Pitt Street Research has released an equity valuation report on clinical stage oncology company Prescient Therapeutics (ASX: PTX) that outlines a prosperous and swift path to market for their most advanced asset, PTX-100, while highlighting the utility of PTX’s cell therapy platforms OmniCAR and CellPryme.

The Pitt Street report outlines that the bear market in life sciences since late 2021 has indiscriminately knocked down the valuations of all kinds of biotech and medical device companies across the globe. At the time of the report, PTX’s market cap of $45 million and cash balance of $21.3 million does not even come close to adequately valuing the hundreds of millions of dollars that PTX-100 could have access to in less than three years. 

The report also explains that the market is underestimating the value of the data that PTX has generated over the past four years. This data culminated in a series of announcements by the company this past year that resulted in Prescient appointing highly experienced US biotech executive Dr Ellen Feigal as a Non-Executive Director of PTX. Dr Feigal is currently a Partner and Head of the Biologics practice at NDA Partners, where she leads efforts in designing and executing product development regulatory strategies in the areas of cell therapies, medical imaging, haematology and oncology. 

A final data readout from PTX-100’s recently expanded Phase 1b trial is due this quarter, which will be followed by a much larger Phase 2 trial, with the potential for that trial to serve as an approval study. In a landscape where currently available therapies for TCL are typically characterised by a high occurrence of serious toxicities, low response rates (less than 30%) and a short duration of responses (3-4 months) – there have been no serious adverse events related to PTX-100.

Of Prescient’s diverse pipeline of cancer treating assets spanning targeted therapies and cell therapy platforms, PTX-100 has the shortest path to market. Potential FDA allowance of the Phase 2 trial as a registration study would be a major milestone for the company, and could open up a rapid pathway to commercialisation.

The Pitt Street Report also highlighted the value of PTX-100’s Orphan Drug Designation, which can be very valuable to the developers of a new drug. Prescient had applied for ODD due to the asset’s potential to treat Cutaneous T-cell Lymphoma (CTCL). In a pleasant surprise, the FDA granted the designation broader than PTX’s request. There are over 20 different types of TCL, so this significantly broadens the scope of PTX-100’s potential.

The FDA grants ODD status to drugs and biologics that are intended to treat rare diseases or conditions affecting fewer than 200,000 people in the United States. While drugs with ODD designation still have to go through the same rigorous scientific review process that any other drug must complete for approval or licensing, there is a correlation between receiving the designation and approval: between 2010 and 2016, 75% of all novel cancer drugs that received approval in the United States also qualified as orphan products. During the same time period, the average time between receiving ODD and approval was 5.3 years.

The report utilises Soliris and Ultomiris from Astrazeneca as appropriate examples. The drugs treat two obscure blood disorders, and have a US$650,000/year price tag that generated almost US$6 billion for AstraZeneca in 2022. They also note that due to the high prices, Orphan Drug developers on the Nasdaq will often trade for large market capitalisations once they have products on the market. 

The report considers Amgen’s buyout of Horizon Therapeutics in October 2023. Amgen bought Horizon for Tepezza, which is the only approved treatment for thyroid eye disease. Horizon earned $1.66bn in sales for Tepezza in 2021, in its first full year on the market, and US$1.97bn in 2022. Amgen paid a massive US$27.8bn for this new franchise.

Read the Pitt Street Research report on Prescient here.

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