InMed Pharmaceuticals Inc (INM)

[lesgetrich]

Nothing fundamental about this company has changed over the last two months. Two months ago the pps stood were it is now at around $.70/share. It was undervalued then and there was a sudden run up to $1.95/share and then a panicked selloff of people taking profits back down to where we are today.

As I said, I believe this stock is currently undervalued with a market cap of only $132 million. The total market for EB drugs alone is $1 billion. There are only three or four companies that have or are working on EB medications and InMed is the only one that shows promise of treating the underlying disease as well as the symptoms. The market for Glaucoma meds is $5 billion+ and InMed claims to have a unique delivery system...

InMed Announces Positive Pre-Clinical Data on an Ocular Hydrogel Formulation using a Biosynthesized Cannabinoid

The InMed-UBC study is the first ever to report hydrogel-mediated cannabinoid nanoparticle delivery to the eye, resulting in enhanced drug uptake via the cornea and lens. This study further validates the Company's capacity to conduct a wide spectrum of drug development activities, including:

* biosynthesis of a cannabinoid using a novel E. coli-based system;
* packaging the cannabinoid as a nanoparticle;
* formulation of a cannabinoid drug candidate into a novel, tissue specific delivery vehicle; and
* confirmation of drug delivery and diffusion into a target tissue.

Typical ocular formulations, such as eye drops, are washed away almost immediately upon administration due to blinking. In this study, InMed's proprietary hydrogel delivery method offers unique rheological characteristics permitting it to form a thin, uniform coating, a gel-like 'lens', over the cornea through blinking of the eyelid. This 'lens' holds the drug in place and allows for trans-corneal absorption of the drug, which can then diffuse within the eye to the retina. Total drug delivered using this hydrogel nanoparticle formulation was three-times higher than the control formulation.

If inMed were able to capture just 5% of each of these markets, their annual sales would be $300 million ($50 million + $250 million).

Moreover, InMed also has a pain medication in their pipeline. The total market for pain medications is over $36 billion. Let's say that InMed could ultimately capture 1% of this market. That would mean another $360 million/year. Conservatively, we could be looking at $660 million/year as the potential revenue for this company, and that doesn't include bioinformatics or biosynthesis.

According to Motley Fool...

How to Value Clinical-Stage Biotech Stocks

We can now turn to the bottom-line question: How does a peak sales estimate play directly into the valuation for a company? Historically, biotechs are valued at about three times the peak annual sales of the company's lead candidate. If chances of approval look good, which you can judge by how far along the drug is and the strength of the trial data, and yet shares are still trading for far below three times peak sales, you may just have found yourself an undervalued gem. And if the company has other drugs in development, that's a helpful hedge against the worst-case scenario: the FDA rejecting the drug, turning its peak sales to $0.

Consequently, if we assume the above estimates and that pain medication (at $360 million/year) would be their lead candidate, the company could potentially be valued at roughly $1,080,000,000

$1,080,000,000 / 132,000,000 OS = $8.18/share

While this is a very loose estimate I believe that it's actually a bit low. It's also a projection of where we should be within the next two+ years after we start seeing clinical trial results. Clinical trials will be starting this summer for the EB medication. We will be much higher than $.70/share by the end of the year. JMO