My prior take on ImmunityBio was negative, anchored on the FDA warning letter. I’m revisiting because the mechanism, an IL-15 super agonist that expands NK and T cells, is worth a fresh look on its own terms.

Executive Summary

ImmunityBio ($IBRX) is a commercial-stage immuno-oncology company built around ANKTIVA (N-803), an IL-15 receptor super agonist approved in April 2024 for BCG-unresponsive non-muscle invasive bladder cancer (NMIBC) carcinoma in situ. ANKTIVA is the engine of a wider “Cancer BioShield” platform that also pairs DNA/adenovirus vaccine vectors with NK-cell therapies.

My view is constructive but not aggressive. I value $IBRX at $11.01 per share versus $9.80 today, implying about 12% upside. That justifies interest for investors comfortable with binary clinical and financing risk, but it is not a wide margin of safety. The stock is driven more by commercial and clinical delivery than financial assumptions.

Commercial traction is real but early. ANKTIVA net product sales reached $44.2M in Q1 2026, up 168% YoY. Growth appears to be slowing because a TICE BCG supply shortage limits the eligible patient pool.

The headline loss is misleading. The $632.8M Q1 2026 GAAP net loss was almost entirely due to about $531M of non-cash, mark-to-market adjustments tied to the stock’s rise. Adjusted net loss was $86.2M, and operating cash burn improved.

Catalysts cluster over the next 12 to 18 months. A papillary-disease sBLA has a PDUFA target date of January 6, 2027. A BCG-naive NMIBC filing (QUILT-2.005) is expected in 2026. These label expansions would materially widen the addressable market. Because the company is early in commercialization and relies on equity raises to fund operations, the 10-Q will also be important to the company’s overall share price and will likely be filed in early November.

Dilution is the structural overhang. Shares outstanding grew from about 397.8M (year-end 2021) to over 1.06B by mid-2026 through ATM sales, warrant exercises, and related-party debt conversions. Further raises, possibly at lower prices, seem likely before the business is self-funding.

The sensitivity analyses in the valuation section illustrate where the risk lives: value spans roughly $3.54 to $22.22 per share on commercial and clinical outcomes, versus a far tighter $8.75 to $15.45 on discount rate and extended growth. A ~20% shortfall in either commercial uptake or clinical success would likely push fair value below today’s price.

Incorporation and Heritage

Because ImmunityBio has an interesting history, let me give a quick overview. The public filings actually start with ZelleRx Corporation, incorporated in Illinois on October 7, 2002; the company initially focused on clinical-stage immunotherapy using natural killer (NK) cell technologies. In February 2003, it licensed the core NK-92 cell line from founder Dr. Hans G. Klingemann. It rebranded as Conkwest in 2010 and redomesticated from Illinois to Delaware. In 2015, following considerable investment under Dr. Patrick Soon-Shiong’s NantWorks ecosystem, it changed its name again, to NantKwest — and in July 2015 went public on the Nasdaq under the symbol “NK.”

By then the company had already carried three names. On December 21, 2020, NantKwest entered into a definitive merger agreement with ImmunityBio, a private company formerly known as NantCell; the merger closed on March 9, 2021, with the combined entity taking the name ImmunityBio, Inc. and trading on Nasdaq under the ticker IBRX. The logic of the deal is what matters: pairing NantKwest’s NK cell line with ImmunityBio’s cytokine-superagonist and vaccine technologies created a unified innate-plus-adaptive platform, intended to drive both rapid tumor destruction and long-term immunological memory.

The Drug

We’ve talked about lymphopenia — the depletion of the very immune cells that actually fight cancer. Now imagine a Cancer BioShield that reverses that depletion. That’s what ANKTIVA is designed to do.

NantKwest’s platform started with IL-2–dependent cells. Parental NK-92 cells, the basis for the aNK platform, naturally depend on continuous IL-2 in the culture media to survive and divide. Supplying exogenous IL-2 every few days during manufacturing is challenging and expensive. It also limits how long the cells survive in vivo once infused.

To overcome this, NantKwest genetically engineered its haNK and t-haNK cells with a specialized, endoplasmic-reticulum–retained variant of IL-2 (ERIL-2). Retained IL-2 works as an internal fuel tank for a single infused cell type. ImmunityBio needed something different: a systemic biologic that could activate the patient’s entire endogenous immune system and rescue lymphocytes. Systemic IL-2 was unsuitable because it expands Tregs and causes significant toxicity.

So ImmunityBio developed ANKTIVA (N-803): a first-in-class IL-15 receptor superagonist fusion protein consisting of an IL-15 mutant (IL-15N72D) fused to the IL-15Rα sushi domain and linked to an IgG1 Fc region

• Mimicking Natural Dendritic Trans-Presentation: ANKTIVA mimics how dendritic cells naturally present IL-15 to lymphocytes.

• Selective Immune Expansion: It binds with high affinity to IL-15 receptors on host NK cells and CD8+ T cells, driving massive proliferation and memory T-cell generation without expanding Tregs.

• Extended Half-Life: Native IL-15 has a serum half-life of less than 1 hour, whereas ANKTIVA’s fusion structure extends its in vivo half-life to approximately 20 hours, providing sustained NK and CD8+ cell proliferation for weeks.

• Rescuing Lymphopenia & Cold Tumors: Systemic ANKTIVA restores depleted lymphocyte counts (ALC) caused by chemotherapy or radiation and triggers interferon-gamma (IFN-γ) secretion from activated NK cells, converting MHC-I negative “cold” tumors into MHC-I positive “hot” tumors

The Three Pillars of the Bio shield

The bio shield is not just created by ANKTIVA, but by a precise combination of means.

The structure:

1. Cytokine Fusion - this is what ANKTIVA does

2. DNA and Vaccine Vectors

3. Cell Therapy

Pillar 2: DNA and Vaccine Vectors

Pillar 2 delivers genetic instructions for specific antigens directly to host immune cells, generating both B-cell (humoral) and CD4+/CD8+ T-cell (cellular) responses and establishing long-term immunological memory against cancer and viral pathogens.

Overcoming vector immunity. Standard adenoviral vectors often fail because pre-existing antibodies neutralize the vector before it can deliver its payload. ImmunityBio’s platform, built on human adenovirus serotype 5, carries proprietary deletions in the E1, E2b, and E3 regions (hAd5 [E1-, E2b-, E3-]). These deletions lower the risk of provoking new vector-directed immunity and let the vector work even in patients with high pre-existing anti-adenovirus immunity.

Pillar 3: Cell Therapy Platform

The cellular arm operates through two complementary strategies. The first is off-the-shelf CAR-NK cells, which directly destroy tumor escape clones that evade T-cell recognition. The second is an apheresis platform that produces memory-like cytokine-enhanced NK cells (M-ceNK): it differentiates a patient’s NK cells into a “memory-like” state marked by durable metabolic reprogramming, elevated IFN-γ secretion, and sustained cytotoxicity against NK-resistant tumors lasting weeks to months. In plain terms: one approach is a ready-made cell that kills cancer the T cells miss, and the other retrains the patient’s own immune cells to hit harder and keep working for weeks instead of fading in days.

How the Three Pillars Work in Sequence

The Cancer BioShield platform operates as an integrated “triangle offense”:

• DNA/adenovirus vaccines (Pillar 2) deliver antigens to train T cells and stimulate initial antibody production.

• ANKTIVA (Pillar 1) acts as the central systemic engine, reversing chemotherapy-induced lymphopenia, expanding the patient’s own NK and CD8+ T cells, and releasing IFN-γ to re-express MHC-I on “cold” tumors.

• CAR-NK and M-ceNK cells (Pillar 3) act as specialized effector cells that sweep in to destroy resistant, MHC-deficient, or checkpoint-evading tumor clones through direct lysis and antibody-dependent cellular cytotoxicity (ADCC). In short, this pillar is engineered to eliminate the tumor escape clones, cancer stem cells, and resistant cells the patient’s native immune system can’t clear on its own.

The vaccine teaches the immune system what to target, ANKTIVA rebuilds and reactivates the immune cells that chemo depleted, and the NK cells act as a dedicated clean-up crew that eliminates the tumor cells the body would otherwise miss.

Subscribe now

Pipeline

ImmunityBio’s pipeline centers on its Cancer BioShield platform, which integrates cytokine fusion proteins, off-the-shelf CAR-NK cell therapies, and viral-vector vaccines. ANKTIVA (nogapendekin alfa inbakicept), an IL-15 receptor superagonist, is the systemic backbone.

Bladder cancer (NMIBC)

BCG-unresponsive CIS (± papillary): Approved in 34 countries, including the U.S., UK, EU, and Saudi Arabia. This is the commercial engine today.

BCG-unresponsive papillary-only: Supplemental BLA under FDA review, PDUFA target January 6, 2027 — the next dated, label-expanding catalyst.

BCG-naïve NMIBC (QUILT-2.005): Fully enrolled Phase 2B, sBLA targeted for late 2026. The one to watch: it addresses the larger front-line population and isn’t dependent on BCG supply, so it sidesteps the shortage that constrains the rest of the field — the clearest potential driver of revenue growth.

Non-small cell lung cancer (NSCLC)

Conditionally approved in Saudi Arabia for metastatic NSCLC with checkpoint inhibitors (QUILT-3.055); Phase 3 trials ongoing (QUILT-2.023 first-line, ResQ201A second-line). A second approved indication and the first read on whether the IL-15 mechanism extends beyond bladder.

Lymphopenia reversal

RMAT designation and an FDA Expanded Access Program for ANKTIVA + PD-L1 t-haNK to reverse chemo/radiation-induced lymphopenia in solid tumors. Early-stage, but it’s the mechanism this whole thesis rests on.

Below is a graphic about the next catalysts of IBRX:

The Financial Statements

Revenue

While revenue growth remains positive, the growth rate appears to be decelerating. ImmunityBio points to several operational factors and market dynamics affecting the pace of ANKTIVA’s commercial adoption.

The first, which the company describes as the primary market headwind, is the TICE BCG supply shortage. ANKTIVA is approved for use with BCG in non-muscle invasive bladder cancer (NMIBC), and Merck’s TICE BCG is the only BCG strain currently available in the U.S. Chronic shortages limit the number of patients who receive initial or adequate BCG courses, which shrinks the pool eligible for ANKTIVA. ImmunityBio is addressing this bottleneck through an Expanded Access Program (EAP) for recombinant BCG (rBCG) with Serum Institute and an exclusive U.S. supply agreement for Tokyo-172 BCG with Japan BCG Laboratory.

The second is label scope. The initial FDA approval in April 2024 was restricted to BCG-unresponsive NMIBC CIS (carcinoma in situ, with or without papillary disease). The larger populations are still awaiting label expansion: papillary-only disease (sBLA accepted, PDUFA target action date January 6, 2027) and BCG-naïve NMIBC (QUILT-2.005, sBLA targeted for late 2026).

The third is expanding gross-to-net (GTN) deductions. As sales volume grew, GTN adjustments (prompt-payment discounts, specialty distributor fees, rebates, and co-payment assistance) increased substantially. They rose from $1.6 million in FY24 to $21.1 million in FY25 and reached $10.7 million in Q2 2026 alone, reducing reported net product revenue relative to gross sales.

Finally, there is a lag in turning approvals into revenue internationally. ANKTIVA has regulatory authorizations in 34 countries, including the U.S., UK, EU, Saudi Arabia, and Macau. Converting those authorizations into product revenue requires regional subsidiaries, pricing negotiations, and commercial distribution partnerships, such as Accord Healthcare in the EU and Cigalah/BioPharma in MENA.

Subscribe now

Net Losses and Operating Performance

ImmunityBio’s GAAP net loss rose sharply in Q1 2026, to $632.8 million from $129.7 million in Q1 2025. The increase was driven mainly by non-cash accounting adjustments tied to a significant rise in the company’s stock price, not by higher operating cash burn. Although these charges are non-cash, they show how sensitive reported earnings are to the share price, so they’re worth walking through.

The core driver was fair value accounting, with an impact of about $532 million. Liability-classified warrants and convertible notes carried at fair value must be remeasured every quarter at current market values. When ImmunityBio’s stock price surged in Q1 2026, the estimated fair value of these liabilities rose substantially, and the company had to record large paper losses:

• Warrant liabilities: a non-cash revaluation loss of $295.4 million in Q1 2026 (vs. a $0.4 million loss in Q1 2025), driven by stock price appreciation.

• Convertible notes: a non-cash revaluation loss of $236.6 million on the related-party convertible note in Q1 2026 (vs. a $42.6 million loss in Q1 2025), also driven by the stock price.

• Derivative liabilities: a small offsetting non-cash gain of $1.1 million.

• Convertible note receivable write-off: a one-time non-cash impairment of $7.4 million, covering principal and accrued interest on a note advanced to Riptide in 2016, after its maturity condition was deemed unlikely to be met.

Net of the derivative gain, fair value adjustments totaled $530.9 million in Q1 2026 ($532.0 million in gross revaluation losses). Including the Riptide write-off, non-cash charges came to roughly $538 million, against a $503.1 million year-over-year increase in the net loss.

Operating performance vs. non-operating Items:

Altogether, non-operating expenses rose by $497.5 million to $563.0 million. Meanwhile, ImmunityBio’s core operations showed strong top-line growth with only a modest widening of the operating loss. Net product sales of ANKTIVA grew 168% year over year, to $44.2 million in Q1 2026 from $16.5 million in Q1 2025. Loss from operations increased slightly, to $69.8 million from $64.4 million. Research and development (R&D) expense rose $19.8 million to $68.0 million, driven by clinical-trial expansion (CRO, lab, and investigator fees), contract manufacturing, and headcount. Selling, general and administrative (SG&A) expense rose $13.1 million to $45.8 million, driven by legal defense and settlement costs, commercial consulting, and sales-force expansion.

GAAP vs. non-GAAP. Because these mark-to-market revaluations are non-cash adjustments tied to the stock price, ImmunityBio also reports an adjusted net loss (non-GAAP) that excludes fair value changes, stock-based compensation, and the note write-off:

• GAAP net loss (Q1 2026): $632.8 million

• Adjusted net loss (Q1 2026): $86.2 million, vs. $82.7 million in Q1 2025

In short, the jump in the GAAP net loss was primarily an accounting artifact of stock-price appreciation, not a deterioration in operations: non-cash charges account for nearly all of the $503.1 million year-over-year increase. On an adjusted basis, the loss widened only $3.5 million while ANKTIVA sales grew 168%.

Cash Flow Breakdown

Operating cash flow (CFO): Cash used in operating activities fell to $75.4 million in Q1 2026 from $85.9 million in Q1 2025. For the full year, cash used fell to $304.9 million in FY25 from $391.2 million in FY24.

CapEx: Capital expenditures remained low at $1.8 million in Q1 2026 (vs. $1.1 million in Q1 2025) and $3.8 million in FY25 (vs. $6.9 million in FY24).

Working capital: In Q1 2026, working capital was a negligible $0.5 million use of cash, compared with a $22.0 million drain in Q1 2025. In FY25, working capital used $54.3 million, driven mainly by a $40.2 million increase in accounts receivable as commercial ANKTIVA sales scaled.

In short: CapEx was negligible, and headline cash burn shrank. But the Q1 improvement came from working capital: the $21.5 million swing more than explains the $10.5 million CFO improvement. Before working-capital changes, operating cash burn widened to about $74.9 million from $63.9 million, consistent with the slightly wider adjusted net loss. Free cash flow (CFO less CapEx) was −$77.2 million in Q1 2026 vs. −$87.0 million in Q1 2025.

R&D and SG&A

Operating expenses: where the money went

Rising operating costs at ImmunityBio have not been mainly a marketing story. In the launch year, SG&A growth came from legal and consulting fees. In FY25, those fees fell sharply and a sales force replaced them. Across all three periods, marketing and distribution accounted for a small share of the change.

R&D rose $19.8 million to $68.0 million in Q1 2026, driven by clinical-trial expansion (CRO, lab, and investigator fees), contract manufacturing, and headcount. R&D growth outpaced SG&A growth, which suggests spending is weighted toward the pipeline rather than promotion.

Category groupings follow each filing’s MD&A and are not fully consistent across periods. Sources: IBRX FY24 and FY25 Form 10-K; Q1 2025 and Q1 2026 Form 10-Q.

Cash and Marketable Securities

ImmunityBio held $357.4 million in cash, cash equivalents, and marketable securities at June 30, 2026, down from $380.9 million at March 31. Over the quarter, the mix shifted sharply: cash and cash equivalents fell to $75.7 million from $205.2 million, while marketable securities rose to $281.7 million from $175.7 million. That shift reflects $303.3 million of gross Treasury purchases in the first half of 2026. It moved money between categories rather than changing the total.

Nearly all of the securities are short-term U.S. Treasuries maturing within 12 months. That’s partly by contract: the December 2023 Revenue Interest Purchase Agreement (RIPA) with Oberland Capital restricts the company from investing excess cash in corporate or European bonds, which it previously held alongside commercial paper and government-sponsored securities.

Liquidity fell only $23.5 million in Q2, well short of the roughly $77 million quarterly burn in Q1, because the company kept raising capital. That’s the subject of the next section.

Equity and Dilution

At-the-Market (ATM) Program

In April 2021, ImmunityBio established an Open Market Sale Agreement with Jefferies LLC to sell common stock directly into the market. After raising $164.5 million in 2021, the company used the ATM sparingly for three years ($13.1 million in 2022, $16.1 million in 2023, and $3.6 million in 2024). Usage then rose sharply to $250.1 million in net proceeds in 2025, and in December 2025 the company expanded ATM capacity to $500.0 million. In 2026, the ATM generated $102.1 million in net proceeds in Q1 and $45.1 million in Q2, for $147.2 million in the first half.

Registered Direct Offerings and Warrants.

ImmunityBio completed five registered direct offerings (RDOs) between December 2022 and July 2025, several of which paired common stock with short- to medium-dated warrants. That structure creates a delayed second tranche of capital. In the July 2025 RDO, for example, the company raised $75.4 million net by issuing 29.6 million shares at $2.70 per share, along with 29.6 million warrants exercisable at $3.24.

Holders exercise these warrants when the share price trades above the exercise price, and those exercises have been a meaningful source of cash:

• The two 2023 RDOs (February and July) issued a combined 28.6 million warrants, all at a $3.29 exercise price after the February warrants were repriced from $4.26 in July 2023. Of these, 22.2 million were exercised in FY24 for $73.3 million. The remaining 6.4 million were exercised after Q2 2026 quarter-end for $21.1 million, retiring the series.

• In Q1 2026, 17.2 million warrants from two 2025 series were exercised for $53.5 million: 15.5 million April 2025 warrants at $3.10 and 1.7 million July 2025 warrants at $3.24.

Related-Party Debt-to-Equity Conversions.

A large share of the growth in share count came from converting debt held by entities affiliated with Executive Chairman Dr. Patrick Soon-Shiong (Nant Capital / NantWorks) into common stock:

• December 2022: $56.6 million of principal and interest into 10.0 million shares at $5.67

• September 2023: $270.0 million of principal and interest across several notes into 209.3 million shares at $1.29

• December 2024: $231.4 million, including accrued interest, from two notes ($30.7 million and $200.7 million) into 117.2 million shares at $2.28 and $1.94, respectively

• March 2026: $25.0 million of the $505 million related-party convertible note into 4.6 million shares at $5.43

Together, these conversions added about 341 million shares, roughly half of the increase in share count since 2021, and reduced the company’s debt. Most of the $505 million note remains outstanding.

Share Count and Dilution

To accommodate these offerings, warrant exercises, and conversions, stockholders approved three increases in authorized common stock: from 500 million to 900 million shares in February 2022, to 1.35 billion in October 2023, and to 1.65 billion in November 2025. Shares outstanding grew from about 397.8 million at year-end 2021 to more than 1.06 billion by mid-2026, roughly 2.7 times as many.

Valuation

Price target: $11.01 | Current price: $9.80 | Implied upside: ~12%

We value IBRX at $11.01 per share, about 12% above the current price. Our target averages a constructive case and a conservative case with equal weight, so it doesn’t lean on either view. It reflects ANKTIVA’s continued commercial momentum in bladder cancer, a late-stage pipeline with several regulatory events over the next 12–18 months, and the equity funding we expect the business to need before it becomes self-funding.

Valuation sensitivity ($/share)

Financial assumptions (top table): the valuation is stable, ranging from $8.75 to $15.45. In most scenarios, value remains at or above today’s price. Only a significantly higher cost of capital, about 1–2 percentage points above our base, combined with lower long-term growth, pushes it below the current price.

Commercial and clinical outcomes (bottom table): these drive value much more than financial assumptions, ranging from $3.54 to $22.22. A 20% shortfall in either lowers value to about $8.70. Outperforming by 20% on either supports about $13.35. Strong delivery on both points to $16–22 per share.

Key risks: competition in bladder cancer, timing of regulatory decisions on label expansions, further share dilution from capital raises (possibly at lower prices), and reliance on related-party financing.

Verdict

IBRX is a company with high potential but many factors compressing its valuation. The clinical programs are one-of-a-kind and solve clear problems for bladder cancer patients. Expansion beyond the bladder cancer market seems possible, led by the NSCLC indication, which opens many opportunities.

Near-term revenue, near-term important because of the maturing pipeline. If any other drug is maturing, it will need additional funding. Anything not covered by retained earnings from revenue growth will require equity raising and dilution. The growth rate is undesirable because it is decelerating due to the BCG shortage. Since the company is early in its commercial phase, valuation also depends heavily on changes in the clinical pipeline, as shown in the sensitivity tables.

In the end, the investment decision is yours based on your judgment of the probability of ANKTIVA expanding, as well as revenue growth and dilution, which interact to some extent.

We also discussed the impact Dr. Patrick Soon-Shiong has on the company. If you invest, he drives the investment’s direction. Dr. Soon-Shiong (Founder, Executive Chairman, and Global Chief Scientific and Medical Officer) and his affiliated entities hold about 62% of the outstanding common stock (previously over 80% after the 2021 merger). To own this stock, you must fully trust him.

This is not investment advice. I do these analyses for fun.

Leave a comment

Whenever the market sells off broadly, I find a second look can be very telling; the selling rarely separates the fragile businesses from the durable ones. Autodesk has been interesting enough that I may follow it with pieces on BSY, TRMB, and PCOR. What got me started here was Jim Collins’s Good to Great. Writing about technology, with the dot-com bubble as his example, Collins argued that companies benefit most from technology when they use it to augment a business that already works, rather than basing the whole business on it. ADSK, I’d argue, is doing exactly that.

Executive Summary

Autodesk (NASDAQ: ADSK) is a leading provider of software for architecture, engineering, and construction, product design and manufacturing, and media and entertainment.

It’s a subscription business: 97% of revenue is recurring. By segment, Architecture, Engineering, Construction and Operations (AECO) is the largest at 50% of revenue, followed by AutoCAD at 25%, Manufacturing (MFG) at 19%, and Media & Entertainment at 5%, with the rest in the others section. Revenue has compounded at 13% per year over the last four years ($4.4bn in FY22 to $7.2bn in FY26). Gross margin sits at 92.3%, with an operating margin of 25.1%. On valuation, ADSK trades at 5.74x EV/Revenue, modestly above the peer average of 5.45x, so it isn’t cheap on a headline multiple, even if it looks more reasonable once you adjust for growth (more on that later). What stands out more to me is capital return: over the past four years ADSK has repurchased $5bn of stock, though, as I’ll get to, that buys less share-count reduction than the gross figure suggests.

