The focus on metabolic/lifestyle diseases is potentially a lucrative one –
Get the safety/efficacy profile and the cost/benefit ratio of a drug right in this
field and the rewards can be substantial.
Lifestyle diseases are both a serious public health threat and an economic
calamity – The threat obesity poses to modern society is well know but the
same can also be said for diabetes. While adequate treatment is available for
the latter, much remains to be achieved. In obesity, there is still all to play for.
The lifestyle drug market is very large and potentially explosive for good
drugs – We have estimated market sizes of around US$100 billion for obesity
and US$27 billion for Type 2 Diabetes in the key markets. The dynamics in
these markets are such that a drug with an incremental benefit and reasonable
cost/benefit ratio can achieve deep market penetration rapidly and benefit from
the buoyant longer term growth prospects of these markets.
Bridge’s lead candidates have the ‘right stuff’ to make significant inroads
here – Both 2-OHOA and isosteviol/STX03 are unusual in that their putative
mechanism of action affects multiple targets which seem to translate into
multiple benefits. The ability to link obesity and diabetes with hypertension,
in both cases, offers the potential, if human clinical validation holds up, of
a very disruptive market entrant.
Over the next 12 months, the focus is on human clinical validation – As ever,
Proof of Concept clinical trials (Phase I for 2-OHOA and Phase II for STX03)
will be the clinchers. The translation of currently available data to full human
safety and efficacy data seem circumstantially obvious in this case but, in the
end, the trial results will always be the clincher.
Bridge’s simple, low cost business model lowers investor risk and improves
survivability – In tough times, the ability to survive is a quintessential
ingredient for an emerging pharma company. Assuming the success of
the current round of financing, the company should be able to deliver the
PoC data required to achieve early partnerships with big pharma triggering
significant upfronts and later milestones and royalties.
Bridge’s management have been engaged in some astute dealmaking! –
The IP collected from Spain and Denmark stacks up scientifically, offers
good market protection with a confirmed freedom to operate and at a very
reasonable cost. The vendors have retained upside linked to success and
Bridge are the designated execution team to make market success a reality.
Our valuation analysis indicates that the current offering price level is
conservative and fair – In a market where public prices have plummeted, it
may seem a tall order to look for a pre money valuation of around £35 million.
Our valuation analysis indicates a fair value in the £1.02 to £1.51 range which,
when matched to a price of 80p in the last round, seems like reasonable level
to go for with significant upside left on the table for investors.
Diamond in the rough? – Bridge is an unconventional company from an
unconventional source financed in an unconventional way. However, the
experienced management team, supported by a highly qualified group of
scientific/clinical advisors, seems to be on track for what could be a very
lucrative participation in what we view as an explosively dynamic segment of
the market.
