Ok, the ticket is RARE, Ultragenyx Pharmaceutical Inc., with a market cap of $2.6B on revenues of $717M TTM. They already have four approved drugs bringing in revenue. They are however currently unprofitable which is the issue and why they are undervalued because the market is pricing in a capital raise.
Now here’s the value proposition, in my humble opinion, what the market IS NOT PRICING IN, and thus where the opportunity lays. Two PFUDA dates approaching within the next 30 days, which based on my research, carry high probabilities that the FDA will approve these drugs based on the positive clinical trial data. These two drugs COMBINED have an estimated TAM of $400-700M. Not blockbusters, but further diversifying their revenue. These are UX111 and DTX401.
Now to the BIG ONE. GTX-102 for Angelman Syndrome with a TAM of $1.2-$1.5B currently in Phase 3 with readout expected in October or November. My research currently places about a 50% odds of approval for this as of TODAY based on the results of previous clinical trials. If the readout in Oct/Nov for the current phase 3 trial confirms previous trials then odds jump even higher.
Also, as of the latest earnings call management says they are on track for PROFITABILITY by 2027. This lowers odds of dilution or lowers odds of a massive dilution. A dilution that is less than what the market expects is positive for the stock.
So the value lays in the fact that they already have an existing revenue stream based on existing drugs. This creates a floor for the share price. The market is not pricing in their late stage pipeline at all, which I briefly explained, and is pricing in guaranteed dilution.
The competition landscape. For UX111 and DTX401 they are first movers and have ZERO COMPETITION. For GTX-102 they are currently in competition with Biogen/Ionis for Co-Standard of Care however GTX-102 shows best in class efficacy in motor/cognition. Also I have not mentioned the entirety of their pipeline but just what interests me the most.
Full disclosure: obviously I bought shares because I think the market currently isn’t valuing the late stage pipeline at all. I do think that the risk of dilution is real but is also currently priced in.