More on both below.

Here is a graph of the recent performance of Autodesk:

Below you’ll find a time series of Autodesk’s (I will now refer to the company as ADSK, under which name it trades on the NASDAQ) multiples, compared to its margins and growth rates:

An important caveat to the chart above: these multiples are not normalized, so they may look extraordinarily high. I used the chart anyway because what matters here is the trend over time, not the absolute levels. But even so, the early multiples, especially P/E and EV/EBITDA, are heavily distorted. Not because ADSK was a young company (it has been public since the mid-1980s), but because its shift from perpetual licenses to subscriptions temporarily depressed net income and EBITDA. And as we know, a small denominator makes for a larger number. EV/Revenue is the cleaner line to watch, since revenue wasn’t suppressed in the same way.

I point this out because we have to be careful about how we think about data, and I want to present an image as free from bias as possible.

The Agenda

So how can we find a standpoint, based on the information available, that helps us understand this problem better?

1. The Value Chain. What are the key drivers of Autodesk?

2. Crunching the numbers.

3. Step back from both of the above, and consider the biases that I (or we) might be bringing to them.

The Value Chain

ADSK is the market leader in AEC software and operates primarily as a SaaS business. Revenue has grown at a 13% CAGR over the past four years, from $4.4bn in FY22 to $7.2bn in FY26, driven by infrastructure development in emerging megacities and wider adoption of BIM in public-sector projects. The quality of that growth is as notable as the rate: 97% of revenue is recurring. On valuation, ADSK trades at an EV/Revenue of 5.74x, modestly above the peer average of 5.45x, which I read as a reflection of its maturity and leadership rather than a sign that it is expensive.

Below are two views of the revenue base: first the split by business segment, then the share that is recurring.

The SaaS model lets ADSK run extremely high gross margins, at 92.3%. The main cost drivers are R&D ($1.62bn) and SG&A ($3.08bn), which bring the operating margin down to 25.1%, though operating income still grew 27.8% versus FY25. The effective tax rate rose from 19.7% to 29.9%, driven by timing adjustments in foreign-subsidiary taxation and changes in U.S. R&D expensing, and interest expense increased after refinancing and new debt issuance. The income-statement flow below traces how revenue nets down to $1,124mn of net income.

Liquidity is solid, with $2.25bn in cash and an 11.5% ROA. Debt/FCF sits at 1.17x against $3.7bn of debt. Stock-based compensation of $788mn is more than offset by $1.7bn of share repurchases in FY26, which helps support per-share value.

Despite improving margins and growth, ADSK’s multiples have not re-rated in step. The picture is less contradictory than it first looks: the company trades at a premium to peers on EV/Revenue, yet looks inexpensive once you adjust for growth. On that basis its forward PEG is just 0.98, among the lowest in its peer group. The gap, I would argue, is less about fundamentals and more about sentiment that is still shadowed by fear of AI.

That is the counterintuitive part. Much of ADSK’s value rests on recurring revenue and on the real-world infrastructure buildout that AI itself is driving, and yet AI fear is the very thing weighing on the SaaS complex, ADSK included.

To round it up, two things drive ADSK’s value. First, strong recurring revenue, underpinned by its leadership in AEC software. Second, share buybacks, which offset SBC and lift each remaining holder’s claim on the business.

For the model, the line that matters most is operating expense, led by sales and marketing ($2.37bn). OpEx runs at 67% of revenue, and SG&A is about 64% of that in FY26.

One more area I am watching is Media & Entertainment. It is still the smallest part of the portfolio, but it may have attractive growth prospects from here.

AI Integration

Because this article focuses on the perceived disruption of ADSK’s business model by AI, it comes natural to look at ADSK’s AI strategy as on their last 10-K.

Generally ADSK states that it is aiming financial resources to research and development to deliver additional automation and insights to our customers through artificial intelligence AI, machine learning, and generative design, which increase efficiency and sustainability and reduce waste. Specific product improvements involve granular, interoperable, and accessible data through shared and centralized capabilities that support the functionality, performance, usability, security, and scalability of ADSK’s offerings. These shared capabilities include Autodesk AI, reflecting nearly a decade of investment in artificial intelligence technologies used to augment, automate, and analyze customer workflows. The products are built on an API-based architecture that enables third-party developers and partners to build complementary and industry-specific applications. Autodesk Platform Services (APS) provides technology, infrastructure, and services that support connected workflows across design, make, and operate use cases. As part of the ongoing development of APS, we are integrating Model Context Protocol (MCP) servers to provide a standardized foundation to support AI-enabled integrations and workflow automation for developers and partners.

It is yet to be seen how good this AI-Integration will, be and how much ADSK is going to profit from it, but as of right now this sounds like the type of implementation Jim Collins was talking about in his book.

Crunching the Numbers (DCF)

To be transparent about how I get to a number, here is the shape of the model rather than every input.

I forecast revenue from the bottom up, one product family at a time (AECO, AutoCAD, MFG, M&E, and Other), rather than growing the whole company at a single rate. Each segment starts at a normalized growth rate and then fades toward the long-run growth rate of its end market, on the logic that no segment outgrows its industry forever. I deliberately start the segments below ADSK’s reported FY26 growth, which also puts my near-term revenue a little under the company’s own guidance. That is on purpose: it strips out two things that flatter the headline but are not durable, the timing effects of the move to annual billing and the contribution from the MaintainX acquisition. The result is a revenue path that compounds at roughly 10% a year through FY31E, which is, if anything, a touch conservative next to what the Street currently models.

From there it is a standard five-year unlevered free-cash-flow DCF. Three inputs do most of the work, so it is worth saying what each one is in plain terms:

The discount rate (WACC) is the return an investor should reasonably demand for the risk being taken, and it is what converts future cash into what it is worth today. A higher rate means a lower value now. I build it from ADSK’s own cost of equity and cost of debt.

The terminal (exit) multiple is my assumption for what the business is worth at the end of the five years, expressed as a multiple of its cash flow. This is usually the single most important assumption in a DCF, and I will come back to how much the answer leans on it.

The growth fade, described above, which decides how much cash there is to discount in the first place.

Running the model across a range of discount rates and exit multiples gives an implied value of roughly $285 to $425 per share, with a base case near $350, against a recent price of about $221. For context, that base case sits within the range of Wall Street price targets and toward the more constructive end, a little above the consensus of around $330. So the model is optimistic, but it is not an outlier, and notably it gets there without reaching on revenue.

Two honest caveats. First, as in most DCFs, a large share of the implied value sits in the terminal value rather than in the five years I actually forecast, so the exit multiple carries a lot of weight. If SaaS multiples stay compressed, the base case moves lower. Second, and I will expand on this in the biases section, much of the upside depends on the assumption that buybacks keep shrinking the share count. That is a real lever, but it is also the one I trust least.

A model like this assumes demand holds and growth continues along the path above, so please treat it as a framework for thinking about value, not a price target.

Subscribe now

Biases

The first thing to watch is the buyback assumption. A buyback yield doesn’t translate one-for-one into a higher share price. Repurchases lower the share count, but stock-based compensation adds shares back, and the market still sets the multiple, so the per-share gain is usually smaller than the gross yield suggests. That matters here, because as noted above, a good part of this model’s upside comes from that shrinking share count. On top of that, I had assumed ADSK’s buyback yield was among the highest in the group, but Salesforce’s net yield appears to be higher still.

As a result, ADSK’s drivers, while supported by buybacks, may depend more on the broader market environment, along with the implementation of AI and the reorientation toward BIM (Building Information Modeling), both of which are growing areas within the sector.

I also want to be clear about what the sensitivity table does and does not show. It flexes the exit multiple across a range, but every cell still assumes the business leaves the forecast period at some stable multiple. It does not capture the scenario I am actually most wary of, which is SaaS multiples failing to re-rate, or continuing to compress, for an extended stretch. In that world, ADSK could keep growing, and the stock could still take longer than the market to deliver a meaningful return.

As so often, then, the alpha sits in the broadly unknown part of the model.

Thank you for reading. Please understand that this is not investment advice. I write these articles because I am curious about the businesses I look at.

If you would like deeper analysis, especially on tech or Biotech, let me know.

Leave a comment

In May, I first posted about Verastem. The company stood out to me because its market cap seemed low for a company with an (almost) approved asset. Naturally, I did some further research and found some discrepancies. What really stood out to me is that it has a first-in-class approved drug for recurrent low-grade serous ovarian cancer (LGSOC), called AVMAPKI® FAKZYNJA® CO-PACK, while it seemed to have been fully valued based on its pipeline, rather than this approved and selling asset. And even so, much of the stock’s value is still driven by the pipeline (I will demonstrate this via a sensitivity table further below), but I think it is important that product revenue has a range of positive effects for an investment. Obviously, revenue increases net income, which in turn increases valuation, but it also supports R&D funding and limits the dilution needed from capital raising, even if the company is not profitable yet. So not only does the valuation increase, but we also keep a bigger share of the company. I am saying this to point out that while much of the company’s value is driven by its massive pipeline, revenue is still an important part of the picture.

Before CO-PACK’s approval, no FDA-approved treatments were available specifically for LGSOC. Therapists generally used treatments from high-grade ovarian cancer.

Since that last article, a lot has happened with Verastem. Sales into Q1 have been a bit disappointing, which may also be reflected in the stock selloff in the graph. Then Verastem hired a new Chief Commercial Officer, and since then, in Q2, sales have recovered. I will go into the income statement situation further below. For reference, my last article was on May 1.

Since this is an Update, and not a fresh analysis, I will focus on the following points:

1. What factors have actually changed since the last time I wrote about Verastem, which comes down to the following two areas:

   1. What has changed in the Pipeline

   2. What has changed in the Financials

2. We will look at the factors that determine the future valuation of the stock

We’ll look at potential scenarios and apply a range to the numbers, but my main goal is to understand the changes and drivers behind this stock.

Pipeline

Let’s look at what happened after the last article on May 1. See this as housekeeping; it’s important to know what is going on, but we will crystallize the key points further down:

VS-7375 (KRAS G12D) - the most active area:

By the end of June 2026, the company completed target enrollment in the TARGET-D 101 PDAC and NSCLC monotherapy cohorts and the CRC cetuximab combination cohort, with over 200 patients treated in the dose-escalation and expansion study.

The 1200 mg daily dose was cleared with no dose-limiting toxicities. Patients continue to be evaluated at that dose to support Project Optimus, with no changes to the Phase 2 TARGET-D 201, 202, and 203 study designs.

First patients were dosed in all three TARGET-D Phase 2 registration-directed trials (2L PDAC, 2L/3L NSCLC, 2L+ CRC).

FDA granted Fast Track designations for KRAS G12D-mutated PDAC (≥1 prior line) and, in June 2026, for KRAS G12D-mutated advanced NSCLC.

RAMP 205 - Early efficacy signal: as of the June 5, 2026 cutoff (median 9.8 months follow-up), the combination achieved a 52% confirmed objective response rate, with 86% overall survival and 68% progression-free survival at six months.

Upcoming:

Update VS-7375 clinical data in October 2026 and complete trials across all three TARGET-D Phase 2 trials by the end of 2026.

First patients in the three Phase 3 pivotal trials (1L PDAC, CRC, lung) by the first half of 2027.

RAMP 301 topline primary-endpoint readout in mid-2027.

Crunching Some of the Numbers → Explaining the Statements

Use these two graphs as reference points; the first is important for understanding revenue and revenue growth over the past quarters. The percentage increase is a bit distorted because Q2’25 sales were so low. But I believe this gives you the best holistic view of when the sales actually started; you can also see the low relative sales adoption from Q4’25 to Q1’26. The second graph just shows the losses over the last quarters.

Subscribe now

Losses stayed roughly consistent, as a gradual increase in R&D and SG&A expenses offset revenue growth, until they decreased to around $40mn in Q2’26, when revenue improvement finally outpaced costs. Part of the revenue improvement reflects a $15mn milestone payment from the sale of COPIKTRA to Secura Bio, the second of potential milestone payments totaling $311mn. Nonetheless, product revenue increased $6.4mn from Q1’26 to Q2’26. I see the SG&A expense step-up in Q2’26 as a positive signal, as the increase from $22.3mn to $27.4mn appears to have helped drive sales from $18.7mn to $25.1mn from Q1’26 to Q2’26. While this might not seem like much, it is a positive trend that could compound over time. This is one of the key value drivers heading into the next quarters.

If clinical trials succeed, R&D costs are likely to increase over the coming quarters as more Phase III trials begin. While this will increase the cost basis, sales adoption appears to be moving in the right direction and may offset costs before potential equity raising; clinical advancement could also increase the market cap, which, combined with continued sales growth, could keep dilution manageable. SG&A is much less predictable but will likely increase as well, though not as much as R&D.

To fully grasp the impact of Verastem’s current financial situation, we need to look not only at Income Statement items but also at the Balance Sheet. With a net loss of around $40mn in Q2’26 and cash of around $136mn, not accounting for sales improvement, the company has a runway of just under a year before it needs additional financing. If sales improve as in my projections, the company might avoid another financing round entirely, because accumulated losses over the next few years will be just below the cash balance. These are projections, and losses are unavoidable at this stage, so financing might still be necessary.

In my projections, I estimate the company could turn cash flow positive in early 2028.

Below are sensitivity tables showing the company’s potential valuation.

(Here is a quick explanation of sensitivity tables in case you haven’t read one before: The middle value ($20.14) is the company’s base-case value. In Table 1, the columns are the WACC (the company’s cost of funding), and the rows are the company’s long-term growth rate, essentially into infinity. Notably, biotech companies are plotted until the patent runs out. After that, the growth rate is low to negative, decreasing the current value of the stock. The exact mechanics are a lot to explain, so look at the tables as scenarios of different risks on the Column side, combined with different growth rates)

Table one is the standard WACC - Growth Rate table, and in table two I sensitized my model depending on the peak sales of the drug and the probability of success, or the chance of the clinical trials being passed. As you can see, these assumptions are critical to the model. In this case, the latter is more important because the terminal value in this long-term DCF is a smaller part of the overall valuation.

For comparability reasons, the share price as of me writing this is $7.69.

Conclusion/Drivers

As you can see, the main drivers behind this company’s success comprise the following:

• Successfully expanding CO-PACK sales volume. Verastem is expected to file its Q3 2026 financial results and Form 10-Q in early November 2026, around Tuesday, November 3, 2026

• Successfully advancing the clinical trials; these could significantly change peak sales and overall PoS, which, as you can see, have a massive impact on valuation. Much of this will happen this month; I’ll update you here when the trials happen.

• Aside from that, the market is pretty volatile, which is a massive risk for Verastem. This is the case for most young biotech companies, and Verastem might have a step up with its approved asset, but it is still a risk worth noting

All in all, the company is currently in an interesting place, with a lot of new-term catalysts. I look forward to seeing both the clinical trial results and the sales numbers in the upcoming quarterly report. The opportunity in this stock is big, and the downside risk seems buffered by existing product revenue, but we should not forget the following: I didn’t list it in the key drivers because the historical possibility of this happening is low, but something else that could happen is an oddity in the confirmatory trials that are going on for CO-PACK, which might be a reason for the heavy emphasis on the pipeline in this stock, just because the market still discounts it.

I am curious to see what you think about this article, so please leave a comment below:

Leave a comment

Thank you for reading this article. Subscribe to me for more! Also, my articles are still free, so you can share them if you want.

Subscribe now

Share

A quick disclaimer:

1. This is not investment advice; I write these articles because I enjoy thinking about companies

2. The numbers used are as of the morning of the article (10/05/26), so they might not be accurate at the time you read them.

Pipeline

ORLADEYO® — Key Assumptions

ORLADEYO (berotralstat) is a plasma kallikrein inhibitor indicated for prophylaxis to prevent attacks of hereditary angioedema in patients aged 2 and older. Discovered in BioCryst’s own labs, it was approved in the US in December 2020 and is now in its sixth year of launch. The franchise was further broadened on December 12, 2025, with approval of a pediatric formulation (oral pellets), extending reach into the youngest patient segment. Intellectual property protection runs through May 2040.

Commercial traction at the end of 2025 underscores the depth of the launch: more than 1,600 patients were on therapy, over 3,500 patients had tried the drug since launch, and more than 1,500 unique prescribers had written for it.

Taken together, these dynamics support a sustainable $1 billion peak revenue opportunity for ORLADEYO, underpinned by an ~80% contribution margin and an IP runway into 2040.

Navenibart — Key Assumptions

Navenibart is a long-acting plasma kallikrein inhibitor in development for hereditary angioedema prophylaxis, with the potential to become the first HAE prophylactic dosed every three or six months. BioCryst obtained the asset through the acquisition of Astria Therapeutics in January 2026. It is currently in pivotal Phase 3 studies, with intellectual property protection running through 2042.

The program’s appeal rests on four reinforcing attributes. It pairs a trusted mechanism and modality, a monoclonal antibody inhibitor of plasma kallikrein, with compelling efficacy data, where high affinity and potency with fast onset deliver rapid, effective attack prevention. A YTE modification extends half-life to enable the infrequent dosing schedule, and a citrate-free, high-concentration formulation delivered via an autoinjector supports pain-free subcutaneous administration.

Interim results from the long-term ALPHA-SOLAR study, presented at the 2026 AAAAI Annual Meeting, point to durable attack suppression across both regimens: 92% mean attack rate reduction over 13.3 months of mean follow-up (n=17) for the every-3-month arm, and 90% mean attack rate reduction over 11.9 months of mean follow-up (n=12) for the every-6-month arm.

The program remains on track to support a US regulatory filing by the end of 2027.

Valuation

Below, I analyzed the stock using a DCF:

When I examine the DCF, I notice the potential upside is more modest than with my typical picks. This is largely due to the reduced risk, as the drug has already cleared approval or is in Phase III. As a result, the stock has attracted a wave of institutional investment, which has sharpened its efficiency.

Subscribe now

Financing

Honestly, I hope you weren't expecting any dazzling, over-the-top modeling. I tried it, and while it certainly looks flashy, it just does not really add any value. If revenue continues to rise at this rate, even with a conservative view, the company will pay for itself. That is why the PoS is much more fascinating to explore than just the revenue numbers. (The margin will likely improve a bit more over time than what I projected below, but the important part is the earlier years)

A Qualitative Look at the PoS

The tables on the next slide highlight key advantages that may set Navenibart apart from other HAE treatments:

Considering this, I expect PoS to be around 60%.

Subscribe now

This is not financial advice in any shape or form

Leave a comment to request another company!

Leave a comment

There are a few points that prompted me to write this article, which I aim to investigate and revisit at the end:

1. What is it about “Augmented Reality” that CEOs find so interesting? It doesn’t resonate with me, and I don’t feel like I need it, which seems confirmed by the failure of the Metaverse and by Meta’s Ray-Ban glasses not being a big success either. On the other hand, we didn’t really know that we wanted Instagram or Facebook before it was out, and now everyone is using it, so could this be a similar situation? In other words: Is this a real market? → CEO’s of large tech companies seem to think so. Sure, it seems like Mark Zuckerberg was off on his bet on the metaverse, but what if the setup or the product was flawed, not the idea? What if another product could grab that market and make it real?

2. The market priced the glasses as a failure. But if AR glasses become what CEOs believe they will, today's market cap looks very low. So we need a way to confidently size the upside of the glasses and the OS (as good as possible).

3. If we find that “YES,” this is a real market, and the upside is substantial. Then we would need to figure out who will win this market. The thing about Snapchat is that whether you like the app or not, they have the most “real” consumer-facing experience with Augmented Reality through their app. Their filters work really well, even on a phone, and they are real-time. So will Snapchat’s moat be enough to win the market?

The perception that the glasses were unsuccessful and that Snapchat is a declining platform warrants further investigation. Since markets are imperfect and investors tend to be emotional or overscrutinize, this could be a great opportunity to buy a really cheap stock that might be on the cusp of turning around and getting back on the good side of investors (I did this with Bayer at the start of this year). The challenge in investing is finding these stocks before the turnaround happens and sentiment is still bad. So will Snapchat be a value play like this, or disappoint us and keep declining? ← I guess this is the question of the whole article.

Some additional points I want to talk about:

4. Why can’t Snapchat turn a profit?

5. Who are the competitors in this market?

6. What is Snapchat’s general financial health?

7. Rounding it up with a clear investment thesis that explains, in simple terms, why or why not Snapchat might be a good investment

Why Can’t Snapchat Turn a Profit?

Snapchat’s early emphasis on vanishing messages made it a tricky sell for advertisers, since few people welcome ads interrupting their private chats. To tackle this, Snapchat has refreshed its ad tools and found new spots for ads to appear, such as between quick, engaging videos.

While Snapchat enjoys a devoted following among Gen Z and millennials, its youthful audience can make some businesses think twice about the kinds of products they promote there.

Let’s look at the user age:

Recent estimates claim Snapchat’s audience is getting older, now hovering between 18 and 24 years old. (From what I have seen, though, the crowd often feels younger.) If these stats hold up and the user base continues to mature, we could see a boost in ad revenue.

It is still unclear whether this shift will matter for Snapchat’s augmented reality ambitions, but the overall trend seems to be heading in a promising direction.

Who are the Competitors?

Here are some standout companies building AR glasses. I left out Meta glasses, since they are already widely recognized and feel more like a fancy Apple Watch than a true AR device. Instead, I focused on highlighting pure-play innovators in the field.

As you can see, Snapchat’s biggest advantage is “Hand Tracking” because it is real-world integration, and the tech has been built for years in their app. Getting to the same level as SNAP would likely require years of research and development, giving Snapchat a strong economic moat.

Subscribe now

Valuation

This chapter gives an overview of SNAP without considering augmented reality. This is important to understand the base we’re working from.
I have based the revenue growth organically on the past growth rates, and then increased them by the current inflation:

The DCF does not account for litigation and assumes revenue will continue to grow.

This is the result of the DCF:

Analysis

Here comes the intriguing twist. Our foundation is solid and promising, but does the current value truly capture what SNAP’s SPECS are worth?

I always appreciate simplicity whenever possible. Yet when I consider SPECS’s potential, a few limitations inevitably come to mind.

As you look at this picture, ask yourself: How close is SNAP to overcoming these challenges and truly creating something consumers will find valuable?

Another key challenge is the OS. SNAP has worked to make it more accessible for developers, and it will be interesting to see how this evolves. The real breakthrough could come if developers start building more apps for the OS, especially now that AI-powered coding is possible. This could unlock the glasses for a much wider range of customers.

Here is the heart of my point:

SNAP already has the technology and the right solution. From here, it’s refinement, not reinvention.

Subscribe now

To bring this market perspective into sharper focus, I gathered CAGR insights from leading research firms:

Most analysts are forecasting bold growth rates, and it looks like these glasses are finding their place in industrial settings. If SNAP can carve out a niche here and leverage its edge in hand tracing technology, the company could quickly gain traction.

