Stocks – (WSE: RVU) Ryvu Therapeutics - Partnership
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Ryvu Therapeutics
Company sign partnering deal with Elixis Inc. on the sales of STING agonist with bio-dollar of USD 400mn
Ryvu Therapeutics sign partnering deal with Elixis Inc on the sales of STING agonist. Deal assumes the following:
- Upfront payment of USD 3mn.
- Low double digit royalties
- Biodollar value a touch above USD 400mn for each product commercialized under the agreement for the sales of STING agonists (USD 3mn will be received in near future)
- Conference call will be held today under this link
Our view: POSITIVE
The signing of the partnering agreement is in line with the declarations of the Management Board, which expected the sale of the immuno-oncological compound (STING agonist or HPK1 inhibitor) by the end of 2022 and in line with our assumptions presented in our report, in which we assumed that the STING agonist would be sold in 2022e. However, the parameters of this deal surprised us positively, and we see these information clearly to the positive side:
- The upfront payment is USD 3mn (vs. USD 15mn assumed by us)
- Bio-dollar is USD 400mn for each product commercialized under the agreement for the sales of STING agonists (vs. USD 150mn for all products assumed by us)
- Low double digit royalties (9% assumed by us)
In our last report, we valued STING agonist at PLN 149mn and company’s shares at PLN 58/sh. Now, assuming that the STING agonist will be commercialized in one indication (product), we estimates value of this compound at PLN 213mn and we value company’s shares at PLN 61.2/sh. However, we believe that such high biodollar indicates also much higher peak sales of this compound expected by Elixis. Assuming that the peak sales will be three times higher than our assumption of USD 1206mn, i.e. assuming the peak sales is USD 3618mn, the value of compound is estimated by us at PLN 361mn (PLN 20/share) and share price indicated by our model is PLN 70/sh.
The agreement also reduce the risk of new share issue.
