Radiopharm Theranostics Ltd (ASX:RAD) (RAD) has earned a price valuation of $0.70 per share, an implied upside of nearly six times its current share price of $0.12 based on recent developments, according to Diamond Equity Research.
The New York-based research firm, however, said this was also contingent upon the company’s successful execution of its diversified pipeline of therapeutic and diagnostic candidates targeting diseases with high unmet needs.
RAD is working to commercialise its pipeline for a possible licensing and distribution agreement or possible sale to a leading global pharmaceutical company, it said.
Notably, the clinical-stage radiopharmaceutical company has secured the licences of four platform technologies, which it is seeking to develop for the diagnosis and treatment of a range of cancers.
The following is an extract from the research firm’s update note:
Pivalate achieves positive Phase 2 data in brain mets trial - In October 2022, RAD announced that Imperial College London's F-18 Pivalate (RAD 101) has achieved successful Phase 2a data in patients with brain metastases, having shown significant tumour uptake that was consistent and independent from the tumour origin. RAD acquired an exclusive worldwide license for the Pivalate platform technology from Cancer Research Technology Ltd and Imperial College London and has a Sponsored Research Agreement on new analogues with Professor Aboagye. In November 2022, RAD announced Pivalate’s additional data from a positive Phase II imaging trial in brain metastases. The new data released shows the additional benefit of PET scan with F-18 Pivalate in detecting the metabolic activity in brain metastases. This quality image is a promising indication that the tracer could be used to monitor brain metastases, which is a positive step toward the potential of this technology for RAD.
New clinical supply agreements - RAD entered into new supply agreements with NorthStar Medical Radioisotopes and ANSTO (Australia's Nuclear Science and Technology Organisation), wherein these organisations will supply RAD with Actinium-225 and lutetium-177 (Lu-177), respectively. Actinium-225 is key to the development of several radiopharmaceutical products within RAD’s broad portfolio of technologies, while isotope lutetium-177 will be used in combination with RAD’s propriety nanobody in Phase I therapeutic dose escalation trial in patients with non-small cell lung cancer (NSCLC).
Successful completion of entitlement offer - Earlier in October 2022, RAD announced that it would raise A$10 million; A$5.5 million through an institutional entitlement offer, and A$4.5 million through a retail entitlement offer. For the institutional offer, RAD successfully raised A$5.5 million at a price of A$0.14 per share, and for the retail offer, the company raised gross proceeds of approximately A$1.2 million (for 8,705,317 shares). The shares that were not subscribed (23,367,918 shares) under the retail entitlement offer will be subscribed for by Bell Potter Securities Ltd (underwriter) in accordance with the underwriting agreement between the company and the underwriter. The new shares to be issued under the retail entitlement offer will rank equally with the existing RAD fully paid ordinary shares in all respects. Proceeds raised from the entitlement offer should provide the company with a runway until at least the end of 2023, including three new assets acquired since the IPO.
Q1 FY2023 cash flow update - RAD reported the financial results for the quarter ended September 2022. The research and development (R&D) expenses for the quarter amounted to A$3.23 million. Staff costs amounted to A$2.25 million, and other expenses, including general and administrative expenses, were reported at A$0.66 million. The company ended the quarter with an operating cash burn of A$6.03 million, out of which research and development and staff costs represented over 90% of the net cash used in operating activities. We estimate the full year operating cash burn of 2023 and 2024 at A$19.2 million and A$29.1 million, respectively. The company appears well positioned with a quarter-end cash balance of $21.34 million and an additional $10 million placement.