Mashable highlights that SNAP is aiming to sell 10,000 SPECS units. At the same time, Brand Innovators notes that Google priced GLASS at $1,500, with 10,000 to 20,000 units expected to reach consumers by the end of 2014. Yet Google Glass generated significantly more online hype, as Google Trends data reveals. Although the precise user demographics remain elusive, SNAP must intensify its marketing push to get those 10,000 units into customers’ hands.

That being said, SNAP’s real challenge is to get enough glasses into the hands of the right people, especially developers who are excited to use them, share their experiences, and build a vibrant ecosystem of apps that make these glasses truly useful.

I won’t dive into the unit economics, since selling 10,000 glasses at around $2,000 each barely moves the needle for SNAP’s valuation. What really matters is the disruptive potential these glasses hold. SNAP is closer to unlocking this than anyone realizes, even as others dismiss them. That’s exactly why I see a promising investment opportunity here.

The Thesis

Snap is often dismissed by retail investors, who see the glasses as awkward and impractical. This has fueled negative market sentiment, which is exactly the kind of pessimism that creates a buying opportunity. The market is overlooking the potential unlocked by an aging user base and smarter algorithms that are attracting more advertisers. Even more, few recognize just how close SNAP is to seizing the enormous promise of AR.

Investing in SNAP means embracing risk and thinking for yourself, especially when the crowd has already written it off.

Conclusion

Looking back, I believe I managed to answer the questions I set out with at the start:

1. CEOs are drawn to AR because it promises to be the next big thing, much like the smartphone revolution. While a long road of development remains, innovation has a way of breaking through, and no one wants to be left behind.

2. The second question I raised is also addressed by the previous answer, though the CAGR numbers we uncovered offer a fresh perspective. The story of Google GLASS comes to mind here. Interest was once sky-high and could be again; people are simply waiting for a convincing proof of concept.

3. SNAP seems well positioned to lead this market, thanks to its all-in-one interface. While the product is not perfect yet, it already boasts the most impressive capabilities. With further R&D, it could easily outpace competitors. SNAP’s deep roots in AR give it a powerful edge.

As shown above, SNAP appears to have a relatively stable foundation that could grow into a solid base for profitability. The manageable R&D costs for SPECS inspire confidence in SNAP’s ability to keep innovating. If revenue growth keeps pace, we could see the perfect storm: the company turning profitable just as SPECS sales gain traction. This is a long-term investment with significant risk, not a quick win.

Subscribe now

This is not financial advice!

Leave a comment

PIPELINE

ABOUT DERAMIOCEL

Deramiocel (CAP-1002) consists of allogeneic cardiosphere-derived cells (CDCs), a rare population of cardiac cells that have been shown in preclinical and clinical studies to exert potent immunomodulatory and anti-fibrotic actions in the preservation of cardiac and skeletal muscle function in muscular dystrophies such as DMD. CDCs act by secreting extracellular vesicles known as exosomes, which target macrophages and alter their expression profile to adopt a healing rather than pro-inflammatory phenotype. CDCs have been investigated in more than 250 peer-reviewed scientific publications and administered to over 250 human subjects across multiple clinical trials.

Deramiocel has received Orphan Drug Designation for the treatment of DMD from both the U.S. FDA and the European Medicines Agency (EMA). In addition, it has been granted Regenerative Medicine Advanced Therapy (RMAT) designation in the U.S., Advanced Therapy Medicinal Product (ATMP) designation in Europe, and Rare Pediatric Disease Designation from the FDA, which may qualify Capricor for a Priority Review Voucher upon approval.

DMD

Duchenne Muscular Dystrophy (DMD) is a severe, X-linked genetic disorder characterized by progressive muscle degeneration affecting the skeletal, respiratory, and cardiac muscles. It is caused by the absence of functional dystrophin, a key structural protein in muscle cells. DMD affects approximately 15,000 individuals in the United States and primarily impacts boys. Over time, deterioration of the heart muscle leads to cardiomyopathy and heart failure, which is the leading cause of death in DMD. There is no cure, and treatment options remain limited.

HOPE-2-OLE

Data from June 26, 2026 company press release

Patients experienced a mean total-score decline of less than 5 points over five years. By comparison, a cohort-matched external comparator of standard-of-care DMD patients showed a modeled decline of roughly 2.4 points per year, which if continued would project to approximately 12 points over five years.

Cardiac function, as measured by left ventricular ejection fraction (LVEF) on cardiac MRI, remained stable over the full five-year period, in contrast to the modeled decline of approximately 3.2% per year observed in a propensity-matched external cardiac comparator.

HOPE-3

Data from May 18, 2026 CGT article

“The newly presented HOPE-3 analysis demonstrated statistically significant improvements across both skeletal muscle and cardiac endpoints, while also showing reductions in myocardial scar progression measured by late gadolinium enhancement (LGE) on cardiac MRI. Investigators noted that the findings may provide the first clinical evidence that antifibrotic effects observed in preclinical DMD models can translate into measurable cardiac benefit in humans.”

According to the presented findings, deramiocel met both the primary and key secondary endpoints. Treatment led to a statistically significant 4.55% advantage over placebo in total PUL 2.0 score (95% CI, 0.47-8.63; P = .029), with an even greater 8.12% benefit observed in mid-level PUL function (95% CI, 2.12-14.11; P = .008).

Cardiac outcomes also favored deramiocel. Investigators reported a statistically significant benefit in LVEF, corresponding to an absolute treatment difference of approximately 2.4% compared with placebo (P = .041). Among the subgroup of patients who underwent evaluable gadolinium-enhanced cardiac MRI scans, deramiocel reduced progression of myocardial fibrosis over 12 months, with a mean treatment difference of –3.00 affected cardiac segments (95% CI, –5.50 to –0.51; P = .022).

DCF VALUE CHECK

This is essentially a sanity check, to make sure that the price matches the risk/benefit of investing. To derive this DCF I simplified the statements, but made sure everything balances reasonably so we can make sure that the value of the stock is in a reasonable range, and not hyped from a cash flow standpoint.

Subscribe now

PoS OF THE BLA

The attention is on Capricor Therapeutics, especially because it’s BLA application was rejected back in July 2025. According to the FDA’s CRL, HOPE-2 (The BLA was based on this study) did not meet its primary efficacy end point and several secondary end points.

“The HOPE-2 study failed to demonstrate efficacy for its prespecified primary efficacy endpoint, which was change from baseline to Month 12 in the mid-level (elbow) dimension of the Performance of Upper Limb version 1.2 (PUL 1.2), a neuromuscular outcome assessment,” the FDA wrote in the CRL.⁴ “Additionally, HOPE-2 failed to demonstrate efficacy on its prespecified secondary end points. To support your proposed indication for treatment of cardiomyopathy in patients with DMD, you have presented post hoc analyses of HOPE-2 and HOPE-2-OLE. However, as outlined below, these post hoc analyses are not sufficient to provide substantial evidence of effectiveness to support approval of deramiocel.”

The BLA did not meet the statutory requirement for substantial evidence of effectiveness and did not meet the need for additional clinical data. The CRL also referenced certain outstanding items in the Chemistry, Manufacturing, and Controls (CMC) section of the application, most of which Capricor believes it has addressed in prior communications to the FDA. However, these materials were not reviewed by the FDA due to the timing of the CRL issuance. The FDA confirmed that it will restart the review clock upon resubmission. In addition, the agency offered the company the opportunity to request a Type A meeting to discuss the path forward. Capricor plans to engage further with the FDA to determine the appropriate next steps.

Considering this, lets look at the performance of the HOPE-3 trial, to understand how clear the substantial evidence of offecticeness, and how much additional clinical evidence was provided.

Critically, all had impaired PUL entry-level scores and most had established cardiomyopathy (over 75% with diagnosed heart involvement at baseline. The mean baseline LVEF was modest, and ~90% were on cardiac medications, indicating a high-risk population.

• The trial met its primary endpoint with statistical significance: the Deramiocel arm showed a 54% slower decline in upper limb function compared to placebo over 12 months (p=0.029). In absolute terms, this “slowing of progression” means that the expected loss of PUL points in the placebo group was cut by over half in the treatment group.

• The key secondary endpoint, cardiac LVEF, also favored Deramiocel: a remarkable 91% slowing of LVEF decline versus placebo (p=0.041).

Safety: In HOPE-3, Deramiocel appeared well-tolerated. The press release indicated a safety profile “consistent with prior clinical experience”.

Statistical rigor is important here. Capricor applied a Type I error-controlled hierarchical testing scheme, meaning that significance on the primary endpoint allowed formal testing of key secondaries. The press release confirms all type-I error-controlled endpoints were significant.

CONCLUSION

I would not engage muc

I will not delve further into this matter, as additional analysis may unnecessarily complicate the issue. The primary consideration is that the HOPE-3 trial will likely be sufficient to support the Biologics License Application (BLA) and facilitate CAPR’s transition to a commercial entity. My confidence is reinforced by the increased patient population in the trial, which now includes 106 participants compared to the initial 20. The financial outlook also appears favorable. Furthermore, depending on the allocation of the marketing budget, available capital should be adequate to address most commercial challenges, thereby reducing dilution risk, particularly in light of the potential Priority Review Voucher (PRV).

Subscribe now

This is not financial advice!

Leave a comment about which company I should do next:

Leave a comment

Rubric:

1. Litigation: EyePoint sues rival Ocular Therapeutix

2. Licensing: With Incept, and Afamed

3. Pipeline: Wet AMD, NPDR, & Glaucoma and ocular hypertension

4. DEXTENZA: Commercialization & Reimbursements

5. Cash Position: How long does OCUL have

6. The Valuation: What is a fair price for the company

7. The Pluto Value: How does the company fit into the pluto framework

Litigation

Since I am writing an analysis, I have to address this:

March 20, EyePoint, filed a lawsuit accusing rival Ocular Therapeutix, of spreading ​false or misleading information about EyePoint and its ‌lead experimental eye drug.

EyePoint said Ocular Therapeutix made statements that ​misrepresented the company and the clinical results of the drug, Duravyu.

The company is accusing Ocular Therapeutix of defamation, commercial disparagement, and violations ​of Massachusetts consumer protection law. It also accused Ocular ​Therapeutix of interfering with its business relationships.

EyePoint is asking the court ‌to ⁠order Ocular Therapeutix to stop making the statements, issue a public retraction, and pay monetary damages and legal fees.

“We’re confident in our statements and look forward to responding ​in the ​course of the ⁠legal process,” an Ocular spokesperson said.

I am not sure what is to come of this. It does not seem like too big of a deal, for Ocular Therapeutix, but for the fullness of this article it is important.

Licensing

INCEPT License Agreement On September 13, 2018, the Company entered into a second amended and restated license agreement with Incept, LLC to use and develop certain intellectual property.

AFAMED

• Upfront Consideration: $12.0 million received upon signing.

• Total Potential Bio-Bucks: Up to $91.0 million in aggregate development, regulatory, commercial milestone, and clinical development support payments.

• Royalties: Tiered royalties on future product sales ranging from the low teens to low twenty percent range.

Ocular Therapeutix agreed to grant AffaMed exclusive rights to develop and commercialize DEXTENZA for the treatment of post-surgical inflammation and pain following ophthalmic surgery and ocular itching in patients with allergic conjunctivitis, and OTX-TIC for the reduction of elevated IOP in patients with primary OAG or OHT in specified Asian markets. Ocular Therapeutix retains the right to develop and commercialize DEXTENZA and OTX-TIC in all other global markets.

Pipeline

Below, I have illustrated the pipeline. The focus is strikingly centered on AXPAXLI, which brings both opportunity and risk. Concentrating resources on a select few drugs can sharpen their efforts, but if even one of these key assets fails, the impact on the entire program could be much greater than if their portfolio were more diverse.

Wet AMD

INDICATION SUMMARY:

AXPAXLI is being investigated for the treatment of wet AMD. AXPAXLI targets with axitinib – a highly potent tyrosine kinase inhibitor (TKI) with strong selectivity for pan-VEGF receptor inhibition – and is delivered with ELUTYX™, Oculars proprietary fully bioresorbable hydrogel technology

The company remains on track to submit its New Drug Application (NDA) for AXPAXLI in wet AMD based on the SOL-1 trial alone, complete AXPAXLI NDA package in wet AMD is planned to be submitted in 4Q 2026

According to the most recent update of the SOL-1 trial, AXPAXLI demonstrates strong durability and maintenance. The report further indicates that AXPAXLI has exhibited “generally well-tolerated safety.”

The Wet AMD market is projected to reach $17.99 billion by 2030. Based on this projection, peak sales are estimated at $2.8 billion, with a probability of success (PoS) of 60% to Biologics License Application (BLA) filing and a PoS to commercial viability of 55%.

NPDR

INDICATION SUMMARY:

On November 24, 2025 the first patient was dosed into HELIOS-3 a Phase III 3 registrational program. From the HELIOS trial 1-year results, we can derive the following data:

One intravitreal bioresorbable hydrogel injection allows sustained release of the drug for 6 to 12 months.

An additional advantage, not depicted in the graphs, is that AXPAXLI is administered as a single injection, whereas treatment with aflibercept requires 8 to 12 injections.

The NPDR market is projected to be valued at $3.06 billion in 2026. A probability of success (PoS) of 55% is applied for passing Phase III, and a PoS of 50% is used to estimate the likelihood of reaching commercial viability. Based on these assumptions, peak sales are estimated at approximately $280 million.

Glaucoma and Ocular Hypertension

INDICATION SUMMARY:

OTX-TIC is being investigated for the treatment of glaucoma and ocular hypertension. OTX-TIC targets with travopost, a prostaglandin analog, and is delivered with ELUTYX, our proprietary fully bioresorbable hydrogel technology.

From the 1Q 2026 report, we know “the company is evaluating next steps for the OTX-TIC program.”

Given the substantial size of the Glaucoma and Ocular Hypertension markets, it is essential to include the drug in the valuation.

The Ocular Hypertension market is projected to grow from USD 4.65 billion in 2026 to approximately USD 9.37 billion by 2035. Similarly, the Glaucoma market is estimated to expand from USD 9.85 billion in 2026 to approximately USD 14.85 billion by 2035.

I compiled data comparing OTX-TIC (PAXTRAVA) to the standard of care in Glaucoma. The Mean IOP Reduction is presented as a range, and the delivery methods differ significantly, making graphical comparison challenging. This IOP value is important for both Glaucoma and Ocular Hypertension.

I project peak sales of $1.3 billion for the treatment. However, the primary concern is determining the commercial launch timeline, as development is currently paused.

The PAXTRAVA trial was completed in 6 months. If Ocular can refocus on PAXTAVA in the fourth quarter after filing the NDA for AXPAXLI for Wet AMD, it will likely take 6 to 12 months to restart the program, followed by approximately 12 months for a pivotal study, and negotiations with insurance, etc. Commercialization could occur within 6 years. Another way would be outlicensing, which would be (depending on the terms) the best solution for them.

I would apply a PoS of 45% due to the pause of the trial.

Subscribe now

DEXTENZA

Treatment of ocular inflammation and pain following ophthalmic surgery in adults and pediatric patients and for the treatment of ocular itching associated with allergic conjunctivitis in adults and pediatric patients aged two years or older. USD 5.2 billion in 2025 and is projected to reach USD 10.0 billion by 2035 Ocular Therapeutix recorded In-Market Sales of approximately 42,000 units in the three months ended March 31, 2026, an increase of approximately 2,000 units compared to the three months ended March 31, 2025. The decline in revenue is due to a challenging reimbursement environment

Cash

As you can see in the graph above, it looks like the company will be operational until late 2026 before another round of funding is necessary. They also state in their latest 10-K that additional funding will likely be required to support the commercialization of AXPAXLI, if approved.

Valuation

As you can see below, I have estimated the fair value of Ocular Therapeutix according to DCF to be at around $23.30.

Pluto Value

While the Valuation via DCF shows positive for the company, my Pluto value is relatively low at 0.66x this is mainly due to the CEO being paid $35.9 million in 2025 and some other oddities. The pay is factored in via my algorithm, and this wouldn’t be an issue if the market cap of the company was much higher, or if the company was profitable.

For example, a companies management which I really respect is the management of Kodiak Sciences which has incredible focus, on the company, CEO Victor Perlroth received $2.5 million in total compensation. I am orienting myself heavily on Jim Collins book “Good to Great” where he says that the company should come first in a CEO’s mind, which I unfortionately don’t see for Ocular at the moment.

This is not to say that you can’t make a profit in this investment, but in my opinion there can be more upside found elsewhere.

Please consider subscribing to receive more analyses before I create a paywall!

Subscribe now

This is not investment advice.

→ Also leave a comment to let me know what company you want to hear about next?

Leave a comment

I want to emphasize that Processa Pharmaceuticals is a high risk investment. The company is more likely to fail, but there is a small chance it could experience substantial growth. We will evaluate this thesis below.

These are the chapters of this analysis:

1. The Past

2. Insider Buying

3. Litigation

4. Pipeline

5. Cash Situation

6. The Management

7. The Valuation

8. The Pluto Value

The Past

In this chapter, I will provide some key past milestones of the company. The main objective is to get a feel on how the company operates.

On Feb 10, 25 Processa risked getting delisted from the Nasdaq

At that time, the company was trading at $0.63 with a market capitalization of $2.95 million. Nasdaq’s Listing Qualifications Department notified the company that its stock price had failed to meet the minimum bid price requirement for 30 consecutive business days, placing it at risk of delisting from the Nasdaq Capital Market. The notification, received on Monday, February 4, 2025, stated that the company’s common stock closed below the required $1.00 per share. According to InvestingPro data, the stock has declined over 25% year-to-date, highlighting broader challenges for the company. This issue was addressed by practicing a 0.04:1 split.

On Feb 20, 2026, Processa Pharmaceuticals reevaluated its development roadmap after exclusive licensing negotiations ended unsuccessfully.

The company’s potential agreement with Intact Therapeutics for the drug candidate PCS12852 has been terminated, eliminating the prospect of $452.5 million in milestone payments and royalties. The failure to secure this licensing deal for PCS12852, a treatment for gastroparesis, was a significant setback. The non-binding term sheet, in place since June 2025, expired on February 12 without a final agreement. Both parties were released from their preliminary commitments.
Despite the warning, the trading of Processa Pharmaceuticals’ shares continues under the ticker symbol “PCSA”. The company is now in a 180-day grace period, ending on August 4, 2025,

On Aug 07, 2025 Processa Pharmaceuticals secured strategic investment and explored cryptocurrency treasury strategies for long-term growth

“Processa believes that adopting emerging financial technologies, including select cryptocurrencies, will diversify its capital base and provide additional funding for clinical development, while minimizing shareholder dilution.”

The discussion regarding this headline was limited, focusing primarily on concepts such as “Value Creation,” “Flexibility,” and “Reduce Dilution.” The strategy appears to prioritize continuous growth in coin value without acknowledging potential drawbacks. The use of cryptocurrency terminology may be intended to attract retail investors. Although this strategy is being implemented incrementally, the specific methods for achieving these objectives remain unclear.

Insider Buying

Recent insider transactions amount to $145 thousand year-to-date, constituting slightly more than two percent of the company’s market capitalization.

Although this initially appears favorable, further analysis reveals potential concerns. The CEO received $673 thousand in 2025 and $521 thousand in total compensation in 2024, which is substantial considering the company’s market capitalization remains below $10 million. I want to reitterate, that this is around 10% of the companies market cap, while the shareholders are likely goiong to be heavily diluited.

The chart below illustrates insider purchases by the entire executive team. The comparable transaction amounts indicate a possible coordinated effort. It is probable that the executive team is attempting to generate sufficient liquidity to utilize the at-the-market (ATM) facility. Based on current financial data, the company may otherwise face significant operational challenges.

Subscribe now

Litigation

To start this chapter, I have the following excerpt from Processas “424B4 - 01/29/2025 - Processa Pharmaceuticals, Inc.” filing:

”On December 22, 2024, two of the investors in our February 2021 private offering filed a lawsuit alleging fraud and negligent misrepresentation in connection therewith and seeking monetary damages. In addition, on May 10, 2024, we filed a lawsuit against Elion Oncology, Inc. disputing the purported termination of a license agreement, which lawsuit is subject to counterclaims by Elion.“

Both lawsuits remain ongoing, with the Investor lawsuit predicated on the claims made in the Elion lawsuit.

In the Elion lawsuit, Processa alleges that Elion wrongfully terminated the licensing agreement for PCS6422. In response, Elion filed a counterclaim, alleging that Processa breached the licensing agreement.

This dispute prompted an Investor lawsuit, in which investors allege that Processa misled them into believing that PCS6422 was under development, despite the company allegedly failing to make reasonable efforts to advance the drug. Processa denies these allegations.

An unfavorable outcome in this litigation could result in the termination of the NGC-Cap clinical program, which represents the primary value driver for Processa Pharmaceuticals.The Pipeline

Pipeline

NGC-Cap (PCS6422) + Capecitabine

From December 17, 2025:

Data from the first 16 of 19 enrolled patients indicate that NGC-Cap significantly increases exposure to capecitabine metabolites (this is what kills the cancer) with cytotoxic activity, without increasing the severity of side effects compared to standard monotherapy capecitabine therapy (Mono-Cap). This pharmacological profile suggests the potential for enhanced clinical efficacy while maintaining a manageable safety profile, which is a primary objective of the NGC platform developed by Processa.

Preliminary findings from the Phase 2 study indicate that NGC-Cap may enable patients to achieve greater exposure to the most active cytotoxic components of therapy, without an associated increase in the severity of side effects commonly observed with standard treatment.

Patients in the NGC-Cap group experienced up to tenfold lower FBAL exposure compared to those receiving standard Mono-Cap therapy.

Timeline:

1. Jan 19, 2024 they announced Expansion of NGC-Cap Program into Advanced or Metastatic Breast Cancer

2. July 30, 2024 they announced FDA Clearance of IND Application for a Phase 2 Clinical Trial of NGC-Cap in Breast Cancer

3. Oct 02, 2024 they announced dosing of the first patient

4. Jul 01, 2025 they announced that NGC-Cap Phase II clinical trial in metastatic breast cancer is actively enrolling patients. They continued to anticipate sharing initial data in the second half of 2025

5. Dec 17, 2025 they announced preliminary Phase II data demonstrated PCS6422+Capecitabine increased cancer-killing metabolite exposure while maintaining comparable safety to monotherapy capecitabine. Company was on track to conduct formal interim analysis in early 2026

6. Jan 05, 2026 they announced enrollment of 20th patient for formal interim analysis in Phase 2 NGC-Cap Breast Cancer Study

January was the last time we were told that the formal interim analysis is expected to be completed in the 1Q 2026. This was changed to 1H 2026 in the last quarterly report.

Although multiple cancers are included in the indication field, the only ongoing trial is for Metastatic Breast Cancer. Therefore, this trial provides a real-world example for assessing the peak sales of Xeloda, which is the current SoC breastcancer chemotherapy drug.

According to Precision Business Insights, the Xeloda market size was valued at US$ 468.5 million in 2025 and is projected to reach US$ 690.6 million by 2032, representing a compound annual growth rate (CAGR) of 5.7% from 2026 to 2032.

I am using a PoS of 20% through BLA, and a Peak Sales of $617 million, in about 8 years.

