Point Biopharma has a 51 per cent upside, says Raymond James

Raymond James published a coverage initiation of Point Biopharma Global (Point Biopharma Global Stock Quote, Charts, News, Analysts, Financials NASDAQ:PNT) on Wednesday, with analyst Rahul Sarugaser starting PNT off with an “Outperform” rating and $10.00 target price. Sarugaser said Point Biopharma has a deep pipeline of clinical programs and is catching the radiopharma sector at an inflection point.

Indianapolis-headquartered Point Biopharma, now in its third year of operation, is in the precision oncology field and is developing radiopharmaceuticals for the treatment of cancer — these are drugs that deliver radiation directly (and specifically) to cancer cells. Point’s assets include PNT2002, a PSMA-targeting drug for the treatment of late-stage prostate cancer, which is in Phase 3 trials, and PNT2003, an SSTR-targeting Phase 3 drug for treating neuroendocrine tumours.

Last month, Point announced that Lantheus Holdings will license exclusive worldwide rights to PNT2002 and PNT2003, paying a total of $260 million upfront plus milestone payments of up to $1.8 billion and royalties on net sales of 20 per cent for PNT2002 and 15 per cent for PNT2003.

“The terms of the deal affirm for us the value of POINT’s platform and maximizes value for both shareholders and patients,” said Joe McCann, CEO, in a November 14 press release. “We founded POINT to accelerate the discovery, development, and global access to life-changing radiopharmaceuticals, and with this collaboration POINT is now better positioned than ever to execute on our mission.”

Along with the two advanced assets, Sarugaser highlighted Point’s earlier-stage candidates, including PNT2004, a Phase 1 asset for the treatment of solid tumours, with first data expected during the first half of 2023, PNT2001, a PSMA-targeting preclinical asset for the treatment of prostate cancer, to be entering trials in 2023, and also a number of earlier-stage assets.

For Sarugaser, the evolution of Point from in-licensing and development to an asset-generating platform company in the radiopharma field is a key feature.

“We also focus on the capabilities of PNT’s internal radiopharmaceutical discovery capabilities, which will govern its transition from radiopharmaceutical in-licensing and development company—which fits the company’s historical profile—to a holistic radiopharmaceutical platform company,” Sarugaser wrote.

“The value of a true, end-to-end discovery, manufacturing, and development platform in this space—wherein radiopharmaceuticals could be developed at high throughput to newly address most biomarker-expressing tumors—would be, in our view, extremely high,” he said.

On valuation, Sarugaser is using the sum of three parts: the risk-adjusted net present value of estimated cash flows from PNT2002 at $635 million; the rNPV of estimated cash flows from PNT2003 at $24 million; and the value of PNT’s clinical development platform at roughly $400 million. That puts the sum of the parts value at $1.036 billion, which when divided by a fully diluted outstanding share count of 105.6 million generates a per-share value of $10.03. 

“We do note, however, that our forward estimates on a positive Phase 3 readout, and subsequent FDA approval, are $14.50/sh. and $15/sh., respectively,” Sarugaser wrote.

At press time, Sarugaser’s $10.00 target represented a projected one-year return of 51 per cent.