes commercial and scientific sense. Things like Agile are still on the table but….. Reading between the lines (dangerous but it’s a perspective) I suspect that they don’t trust the politicians (I certainly don’t). The Governments around the world have done nothing but place their faith in the vaccine as a silver bullet solution. If this was ever a long term solution we would have cured the common cold decades ago. Instead we have a political agenda that pays lip service to therapeutics and in the meantime far more people are at risk from the real killers such as cancer, heart disease and the other top ten killers that outpace Covid. Covid for me remains a sideshow until we have data that shows 1801 as effective against upper respiratory infections. I had hoped that it would fast track 1801 but the politics have got in the way. If anything changes then we’ll see the value restored but I’m not anticipating anything in the short term.

Now that we are through the silly season I expect to see more positive activity in respect of delivering value to investors. However, I’m not expecting it all in one month. Over the holiday period there’s been a lot of debate over both Peel and consolidation both of which are, in my opinion, sideshows. What is in danger of being missed is that we have tiers of news that will add value in different proportions. For me the highest tier is 737 going back into the clinic and 1801 and 1802 going into P1. All 3 will add significant value to the SP by which I mean multiples of where we are currently. 737 should take us to 10p and beyond, 1801 to 15p and 1802 to 18 possibly 20p. The key events/issues are that Momo is a success for Sierra when they get their data read in Feb. That will give Dilly the leverage to raise funds and get institutional approval to go beyond their one drug pipeline and all the risks inherent in that strategy. I don’t see 737 coming back unless Momo is a disaster.
As to 1801 and 1802 its all about risk vs reward. At the moment the class is fraught with risk. If I was a large pharma I’d simply be saying ‘show me data that mitigates the investment risk’. On this basis any deal/licence would come with a mega discount of 90-95%. SAR can mitigate that risk in two ways. First of all, prove its safe (and I think we are very close pending the publication of the final report). Second, show me it has a high probability of efficacy in one key indication. Clinical trials will do the latter but others having success (even with black box warnings) will do much to reduce the risk factor. There’s no doubt in my mind that if successful 1801 and 1802 are multi billion pound drugs. For me 2022 is all about data and risk reduction. The science might do the talking but our NED’s are under the microscope in terms of commercialisation and negotiation. Their track records are strong in this respect so I have no fears in this area. The one thing SAR must do is keep to the timeline.

A couple of years ago I questioned the Chairman about consolidation and seem to recall that he didn't think it was appropriate at the time - a view I happily bought into. Here we are two years on and we've moved from 0.4p to 5p (Mkt Cap £14m to £174m). That's pretty transformational but if we want to be seen as a big player then we have to move out of the penny share arena. Today I can see value in a consolidation - it gives the big investors/institutions the comfort that they've invested in a serious company rather than the PI penny pot sector. It's purely perception but in the sector we're moving towards image is highly important. I'd support the move but my real interest today was not to see any more delays and in particular to hear the words 'highly optimistic' used in the context of 737. I also like the fact that TIm supported the view that 2022 will be pivotal. I suspect that more news is in the pipeline and as many have already said, the AGM is not where you drop big news, its a regulatory box ticking exercise. I'm happy that the appropriate boxes have been ticked. GLA

Tox on 1801 is effectively complete, capsule development underway, consultants engaged to design trials. No delays. Agile under consideration along with other platforms- no change. Increasing confidence in 737 going back into the clinic. 1802 patent protection upped and progressing towards the clinic. Hardly treading water. Consolidation to raise the profile. The outlook appears transitional. With everything mentioned we move to being a much more attractive proposition with all the upside that brings.