NGC-Iri (PCS11T) Irinotecan

From Aug. 19, 2024:

Processa is currently defining the regulatory path for NGC-Iri, including identification of the target patient population and the specific cancer type to present to the FDA. Upon completion, the company will provide an update regarding the regulatory pathway and anticipated timeline.

As of the present date, no such update has been reported. Because the drug remains as preclinical for now, it will not be included in this analysis.

PCS12852

From June 17, 2025:

This drug was supposed to be outlicensed.

• $452.5 million in total milestone payments

• $2.5 million in near-term payments

• Double-digit royalties on future net product sales

• 3.5% equity stake in Intact Therapeutics

PCS12852 is a leading 5-HT4 receptor agonist with the potential to serve as the first significant treatment for gastroparesis and other gastrointestinal motility disorders.

On February 20, 2026:

The binding term Sheet dated June 17, 2025, with Intact Therapeutics regarding the drug candidate PCS12852 expired without the execution of a definitive license agreement. Due to the absence of further updates on the program, this drug will be excluded from the DCF analysis, and neither the PoS nor peak sales will be estimated.

PCS499

From July 01, 2025:

Following preliminary positive results in kidney disease and the FDA’s recent approval of surrogate endpoints for rare kidney diseases, Processa is designing a new adaptive pivotal PCS499 Phase III study for discussion with the FDA later this year. Additionally, Processa is establishing a dedicated subsidiary to manage PCS499. This initiative aims to increase strategic flexibility for capital raising and partnership opportunities after the FDA meeting.

I am using a PoS of 20% through BLA, and a Peak Sales of $177 million.

Cash/Funding

Processa currently holds $1.7 million in cash and equivalents and $1.6 million in digital assets at fair value. In 2025, research and development expenditures totaled $7.8 million, while selling, general, and administrative expenses amounted to $6.2 million, resulting in an operating loss of $14 million for the year. If the current expenditure rate persists, Processa will likely require additional capital in the near term, as available funds may be depleted within the current or following quarter.

This might be the reason for the insider spending aswell.

Management

Processa Pharmaceuticals management scores 3.5/10. This number is heavily affected by the disproportionally high executive pay.

The CEO is essentially paying himself 10% of the companies market cap every year.

Valuation

Due to certain constraints, I used Google Sheets instead of Excel today. While the graphics may not be as polished, the data quality remains consistent.

In my DCF analysis, I valued the company at $4.14 per share, approximately double its current value. This estimate is based solely on market data and does not account for the risks discussed earlier in the article.

I estimated $177 million in peak sales for PCS499 by benchmarking against competitors, which assumes the drug will demonstrate competitive results. Without PCS499, the equity value would be negative. Investing in this company carries significant risk due to limited available information.

Pluto Value

Following dilution and the application of the management discount, the Pluto Value for Processa is approximately 4.72x.

After completing this analysis, I have concluded that this is not a suitable investment for me. The primary concern is not the pipeline or funding, but rather the company’s current predicament and the fact that the CEO is compensating himself at a rate equivalent to 10% of the company’s market capitalization annually. I do not consider this to be the type of leadership capable of guiding a company through challenging circumstances.

Subscribe now

This is not financial advice.

Please leave a comment to let me know what company, you wan’t an analysis about next:

Leave a comment

In evaluating Structure Therapeutics, I will address the following key issues in this article:

1. Pipeline

2. Cash

3. Management

4. Valuation

5. How safety and tolerability might affect the market

6. Pluto Value

Structure Therapeutics is a clinical-stage global biopharmaceutical company discovering and developing novel small molecule oral drugs to treat chronic metabolic and pulmonary diseases with unmet medical needs. By leveraging its next-generation structure-based drug discovery platform, the company has built a pipeline including two clinical-stage small-molecule compounds designed to overcome the limitations of biologics and peptide therapies. The company is currently focused on the GPCR family of drug targets.

GPCR = G protein-coupled receptors (GPCRs) form the largest family of cell-surface receptors in humans. For example the GLP-1 receptor.

Pipeline

Given the high failure rates in biotech, I will focus exclusively on assets at least in Phase I. Thus, I am going to outline the following indications:

1. In the Phase 2b ACCESS (+ OLE) study, aleniglipron achieved a clinically meaningful and statistically significant placebo-adjusted mean weight loss of 11.3% (27.3 lbs, p<0.0001) at the 120 mg dose after 36 weeks. The adverse event (AE)-related treatment discontinuation rate across all active treatment arms was 10.4%.

2. In the exploratory ACCESS II study, aleniglipron resulted in a placebo-adjusted mean weight loss of up to 15.3% (35.5 lbs, p<0.0001) at a 240 mg dose over 36 weeks. The tolerability profile of aleniglipron was consistent with the GLP-1 receptor agonist class, and the agent demonstrated a favorable off-target safety profile.

3. Type 2 Diabetes and Obesity: The randomized, double-blind, 12-week, placebo-controlled Phase 2a clinical trial has enrolled 94 participants to date, including 60 randomized to GSBR-1290. The type 2 diabetes mellitus (T2DM) cohort enrolled 54 participants, who were randomized to GSBR-1290 45 mg (n=10), 90 mg (n=26), or placebo (n=18), administered once daily. The obesity cohort initially enrolled 40 individuals randomized to GSBR-1290 120 mg (n=24) or placebo (n=16), also administered once daily. An additional 24 participants are currently being enrolled in the obesity arm and will be randomized 3:2 to GSBR-1290 or placebo.

   1. Among the 60 participants who received GSBR-1290, only one discontinued the study due to adverse events related to the study drug. No discontinuations occurred in the obesity cohort, while one participant (2.8%) in the T2DM cohort discontinued.

   2. In the T2DM cohort, a statistically significant placebo-adjusted reduction in HbA1c (-1.01% to -1.02%) was observed at Week 12 (Table 2). The study also showed a statistically significant and clinically meaningful reduction in weight at Week 12 (-3.26% to -3.51%, placebo-adjusted) (Table 3). Weight loss continued to progress through Week 12.

4. Maintenance Study: This supplementary study evaluates the transition from an approved injectable GLP-1 receptor agonist to once-daily oral aleniglipron for weight loss maintenance. The study assesses various aleniglipron starting doses and their effects on weight loss maintenance over a 12-week period.

5. Body Composition: Structure Therapeutics is conducting a randomized, placebo-controlled study to evaluate the effects of aleniglipron (up to 120 mg) on body fat loss in 71 adult participants over a 40-week period. In the aleniglipron arm, participants begin at a 2.5 mg dose, with monthly titration to a target dose of 120 mg. Interim analysis after a median follow-up of approximately 10 weeks showed that initiating treatment at 2.5 mg for the first four weeks significantly improved tolerability compared to a 5 mg starting dose, as observed in the ACCESS and ACCESS II studies. No adverse event-related treatment discontinuations occurred at either the initial 2.5 mg or subsequent 5 mg doses.

All of these indications assess the safety and efficacy of Aleniglipron for obesity and type 2 diabetes. I will not include diabetes in my valuation, as there does not appear to be a clear guideline for this indication, since Structure Therapeutics appears to be focused primarily on weight-loss management.

On December 8, 2025, the company announced positive topline results from the ACCESS program, which evaluated its once-daily oral small molecule GLP-1 receptor agonist, Aleniglipron. In the 36-week study, the 120 mg dose produced a placebo-adjusted mean weight loss of 11.3% (27.3 lbs), with a 10.4% rate of adverse event-related treatment discontinuation. The exploratory ACCESS II study demonstrated a placebo-adjusted mean weight loss of up to 15.3% (35.5 lbs) at 36 weeks with the 240 mg dose. In the ACCESS Open Label Extension and Body Composition Study, initiation at the 2.5 mg dose was not associated with any treatment discontinuations due to adverse events. Comprehensive data anticipated by mid-2026 are expected to support and inform advancement to a Phase 3 clinical development program.

Given this focus on obesity, the analysis centers on the drug’s potential in the weight-loss market.

My algorithm projects peak sales for Aleniglipron at 18.8 billion USD. I expect the drug to enter the market in approximately 2 years and reach peak sales after about 11 years, reflecting both market growth and the time required for international expansion.

I will apply a standard probability of success (PoS) for this pivotal study, as there have been no failed Phase III studies in the GLP-1 class for weight-loss indications. Notably, CagriSema did not demonstrate significant improvements compared to tirzepatide, but did not technically fail the trial.

Therefore, I will use the standard biotechnology PoS for Phase III clinical trials at 60%. I have selected 60% rather than 55% due to the observed safety advantage with Aleniglipron, in the body composition study.

Understanding the Current Studies

Analysis of these studies elucidates the competitive advantage of Structure Therapeutics. Both the ACCESS phase 2b and ACCESS II studies demonstrated strong efficacy, although tolerability profiles presented certain challenges. The body composition study provides particularly significant data, as the titration phase commenced at 2.5 mg rather than the previously used 5 mg. This adjustment resulted in a notably low dropout rate of 2–3%, compared to approximately 25% when starting at 5 mg. Sustaining this trend across subsequent studies could confer a substantial safety advantage, which would be advantageous for marketing purposes.

The ongoing ACCESS OLE (Open Label Extension) study is assessing whether weight loss can be sustained beyond the duration of the previous ACCESS study or if a plateau occurs. Interim analysis indicates that a plateau in weight loss may not be present.

Additionally, in the diabetes cohort, Aleniglipron achieved a placebo-adjusted HbA1c reduction of 1.01 to 1.02% over 12 weeks, according to the most recent update from the phase I trial in 2023. This outcome compares to a 0.9–1.4% reduction observed with oral Semaglutide over 68 weeks. The results for Aleniglipron appear less significant than those reported by Novo Nordisk and Eli Lilly for their respective diabetes cohorts.

The Edge

My interest in Structure Therapeutics was sparked by the low dropout rate highlighted in their recent press release. Below, I compared both the efficacy and dropout rates of Aleniglipron with those of other currently approved subcutaneous and oral drugs on the market. As shown in my analysis, while there is an efficacy advantage, Aleniglipron particularly excels in tolerability, especially as an oral compound. To determine whether this represents a strong investment opportunity, it is important to consider what patients value most, which I will address in a subsequent section.

Cash

Here, I will assess whether the company’s cash position aligns with its stated expectations.

According to the company’s 2Q 2026 report: “Cash, cash equivalents, and short-term investments totaled $1.5 billion as of March 31, 2026. The Company received $100.0 million in the first quarter of 2026, consisting of an upfront license fee for certain patents that cover a class of oral GLP-1 receptor agonists that is different from aleniglipron. The Company expects its current cash, cash equivalents, and short-term investments to fund projected operations and key clinical milestones through the end of 2028. This includes costs related to the ongoing aleniglipron ACCESS OLE, ACCESS II extension study, the supplementary studies, and Phase 3 registrational studies in chronic weight management, but excludes additional costs related to pre-commercialization activities, including commercial manufacturing.”

Expenses have doubled compared to the previous year, and I anticipate this trend will persist. The initiation of Phase III trials in 3Q 2026 will likely require increased research and development expenditures.

Projected cash flow, assuming a 10% growth in research and development (R&D) costs and a 5% increase in selling, general, and administrative (SG&A) expenses, suggests sufficient funding through the fourth quarter of 2028. Expenses are expected to increase with the upcoming Phase III trial. Overall, the financial outlook appears robust and may be adequate to support Phase III activities without requiring additional dilution. Commercialization is not inluded in the current funding, so dilution will become an important factor at that point.

Subscribe now

Management

The algorithm assigns a management rating of 7.9 out of 10. This score primarily reflects the CEO’s simultaneous occupancy of multiple roles in addition to the CEO position, as well as certain internal caveats.

Additionally, this rating will result in a 5% discount applied to the Pluto Value, which will be discussed in detail in a subsequent section.

Valuation

I have carefully considered the valuation and recognize that some analyst expectations exceed my own assessment. Based on my analysis, I estimate a fair price for the company to be approximately 70.50 USD. Although the company’s potential is significantly higher, Structure Therapeutics remains at an early stage, particularly within this rapidly expanding and extremely competitive market. I have applied a high weighted average cost of capital (WACC) due to substantial equity financing costs, the disadvantage of not yet being established in this fast-growing sector, and the considerable risk that the company may not develop a drug capable of competing with existing market leaders. Additionally, the ACCESS trials have raised concerns regarding the company’s potential tolerability advantage, which is essentially the investment thesis for this stock.

How Will Safety and Tolerability Affect the Market

The outcome of this question may determine whether investment in Structure Therapeutics results in significant success or becomes a modest addition to the market, similar to CagriSema. This is particularly relevant given the presence of pipeline drugs, such as VK2735 or potentially high-dose Wegovy, which may decrease the efficacy gap between Aleniglipron and other up-and-coming therapies.

A central consideration is how consumers prioritize efficacy relative to tolerability. It remains uncertain whether emphasizing favorable tolerability profiles and low dropout rates will be more effective than promoting drugs with superior efficacy.

However, it is not yet empirically established whether tolerability will be superior to efficacy.

If consumers prioritize efficacy over safety, the drug may face significant market risk once a more efficacious alternative becomes available.

Attempt to Quantify Tolerability Advantage

The following section reviews several studies relevant to this topic. Readers seeking information specifically about the Pluto Value may proceed to the subsequent section.

This is an excerpt from “Glucagon-Like Peptide-1 Receptor Agonist Treatment Attributes Important to Injection-Experienced Patients with Type 2 Diabetes Mellitus: A Preference Study in Germany and the United Kingdom” by Lei Qin et al.:

“510 GLP-1RA injection-experienced patients completed the survey; 45.3% respondents were being treated with exenatide QW and 54.7% respondents were being treated with liraglutide QD. In terms of GLP-1RA attributes, patients indicated a preference for a treatment with greater efficacy (i.e., a 1.5-point improvement in HbA1c) (OR 2.58; 95% CI 2.37, 2.80; p < 0.001), fewer side effects (OR 2.67; 95% CI 2.52, 2.82; p < 0.001), once-weekly rather than once-daily administration (OR 2.26; 95% CI 2.13, 2.39; p < 0.001), and the preparation required for a multi-use pen (OR 1.71; 95% CI 1.55, 1.88; p < 0.001). Needle size, device size, and titration were not significant drivers of patient preference.”

This study found that patients prefer fewer side effects (odds ratio [OR] 2.67) over increased efficacy (OR 2.58). Assuming a standard economic utility function, the marginal rate of substitution is calculated as 2.67 divided by 2.58, resulting in 1.0349. This indicates that patients are willing to trade 1.0359 percentage points of efficacy to gain one point of safety. This approach could be extended by applying the marginal rate of substitution to dropout rates or other safety concerns to compare the relative value of different drugs. A comprehensive analysis would require similar calculations for additional relevant factors.

When calculated using this method, Aleniglipron demonstrates a clear advantage over other oral formulations. This represents the primary benefit of the drug.

Of course there are some caveats to consider. I believe that at some point when efficacy is high enough, patients are going to trade even more safety for an increased efficacy, so this model would assume a linear utility function, rather than a curve. Furthermore, we don’t know how Structure Therapeutics is planning to market the drug, how the trials will end up looking, how informaed consumers will be, how imperfect the distribution of information will be, and how rational consumers will behave.

Subscribe now

Pluto Value

Here I will calculate my Pluto Value, which serves as my internal comparison metric. My algorithm accounts for factors such as dilution potential, management quality, and additional variables. Based on this analysis, GPCR receives a 5.59x rating. This indicates that its expected value over an 11-year holding period is 5.59 times the current value.

If you liked my article please consider subscribing!

Subscribe now

This is not investment advice.

Also this article really attempts to evaluate who would be most likely, and why to acquire Viking Therapeutics, rather than if someone is going to acquire the company, as the latter is likely difficult to evaluate since the asset has been interesting for a while, so either the CEO Brian Lian, has a specific time frame in mind, doesn’t want to sell at all, or other companies want to try something elso out before offering for a now 3.8 billion USD market cap company, in this rather explosive market.

I want to divide this article into four main sections to understand the current market dynamics. Let me just tell you it’s interesting.

1. Market Overview

2. Why is VKTX a great acquisition

3. Who are potential VKTX acquirers

4. Conclusion

Market Overview

According to recent GLP-1 market analyses, the anti-obesity market is projected to grow rapidly. This anticipated expansion provides a strong incentive for mergers and acquisitions. The market is currently valued at approximately 80 billion USD and is forecasted to reach between 150 and 240 billion USD by 2035.

Market projections indicate that by 2033, the anti-obesity sector will reach a valuation of USD 185 billion.

The market is characterized by a high concentration of market share among a limited number of commercial companies. At present, mainly Eli Lilly and Novo Nordisk are marketing GLP-1 drugs for weight management. Although several companies are developing new drugs, VKTX is among the few notable entrants.

At first glance, numerous drugs appear to be under development; however, closer examination reveals that most market participants are large pharmaceutical companies or are in a direct licensing agreement with one of them. From an acquisition standpoint, this leaves out a couple of companies.

Isolating companies with market capitalizations below 10 billion that may be acquisition targets for larger pharmaceutical firms yields the following six companies.

Zealand Pharma is already collaborating with Ingelheim, which excludes it as a potential acquisition target.

Similarly, Sciwind Biosciences is partnering with Pfizer in China. Additionally, Verdiva Bio, a smaller company with substantial backing from RA Capital and OrbiMed, owns the remaining global rights.

Kailera is an unlikely acquisition target due to secured funding through the second quarter of 2028. These resources are expected to support ongoing pipeline development, potentially enabling independent progression or positioning the company for acquisition at a higher valuation by an entity with a more advanced pipeline.

Consequently, Viking Therapeutics, Altimmune, and Structure Therapeutics remain as the primary acquisition targets within this market segment.

These four companies represent the principal opportunities for major pharmaceutical firms seeking rapid entry into the GLP-1 market. As you can see, any leading pharmaceutical companies are seeking entry into this market, yet only a limited number of smaller firms possess the necessary assets to do so.

Subscribe now

Why is VKTX a great acquisition

Let’s compare the leftover companies:

1. Viking Therapeutics

2. Altimmune

3. Structure Therapeutics

The graph, which presents data from the most recent clinical trials conducted by each company, indicates that VKTX demonstrates the highest efficacy on a duration-adjusted basis (green line for the duration). Additionally, the oral formulation exhibits superior efficacy compared to alternatives and is expected to reach commercial availability sooner, as Structure is only now entering Phase III trials.

The combination of high efficacy and anticipated earlier market readiness positions VKTX as a strong acquisition target. However, the elevated dropout rate observed for the oral formulation remains a concern. This issue is expected to be addressed in the third quarter through a maintenance trial that will adjust the dosing schedule. Additionally, the placebo group also exhibited a significant dropout rate, suggesting that factors unrelated to the drug’s efficacy may have influenced the trial outcomes.

Another concern I had is that rapid weight loss triggers greater muscle loss, placing even more importance on the maintenance trial. As you can see below, the real benefit might be the low-dose VK, as the moderate nausea is incredibly low here.

Who are potential VKTX acquirers

There are several potential acquirers of Viking Therapeutics. First, I will examine companies that have previously expressed interest in entering the anti-obesity market.

Novartis stated: “The company is working on next-generation obesity treatments that are still in preclinical development. These innovative drugs aim to provide preclinical benefits, such as longer-acting agents through biologics or siRNAs, which could provide dosing and tolerability advantages or the ability for muscle sparing.”

This is noteworthy, as VKTX could align with this profile given its high efficacy, potentially enabling significantly reduced dosing. However, Novartis is likely referring to drugs that are more favorable for muscle maintenance. I will categorize this list into tiers 1 through 3, with tier 1 representing the most likely acquirers. I will also provide explanations for each categorization.

Tier 1

1. Eli Lilly, along with Novo Nordisk, is frequently mentioned as a potential acquirer. Previously, I considered an acquisition unlikely, given Eli Lilly’s existing GLP-1/GIP dual agonist. However, with Orfoglipron lagging behind the Wegovy pill, an acquisition now appears more plausible.

2. Novo Nordisk has already acquired Akero Therapeutics, which possesses a GLP-1 asset, and is developing its own effective oral pill. I continue to classify Novo Nordisk as Tier 1 due to the impending patent cliff the company faces.

3. Sanofi could be a potential acquirer, as it does not currently develop its own anti-obesity drug. Although Sanofi offers a GLP-1 diabetes drug, it lacks a weight-loss drug after the cancellation of its previous candidate due to psychiatric safety concerns. While an acquisition could align with the company’s overall strategy, Sanofi may instead prioritize the commercial success of its diabetes drug.

4. As previously discussed, Pfizer still faces significant development milestones, with ten Phase III clinical trials remaining for its drug candidate PF-08653944. I consider an acquisition by Pfizer unlikely unless these trials fail. The company’s substantial R&D expenditure may indicate urgency, which could ultimately lead to an acquisition to enter the market. Moreover, Pfizer is particularly interesting because its revenue growth has declined from 14% in Jun 2025 to 1.4% in Mar 2026. This might push them into a situation where an acquisition seems like a way out. However, cash of 13 billion USD might already be a bit low if you are thinking about acquiring Viking Therapeutics.

Tier 2

1. AbbVie has a single indication for obesity, which remains in Phase I. The acquisition potential of this asset depends significantly on the outcome of this early-stage trial. This asset is part of a licensing agreement with Danish biotech company Gubra. AbbVie and Gubra have announced a collaboration to develop an amylin analog for the treatment of obesity. The agreement allows for the integration of GUB014295, an amylin analog discovered and developed by Gubra, into AbbVie’s global infrastructure (ABBV-295). Amylin is a hormone secreted by pancreatic beta cells that plays a critical role in energy balance and glucose homeostasis. As a satiety signal, it activates neural pathways to suppress appetite and reduce food intake.

2. Gilead Sciences possesses substantial financial resources and has demonstrated interest in the obesity sector, as evidenced by its Phase I study of a GLP-1R agonist (GS-4571). Should this study fail, Gilead may seek to acquire another company to avoid restarting its program, which would otherwise delay market entry.

3. Merck is engaged in a licensing agreement for HS-10535. This drug remains in the preclinical stage with limited publicly available information. Preclinical is placed in the same category as Gilead. HS-10535 is a small-molecule drug, similar to the asset developed by Structure Therapeutics, which may indicate potential for a future deal if HS-10535 does not progress successfully.

4. Amgen is unlikely to acquire Viking Therapeutics, particularly because it already possesses MariTide. Acquiring Viking Therapeutics would render previous development expenditures on MariTide redundant.

5. Bristol Myers Squibb (BMY) is positioned as a potential acquirer; however, the CEO has stated that “Bristol Myers Squibb is hoping to build on the core therapeutic areas it knows well.” This statement suggests limited interest in expanding into new areas. Additionally, initiating an acquisition of a company such as Viking Therapeutics carries significant risk. Recent Acquisitions include Linck Cell Therapies (Oncology), and Orbital Therapeutics (RNA therapeutics platform)

6. GSK is an interesting company with both the income and cash to acquire a company like Viking Therapeutics. They are currently expanding into oncology and immunology; their attention might be somewhere else. Some of their recent acquisitions include 35Pharma (Pulmonary Hypertension & Musculoskeletal disorders) and RAPT Therapeutics (Immunology).

