The recent $12 billion acquisition of Kite Pharma, Inc. by big-pharma giant, Gilead Sciences has biotech investors hungry for the next big buyout target.
Does GT Biopharma (GTBP) have what it takes to be a billion dollar opportunity?
It’s clear that companies like Gilead don’t have any plans on slowing down their M&A trend anytime soon. In fact, in a conference call regarding its latest deal with Kite, John Milligan, Gilead’s CEO, said that the company is “quite interested in things that would augment cellular therapy.”
Therefore, many investors have started to search for “the next Kite” opportunity. What if we told you that some of the “top brass” in the biotechnology sector have made a move to join a company that, right now, is flying under the radar of larger investment firms?
Follow The Trail Of Biotech Breadcrumbs
We’re sure you’ve most likely heard of Roche, Sanofi, and Pfizer, right? How about Mylan Inc. or Aventis (acquired by Sanofi for $64 Billion)? Have you heard of Chase Pharmaceuticals, which was acquired by Allergan, PLC in 2016 in a deal that with milestones could reach $1 billion?
And did you know about the $100 million acquisition of Prestwick Pharmaceuticals by Biovail?
Here’s why we mention this: The top talent that helped build these companies, quickly take their therapies to market, and who had a hand in major acquisitions are now part of the leadership team with roles like Chief Executive Officer and Chief Medical Officer at a company that already has a pipeline of novel drug therapies.
We’re sure you have found out that Dr. Clarence-Smith has myriad success stories in the biotechnology space including being there at the time of the Chase/Allergan transaction.
As the head of CNSdevelopment at Sanofi (SNY), Hoffmann-La Roche and Otsuka (OTSKF), Dr. Clarence-Smith managed to develop, secure approval for and support the launch of a multitude of significant neurological treatments. These include Abilify® (aripiprazole), which is a $7 billion peak-year sales pharmaceutical drug used in the treatment of schizophrenia and bipolar disorder.
Add in more talent being brought on with the likes of former Pfizer CMO/Vice President and Senior Director of Oncology Research, Raymond Urbanski, as well as Dr. Thomas N. Chase, a 40-year veteran in the space; this could begin to connect the dots to what’s to come for GT Biopharma!
This is very recent too so the street most likely has only heard rumors of it until now. GT Biopharma (GTBP) announced that it had formally acquired Georgetown Translational Pharmaceuticals Inc.
This is a move that will deliver new management and a class of close-to-market Central Nervous Systems products to GT Biopharma (GTBP) . Just as an example, Georgetown’s Pain Brake, a pain-relief drug expected to be submitted to the FDA as a New Drug Application in 15 to 18 months, is their lead drug candidate.
Over $1 Billion In Market Potential
But management is just the tip of the iceberg for GT Biopharma (GTBP) as the company could stand to see potential of over $1 billion in market opportunity. A Lofty statement but according to the GT Biopharma (GTBP)’s expectations, that projection could be come a reality, and in the near term.
PainBrake: $300 Million Peak Sales
The global pain management therapeutics market is expected to expand to $83 Billion by 2024 and even a small share of this market can represent significant sales.
According to Georgetown’s data that is based on a conservative estimates, total annual peak sales for PainBrake are anticipated to reach $300 million or more. In addition to PainBrake, there are additional therapies that come with the acquisition.
GTP-004: $280 Million
These include therapies like GTP-004, which is a novel treatment for myasthenia gravis, a rare muscular disease caused by antibodies that attack certain components of muscles leading to varying degrees of weakness and fatigue. With a sale price of $2,400 per month the company anticipates annual sales in the US to reach $280 million (assuming 30% penetration of the market or roughly 13,000 patients.)
GTP-011: $300 Million
The company’s GTP-011 could anticipate that peak annual sales to reach $300 million based on its estimates. This is a treatment for motion sickness, which impacts as much as 38% of the US population alone, depending on the study you find.
GTP-011 is a repurposed version of an existing drug and was designed to be as effective as the scopolamine patch, but to have fewer side effects, especially fewer memory problems, which is particularly important in elderly patients.
That’s right, just the 3 therapies coming to the company from Georgetown could equate to $880 million. Remember, the company has stated “conservative figures”.
Dr. Clarence-Smith says the therapies brought to the merger by Oxis are higher value therapies than the three described above. This is why; right now could be the most important time to have GT Biopharma (GTBP) on your list of biotech stocks to watch.
While Georgetown has focused on Central Nervous System therapies, Oxis Biotech was developing its oncology portfolio that could, on it’s own, be north of $200 million!
Someone’s $500,000 “Oversight” Just Gave GTBP The Green Light
A recent breakthrough for the industry was made when CAR-T therapy developer, Novartis received FDA approval for its cell therapy. This is great news but it comes at a cost of nearly $500,000 for a one-time treatment.
For GT Biopharma (GTBP) , this couldn’t be a better situation and here’s why:
Unprecedented clinical success has been achieved in cancer immunotherapy using cytotoxic T cells armed with activating tumor-specific Chimeric Antigen Receptors (CARs), hence the “CAR-T”.
But the obvious elephant in the room is that jaw-dropping price in addition to the inability to be utilized on a mass scale. This is where GT Biopharma (GTBP) could be well positioned to gain a HUGE advantage.
The company’s OXS-1550 therapy is in FDA Phase 2 clinical trials right now. In fact, the first patient has begun treatment in a Food and Drug Administration-approved Phase 2 clinical trial of its promising cancer therapy. OXS-1550 has already demonstrated success in early human clinical trials in patients with relapsed/refractory B-cell lymphoma or leukemia.
And the big advantage that GT Biopharma (GTBP) has after Novartis showed their hand has everything to do with marketability and pricing. That could equate to a large opportunity for GT Biopharma (GTBP) to capitalize on. The low cost of OXS-1550 is roughly $12,000.00 per patient, which is a significant difference compared to CAR-T’s price per patient of around $500,000.
Assuming that from the 1.7 million people diagnosed with cancer in the National Cancer Institute’s 2016 study, if the OXS-1550 treatment was applied to just 1% (17,000) of that group and GT Biopharma (GTBP) charged $12,000 per treatment per person, that equates to over $200,000,000.
It’s also important to recognize that this is a drug and not a “per person engineered therapy” like CAR-T. This allows OXS -1550 to be sold to hundreds of thousands of patients per year compared to the 4 to l patients that companies like Kite and Juno can service per year…remember, Kite was just acquired for almost $12 billion and has a higher cost/less impactful therapy based on the audience size for a similar target!
The crazy part is that these 4 therapies mentioned are just part of the company’s near term pipeline. The company has additional therapies under development that could present a whole new opportunity for the company to grow from!
GT Biopharma (GTBP) has a drug therapy pipeline that could be worth over $1 billion, but investors need to really think about something when looking at GT Biopharma (GTBP) instead of the numerous other biotech companies out there: Why would some of the most experienced people within the industry like Dr. Clarence-Smith or Dr. Urbanski choose to come on board GT Biopharma (GTBP)?
The simple answer: GT Biopharma (GTBP) has something that other companies don’t and the potential to be a billion dollar company on a shorter timeline than other companies in the marketplace.
These are the questions that have biotech investors beginning to focus on GT Biopharma (GTBP) right now!
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