This week we've initiated coverage on SUDA, a Perth-based a drug delivery company focused on oral spray formulations of existing drugs. Imagine these five things:  

First, a small pharmaceutical company with a unique platform for reformulating billion-dollar drugs for oral delivery.  

Second, that such delivery is not only safer but also much faster-acting.  

Third, that the target markets are large, including patients suffering migraine, anxiety, erectile dysfunction, nausea and malaria.  

Fourth, that a reformulated approval potentially involves months (not years) and costs a few (not hundreds of) millions.  

Fifth, that the small pharma already has its first licensing deal with a top-20 global pharma, as well as two other recent deals.  Well, the small pharma is SUDA.  

We value it at 9 cents per share base case and 25 cents per share optimistic case using a probability-weighted DCF approach. Our target price of 17 cents per share sits at around the mid-point of valuation range.


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