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.