Alaunos Therapeutics Inc (TCRT)

[Paulieme]

In a very recent development, at the Barcaly's Global Healthcare Conference on March 13, ZIOP CEO Jonathan Lewis suggested that the PICASSO III trial's primary efficacy endpoint has been changed to just PFS (it used to be PFS followed by OS), and that the company and FDA have agreed that PFS would suffice for FULL approval. Here is what Lewis said:

Notable and new is the following -- and that is in the study, as of now, PFS is the primary endpoint and for protocol, its primary endpoint, full approval. OS is a secondary endpoint. This modification has been done, incorporating changes with dialogue with FDA.

He later reiterated:

Again, consistent with FDA policy as articulated by them, and again, consistent with the amendment, as done now, to this protocol, with PFS as a primary endpoint, for full approval.

If these statements accurately reflect FDA's stance on the issue, this particular bear argument is no longer valid.

Should the PICASSO III trial succeed, we value the company at 3 times expected peak revenues (for the STS indication). We estimate peak world-wide sales of Palifosfamide for STS at roughly $330 million which is in-line with company estimates for us-only sales (see slide 18 in this presentation). While the company based it's market sizing on prescription data from IntrinsicQ Data for first-line STS, we note that with 11,000 newly reported STS cases per year and 4,000 deaths due to the disease, these numbers may be an over estimate of US-only sales.

Based on our $330 million peak revenue estimate, a 3x revenue multiple (equivalent to peak revenues in year 5 discounted at 10%), we employ a positive outcome market cap of $990 million.