Arbutus is on a wild ride of late, huge volatility has come into it since Nov as the vaccines came closer to being deployed, I have done a huge amount of DD on this stock and I am very very confident of 3X min by mid 2021.
Brief outline of what is going on:
Main catalyst in the coming years is Hep B vaccine/cure that may be able to dose as little as every 12 weeks. Arbutus entering Phase trials in Q1 2021 it looks like.
Also teamed up with Assembly Bio who are in phase 2 trial with their candidate, will have results with this one sooner than their own I would imagine. These are both long prospects.
Reason for the volatility lately is that Arbutus have an ongoing patent battle with Moderna, so far Moderna are losing.
Covid vaccine has to be delivered into the cell, in order to do this the RNA has to be protected for long enough to make it from the syringe and into the cells of the body. This is done by basically by wrapping it in fat, not just any old fat though it is a combination of lipids at very specific mol percentages that allow it to work, you can read more about it here www.ipwatchdog.com/2...ne-patent/id=123802/
Arbutus owns 16% of Genevant and Roivant owns the other 84%
Genevant have sub-licenced out the 069 patented LNP to bioNtech/Pfizer for their vaccine, so far there has been no public comment on what that deal involves, I did some conservative numbers using 'best guess' figures from other agreements to figure out Arbutus' royalty
Qualifiers:
-BioNtech and Pfizer may well have agreed to split the royalty but I have not seen anything public stating they have so I have not factored it in. If they have it obviously doubles the royalty.
-I have given a figure of 10% for Genevant's cut of the sub-licence, I have very little idea of what this is and welcome anyone with insider knowledge to comment on this, I am taking what I consider to be a conservative figure, this may in fact be a lot higher, I have seen others suggest a figure of 35%?
1.3 billions doses X 20 dollars per dose = 26 billion dollar revenue
26Bn/2 = 13 billion (Biontech and Pfizer are 50/50 split on the vaccine)
Abus gets single digit royalties of sub-licensee sales or 20% of Genevant cut whichever is lowest, I am assuming a 10% share for Genevant for
13B X 3% = 380m (could be 780m)
1.3B (10% of 13Bn) x 20% = 260 milion (could be 780m)
This will probably appear as a line in a submission to the SEC at some point or might come up at a conference call in the New Year but it would be a massive catalyst if you bear in mind that current market cap of the entire company is about 300 - 350 million.
Moderna are in violation of the patent and are trying to bully Genevant and Arbutus at the moment, this may work in the short term but long term they will also owe patent royalties to ABUS of a simlar amount as Pfizer.
There is also a question over the LNP that Curevac are using but we can just leave that parked for the moment.
If and when this comes to fruition it should boost the share price to about 12 - 15 dollars. This would provide the operating cash for the Phase 2 trial and hopefully by 2022 the ATM selling by the company could stop altogether which would also boost the share price.
Looks like the share price will follow the steeper newer channel and the next major spike will be to about 6 bucks ... all in all an interesting stock
Brief outline of what is going on:
Main catalyst in the coming years is Hep B vaccine/cure that may be able to dose as little as every 12 weeks. Arbutus entering Phase trials in Q1 2021 it looks like.
Also teamed up with Assembly Bio who are in phase 2 trial with their candidate, will have results with this one sooner than their own I would imagine. These are both long prospects.
Reason for the volatility lately is that Arbutus have an ongoing patent battle with Moderna, so far Moderna are losing.
Covid vaccine has to be delivered into the cell, in order to do this the RNA has to be protected for long enough to make it from the syringe and into the cells of the body. This is done by basically by wrapping it in fat, not just any old fat though it is a combination of lipids at very specific mol percentages that allow it to work, you can read more about it here www.ipwatchdog.com/2...ne-patent/id=123802/
Arbutus owns 16% of Genevant and Roivant owns the other 84%
Genevant have sub-licenced out the 069 patented LNP to bioNtech/Pfizer for their vaccine, so far there has been no public comment on what that deal involves, I did some conservative numbers using 'best guess' figures from other agreements to figure out Arbutus' royalty
Qualifiers:
-BioNtech and Pfizer may well have agreed to split the royalty but I have not seen anything public stating they have so I have not factored it in. If they have it obviously doubles the royalty.
-I have given a figure of 10% for Genevant's cut of the sub-licence, I have very little idea of what this is and welcome anyone with insider knowledge to comment on this, I am taking what I consider to be a conservative figure, this may in fact be a lot higher, I have seen others suggest a figure of 35%?
1.3 billions doses X 20 dollars per dose = 26 billion dollar revenue
26Bn/2 = 13 billion (Biontech and Pfizer are 50/50 split on the vaccine)
Abus gets single digit royalties of sub-licensee sales or 20% of Genevant cut whichever is lowest, I am assuming a 10% share for Genevant for
13B X 3% = 380m (could be 780m)
1.3B (10% of 13Bn) x 20% = 260 milion (could be 780m)
This will probably appear as a line in a submission to the SEC at some point or might come up at a conference call in the New Year but it would be a massive catalyst if you bear in mind that current market cap of the entire company is about 300 - 350 million.
Moderna are in violation of the patent and are trying to bully Genevant and Arbutus at the moment, this may work in the short term but long term they will also owe patent royalties to ABUS of a simlar amount as Pfizer.
There is also a question over the LNP that Curevac are using but we can just leave that parked for the moment.
If and when this comes to fruition it should boost the share price to about 12 - 15 dollars. This would provide the operating cash for the Phase 2 trial and hopefully by 2022 the ATM selling by the company could stop altogether which would also boost the share price.
Looks like the share price will follow the steeper newer channel and the next major spike will be to about 6 bucks ... all in all an interesting stock
Comment:
BioNtech/Pfizer have since stated that their LNP comes from Acuitas, Arbutus used to be partnered with Acuitas many moons ago and considerable time as spent in legal action when they separated. It would be as well to disregard any royalty income from the equation as if it does come it will have to be through legal action and thus would be a long way off
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