7. Johnson & Johnson has expressed interest, but it would require developing a different asset. In my assessment, this level of interest justifies classifying the company as Tier 2. The problem with Johnson & Johnson is that it seems the company is fiercely focused on immunology, oncology, and neurology.

8. Roche seems likely to be an Acquirer because of its presence in metabolic diseases through acquisitions. Their acquisition of Carmot might block them from making another move. If that asset fails, an acquisition seems likely. Their cash position is strong as well, and the company has many Phase II assets, which could cause a steep falloff and potentially spike acquisition interest. It also looks like the company has been losing patents since 2016.

9. AstraZeneca is currently developing an anti-obesity drug called ECC5004 or AZD5004. This drug is advancing into Phase III; thus, the chance of an acquisition is pretty low. The weight-loss efficacy was questionable compared to the diabetes efficacy, so I would go so far as to say that the company might be a more likely acquirer.

10. Novartis is another giant that has a metabolic program and thus seems like a fairly likely acquirer.

Tier 3

1. Vertex Therapeutics presents a distinct case. Although the company has focused on diabetes, most past acquisitions have targeted a cure for diabetes rather than expanding its market. An acquisition of Vertex appears unlikely but remains possible. The company is particularly relevant in discussions concerning Eledon Pharmaceuticals.

2. Bayer, I wanted to take Bayer in here, because I think not many people talk about the company as a potential acquirer. It is a huge company, but they are currently facing their own issues, with a high debt load and relatively low cash (for a VKTX acquisition) of 7.6 billion USD as of March 2026.

Conclusion

It is really hard to pinpoint potential acquirers of Viking Therapeutics. The issue is that many companies with a fitting portfolio already have assets in the Anti-Obesity Market, so as long as no one else threatens to buy them, it makes no sense for many of them to make the first move. Before someone makes the first move, those assets would likely have to fail first.

The price of Viking Therapeutics would likely be high due to its large market cap and rapidly growing market, which already cuts out many companies with unfavorable financial profiles.

On the other hand, there is extreme interest in this market; for example, Pfizer is spending massive amounts on R&D to get. timely piece of it.

Not investment advice

Subscribe now

Share

NTLA utilizes CRISPR gene editing and other core technologies. The company’s most advanced asset is currently awaiting Biologics License Application (BLA) approval. This asset is a treatment for Hereditary Angioedema (HAE), a rare genetic disorder characterized by painful and unpredictable episodes of severe swelling in the face, limbs, airways, and organs.

CRISPR, which stands for Clustered Regularly Interspaced Short Palindromic Repeats, is a gene-editing technology that enables scientists to modify DNA sequences. This technology functions as a precise tool for editing genetic code, thereby facilitating the treatment of genetic diseases.

Subscribe now

Section 1: Pipeline

Each indication will be examined in detail below. Broadly, Intellia is conducting one independent trial (Lonvo-z), two trials for Nex-z in partnership with Regeneron, in which 25% of the trial costs and commercial profits are shared, as well as managing two fully outlicensed assets and several early-stage assets.

Evaluation of NTLA should consider the potential peak sales of Lonvo-z and Nex-z, as well as licensing revenue from the two outsourced drugs. Insufficient information is currently available to value the remaining programs.

Lonvo-z (HAE)

Diesease

Hereditary Angioedema (HAE) is a genetic disorder characterized by a deficiency or dysfunction of the C1 inhibitor protein, resulting in an imbalance of the kallikrein-kinin system and excessive bradykinin production. Current treatments for HAE primarily address symptoms rather than the underlying cause. Approximately 50% of patients experience a laryngeal attack during their lifetime, and lifelong medication is typically required.

MoA

Lonvo-z is the first investigational therapy designed to target the KLKB1 gene, thereby reducing kallikrein production at its source. It is being developed as a one-time intravenous infusion for administration in an outpatient setting.

Lonvo-z demonstrated the potential to eliminate hereditary angioedema (HAE) attacks and reduce the need for ongoing therapy in most patients. This efficacy is supported by a favorable safety profile.

The following graphs present data from the phase 1/2 clinical study.

The efficacy of Lonvo-z is demonstrably superior to that of the placebo. The following table presents the Treatment-Related Adverse Events (TEAEs).

Peak-Sales/PoS

An analysis of the market reveals that while several drugs demonstrate comparable efficacy and safety, Lonvo-z distinguishes itself as the only permanent cure, rather than a treatment requiring lifelong administration. This unique characteristic complicates the process of accurately valuing the drug.

Lonvo-z is scheduled for launch in the first half of 2027. The global hereditary angioedema therapeutics market is estimated at USD 3.60 billion in 2025 and is projected to reach USD 8.18 billion by 2033, reflecting a compound annual growth rate (CAGR) of 10.43% from 2026 to 2033.

As Lonvo-z is a one-time cure, it is anticipated to be administered as a single treatment. Approximately 160 new cases of hereditary angioedema (HAE) are diagnosed annually in the United States, and when combined with Europe, this figure rises to around 350 cases per year. Due to the one-time nature of the treatment, there is no recurring revenue from patient groups. The lifetime cost of HAE treatment typically ranges from USD 10 million to USD 20 million or more.

Pricing remains the most significant variable. The key consideration is the amount patients or payers are willing to pay upfront to avoid ongoing lifetime costs. The drug’s value can be estimated using a 60-year annuity formula, assuming a USD 10 million lifetime cost at a 3% discount rate, resulting in an approximate one-time payment of USD 4.5 million. However, this figure is likely to be reduced through negotiations with insurance companies and the implementation of payback agreements for potential treatment failures, given the novelty of the drug. Adjusting for these factors, an average price of approximately USD 170-200 million per treatment is estimated, which would yield peak US sales of USD 300 million and eventual global peak sales of USD 500-600 million. The probability of success (PoS) is valued at the average Biologics License Application (BLA) approval rate of 90%.

Nex-z (ATTR)

Disease

Transthyretin amyloidosis (ATTR) is a rare and progressive disease characterized by the accumulation of abnormal misfolded proteins, known as amyloids, within organs and tissues. These amyloid deposits increase cardiac stiffness and cause nerve damage, resulting in heart failure, sensory deficits, and multi-organ dysfunction.

MoA

Nex-z acts on the TTR gene to decrease the production of TTR protein at the genetic level.

Peak-Sales/PoS

Both patient groups demonstrated favorable responses to the drug. In the Phase 1 study, no treatment discontinuations were reported. The ongoing Phase III MAGNITUDE (ATTR-CM) trial is assessing the drug for pivotal approval in a 2:1 randomized, placebo-controlled design, with a composite endpoint of cardiovascular-related mortality and cardiovascular-related events. In parallel, the MAGNITUDE-2 (ATTRv-PN) trial employs a 1:1 randomization and focuses on neurological outcomes, with primary endpoints including change from baseline in Norfolk QOL-DN, modified body mass index (mBMI), serum transthyretin (TTR), and absolute serum TTR at month 18.

The probability of success (PoS) for Nex-z is relatively straightforward to estimate, as both indications share the same underlying pathology, though clinical manifestations differ between cardiac and hepatic involvement. For this analysis, two separate PoS values of 75% each are applied, reflecting the strong efficacy data observed in both the MAGNITUDE trials and earlier clinical phases.

Similar to Lonvo-z, Nex-z is administered as a one-time treatment, which precludes evaluation of peak sales solely as a market share. The average lifetime cost for transthyretin amyloidosis (ATTR) treatment ranges from $1.5 million to over $3 million. For modeling purposes, a midpoint estimate of $2 million is used, acknowledging that insurance providers may negotiate lower prices, although their leverage may be limited due to the scarcity of available treatments and the high mortality associated with the disease.

This estimate serves as a baseline, considering the potential for increased diagnosis rates and the nascent stage of the market. These assumptions yield a projected peak sales figure of 21.7 billion USD. After applying a 25% discount to account for the Regeneron partnership, the adjusted peak sales estimate is 16.3 billion USD.

Patient dosing is expected to conclude in the second half of 2026, resulting in a projected readout in the first half of 2028, consistent with the timeline for the nerve trial (ATTRv-NP).

The Cardiomyopathy trial, due to its larger scale, is anticipated to require a longer duration, with results expected around mid-2028.

Other Assets

Given that the remaining assets are either in early development or have been outlicensed, I will address them collectively in this chapter.

The Hemophilia B program is associated with $320 million in milestone payments and projected peak sales of $1.5 billion. However, these revenues will likely accrue to NTLA as tiered royalties. While this is a significant opportunity, the drug remains in Phase 1/2, resulting in a substantial probability of success (PoS) discount. Therefore, I will not include this asset in my analysis.

The AvenCell agreement is notable because NTLA holds a 33% equity stake in AvenCell, with the potential to convert this into a 50% cost and 50% profit-sharing arrangement at a later stage. Despite this potential, the asset is currently in Phase 1/2. Consequently, I will also exclude it from this analysis.

Section 2: Financials

As of March 31, 2026, cash, cash equivalents, and marketable securities totaled $517.2 million, compared to $605.1 million as of December 31, 2025. In April 2026, the company completed an underwritten public offering of common stock, generating approximately $207 million in gross proceeds. Existing cash resources are projected to fund operations at least into 2028 and extend beyond the anticipated U.S. commercial launch of Lonvo-z for HAE in the first half of 2027. This cash guidance does not include potential revenue.

Collaboration revenue totaled $15.0 million.

Research and development (R&D) expenses totaled $80.7 million for the first quarter of 2026, compared to $108.4 million for the same period in 2025. This decrease was primarily attributable to reduced costs for research materials and contracted services, as well as lower employee-related expenses and stock-based compensation. Stock-based compensation included in R&D expenses was $7.6 million for the first quarter of 2026.

General and administrative (G&A) expenses totaled $34.8 million for the first quarter of 2026, compared to $29.0 million for the same period in 2025. The increase was primarily due to the continued expansion of commercial infrastructure and higher legal expenses, partially offset by reduced stock-based compensation. Stock-based compensation included in G&A expenses was $5.9 million for the first quarter of 2026.

The current cash position is sufficient to support a product launch extending into 2028, beginning in the first half of 2027. Given the highly competitive market, additional capital may be required to fund marketing efforts necessary for successful drug commercialization.

Regarding potential dilution, estimates indicate that, depending on revenue growth, NTLA may experience an additional 20 to 40 percent dilution to secure funding for the initiation of Lonvo-z commercialization. For Nex-z, the extent of dilution will depend on the company’s market capitalization following trial results and the ease of market penetration.

Section 3: Management

Application of the algorithm results in a management score of 7.6 out of 10, positioning the company at the upper end of the scale, with a corresponding discount rate of 5%. This adjustment is relevant for the Pluto Value calculation, but not for the discounted cash flow (DCF) analysis.

This multiplier is designed to account for the significant influence that management can exert on a company’s performance.

Section 4: Valuation

The discounted cash flow (DCF) analysis values NTLA at approximately 230% above the current share price. This valuation would be higher if not for the recent increase in interest rates, which necessitated a higher weighted average cost of capital (WACC). Despite the increased WACC, the outcome remains favorable compared to peer companies. The primary catalysts for NTLA are developments related to the Nex-z study, as this study is expected to have the greatest impact on projected peak sales.

Keep in mind that we are in a chaotic situation right now, which will do whatever it wants with this stock until we get closer to the next catalysts.

Section 5: Pluto Value

The Pluto value for this company is 11.08x, placing it within the same range as Viking Therapeutics. This comparatively low value is attributed to potential funding challenges the company may encounter. It remains to be determined how the market capitalization will change once the company secures full funding.

Section 6: Risks and Caveats

The biggest risk was in the MAGNITUDE trials, which were paused. Nex-z uses Lipid Nanoparticles (LNPs), which enter directly into the bloodstream, making the liver a good target for editing but also exposing it to a large metabolic load. The trial was paused because a patient experienced severe Grade 4 liver transaminase elevations and passed away. The trial continued, but this still remains a hurdle to overcome.

The current market environment also poses a substantial risk. Rising interest rates and increased volatility can exert significant downward pressure on biotechnology stocks, potentially hindering NTLA’s ability to secure necessary funding. This risk may be mitigated if existing cash reserves extend into 2028 and market conditions improve.

Subscribe now

Please consider subscribing. It’s free, and you will receive updates to new and more articles.

Section 1: Industry Overview, Trends, and Segmentation

The global oncology drugs market was valued at USD 256.46 billion in 2025. Projections indicate growth from USD 286.36 billion in 2026 to USD 697.59 billion by 2034, representing a compound annual growth rate (CAGR) of 11.77% during the forecast period. Oncology represents the largest therapeutic market for pharmaceutical manufacturers.

Oncology products currently dominate the global drug development pipeline, comprising approximately 38% of all drugs in development. In 2025, North America accounted for 45% of the oncology drugs market.

Growth in the oncology drugs market is further driven by advances in biomarker development. Immunotherapy biomarkers demonstrate significant potential for facilitating early cancer diagnosis.

The oncology drugs market can be segmented by distribution channels and therapy types, such as immunotherapy and chemotherapy. For the purposes of this analysis, segmentation by indication is employed to provide a drug-focused perspective.

Breast and lung cancer represent the largest market segments, followed by prostate, colorectal, and stomach cancer. Ovarian and pancreatic cancer are separated from the “others” category to highlight their relevance to VSTM. The graph demonstrates the high degree of market segmentation, as the “others” category accounts for approximately twice the market share of the largest individual segment. Further segmentation is possible; for instance, the lung cancer segment can be divided into Small Cell Lung Cancer (SCLC), which is challenging to treat, and Non-Small Cell Lung Cancer (NSCLC), which offers more treatment options. These categories can be further subdivided based on specific genetic mutations.

Another important distinction is that 90% of cancers are classified as solid tumors. Pharmaceutical companies often conduct trials across multiple solid tumor types to identify which cancers respond to a particular drug; these are known as Basket Trials or Tissue-Agnostic Trials. The remaining 10% of tumors are liquid tumors, typically involving the bloodstream, lymphatic system, and bone marrow.

The FDA employs immediately measurable endpoints for fast-track approval, and the heightened public concern regarding cancer has contributed to a regulatory environment more permissive toward cancer drugs. As a result, 85% of drugs utilizing the FDA’s accelerated approval pathway are indicated for cancer.

This section presents the most complex aspects of the analysis.

Subscribe now

Section 2: Threat of New Entrants

Similar to the process described in the GLP-1 article, the commercialization of a cancer drug typically necessitates either prolonged, costly, and uncertain clinical trials or expensive acquisitions, both of which may involve significant uncertainty and extended periods to recover the investment.

Multiple factors influence market dynamics, and once a drug demonstrates strong efficacy, its adoption tends to be rapid. Market leaders frequently capture the majority of market share. For instance, Keytruda and Opdivo together accounted for 80% of the global checkpoint inhibitor market by 2021 (IQVIA, 2022).

The following section presents an analysis of the costs associated with developing an oncology drug.

Failed assets encompass the funding allocated to unsuccessful trials relative to each successful trial. Additionally, the duration required to complete these trials is considerable. Progression from Investigational New Drug (IND) application to Phase III may require up to 13 years. Following regulatory approval, an asset may require an additional 2 to 5 years to achieve profitability.

The standard launch curve of a clinical asset is presented below. Typically, drug adoption follows an S-shaped trajectory.

No further explanation is required because this practice is widely recognized as standard in both oncology and the broader pharmaceutical industry.

Large pharmaceutical companies nearing a patent cliff frequently acquire smaller assets. These acquisitions are typically associated with high premiums, as illustrated below:

Section 3: Supplier Price Setting Power

The cancer drug market demonstrates significant pricing power. In the United States, Germany, and Switzerland, cancer medications are priced at nearly three times the cost of other pharmaceuticals. This substantial cancer premium cannot be attributed solely to higher mortality rates or superior drug efficacy. Instead, the disease's associated fear contributes to this pricing disparity.

The degree of pricing power held by pharmaceutical companies varies considerably across countries. In the United States, companies have substantial autonomy in setting drug prices. In Germany, firms may set prices freely for the first year after a drug’s introduction, after which prices are adjusted based on the drug’s therapeutic value. In Switzerland, the Federal Office of Public Health negotiates drug prices with manufacturers upon market entry.

The question arises as to why cancer drugs remain more expensive even in highly regulated markets.

1. Drugs targeting smaller population groups, or niche markets, typically command higher prices within these monopolistic environments.

2. Additionally, the dread effect and fear associated with cancer, as previously discussed, further contribute to elevated pricing.

These interacting factors foster a social and political environment that enables the acceptance of the so-called cancer premium.

Section 4: Threat of Substitute Industries

Similar to trends observed in other markets, generic manufacturers may enter the market with low-cost drugs following patent expiration.

Beyond the established competition from generic drugs, the market for alternative cancer treatments is expanding. This sector is valued at USD 15.65 billion in 2024 and is projected to reach USD 26.94 billion by 2030, representing a compound annual growth rate (CAGR) of 9.62%. Globally, approximately 22% of oncology patients use herbal medicines, with prevalence ranging from 17–21% in North America and Europe to as high as 40% in Africa.

Increasing physical activity may counteract growth in this market. The chart below shows the percentage of adults aged 18 and older who reported no leisure-time physical activity from 1997 to 2022.

Alaina H. Shreves et al. report an inverse association between increased physical activity and reduced cancer risk. The subsequent graph illustrates these findings.

Increased physical activity is generally inversely associated with cancer incidence, as demonstrated by the hazard ratio. The implications of this finding for the cancer therapeutics market depend on the adoption rate of physical activity within the general population and the expansion rate of the cancer drug market to address additional indications. These factors may counterbalance potential reductions in the total addressable market resulting from improved cancer prevention.

This finding highlights the significant impact of lifestyle modifications, such as increased physical activity, on cancer risk reduction.

Engagement in regular physical activity reduces cancer risk.

Section 5: Rivalry Among Existing Competitors

Identifying the competitive dynamics among current market participants is a complex task that requires a systematic, stepwise analysis.

Based on the initial graph, which is organized by market size, the number of approved drugs for each cancer type was plotted. Lung cancer is more than twice as prevalent as prostate cancer, which may be attributed to the presence of numerous distinct mutations.

Cancer types with substantial market share also tend to exhibit higher market share per approved drug, which increases their attractiveness to pharmaceutical companies. The analysis includes drugs that are not currently in use, encompassing chemotherapy and radiation therapy. Nevertheless, this provides a valuable overview of the market landscape.

The data presented indicate that competition within the lung cancer drug market is intense.

In the high-mutation segment, new drugs are frequently introduced, rendering older drugs or broader treatments partially obsolete. The substantial number of available drugs contributes to elevated acquisition premiums. Major pharmaceutical companies compete aggressively for market share, as the lung cancer drug market is the largest segment of the industry.

This competitive environment places significant pressure on smaller companies, as increased competition raises marketing costs for independently launched drugs. Additionally, the likelihood of bidding wars for smaller acquisitions intensifies, enabling larger firms to expand their pipelines and address impending patent expirations. As previously noted, such bidding wars can result in acquisition premiums for oncology companies exceeding 150%.

Conclusion

The oncology sector is characterized by rapid innovation and intense competition. Due to significant barriers to entry, only the most resilient companies persist. Emerging biotechnology firms must determine whether to pursue acquisition opportunities or compete independently against established pharmaceutical corporations.

IBRX, CHRS, and VSTM each face pivotal strategic decisions. Although these companies are relatively small, with IBRX demonstrating the strongest performance, all three have an approved drug and maintain operational independence.

• IBRX appears committed to independent operation and ongoing innovation as a specialized oncology company. Its current drug, Anktiva, has experienced rapid adoption, and the company is likely pursuing additional Biologics License Application (BLA) approvals. Competition from larger firms does not appear to significantly impact IBRX. While earnings exceeded revenue expectations, earnings per share (EPS) fell short.

• CHRS was projected to achieve approximately 14 million USD in revenue this quarter, aligning with both my own estimates and broader analyst expectations. This level of growth would have enabled the company to continue self-funding its ongoing clinical trials. However, actual revenue stagnated at 12.3 million USD, suggesting that profitability may be delayed or unattainable at the current growth rate. The CEO’s optimistic projections, which I previously critiqued, now appear overstated. Consequently, CHRS should be regarded primarily as a clinical-stage asset rather than an imminent source of profitability.

• VSTM faces comparable challenges, having struggled to achieve significant revenue growth this quarter. Slow adoption by physicians, due to a limited patient population within relevant treatment lines, contributed to this outcome. The company replaced its former Chief Commercial Officer (CCO) with an individual experienced in launching early-stage assets.

Overall, I observed that in Q1, the biotech sector significantly undershot expectations for the assets I have covered.

Additionally, I am evaluating CGON, a company in the cancer market that I have previously analyzed in the context of bladder cancer. The company is entirely institutionally owned and remains in the clinical stage. Its mature pipeline, lacking early-stage assets, indicates a likely intention to pursue a sale.

The final company I wish to highlight is RVMD, which is positioned similarly to CGON.

RVMD has demonstrated remarkable year-to-date growth, attributable to its potential to improve outcomes across multiple cancer types. Its approach is reminiscent of KOD, a retinal disease company with a pipeline dedicated to new indications. Unlike companies seeking acquisition, RVMD appears committed to driving innovation, as evidenced by its recent 2.2 billion USD capital raise.

Given the crowded nature of this market, I believe that management quality should be weighted heavily in investment decisions. Effective leadership is essential, particularly when management can objectively evaluate their assets against competitors and make difficult decisions. Teams must possess a clear understanding of their results and maintain disciplined cash management. While exceptions exist, overall, navigating this sector remains challenging.

Subscribe for complimentary updates and ongoing insights into developments within the healthcare market.

Subscribe now

This is not financial advice.

Section 1: Industry Overview, Trends, and Segmentation

The anti-obesity drug industry is currently valued at about USD 79 billion. According to Morgan Stanley, the market could reach USD 240 billion by 2035 in the bull case and USD 150-190 billion in the base case, a USD 40 billion increase over the previous 2025 estimate. Grand View Research projects a compound annual growth rate (CAGR) of 31.66% from 2024 to 2030.

In 2023, North America accounted for 37.67% of global revenue. The World Obesity Atlas 2022 predicts a significant increase in global obesity rates, estimating that by 2030, approximately 1 billion individuals worldwide will be living with obesity. This trend is expected to place substantial pressure on national healthcare systems.

International markets, especially Brazil and China, are likely to expand rapidly as generics improve affordability. Increased adoption of GLP-1 therapies may reduce spending on discretionary food categories while encouraging shifts in consumer behavior, such as more spending on fitness and higher-quality dining.

The market faces increasing regulatory scrutiny, requiring careful benefit-risk evaluation, focus on safety profiles, and long-term efficacy studies. New drugs must show effective weight loss, maintain a favorable safety profile, and meet rigorous regulatory requirements. ← This is just long for “you need to conduct clinical trials”.

The market can be segmented in the following ways:

1. Prescription drugs and over-the-counter (OTC) drugs

   1. Prescription drugs represent the larger segment. Many patients using prescribed weight loss medications lose 10% or more of their body weight during treatment.

