Radiopharm Theranostics Ltd (ASX:RAD) has attracted a $0.84 share price valuation in initial coverage from Diamond Equity Research.
The analysts have valued the company based on seven indications currently under development that are assumed to have a 10-15% probability of success depending on the clinical phase.
RAD's shares are currently trading at $0.32 with a market cap of $36.17 million.
The following are excerpts from Diamond Equity’s Research Report:
Investment Highlights
Actinium 225 supply agreement provides access to rare isotope for clinical trials: RAD and TerraPower have signed an agreement to provide RAD access to an isotope intended to expedite the development of the company’s diverse pipeline.
Actinium-225 is an alpha-emitting radionucleotide which can be attached to a target molecule to target and destroy cancerous tissues.
“There is tremendous growth projected for radiopharmaceutical therapies over the next five to 10 years, when you can combine the right molecule with the right isotope in areas of high unmet medical need. Access to high quality Actinium-225 allows us to accelerate the clinical development of our broad pipeline,” said Riccardo Canevari, RAD CEO and managing director.
TerraPower is a top tier nuclear innovation company founded by Bill Gates and other innovative executives to bridge the power of the public and private sectors to incubate and develop ideas and technologies to target energy independence, medical improvements, greater sustainability, and other groundbreaking objectives.
We view this as a significant development given the importance of controlling the supply chain in radiopharmaceuticals and the notable experience of TerraPower.
Secures IP ownership of three radiopharmaceutical antibodies: RAD recently announced it has acquired entire Intellectual Property Rights (IP) ownership of three assets targeting the diagnosis and treatment of various solid tumors, with the IP ownership being in addition to the previous licences the company already possesses worldwide.
The company acquired three patents related to nanobodies targeting HER-2, TROP-2, and PTK7, which are common solid tumour pathways.
The ownership was secured from NanoMab Technology Ltd for a payment of $500,000 of fully paid ordinary shares in RAD. We view this as a positive development for shareholders given the relatively minimal cost to acquire the IP to develop these assets further clinically.
Expanding RPT market: The radiopharmaceutical market was valued at $4.86 billion in 2018 and is projected to grow at a CAGR of 9.2% to reach a market value of $9.67 billion by 2026.
With the advancement in technology, there has been an increasing number of potential radioisotopes and increased demand for radiopharmaceutical therapies (RPT).
The future growth of radiopharmaceuticals is expected to be supported by the continued discovery of more specific targets, improvements in radiochemistry, and the increased and low-cost availability of radionuclides.
The current pipeline of RPTs under development by RAD target various cancers, few of which, like prostate cancer, are researched by other companies, while others including breast cancer and kidney cancer are currently not extensively researched. Even with more competitors entering the market, we believe that the company’s diversified portfolio and strong team considerably reduces any competitive risk.
Valuation: We have valued RAD based on seven indications currently under development. We have assumed a 10-15% probability of success depending on the clinical phase. Based on our assumptions, we have valued the company at $0.84 per share, contingent on successful execution by the company. We view RAD as a suitable investment for institutional and high-risk-tolerant retail investors given the unique high risk-reward opportunity.