Attractive model targeting both drug and platform
The Holy Grail in medicine is always to develop the master key. In other
words, the goal is to find the underlying cause of disease and target your
therapy there. Using a proprietary DNA vaccine approach, Scancell is working
towards creating such a platform technology that, if successful, will garner a
premium valuation in the marketplace.
This is not “me too” technology
In both viral infection and tumour models, only high avidity immune responses
mediate viral clearance and tumour eradication. Previous failed attempts in
the field have simply focused on generating T cell responses rather than how
effective those responses are. Scancell is unique in that its preclinical data
has shown the ability to generate T cell responses that work - high frequency,
high avidity immune responses that actually delay tumour growth and
enhance survival.
‘Proof of Concept’ Trial is the key that could unlock the kingdom
The bet with this Company is relatively straight-forward – the trial hits its
targeted endpoints and the Company licenses the technology to a partner
or even sells the entire franchise to the highest bidder or it’s back to the
drawing board.
Valuation is conservative, with blue sky potential
Our investment thesis is conservative, with our licensing deal estimates
predicated upon Scancell as a single product Company. The goal, with
early animal trials on SCIB2, is to demonstrate breadth of application. While
relatively inexpensive, successful data in these trials would be worth its
weight in gold.
A high risk, high reward proposition
As history has shown, the path to market for therapeutic cancer vaccines is
not going to be an easy one. Many bodies litter the road and the science is
still very much evolving, but to the winners go the spoils. Using a conservative
set of assumptions and a heavily discounted valuation methodology, we still
derived a base case value for Scancell of ￡0.59 per share.