   2. OTC drugs, also known as over-the-counter drugs, have also demonstrated steady growth.

2. Retail Pharmacies/Online Pharmacies

   1. By distribution channel, the retail pharmacies segment held the largest market share in 2024.

   2. By distribution channel, the e-commerce segment is projected to be the fastest-growing in the market during the forecast period. This is especially important for companies like Amazon and Hims.

Because there are not enough approved drugs yet, you cannot really distinguish between oral and subcutaneous forms. However, it is important to note that the introduction of the oral version of Wegovy sparked a market uprising. The graph below from IQVIA shows how the market for Wegovy accelerated after the oral formulation became available.

Section 2: Threat of New Entrants

Entry into the prescription drug market is particularly challenging, as it demands significant expertise, specialized knowledge, substantial research and development (R&D) expenditures, selling, general, and administrative (SG&A) expenses, and considerable time for drug development. Mergers and acquisitions (M&A) represent an alternative entry strategy for large firms; however, these transactions often involve acquiring smaller companies that might have been able to enter the market independently.

As a result of these factors, new entrants are relatively uncommon but continue to pose a potential threat. In drug development, superior products are typically favored by customers. Within the GLP-1 segment, high dropout rates indicate that drugs with greater tolerability are especially preferred by patients.

The threat posed by new entrants in the distribution segment is also low, as entry requires economies of scale. Margins on drug sales are often thin, while fixed costs can be extremely high. According to a Fox News report, Zan Armentrout, a local pharmacy Operations Manager, stated that as drug prices increase, insurance companies and pharmacy benefit managers (PBMs) will only reimburse the amounts specified in pre-existing contracts. This unwillingness of insurers to pay is an issue for retail pharmacies, while online pharmacies tend to prioritize inventory for existing customers and use strict BMI requirements, or telehealth companies like Hims sidestep this issue completely by not accepting insurance.

In addition to economies of scale, regulatory requirements further increase barriers to entry. Cold supply chains and specialized logistics are necessary and contribute to the aforementioned high fixed costs. This challenge applies to both online and local pharmacies, although online pharmacies may more readily achieve economies of scale.

The specific unit economics for Amazon Pharmacy, Hims, and other telehealth platforms remain to be determined. The ability to process large volumes of high-demand, low-margin products may improve economic viability. However, for companies such as Hims, transitioning from a compounding to a partnership model could significantly alter their economic structure.

Section 3: Supplier Price Setting Power

The GLP-1 and broader pharmaceutical industry is characterized by high research and development costs and limited patent durations, leading companies to price their drugs at the upper limit of market tolerance.

Increased competition from Eli Lilly’s Tirzepatide has prompted Novo Nordisk to plan a price reduction in January 2027. This decision may also be influenced by regulatory guidelines associated with the Centers for Medicare & Medicaid Services (CMS) initiatives and the concurrent introduction of the BALANCE model.

The program aims to increase patient access to GLP-1-based weight-loss drugs. Previously, Medicare was prohibited by law from covering medications prescribed specifically for weight loss. However, in 13 states, coverage has been available for FDA-approved indications, including obesity.

Manufacturers have agreed to supply Wegovy and Zepbound (Semaglutide and Tirzepatide) at a price of $245, with pharmacies collecting a $50 copay from patients. The wholesale acquisition cost (WAC) of a drug, minus the beneficiary copay, plus a dispensing fee and applicable sales tax, determines the net price. Manufacturers are required to reimburse CMS for the difference between the WAC and the negotiated $245 net price.

This arrangement has two primary effects. First, it expands the potential reach of these drugs across all 50 states through Medicaid. Second, it restricts manufacturers’ pricing flexibility for patients covered under this program. Additionally, the program may improve pharmacy profit margins. Notably, Hims does not accept Medicaid, as it operates on a cash-pay model, whereas Amazon Pharmacy does accept Medicaid.

Generally, drug manufacturers possess greater bargaining power, although this advantage diminishes as competition increases. Conversely, pharmacies may experience increased bargaining power through participation in the Medicaid program, whereas their leverage remains limited outside of it.

The impact on telehealth companies such as Hims remains uncertain, as their customer base is estimated to have an annual income between $75,000 and $150,000. In contrast, Medicaid eligibility typically requires enrollees to have an income at or below 133% to 138% of the Federal Poverty Level (FPL), which equates to approximately $21,220 per year.

The program is scheduled to conclude in December 2031.

Section 4: Threat of Substitute Industries

A significant advantage of GLP-1 drugs is their ability to offer an accessible solution for weight loss, as individuals often prefer the path of least resistance. Many people struggle to lose weight due to persistent cravings or overeating, and achieving weight loss typically requires considerable discipline. GLP-1 drugs can mitigate these challenges by reducing the reliance on self-control.

In summary, manufacturers currently face minimal threat of substitution for GLP-1 drugs.

An emerging trend in the pharmacy sector is the increasing popularity of online options for GLP-1 drugs, which are often associated with social stigma. Companies such as Hims and Amazon Pharmacy exemplify this shift. Telehealth services may experience substantial growth due to the discretion and convenience offered by online ordering. However, the long-term viability of the Hims subscription model in comparison to Amazon’s online pharmacy remains uncertain.

Nonetheless, the distribution segment fights more among itself than with other sectors.

Section 5: Rivalry Among Existing Competitors

The competition among drug manufacturers is intense; however, prescription data from Fierce Pharma suggests that the pharmaceutical market is sufficiently large for multiple drugs to experience simultaneous sales growth.

The graph below shows the growth of the two approved GLP-1 pills.

Novo Nordisk’s main compound patent will expire in 2031, potentially opening the market to generic manufacturers and resulting in an influx of lower-cost Semaglutide alternatives. In this scenario, the ease of switching to generics will likely depend on price sensitivity, as these drugs are primarily used for weight management rather than as life-saving treatments. Both patients and healthcare providers may weigh the incremental benefit of an additional 5% weight loss per year against the drug's cost and safety profile (the numbers are provided as an arbitrary example). Conversely, if a company such as Viking Therapeutics can reduce the required treatment duration through superior efficacy, this would represent a significant competitive advantage.

The following section outlines the key companies currently producing or developing weight management drugs.

Currently approved drugs include the following:

1. Tirzepatide, a subcutaneous drug from Eli Lilly, marketed as Zepbound.

2. Semaglutide, available in both subcutaneous and oral formulations from Novo Nordisk, is widely known as Ozempic for type 2 diabetes and as Wegovy for weight management.

3. Orforglipron, marketed under the name Foundayo. This is Eli Lilly’s oral version, as they didn’t use their Tirzpatede but rather a small-molecule non-peptide GLP-1 drug.

It is important to understand that although Orforglipron’s efficacy and safety are inferior, its advantage is that it is a small-molecule drug. This makes it more stable than peptide-based drugs, which require taking the pill with no more than 4 oz of water on an empty stomach every morning.

In the graph below, you can see a comparison of the efficacy of the above-named approved drugs. Since the trials ran at different times, all data points are normalized to a 10-week window. The second chart shows the absolute numbers if you are curious.

Drugs currently in development include:

1. CagriSema, currently in Phase III studies with Novo Nordisk, was initially expected to achieve significant results by combining Semaglutide and Amylin in a dual-agonist model. However, clinical trials demonstrated that patients experienced 23.6%–25.5% weight loss with Tirzepatide compared to 20.2%–23% with CagriSema after 84 weeks. Commercialization is still expected by the end of 2027.

2. Retatrutide, Eli Lilly’s latest triple agonist targeting GLP-1, GIP, and glucagon receptors, is currently in Phase III trials and is expected to reach commercialization between late 2026 and early 2028. The drug demonstrated substantial weight loss of approximately 27% of total body mass, although the trial reported a 20% dropout rate due to side effects.

3. Survodutide, a dual agonist targeting glucagon and GLP-1, is under development by Boehringer Ingelheim and Zealand Pharma. Ongoing Phase III SYNCHRONIZE trials have demonstrated significant weight loss of up to 16.6%–19%. Commercialization is expected between 2027 and 2028. As you might see in the graph below, the dropout rate was extreme. The Phase III study to be read out in June will show if a slower escalation successfully brought that dropout rate down to competitive levels. The main advantage of this drug also lies in its MASH indication.

4. VK2735 in trial for both oral and subcutaneous has the highest efficacy by a landslide, but still needs to clear some tolerability issues. Commercial by late 2027 to 2028.

The comparative performance of these drugs is illustrated in the following graphical analysis. Importantly, the VK2735 study duration was only 13 weeks, compared with 68 weeks, the next lowest duration for Retatrutide.

There are more drugs in the pipeline from other big players that might change the market, but clinical trials for obesity drugs take a long time. For example, Novo Nordisk has another drug, Zenagamtide, in the early stages of a phase III study, but as you can see, most of these trials are evaluated over 60-70 weeks, so Zenagamtide's commercialization is not expected until 2029.

Other companies that are currently starting Phase III studies are:

• Amgen’s MariTide

• Pfizer tried to launch an oral version but discontinued it due to safety concerns. With its new Subquantatious drug, it is struggling to achieve efficacy above 12% over 28 weeks, and is starting 10+ phase III trials, although the injections are weekly to monthly, which is an advantage for PF-08653944. The extreme Phase III studies show how desperately big players want a piece of this market, as trials can cost 20-100USD M.

• Roche by acquiring Carmot Therapeutics

• Regeneron has a strong drug and positive results in China, but is initiating trials in the US. Their goal is to combine their therapy with muscle-preserving antibodies such as trevogrumab and garetosmab, which showed promising Phase II interim results.

The distribution segment is currently less competitive in the GLP-1 market, as the market is just getting started; it remains to be seen how Hims, with its membership model, can hold up against a really cheap Amazon Pharmacy. Furthermore, it remains to be seen how retail pharmacies will fare against online pharmacies and telehealth companies.

Also, companies like Hims have a different system from Amazon Pharmacy and retail pharmacies, so they serve different patient groups.

Conclusion

As you can see, VK2736 is the most efficacious, especially for the Subquantatious, version, 11% in 10 weeks vs. 4% Reta by Lilly. It goes without saying that if you are looking for a pure-play investment, VKTX is likely the best solution, though the oral version needs some clearance given its dropout rate.

This solution could be to use the 60/80 mg dose, which had a more manageable dropout rate while maintaining competitive efficacy. A slower ramp-up period or different dosing might help the drug address its tolerability concerns; also, a less frequent dosing schedule could address this while being more convenient for patients. We can expect some clearance on this from the current maintenance trial, with data to be released in Q3 2026.

What’s also significant for VKTX is that it’s the most advanced pure-play anti-obesity company, making it a natural target for M&A. The even better part? No offer has been made yet. You might ask why. Well, it’s because once the offer comes, it’s likely too late to buy the stock. Getting into the GLP-1 market is difficult. It takes years to complete trials, so big players acquire biotechs that have little leverage because they need funding.

The twist: VKTX is funded through 2026, with a Q3 data release on the way, allowing it to patch the little extra cash it needs. Thus, this leverage works in VKTX’s favor, and the CEO, Brian Lian, knows it. There is always the chance that he wants to go it alone, but he can, so big players are forced to play a large hand. If they don't do it, there is a chance they might be late to the market.

Many things might prevent them from bidding, such as fear of a bidding war. Difficulty proposing a bid to the shareholders that would be an outrageous valuation compared to the actual share price, especially at the current risk profile. Or just the price itself might be too high for some companies. It’s hard to predict what will happen, but if the maintenance trial is successful, the valuation will follow.

If some people new to biotech investment read this, you also need to consider that there is approximately a 60% chance these trials will fail, which would cause any investment to fall significantly. This is still true for the companies I am going to discuss next, but the losses could be offset by their other assets.

Furthermore, I think both Eli Lilly and Novo Nordisk hold strong positions in the market and will likely continue to grow. Eli Lilly will likely grow with its Tirzepatide and later Retatrutide for subcutaneous use, while Novo Nordisk has a clear advantage with its Oral Wegovy, as well as a currently troubling valuation at a P/E of 12x-13x. The low current P/E ratio makes Novo Nordisk a particularly interesting case in this market. I expect the market to significantly adjust Novo Nordisk’s stock price if the Wegovy sales continue to rise.

The market is still comparatively young and rapidly expanding, allowing entrants to be the first companies to reach customers. Entering later could significantly increase marketing expenses.

Ultimately, if I were more risk-averse, I would look for Novo Nordisk, as the Oral pill could see major growth, and the. I would then reassess this position until the beginning of next year, and the Medicaid coverage and the accompanying price cut might follow. If we have more information and this coverage enables price discrimination, I would keep the investment.

The big advantage of telehealth companies is their ability to be discreet and convenient. They might also allow more patients who do not meet the BMI requirement, but these companies often require only a waiver signed by the patient. Furthermore, this interplay of informational mismatching could double the litigation risk from normal pharmacies to telehealth companies.

I would be wary of telehealth companies, not because they are bad, but because the litigation risk is higher, and changes to the healthcare system could affect this newer segment.

If you think a telehealth company is good, you can still invest in it, but I would always keep this risk in mind. Of course, there are also risks for the drug producers, but often their drugs are already proven to be working through extensive trials and an established system.

I gave you the data; now it is your turn to decide on an investment, if you want. This article is not investment advice.

I hope I covered all you expected to hear, if not, please comment or request another article.

Please consider subscribing, as it helps me out a lot!

Subscribe now

Beyond its approved drug for Low-Grade Serous Ovarian Cancer, Verastem has additional pipeline treatments targeting Low-Grade Serous Ovarian Cancer, Pancreatic Cancer, Non-Small Cell Lung Cancer, and Colorectal Cancer.

The company’s current market cap is around $500 million, which puts the significance of the $1 billion+ peak sales for its approved drug into perspective.

1. The pipeline, Trials, PoS analysis & peak sales

2. The Cash Position/Revenue Development

3. A Management Analysis

4. The Valuation

5. The Pluto Value

Subscribe now

Alright, let’s get into it!

1. The Pipeline, etc.

In this chapter, I will present each pipeline item and explain the corresponding PoS and Peak-Sales assumptions. This will clarify the assumptions used in the DCF valuation below.

RAMP-201

The clinical trial has been completed, and AVMAPKI FAKZYNJA CO-PACK received accelerated approval from the U.S. Food and Drug Administration (FDA) in 2025.

Data presented at IGCS 2025:

ORR

• The study showed a confirmed ORR by BICR of 31%

• Among patients with KRAS-mutated LGSOC, the confirmed ORR was 44%

• Among patients with KRAS wild-type LGSOC, the confirmed ORR was 17%

mDOR

• The median duration of response (“mDOR”) was 31.1 months.

DCR

• The disease control rate (“DCR”) at six or more months was 61% in the total evaluable population.

• 70% in the KRAS mutant population

• 50% in the KRAS wild-type population

Let’s consider these data points from a different perspective.

A study reported a 22% chemotherapy response rate. In comparison, VSTM’s drug achieved a 31% overall response rate, representing a notable improvement.

The drug is already approved, with long-term trials still ongoing.

• Peak Sales: 1B USD

RAMP-301

Due to the accelerated approval of AVMAPKI FAKZYNJA CO-PACK, completion of this clinical trial is required. The investigational drug will be compared with chemotherapy and hormonal therapy.

63% of drugs in confirmatory trials still achieve regulatory approval. I will adjust the peak-sales value above by this number.

RAMP-205

This study aims to enter the pancreatic cancer market through a combination therapy of Avutometinib and Defactinib.

• Phase 1b/2a study

• Evaluate the safety, tolerability, and efficacy of the combination at different doses and schedules to determine the recommended RP2D (Phase 2 dosing)

• Received the first “Therapeutic Accelerator Award” from Pancreatic Cancer Network (“PanCAN”) for up to $3.8 million for this study in May 2025

• In the update, DL1 (the selected dose) demonstrated a confirmed ORR of 83%

• Update in H1 2026

The following table presents the objective response rates (ORRs) for all standard-of-care (SoC) companies compared with chemotherapy and Avu plus Defa as RAMP.

This strong efficacy gives me confidence in its PoS:

• PoS: 70%

• PoS to approval: 38%

• Peak Sales: 1.4B

The peak sales figure is based on projected market growth to approximately 11 billion by 2035, using a standard formula to calculate market share relative to competitors.

VS-7375 Mono

The drug is designed to target both Non-Small Cell Lung Cancer (NSCLC) and metastatic Pancreatic Ductal Adenocarcinoma (mPDAC) as a monotherapy. The present study evaluates the safety and efficacy of VS-7375 in patients with previously treated, advanced KRAS G12D-mutant solid tumors. The monotherapy arm includes:

• Licensed VS-7375 from GenFleet Therapeutics

• Granted Fast Track Designation

  • For the first-line (“1L”) treatment of patients with KRAS G12D-mutated locally advanced or metastatic PDAC

  • KRAS G12D-mutated locally advanced or metastatic PDAC patients who have received at least one prior line of standard systemic therapy.

• Based on preclinical data, VS-7375 offers dual, potent inhibition of both ON and OFF states of KRAS G12D.

• Interim Data 1H2026

Although the data are still early, the results are exciting, with the ORR nearly twice that of Chemo.

Here, I’m using standard PoS numbers because the trial is so early.

• PoS: 45%

• PoS to approval: 12%

• Peak-Sales: 1.25B for NSCLC; 250M for mPDAC; 230M for CRC

It was hard to derive these numbers. What’s important is that I am dividing peak sales between the mono-arm and the combination-therapy arm.

VS-7375 Combi

This arm of the VS-7375 study explores how the treatment works alongside other standard therapies. Unlike previous arms, it also focuses on Colorectal Cancer. The trial aims to assess the effects of VS-7375 both on its own and when paired with cetuximab in patients with advanced colorectal cancer.

In my analysis, I used the same PoS and Peak Sales as in the mono trial.

The VS-7375 trials are aiming to gain new ground specifically for this KRAS mutation.

Pipeline Conclusion

The total peaks could exceed 6.5B non-risk-adjusted. This pipeline targets segments with high need and low competition, especially in cancer. Below is a bar chart showing which assets have the highest peak sales and their share.

2. The Cash Position/Revenue Development

This chapter dives into VSTM’s financial standing, starting with a revealing graph that tells its own story.

If Verastem continues to grow at this pace, the company could soon reach profitability and sustain itself without additional funding.

The one factor that could shift this outlook is the potential for 600 million in licensing payments, unlocked if VS-7375 progresses in its clinical trials.

VSTM not needing to raise more money is a major advantage.

3. Management

I awarded management a 9.3 out of 10, a notably high score based on their track record, focus on the company, and other key metrics, viewed through the lens of Jim Collins’ Good to Great.

The coinciding management discounting factor is 2%

4. Valuation

That is what makes Verastem stand out as truly remarkable.

The company’s fair value lands around 38 USD per share, which translates into a staggering 600 percent gain over where the stock trades today.

So, what explains this massive gap?

The 1L mPDAC market still needs to expand dramatically to reach that level, and VS-7375, despite a 12 percent probability of success in my estimate, is so early in its journey that financial institutions have barely modeled its peak sales.

For example, without VS-7375, Verastem’s fair price is closer to 25 USD, which is still much higher than the current price. In this scenario, it depends entirely on the Pancreatic Cancer market growing, which needs proof, since investors hate risk.

Below, you can see the company’s fair value relative to its current price.

Another factor limiting both the share price and fair value is that their next drug for Pancreatic Cancer is still in Phase II, which is difficult to advance.

If Verastem advances this drug into Phase III, the fair value would be around USD 45, a 750% increase from the current price. The actual price would likely fall between that and 10 USD, reflecting the same discount to fair value as now.

Verastem’s greatest advantage lies in the potential for its revenue to accelerate quickly enough to justify its valuation, narrowing the gap between fair value and the actual stock price.

These sky-high figures hinge almost entirely on the unpredictable world of regulatory approval and the transparency that comes with it.

5. Pluto Value

Inspired by my account’s namesake, I coined the term Pluto Value for the metric I use to gauge my investments. This time marks a new record as Verastem has the highest Pluto Value yet: 16.95x over a six-year holding period.

Conclusion

Verastem is rated as a going concern, yet surging revenue could cover expenses and delay the need for additional capital.

In turbulent markets, when risky stocks depend on fleeting optimism, real revenue becomes a prized asset. Healthcare stocks, for example, weathered the dot-com bubble with minimal losses. While pre-revenue companies often scramble for funding, Verastem may have enough cash on hand to fuel its own growth and trials.

By the way, look at the IT sector: 77% loss across the sector. I didn’t know it was that bad.

Also, please consider subscribing. I love doing this and appreciate any form of support.

To paint a clear picture, I will dive into the following key questions:

1. What’s the exact Mechanism of Action of VKTX, and how does it differ from Zepbound, Ozempic, etc.?

2. (Quick) performance comparison.

3. How is the trial built up, and what are the primary and secondary endpoints?

4. What is the Possibility of Success of this trial? What is the market size?

5. How will a successful maintenance trial add value to the company?

If biotech companies spark your curiosity, consider following me for more insights. If you are still on the fence, perhaps this article will win you over.

Subscribe now

1. Mechanism of Action of VKTX, and how does it differ from Zepbound, Ozempic, etc. (for obesity)?

Up next, I’ll explore how drugs from Eli Lilly, Novo Nordisk, and Viking Therapeutics work. If you’re curious about how they stack up, stay tuned for part 2.

If the mechanisms of action aren’t your thing, feel free to skip ahead to the final topic in this chapter.

Ozempic, Wegovy (NVO)

Let’s begin with Ozempic. Each new generation of these drugs stacks on another antagonist, but since Ozempic led the way, it starts with just one. Also called semaglutide, Ozempic teams up with Glucagon-like peptide-1 (GLP-1), mimicking the version your body naturally makes. After you eat, GLP-1 steps in to curb your appetite and slow your digestion, though that slowdown can cause trouble for some. → Common complaints around this type of drug are nausea and vomiting.

Mounjaro, Zepbound (LLY)

Since Eli Lilly’s drug is a dual antagonist drug that uses both GLP-1 and GIP, this section should really be about GIP.

Eli Lilly’s dual-antagonist drug combines GLP-1, like Novo Nordisk’s treatment, with another powerful component: GIP, which brings a new dimension to its therapeutic approach.

From the source: “The GIP hormone was originally discovered as a peptide that could inhibit gastric acid secretion and protect the small intestine from acid damage.”

Let’s talk about what this hormone actually does. Like GLP-1, GIP is released as your body digests food and helps trigger insulin secretion. Both are known as primary incretin hormones. GIP teams up with islet cells, which produce insulin. I’m mentioning this partly as a reminder to myself, since I covered islet cells in my ELDN analysis. If you’re curious about the possibilities of pig-to-human transplants or new treatments for type 1 diabetes, you might want to check that out.

How do GLP-1 and GIP work together? —> “(Tirzepatide) mimics both GIP and GLP-1 receptor agonists. By doing so, it alerts the pancreas to stop releasing insulin after you eat and decreases glucagon secretion, which slows down digestion and helps you feel fuller for longer.”

LLY stands out by choosing a unique compound for its oral medication: Orforglipron, which belongs to the GLP-1 drug class, so no GIP in its oral version.

Viking Therapeutics (VK2735)

VK2735, like Tirzepatide, is a dual antagonist drug targeting both GLP-1 and GIP. What sets it apart is its innovative side-chain architecture and strategic linker placement, which work together to extend its half-life.

