Sometimes it takes a while before good Life Sciences companies make it to being great Life Sciences companies. Phylogica is one such company. I've been following this Perth-based drug discovery operation since its 2005 IPO and I've always been impressed with the quality of the science and of the team, particularly founder Paul Watt, a very inventive scientist. In the last couple of years it has felt to me like Phylogica is moving to the right place at the right time. Phylogica is focused on peptide drug development. Peptides are potentially very valuable as the basis for future world-leading drugs, and Phylogica has a powerful discovery engine with its Phylomer platform. Most importantly, having discovered how peptide drugs can be delivered intra-cellularly, the company is able to address hitherto ‘undruggable’ targets. This should in turn open the way for a pipeline of potential blockbuster drugs. The company has already signed collaboration agreements with AstraZeneca, Roche, Pfizer and J&J. In due course, each of these can yield substantial milestone payments (one such already received). In addition to the outsourced projects, the company also has its own three, highly-prospective, in-house programmes focused on cancer targets. Phylogica recently commissioned NDF Research to provide a third-party valuation of the company. We value Phylogica at 5.2 cents per share base case and 14.2 cents per share optimistic case. We regard 10 cents per share as a reasonable mid-range valuation for Phylogica. Check out our evaluation report at ndfresearch.com/initiation-reports.html.