The Key Differences

Staying true to the title, I want to lay this out clearly. VK2735 stands apart from Ozempic and Semaglutide because it acts as a dual agonist, targeting both GLP-1 and GIP instead of just GLP-1. Compared to Tirzepatide or LLY’s drug, VK2735 is unique in its delivery method and its precise amino acid sequence, though those details remain under wraps for now.

2. Performance

Safety

Condensing all this data into one neat number proved challenging, so instead of focusing on the precise figures, think of these numbers as painting a broader trend.

Let’s start with the bad news. VK2735 stands out for its higher dropout rate, which is worrisome since the FDA will have to balance the promise of extra weight loss against the risk of more side effects.

I am going to use a graph from their investor presentation to talk a little bit about this.

If you look at the graph above, you will notice that dosing sheds some light on the dropout rates, though it does not shift the overall picture as dramatically as ELDN did. Still, a few important details stand out. For instance, it appears that higher dosages are behind a larger share of severe side effects, particularly vomiting, which may be a key reason why participants dropped out.

Since I tend to think visually, I gathered the data and brought it to life in the bar charts below.

As I scanned these charts, I was surprised by how high the adverse event rates were for both the treatment and the placebo. It was particularly surprising to see that 40% of people on the placebo reported nausea, and 10% even experienced vomiting. Since the placebo is meant to be neutral, I decided to compare it to a study by Eli Lilly that I found on the National Library of Medicine’s website. The table can be found below:

The referenced study evaluated Tirzepatide (LLY) over 12 weeks in patients with diabetes. Although the primary focus was on this patient population, the data on drug-related side effects remain relevant for comparative analysis. The study limited the maximum dose of Tirzepatide to 15 mg, enabling a more direct comparison of adverse events. Notably, the incidence of nausea was 7% in the placebo group compared to 40% in the Tirzepatide group. The data points are referenced below.

In conclusion, VK2735 appears to have a less favorable safety profile; however, the second Viking Therapeutics study also demonstrated poorer side-effect outcomes than in its initial trial and other studies in the field. Notably, the placebo group from the Viking Therapeutics study had worse outcomes than Eli Lilly’s treatment arm, raising questions about whether the observed performance loss was attributable to the drug itself or to external factors. Although the precise cause remains unclear, this comparison suggests that VK2735’s reported poor tolerability should be interpreted with caution.

A comprehensive assessment of VK2735’s side effects would require a direct comparative trial with agents such as Tirzepatide or Semaglutide. Additionally, increasing expectations of nausea associated with weight loss drugs may influence the reported incidence of side effects among patients.

Efficacy

VK2735 demonstrates significant efficacy in this context. The following analysis utilizes study data, with all results normalized to a 10-week timeframe for comparison.

VK2735 demonstrates a clear advantage in efficacy. The accompanying graph provides compelling visual evidence of this finding.

Another graph from the VKTX investor presentation, while contributing minimally to the efficacy model, offers additional context regarding the distribution of weight loss. The data indicate that greater weight loss occurs during the initial weeks of treatment.

3. Maintenance Trial

I initially underestimated the relevance of this trial. However, upon further review, I now recognize that it may significantly influence the company’s share price. First, the study could address the safety concerns discussed in the previous chapter. Second, it has the potential to reframe the use of weight loss drugs, allowing patients to maintain their weight during a maintenance phase. This outcome could extend the lifetime value of Viking Therapeutics’ products.

VKTX has announced the completion of patient enrollment in this exploratory maintenance dosing study of VK2735. Data is expected in Q3 2026.

The website provides the following brief description of the study: “The maintenance dosing study is a Phase 1, randomized, double-blind, placebo-controlled trial designed to evaluate various dosing regimens, following initial weight loss achieved with weekly VK2735 treatment. The trial enrolled approximately 180 adults with BMI ≥30 kg/m2 but who are otherwise healthy.“

Patients receive VK2735 for 19 weeks. Following this initial treatment period, participants transition to various VK2735 maintenance dosing regimens, which include weekly, every-other-week, or monthly subcutaneous dosing, as well as daily or weekly oral dosing, or placebo.

Monthly subcutaneous dosing and weekly oral dosing may represent a significant advantage for the future of Viking Therapeutics. The demonstrated efficacy is substantial, and these dosing regimens could address patient dropout rates by reducing the intensity of side effects associated with lower or less frequent dosing. Additionally, these approaches may offer a convenience advantage over competitors and improve patient adherence due to less frequent administration.

“Exploratory endpoints are assessing change in body weight from baseline, as well as change in body weight from Week 19 to the end of the study at Week 31.”

This study may enable Viking Therapeutics to monitor patients over the long term in order to prevent weight regain following treatment.

4. PoS/Market

PoS

Because this is a phase I study, there is no regulatory pass or fail outcome. The primary focus is on the data Viking Therapeutics anticipates from this study and the associated cost-benefit analysis of initiating a phase II trial.

Given that VK2735 shares the same mechanism of action (MoA) as Tirzepatide, results from previously conducted Tirzepatide studies may provide insight into potential outcomes.

The SURMOUNT-4 Randomized Clinical Trial, sponsored by Eli Lilly (LLY), primarily investigated outcomes following discontinuation of the drug. In contrast, the VKTX trial focuses on optimizing and transitioning patients to a lower interval or dose after achieving the target weight. The SURMOUNT-4 study demonstrated that participants who continued treatment experienced further weight loss, whereas those who received a placebo regained weight.

The primary distinction between these trials is that VKTX intends to adjust the dosage following initial treatment to maintain weight, rather than assessing whether participants would regain weight.

Given that the dosing in the Eli Lilly study was 10 or 15 mg and the observed weight loss was lower than initially expected, it is likely that the VKTX study will yield positive results. On average, 50% to 70% of drugs advance from phase I to phase II. Considering VKTX’s progress in advanced trials, a probability of success (PoS) of 75% is proposed for this analysis.

Market

Given that the drug is intended to transition from the initial VKTX treatment to a permanent, lower-dose regimen, I evaluate the treatment as an extension of the oral and subcutaneous peak sales. This approach anticipates lower annual revenue distributed over a longer period, with revenue naturally increasing as VKTX adoption grows. Based on my assumptions about VK2735 peak sales, I estimate peak sales at 6 billion USD and assign a total probability of success (PoS) from phase I through approval of 20%.

5. Value Added

I estimate the fair value of VKTX at approximately USD 180 per share. This figure exceeds the Yahoo Finance high of 125 USD and is significantly above the current price of 33 USD. As noted in my previous analyses, this discrepancy likely results from the market assigning a higher risk discount than warranted and from rating institutions potentially excluding the maintenance trial from their assessments, given its early stage.

Considering the potential impact of positive Q3 results, adjusting the probability of success (PoS) to reflect the derisking from favorable outcomes would increase the fair value estimate for VKTX to USD 197 per share. While this represents only a 10% increase in fair value, I believe such results could serve as a catalyst, prompting the market price to converge toward the fair value as additional data strengthens investor confidence in the drug’s overall performance.

This study may also address outstanding efficacy and safety questions by implementing a protocol in which participants transition to a lower dose after the initial period. Such an approach could reduce discontinuation rates and further enhance confidence in the drug.

Pluto Value

If you are new here, let me introduce you to my Pluto Value, a unique rating system that weighs a company’s risk, time value, and the length of time you plan to hold the stock. In this article, the Pluto Value leaps to 10.8x, an eye-popping figure for a company of this size, and that is without even factoring in some of the wild sales projections making the rounds. With a 7-year holding period, investing in a portfolio of companies with this Pluto Value could multiply your investment by 10.8 times over that period.

This value does not account for M&A.

Subscribe now

Pipeline

CG Oncology’s pipeline is focused solely on bladder cancer, as shown below. The pipeline is comparatively advanced, meaning they have focused on taking the current trials to market rather than creating new ones.

If you are curious about the specifics, keep reading below; if you are more interested in the general valuation, you should jump to the management section.

BOND-003 Cohort C & P

Long-term data expected in 2026 and

This is a Phase 3, open-label, single-arm trial designed to evaluate Cretostimogene in patients with NMIBC who have failed prior BCG therapy. ← This is essentially the same indication as for ImmunityBio (IBRX), so the companies are head-on competitors here.

I don’t want to extend this too far, so let’s get to the gist of it. There are two Cohorts: Cohort C and Cohort P.

1. Cohort C - CIS:

   • closed to enrollment

   • All Countries

   • 115 CIS bladder cancer patients

   • With or without HG Ta or HG T1 papillary disease

   • Patients will have had to fail prior BCG therapy, which is defined as having persistent or recurrent disease within 12 months #

   • GOAL: Determine the Complete Response rate at any time in patients with BCG-unresponsive CIS with or without concomitant HG Ta/T1 papillary disease.

2. Cohort P - Papillary-only:

   • Open to enrollment

   • Japan and the United States Only

   • Was added to enroll up to 70 patients with HG Ta/T1 papillary bladder cancer

   • The target number of patients enrolled in Cohort P was later increased to 75

   • Patients will have had to fail prior BCG therapy, which is defined as having persistent or recurrent disease within 6 months

   • GOAL: Determine high-grade EFS of cretostimogene in patients with BCG-unresponsive HG Ta/T1 papillary disease without CIS.Ta/T1 papillary disease without CIS

Cohort C and Cohort P will be analyzed and reported separately.

Current data Cohort C:

CR: 75.5%

Median DoR: of 27.9 months

TRAE > 3 = Severe side effects that may require hospitalization and significant medical intervention.

Biologics License Application (BLA) initiated in Q4 2025 and expected to be completed in 2026 for cohort C, while cohort P will likely take another half to a full year.

• Peak sales cohort C → 800M USD

• Peak sales cohort P → 1B USD

• Total PoS cohort C → 95% (BLA)

• Total PoS cohort C → 54%

Intermediate-Risk NMIBC PIVOT-006

Data expected in the first half of 2026.

Will Creto improve the recurrence-free survival?

The tumor will be removed first, then treatment with Creto will be administered. The expedited timeline is due to the rapid enrollment of study participants across over 90 sites. The PIVOT-006 study compares adjuvant intravesical cretostimogene grenadenorepvec versus surveillance following bladder tumor removal in more than 360 patients with intermediate-risk non-muscle invasive bladder cancer (IR NMIBC).

There are no current FDA-approved treatments for adjuvant IR NMIBC

This indication is actually one of the broader ones, carrying a lot of the peak sales potential. I have calculated a potential peak sales of 1.5B for this indication.

• Peak sales cohort P → 1.5B USD

• Total PoS cohort C → 54%

CORE-008 Cohort A, B, CX

A phase II study. From the FDA site:

1. Cohort A

   • Data in: 2H 2026

   • 125 participants

   • high-risk high-grade non-muscle invasive bladder cancer (NMIBC)

   • naïve to Bacillus Calmette-Guerin (BCG) treatment

   • randomized 1:1 to receive cretostimogene via the current (Arm 1) or an alternative instillation procedure (Arm 2).

2. Cohort B

   • Data in: 2026

   • 150 participants

   • High-risk, high-grade NMIBC

   • Previously exposed to BCG treatment

   • Participants with CIS-containing pathology at baseline will be recruited into Arm 1, and participants with papillary-only pathology at baseline will be recruited into Arm 2

3. Cohort CX

   • Data in: 1H 2026

   • 50 participants

   • High-risk high-grade NMIBC

   • Previously exposed to or is unresponsive to BCG treatment

   • 1:1 to receive cretostimogene and gemcitabine either concurrently or sequentially

• Peak sales cohort A → 375M USD

• Peak sales cohort B → 375M USD

• Peak sales cohort CX → 750M USD

• Total PoS cohort A → 24%

• Total PoS cohort B → 24%

• Total PoS cohort CX → 24%

CORE-001

This trial was more of a proof of concept for the combination of Creto with other drugs, for investors and potential partners. CGON is currently focusing on other trials.

Assessing the Pipeline

After looking at the pipeline, one can truly understand how niche it is. This has both some benefits and risks. On one hand, I like a company that knows what it’s doing and doesn’t complicate things, as Jim Collins said in his book: “Good to Great.” On the other hand, in biotech, missing a single trial could seriously hurt the pipeline, since the indications are relatively close.

Let’s revisit the IBRX comparison. I compared them because Anktiva is in competition with Creto in bladder cancer, but aside from that, CGON is fully invested in bladder cancer rather than other cancers, so IBRX and CGON are not full competitors.

Cash

Expenses have been gradually increasing, which is normal for a company that is preparing for a commercial launch

Let’s look at some scenarios. Consider the two graphs below

What is particularly striking, in my opinion, is that the cash might be enough to support a commercial launch without further dilution, which stands in stark contrast to many companies I have researched so far.

The first graph only considers the launch of their current BOND-003 trial, with no additional trials that could increase marketing expenses. The potential revenue ramp could cause cash to recover before crossing into expenses.

The second graph shows a scenario where all trials are approved. As you can see, right when expenses spike, there is a slight dip in cash below the expense line. This would cause some dilution, likely in 2027/early 2028.

Management

With my algorithm, I rate the management 8.2/10, as in my other articles, this number considers the management’s experience, quality, and more. The management is not a 10/10 because it just hasn’t had enough time to prove itself fully, nor has CGON faced any adversity yet, which is the best stress test for any management team.

The management discount results to be 3%, which will be important for the Pluto Value later.

Valuation

Readiness Checklist:

• Do they have cash to fund their trials?

• Management < 7/10

• Potentially commercial within 1 year

• Address unmet need?

The valuation is interesting for this company, especially because the stock is held mostly by institutions (about 111.23%), which makes it efficient. What I found incredibly curious, though, was the importance of pricing in my DCF. Cancer treatment can cost from 100-200k USD in the US. For my analysis, I chose 150k for the first scenario and 200k for the second scenario. As you can see, a difference in pricing has a significant impact on the stock, which is normal in biotech but should usually be treated conservatively. I don’t think that a yearly price of less than 150k USD is likely since patented drugs often go for more, since DALYs (Disability Adjusted Life Years) for cancer are fairly high. I do think 200k as YoY cost per patient is realistic. For example, 0.4 mL Anktiva costs 35k USD and up to 1M a year. Thus, the price could be higher, but I would like to stay on the conservative side and would reassess this once CGON goes commercial.

Below is the graph showing the YoY per-patient cost at 150k. If that was the revenue they made on the addressable population they mentioned on their FY 2025 earnings, a share would be 14% overvalued.

Below is the graph showing the potential 200k YoY per-patient cost. As you can see, if this is the pricing for their Ceto, a share would be around 24% undervalued.

For simplicity, I will now keep the 150k assumption, as it covers the worst-case

Scenario of the two, while still giving an idea of the price increases in trial advancements.

Let’s look at where the stock price could go if CGON successfully brings BOND-003 to market:

As you can see, according to my DCF, even though the market cap is fairly high, trial advancement still gives a 70% price increase upon the current price.

The next catalysts are both coming in H1 2026 where results for both PIVOT-006 and CORE-008 will be released.

This price discrepance depending on the pricing of drugs, and thus the value of the company may also be why institutions are shorting the stock, while the great efficacy, and potential upside could explain why other institutions are still holding the stock.

Pluto Value

My algorithm spat out a Pluto Value of 2.13x, mostly due to the stock's already high share price and efficiency. CGON is a safer biotech stock. It has significant upside and might also be bought out soon because it looks like they just kept the current trials going without any innovation, derisking the stock, and focusing on funding them.

It is not my personal investment profile, but I understand why institutions or investors with more mature portfolios might hold it.

To provide some additional context on these Pluto Values, I will drop some comparison values of comparable companies below:

• IBRX: 8.20x

• OCS: 5.36x

• VKTX: 2.2x

• KOD: 3.36x

Sources:

BOND-003:

https://clinicaltrials.gov/study/NCT04452591#study-plan

CORE-008:

https://clinicaltrials.gov/study/NCT06567743

CORE-001:

https://ir.cgoncology.com/news-releases/news-release-details/cg-oncology-announces-nature-medicine-publication-final-results

IBRX currently faces a complex situation. While the company is experiencing rapid revenue growth, it is also contending with an FDA warning letter and a class action lawsuit that may result in significant financial liabilities.

Since the letter came in March, IBRX’s stock price has declined by 37%, raising questions about the seriousness of the lawsuit and the future profitability prospects, particularly given the possibility of a large litigation payout.

I find this case especially interesting because I just recently read “No More Tears, the Dark Secrets of Johnson & Johnson”, which is about their cover-up of the asbestos contamination of their talc-based baby powder, and the coinciding litigation.

In no way am I comparing this to IBRX’s situation, which is very different, but it sparked my interest.

Revenue Growth

This section reviews IBRX’s historical revenue growth and provides an outlook for future performance.

The first graph presents IBRX’s quarterly revenue in USD millions. The second graph illustrates the company’s cost development, also in USD millions.

Revenue appears to have increased linearly, while costs have largely remained constant, which is a significant factor for valuation. It is therefore relevant to project when IBRX could achieve profitability, excluding any litigation-related risks.

IBRX holds 80 million USD in cash and 314.88 million USD in current assets. Assessing this asset position is necessary to determine whether it is sufficient to cover ongoing losses without additional funding. IBRX’s annual losses have been decreasing, with a net loss of 256 million USD projected for 2025.

Based on the projected costs and revenue for Anktiva, and assuming current costs remain unchanged, the company faces a loss of 342.7 million USD over 2026 and 2027. This will likely require additional equity financing. Given a market cap of 7.9 billion USD, the resulting dilution for this drug would be marginal, around 1%. However, further funding may be needed if their “BCG Naive” indication is approved.

If the “BCG Naive” indication is approved, an additional 572.98 million USD will need to be raised. This amount could double if other indications, such as the Lung Cancer indication, are approved concurrently. At total costs between 500 million and 1 billion USD, the expected dilution would range from 6% to 11%.

Dilution may be lower than estimated if the market cap increases before the next approval.

Pipeline

This pipeline has a peak sales estimate of approximately 5.3 billion USD, with risk-adjusted peak sales of about 2.8 billion USD. The most advanced indications are NMIBC, CIS, and NSCLC. Peak sales are allocated as follows:

Several significant competitors exist. Although Antiva currently leads due to its extended duration, Cretostimogene by CGON is undergoing trials for bladder cancer, with data expected in 2026. The efficacy of Cretostimogene is notable and may present challenges for IBRX’s market entry. Additionally, TAR-200 demonstrates an improved Complete Response rate based on Phase II data. However, the safety profile of TAR-200 is less favorable.

The following graph compares grade III side effects and efficacy among various drugs currently in development.

Safety is defined as the incidence of treatment-related adverse events (TRAE) of grade 3 or higher.

Complete Response (CR) refers to the disappearance of all detectable signs of cancer after treatment.

The bottom line is that sales are great, but there is fierce competition as well, with Cretostimogene being a particularly dangerous competitor.

Subscribe now

Litigation

To assess their current legal situation, we should consider the following three issues.

1. How have similar cases been resolved in the past?

2. How closely does IBRX’s case resemble previous cases?

3. What are the potential worst-case outcomes for IBRX in this litigation, and how might these affect the company’s valuation?

The FDA letter

The FDA letter identified several false statements regarding their drug Anktiva. Below are selected quotes from the letter:

1. “Anktiva will allow all NMIBC patients treated with Anktiva to be cancer-free for the long term, when this has not been demonstrated.”

2. “Moreover, the claims and representations that Anktiva is a “single jab” and a “little vial…on the path to curing the cancer” misleadingly suggest that Anktiva has a treatment effect as a single agent.”…

   …”Cohort C, which evaluated Anktiva as a single agent in the same disease setting, was stopped early for futility.”

3. “we are not aware of data that support the efficacy claims and representations that Anktiva can “cure” cancer”

4. “These broad promotional claims misleadingly suggest that Anktiva has been shown to be appropriate for use in the vast majority of patients with cancer when it is only approved for use in patients with a specific type of NMIBC.”

As you can see, these are some serious misstatements, which I will largely reflect in my management discount for IBRX.

The Lawsuit

The letter from above resulted in a lawsuit from shareholders who bought the stock between January 19, 2026, and March 24, 2026. The plaintiffs are alleging that the statements made in the podcast and advertisement by IBRX were misleading. Lawsuits like this are fairly common in biotech companies; nonetheless, they are not something you would like to see.

Next steps

1. The Court will issue its order appointing lead plaintiff and counsel in the weeks following the submission deadline. (May 26, 2026)

2. Subsequently, the Court will consider the motion for class certification.

3. The Court will also address a Motion to Dismiss at a later stage.

   In similar cases, settlements are typically determined based on the price differential attributed to the alleged statements.

The blue line represents IBRX's stock price.

The share price exhibited significant volume from January to March, indicating that a substantial number of shareholders may be eligible for the settlement.

Although the exact amount remains uncertain, a litigation-related payout of between $100 million and $500 million could exert downward pressure on the share price. Nevertheless, this effect is expected to be manageable within the broader market context.

Litigation in this realm could cause a 1-5% dilution in raising the money. This dilution could be higher, depending on the payouts.

Management

This section may be the most controversial. If your primary interest is the company’s financials, please proceed to the valuation section.

I encourage this community to approach investing rationally. There are several concerns, including misleading statements. Whether these statements were intentional or not, they will factor into my discount rate for the Pluto Value.

Considering this mismanagement, I assign management a score of 4.7 out of 10 and will apply an 8% discount to the Pluto Value.

Valuation

Based on my discounted cash flow analysis, I believe IBRX remains undervalued. I estimate the current fair value at approximately 10 USD per share, representing a potential 25% return from the current price. As with similar stocks, successful completion of a clinical trial would likely result in a significant increase in share price.

Within approximately one year, if both the Lung Cancer and BCG Naive indications receive approval, the projected fair value, as illustrated in the accompanying graph, may increase further depending on clinical trial outcomes and revenue generation. This would result in a 114% gain from today’s price.

Subscribe now

Pluto Value

In this section, I apply the Pluto Value framework to incorporate non-financial risks and potential growth, rather than relying exclusively on company cash flows.

Despite the high management value, I calculated a Pluto Value of 8.2x. This represents a strong valuation, particularly given that IBRX demonstrates relative safety compared to other biotechnology firms.

The Pluto value is what you will hold discounted and risk-adjusted at the end of the holding period, which is 7 years from now.

Conclusion

Interestingly, the Pluto Value is very high for IBRX. I initially expected it to be much lower, given the current volume of discussion surrounding the stock. I exercise caution when evaluating stocks that are receiving significant attention, yet IBRX appears to possess substantive underlying value. In my assessment, this qualifies as investment grade.

The lawsuit warrants attention; however, its financial impact is minimal compared to the stock’s inherent volatility. It is advisable to withhold payment to the management team until there is demonstrable improvement in their media presence.

However, as it remains a biotech company, it is important to recognize the potential risks associated with failed clinical trials, which could significantly impact the stock’s performance. Thus, diversify.

No financial advice.

Sources

For my own orientation, I am going to add sources regarding the data for the drug efficacy. → You can use these as well if you want to double-check my work. I am a big transparent guy:

CGON Presentation 75% CR:

https://ir.cgoncology.com/static-files/beade5aa-7fb2-473a-a7f3-ba0aec234323

TAR-200 80% CR by JNJ:

https://ascopost.com/news/august-2025/new-drug-releasing-system-eliminates-bladder-cancer-in-over-80-of-patients-in-a-phase-ii-trial/

ImmunoBio IR

https://ir.immunitybio.com/

Share

Eledon’s pipeline is centred exclusively on its drug, Tegoprubart. Their development strategy is divided into two primary areas: allotransplantation (human-to-human) and xenotransplantation (animal-to-human). The company’s stated credo is “one kidney for life.”

To make the valuation more understandable, I will primarily focus on the Kidney and Islet Cell Indication

Mechanism of Action

While ELDN’s valuation is a primary focus for many stakeholders, it is essential to understand Tego’s mechanism of action (MoA) and its principal advantage over Tacro, the current Standard of Care (SoC). Tego functions as a communication inhibitor between T-cells and B-cells by binding with CD40L, a protein on the “communication arm” of T-cells that would connect to CD40, the “receptor of B-cells”, preventing T-cells from signalling the presence of a foreign body and authorising an immune response, for example, an attack against a transplanted organ. This mechanism enables the body to accept the transplanted organ.

In contrast to Tacro, Tego permits T-cells to function largely as normal, whereas Tacro paralyses these cells and permanently suppresses their activity. Additionally, Tacro is associated with systemic toxicity.

Kidney

BESTOW, the allograft trial has had 2 separate primary endpoints.

I have listed the metrics for the FDA endpoint below:

1. Biopsy Proven Acute Rejection (BPAR)

2. Graft Loss

3. Death

It is important to note that BPAR does not indicate transplant failure. Instead, it refers to the body’s immune response to the organ or treatment, similar to an asthma attack. Graft loss is measured and marked as “NO” if the kidney fails completely. Death is self-explanatory.

The second endpoint, eGFR, was introduced by ELDN also because it is an important biomarker of kidney function, but primarily for marketing purposes. eGFR assesses kidney function and, by extension, drug efficacy, eg, a high eGFR is good. While the drug did not meet expectations for eGFR, this shortfall is more relevant to marketing than to clinical performance, because, when you look at specific patient groups, the shortfall is more nuanced than the overall average eGFR. Tego’s main advantage lies in its safety profile, and additional factors provide further context for the eGFR results (explained below).

Although the eGFR score appeared lower for Tego, the study suggests that Tego may perform better in certain groups on this measure. This could lead to stronger-than-expected Phase III results and significant returns.

Kidneys vary in quality, which is measured by the KDPI score. A score below 35 indicates an excellent kidney, while a score above 35 represents a higher risk.

The graph below shows that ELDN’s group had a higher proportion of patients with high-risk kidneys than the Tacro group.

According to the investor presentation, Tego and Tacro demonstrated comparable performance across the entire group when measured by estimated glomerular filtration rate (eGFR).

:

An important consideration arises when we analyse eGFR by kidney risk groups (KDPI).

KDPI is a performance metric for transplanted kidneys. A higher KDPI score (above 35) indicates lower kidney quality, often from older donors, while a lower score (below 35) suggests higher quality, such as from younger family members. Higher quality kidneys are generally associated with higher average eGFR.

The left side of the graph shows the mean eGFR for patients with high-risk kidneys. In this group, Tego outperforms Tacro, though both perform worse than with high-quality kidneys. This difference explains the overall performance of Tego v. Tacro, as Tacro has a higher proportion of patients who received excellent kidneys.

Currently, the market perceives ELDN as the outcome of a failed study, although this characterisation is inaccurate. While eGFR did not demonstrate clear superiority over Tacro in overall results, ELDN performed comparably to Tacro and showed improved outcomes in specific subgroup analyses. This discrepancy in perception also overlooks the significant safety advantages of ELDN, which are detailed in the following section.

The only adverse event where Tego performed significantly worse was Proteinuria. Proteinuria indicates increased protein in the urine, which may suggest long-term kidney stress. However, it is important to consider the overall risk profile. For example, taking Tacro causes a risk of heart failure of approximately 4% and the risk of lifelong diabetes by about 11%.

Clinicians are likely to recognise these outcomes, and patient groups may transition to Tego without requiring extensive involvement from sales representatives, as people who experience these side effects will seek an alternative. This trial demonstrates strong results, suggesting a high probability of success for the Phase III study, which I estimate at around 60%.

For future calculations, I will use a peak sales estimate of 1.3 billion USD. This conservative figure is based on standard formulas, adjusted upward to reflect Tego’s safety benefits and its potential to reach a broader patient population due to reduced risks.

Islet Cell

(Ilet Sell pronounced - as a non-native speaker, I had to learn this the hard way)

This treatment is intended for patients with Type 1 Diabetes who have had at least two Severe Hypoglycemic Events (SHE) (this guideline could be eased in the future) and have a mean HbA1c of 8%, indicating significantly elevated blood glucose levels. In comparison, normal HbA1c levels are below 5.7%. Individuals with Type 1 Diabetes are at risk of life-threatening emergencies such as Diabetic Ketoacidosis (DKA), which occurs when insulin is depleted, leading the body to metabolise fat for energy and resulting in increased acid levels that precipitate this acute condition.

An islet transplant replaces the need for 4 to 6 daily insulin injections with intravenous administration of immunosuppressive agents such as Tego or, currently, Tacro every few weeks. This is possible by transplanting healthy islet cells that produce insulin into the patient’s liver. This approach is particularly advantageous because missing an insulin injection can result in immediate and potentially fatal consequences.

Currently, I see two possible scenarios for ELDN. Either Tego will be regarded as an improvement over the standard of care, or, in a more bullish scenario, as a potential treatment for type 1 diabetes.

Eleven of 12 patients who have participated in the study for at least 4 weeks have achieved insulin independence, with the remaining patient on the same trajectory. Beyond this outcome, a major benefit is Tego’s safety profile, particularly when competing with Tacro. No serious adverse events were observed.

Currently, we are awaiting ELDN’s meeting with the FDA, scheduled for mid-2026, as well as the conclusion of the ongoing University of Chicago Phase II trial. I anticipate that ELDN will file for an Investigational New Drug (IND) application toward the end of 2026 to initiate an investigator-sponsored trial.

Additionally, I recommend monitoring for a potential Breakthrough Therapy Designation, which may be announced following the mid-2026 meeting. Such a designation could significantly impact the stock price, as the market assesses the appropriate valuation given the emerging scenario.

If Tego is positioned as a curative approach for the 250k Americans who have had at least two SHEs in recent years, I project a peak sales of $1.56 billion. While this estimate is optimistic, it is realistic in a standard-of-care scenario, particularly considering developments such as Vertex’s stem cell initiatives and the Islet Act. Stem cell development is crucial to this number, so in a DCF, the peak sales need an additional discount relative to the chance that the stem cell trial passes.

The graph above shows blood glucose levels and indicates when each patient became insulin-independent.

For the Islet Cell Therapy indication, I have estimated a Phase II probability of success (PoS) of 80% and a Phase III PoS of 60%, resulting in a combined PoS of 48%. This assessment reflects two main factors: the strong efficacy and safety results, and the relatively small study size of 12 patients. We are also awaiting feedback from the FDA meeting. This is then again discounted for the Vertex stem cell trial.

If Tego for islets captures only Tacro’s market share and a portion of at-risk patients, projected peak sales would be approximately USD 210 million.

Addressing the shortage of transplantable pancreases is essential for this indication. Vertex is currently conducting a pivotal trial to seek approval for stem cell-derived islet transplants. If successful, this could significantly impact ELDN’s valuation.

Xeno Kidney

This analysis was initially considered for omission due to limited data and significant modelling challenges. Potential peak sales were estimated using the proportion of patients with 98–100% Calculated Panel Reactive Antibodies (cPRA), which is 6.2%. Patients with elevated cPRA levels typically reject most or all transplanted kidneys, making them candidates for xenotransplantation, where pig kidneys are genetically modified to prevent immune rejection. Additionally, some patients may switch from the kidney waitlist to receive a xenotransplant. Based on these factors, projected peak sales are approximately 1.5 billion USD six years post-approval.

While demand and potential for xenotransplantation are significant, the associated drug is still in early development. As a result, a conservative probability of success of 7% is applied to reflect the multiple development phases ahead.

Cash

In my assessment, the cash runway is straightforward. I project that their available funds will extend into the second quarter of 2027, which aligns with the management’s views. However, I anticipate that operating expenses may increase more significantly in late 2026 due to rising costs of Phase III trials. ELDN will likely need to secure additional capital before releasing new trial results. Considering upcoming events and the initiation of Phase III trials following FDA approval, I expect an increase in market capitalisation could facilitate ELDN’s capital-raising efforts.

Management

According to my algorithm, management currently scores 8.8 out of 10, reflecting strong performance. This score is expected to improve as additional management decisions are evaluated. The CEO demonstrates a strong commitment to the company, resulting in a management discount of only 1%.

Valuation

As my analysis indicates, ELDN appears significantly undervalued. I believe the market’s reaction to the eGFR results was overly negative; the perceived failure is less substantial than it may seem. Notably, Tego outperformed Tacro in patients with more compromised kidneys. However, since treating severely impaired kidneys is inherently more challenging, Tego’s performance in this subgroup disproportionately affected the overall endpoint.

Based on my DCF, I estimate a share price of 14.50 USD, representing a potential 350% increase from the current market valuation of 3.3 USD. I anticipate that once there is greater clarity regarding future clinical trials, particularly if the Islet trial advances to a combined phase 2/3 or receives general guidance, the share price could move closer to this target.

Further clarity on the outlook for Islet transplantation will also depend on additional data from larger clinical trials, which may take significant time to obtain. Lookout for Vertex’s and other stem cell-derived islet trials is also mandated. If the industry can increase islet supply, ELDN will also see a strong upward correction.

Additionally, achieving the FDA endpoint for kidney transplants and obtaining long-term data on proteinuria will be critical milestones.

Finally, even at a low PoS of 7% for Xenotransplantation, it still adds significantly to the market cap, so getting more info on this part of the pipeline is crucial as well.

I estimate that equity dilution from ELDN’s future marketing fundraising could be approximately 20%. However, interim dilution may be higher and remains difficult to predict, as investor sentiment will play a significant role.

To begin the valuation section, I will examine the valuation excluding certain pipeline items.

Excluding kidney xenotransplantation, the fair share price decreases to 7.29 USD.

If either islet transplantation or allograft kidney transplantation is excluded, the share price declines to below 1 USD.

I consider this a positive outcome, as it indicates that the entire investment is not lost. Reaching a share price of 1 USD is also improbable, since this value is based on projected future cash flows. If a trial fails, another indication would likely be closer to generating these cash flows, thereby establishing a valuation floor and increasing the value of alternative indications due to the discounting factor.

These numbers are largely focused on the US but could vary significantly if they were international.

For example, the islet transplant market could peak at as much as 20 billion, and the kidney transplant market could reach as much as 2.6 billion. This would raise the fair price of ELDN closer to 35 USD, but it would also require a significant increase in marketing costs and time. I will revisit this scenario in the future.

Subscribe now

Pluto Value

In this section, I use the Pluto Value to account for non-financial risks and potential growth, rather than relying solely on company cash flows. This approach aims to predict the expected value of a well-diversified portfolio. ELDN, in particular, scores highly at 17.29x due to its relatively low market capitalisation.

Risks

The primary risks for ELDN concern funding, which is influenced by prevailing market sentiment. ELDN is often viewed critically, particularly due to a general lack of understanding regarding the significance of islet transplantation outside the type 1 diabetes community.

Furthermore, the company should possess imminent milestones, as these events typically lead to an increase in market capitalisation.

Additional risks include the possibility of unsuccessful clinical trials, particularly given the limited patient population in the islet trial. Furthermore, geopolitical events may increase the costs associated with raising capital.

Conclusion

In my view, ELDN is currently significantly undervalued by the market. Following the missed eGFR endpoint, many investors withdrew their capital, leaving the stock poised to demonstrate its potential in upcoming clinical trials. I find the potential upside compelling, particularly given the strength of the management team, which I believe is well-positioned to capitalise on future opportunities. Should ELDN succeed in disrupting both the kidney and islet markets, its valuation could change substantially.

If you have read this far, you are exactly who I want to reach. Please consider subscribing to my Substack for free to see my future valuations.

Share

There is not much to say about the cash, but it gives Viking a huge advantage because it does not need to pursue an acquisition or an unfavourable partnership. I plotted a potential cahs runway below.

Importantly, on their investor call, they said the upfront cost for the trials would be the highest, with normalisation throughout the trials; therefore, it would be enough to bring the company through the ongoing trials, including the oral trial, which started last. Thus, I expect the cash to last into Q2-Q3 202

As I mentioned above, one huge advantage of VKTX is its ability to conduct its own trials, giving it major leverage in any acquisition negotiations. Any company aiming to get a foot in the weight-loss market or to expand its portfolio needs major cash and will have to pay up.

Pipeline

The pipeline is where it gets interesting. Viking has incredibly high peak sales. I used 16B for my DCF, but estimates for their obesity drug alone range from 10B to 30B. The image below is from their latest investor presentation in March.

Obesity

Obesity is the indicator that drives those peak sales. Thus, I really wanted to conduct a deep dive into their drug safety and efficacy, and I was surprised to find VKTX's drug is this much superior. Below is a graph comparing VKTX’s drug to other weight-loss drugs:

As you can see, Viking’s drug is clearly superior. For the same reason, I used a PoS of 55% in my DCF and analyses. Another benefit of VKTX’s drug is the safety profile. Only 40% of participants had mild nausea, with no other side effects observed, which does stand in contrast with most other drugs.

The upcoming Q3 2026 release is for their Obesity/Maintenance indication. I think this is a trial that has limited upside potential, just because it is far from actually bringing commercial value to the company (Phase I). Of course, if the data is good, it will solidify VKTX’s platform and thus has potential for a price increase, although tough to quantify.

What is important to keep in mind when thinking about this trial is that it could be another gateway to more potential acquisition talks, as it is an additional derisk, and if the big pharma companies aren’t scared away by the high market cap, that’s another catalyst that could initiate some bids.

Mash

Metabolically Dysfunctional-Associated Steatohepatitis: here, VKTX has the potential to be the second drug approved for this indication. VKTX is about 50% better than its predecessor, Rezdiffra, at reducing liver fat. So, for this indication, I gave Mash a 60% PoS.

Valuation

In the DCF, I found that Viking is currently still very undervalued. This is likely due mostly to the risk premium associated with their potential inability to bring a drug to market. In the chart below, you can see VKTX’s fair value v. its actual share price.

In biotech, it can also be interesting to look at future valuation after certain milestones are reached. For example, below is a graph of VKTX’s fair value after they successfully completed their trial.

After they pass the trial, conversations about being acquired or going commercial will start again. In the case of an acquisition, especially in this case, I don’t think a 200% premium is unlikely, because the obesity market is growing pretty rapidly, with CAGRs generally ranging between 12.8% and over 30% through 2030-2035.

Now, I think the way they have handled the company until now, by fully funding the Phase III trial and in the face of their already high valuation, there is a good possibility of them actually going it alone.

In that case, I calculated they would need 2-3B USD to fund marketing, which would correspond to a one-time dilution of 8-10% at fair value. So if they do it right, this has the potential of costing more time, but on the other hand, it would probably bring higher returns ultimately. They would need approximately 2 years to reach profitability and around 4 more years to reach their current discounted peak cash flows, from the time when the drug gets commercialised, which is approximately 2 years away.

Due to the incredibly high peaks and strong management, the Pluto Value is 2,2x higher than at any other time to date.

Management

The management on my scale, which takes into account many metrics oriented toward Jim Collins’s book, Good to Great, scores 8.14/10. This corresponds to a 2% YoY discount for the management risk.

Risks

There are not many VKTX-specific risks. The most prevalent risk is trial failure, which would cause the company to bottom out at around 30 USD per share.

Also, there is a risk of new competition entering and swooping VKTX out of the market by offering the next-best drug.

Finally, from what I have seen, the funding they have at the moment looks pretty scarce. The management seems really strong, but I would keep this in mind.

Conclusion/Caveats

For this analysis, I used fairly conservative peak sales figures. If the peaksales actually get closer to 30B, the company is completely undervalued at the moment and should be closer to 400USD than the current price, but I wanted to stay on the conservative side.

If you are thinking about buying shares, you should watch for the Q3 maintenance trial and keep in mind that biotechs tend to stay below fair value until there is more security.

After a lot of ups and downs, Kodiak Sciences has seen an incredible rise.

I bought the stock two years ago, at $3.5. In this article, I want to explore KOD’s chances of further advancing its commercial prospects with its current pipeline.

I want to know how much growth remains in KOD and whether it is worth holding the shares.

Pipeline

As I have discussed above, KOD is focusing on retina treatments using their Antibody Biopolymer Conjugate (ABC) platform, meaning that every approved drug and passed trial slightly improves their overall PoS.

(Tarcocimab has been named Zenkunda)

The Q1 2026 deadline for the GLOW2 study has been met with very positive results. This puts the upcoming DAYBREAK, PEAK, and PINNACLE studies into the spotlight.

Zenkuda will see the market first of all. Since major studies have been completed, the standard PoS for DR and RVO remains 90% for the BLA filing. Only Wet AMD stays at a 60% PoS for Phase III completion. The 60% dissasembles into a 10% premium and the standard 50%, due to its proven safety compared to other drugs.

When discussing KOD and Wet AMD, it's important to mention their DAZZLE failure, which was due to inferiority to Eylea. The inferiority was due to mandatory interval stretches intended to demonstrate KOD’s superior duration, which ultimately reduced their efficacy, as patient pools that needed shorter treatment intervals were undertreated. Around 60%-70% of patients received the drug in 20-week intervals in the DAZZLE study, which speaks for Zekunda’s effectiveness; now KOD needs to get the dosing right in DAYBREAK.

In the pipeline valuation, I would cover KSI-501 as an additional 10% of Zenkuda sales, while 20% of Zenkuda sales would represent the actual patient pool. KSI-501s, PoS is around 50% because it is a first-in-class molecule.

KSI-501 will add value not only through slightly higher sales (50M-100M) but also through KOD being able to treat more patients better.

MESI and KSI-101 are also in their own unproven realm at 50% PoS. Peaksales and PoS are around USD 750M and 50%, respectively

This gives us a complete pipeline with peak sales of USD 3,04B at a total PoS of all drugs, at 12%, and spread-out PoSs, as in the graph below:

As you can see, one of KOD’s biggest strengths is the high Average PoS, which also explains the market cap at USD 2.6B (Apr. 7)

In the graph below, you can see the peak sales for each drug. Good for the company is that Zenkunda for DR, which has the highest peak sales, is already waiting for the BLA filing, leaving its PoS at 90%. (Total Peak-Sales: 3.04B)

As you can see, KOD’s pipeline includes mature drugs, but on the other hand, there are still some potential catalysts, such as Zenkuda for Wet AMD and KSI-101 MESI, which are carrying much of the valuation.

In this next section, I want to talk about how KOD can fund their drugs to commercialise or in an acquisition.

Cash

It looks like KOD’s cash position is fine until their next Q3 release. In that release, their market cap will likely soar significantly, buffering the dilution. Below, I have created a graph showing KOD’s approximate cash position, past and future, through Q4 2025, with its last capital raise in Q4 2025.

Since the CEO has repeatedly expressed interest in taking on commercialisation alone, calculating potential dilution of marketing costs becomes very important.

In my calculation, I evaluated two scenarios. One in which Wet AMD gets approved and one in which it doesn’t. This primarily affects marketing costs. When Wet AMD is approved, and Zenkuda signs the BLA as the complete platform in the pipeline, KOD will need around USD 550M to fund marketing, covering the bridge between negative and positive income. In that scenario, the market cap will be fair at USD 5.5B, given the inherent Wet AMD derisk, which occurs with a likelihood of 60% (just the PoS). The dilution in this case would be 8-10%, which is very manageable.

If Wet AMD does not get approved, the market cap. would be fair at USD 1.7B (a decrease since the 60% chance of another USD 1B pipeline drug would be eliminated, and decrease the potential future cash, thus also the current fair Equity Value), which would coincide with a dilution of 15-17% to raise around USD 300M in capital (for RVO and DR only).

I have visualised this below in a graph:

Management

In my CEO Rating, I give KOD a 9.56/10. The CEO is fully focused on the company, and he co-founded KOD himself. The corresponding yearly management discount is 0,4%, which is the lowest I have seen yet. I have strong confidence in their ability to actually run the company successfully. The management discount is important for the Pluto Value later.

Valuation

My favourite part: The DCF shows that although the price has gotten closer to the current maximum, KOD is still undervalued, which also aligns with the market potentially being on the fearful side at the moment. While the share price is currently at around USD 41.7, the DCF suggests that the fair value of KOD is closer to USD 69,69. This means the market is currently undervaluing KOD, and the investment's fair value is 67% higher than its current value. I would not bet on this gap being closed soon, though, or before the next trial, as biotechs often trade at a risk discount and will likely keep doing so until there are actual tangible cash flows that fully support the corresponding valuation, which could happen at the end of 2026 for KOD.

You can take the value above and move to the next part, or consider my Pluto Value of 3.35x; this value accounts for risk-adjusted peak sales, WACC, time to maturity, and other qualitative variables. The number is especially important for Biotech investments since we usually don’t invest in cash flows the way a DCF would, but rather in the investment's actual potential growth. Importantly, I am still optimising this number, but 3.35x to me means that KOD is worth 235% more than its current price. This growth can be translated into a broadly diversified portfolio and helps me calculate my average future portfolio value.

Another thing I like to consider when evaluating biotech companies, especially given how often they are undervalued, is when the cash actually starts coming in. In my DCF, I found that KOD could be profitable as early as 2029, leaving 3 years until the company has a real basis for proper evaluation

Risks

I think KOD is pretty thin on company-specific risks. Of course, Management has failed a trial before, but the way they handled it was very good, in my opinion.

I think the major risk remains the completion of the Wet AMD trial, as I have shown above; failure of the trial would mathematically reduce the company’s value by 35%.

Furthermore, the competition is very strong, with both Roche and Regeneron in the market, each with a multitude of resources compared to KOD.

Of course, funding is another major risk; we will have to see what the market cap and capital needs look like once the DAYBREAK trial advances.

Conclusion

I think KOD is a great company with a great future. Nothing is certain, but the management gives me confidence, as Jim Collins wrote in his book: a leader who knows his concept and is focused on building a great business rather than being a celebrity will find a way (paraphrased). It looks like KOD has most of what Jim Collins described in his book. I am sure if they manage to go commercial, they will be able to find new market gaps and create drugs to fill those.

Another thing to consider is that KOD still has major long-term upside, even if they fail the Wet AMD trial, they will end up dropping to the 26.80$ floor I talked about above, until it grows through the commercial phase, so contrary to other companies I have evaluated, a failed trial does not instantly lead to you completely losing your invested money. As I calculated above, there is a 40% chance for you to see this valuation and a 60% chance of KOD jumping to 80-90$, so:

40% chance to lose 35%

60% chance to gain +91%-119%

Of course, other events can still affect this pricing.

The company stays undervalued, and there is huge upside still to be had, for me personally it is still a buy.