Wow. What an unusual and fascinating interview. Just to be clear @Strawman I am great fan of CU6 and Alan Taylor but did not suggest the meeting. My thanks to ever did! I agree with your comments mikebrisy it pays to be both skeptical and cautious however I don't think the CU6 story is over yet by a long way.
See my meeting notes below:
Alan Taylor (AT) took it upon himself to talk more broadly about his career and investment journey and towards the end spoke more specifically about CU6.
AT indicated he had not grown up in a business or commercial environment but had to learn investing himself from a zero position. AT expressed common understanding with Strawman, its philosophy and its investing ambitions.
AT on the history of CU6: Science is about observing and measuring to understand within a range of probabilities a particular outcome. Two things exist: A scientific method and a body of knowledge.
AP as a young scientist at Garvin Institute observed the importance of discovery and the need to translate into commercialisation.
AT started concurrently with his science PHd in learning about investing, because he knew little about and saw it as very important and was not valued enough by the traditional science community.
Important to understand outcomes and probability. AT read Ben Graham - wanted to understand companies and value investing.
AP identified a key issue was the lack of information flow to shareholders. At CU6 communication is very important – a high value is placed on transparency. “Shareholders not the enemy but are your family” “The Chair has a fiduciary duty to shareholders.”
AP left science after PHd and shifted to investment banking. Wanted to put deals together.
AT started thinking about domain expertise. Goal was to “better understand the game” – value deriving from IP, barriers to entry + building data (pre-clinical and clinical). Spent 10 years in Investment banking – initially in Resources.
Sees life sciences as similar to resources model – but has own nuances. However concept the same: – low probability, high risk, low value and then build out to a higher probability and more value.
Investing from a distance when information was not there was very difficult. Saw as important companies told their stories correctly. Spoke of: “My community – shareholders and the CU6 Team”. "Relationships are most important.”
April 2013 – started at CU6. Strategies: – wanted more time with kids and to focus on translation of Australian science to the world. In Aust we do not always do this well. Cochlear and Resmed were 30 years ago and only have one CSL.
In 2013 the precursor to CU6 was TM Ventures - had provisional patents with a chelating copper technology. No employees and no cash.
Keytruded – uses the immune system to kill cancer. AT liked the idea of imaging then treating with therapy using the same molecules. Generates information as soon as you put into patient. Early information flow – get important data - critical. With CU6 from the start made sure information is transparent.
By way of CU6 explanation he said: "Radio pharma is a niche area. It is isotopes attached to biologics that hit the cancer."
Leader in radio pharma for therapy is Novartis with Pluvicto in the US - a blockbuster drug.
Other companies grabbed products that were available and commercialised. CU6 built from the ground up a prostate cancer product – developed a product the same as the competition except not Gallium or Lutetium based. Used Cu isotopes.
AT commented that 5 years ago their Cu based product was equally as bad as Novartis. However Novartis has been successful since it is better than previous technologies
With the Uni of Melbourne CU6 went to build 64Cu-SAR bisPSMA molecule for prostrate cancer treeatment.
Did with the knowledge of the inferior products the competitors had. With 64Cu-SAR bisPSMA at least twice as much finds its way into the cancer lesions. the molecule has found lesions that the competition could not find.
Cu64 has a 12 hour half life versus Gallium which has a 1 hour half life. Can image the next day. (Scoonie: have been on conference calls where this is seen by some analysts as a negative because the patient has to come back the following day for the imaging. AT as you would expect pitches this as a positive)
AT talked of 5 x greater binding to the cancer tumour than the competition: Pluvicto has high specificity but low sensitivity (about 40%) – ie mises lesions. AT rates as "terrible" but since better than nothing Pluvicto sales took off.
Clear visibility of what competitors are doing since CU6 runs its trials in parallel with competitor products.
Important question for surgeons pre prostatectomy – has the lesion escaped from the prostate or not? Ph 3 clinical trial now running to see if can better detect cancers outside the prostrate.
Other part is biotechnical recurrence – ie 1 in 2 currently treated with available therapies continue to get cancer. If can pick up the smaller lesions then better outcomes - current treatments cannot detect lesions less than about 5mm. CU6 can pick up the less than 2mm lesions
Pluvicto – monomer they did not dose optimize. Uses 7.5 GBq used of Lutecium.
Dose escalation trials were undertaken – because CU6 did want to dose high early. They got 2 – 3 time of product into the lesion – CU6 now aiming for 12 GBq dosages (up from 8).
CU6 64Cu-SAR bisPSMA results: 8 Gb all patients had psa 50% drops – a remarkable result. Got one complete response on the second dose. This patients had failed 5 – 7 lines of therapy - now patient still lives without cancer. Safety profile has been exceptional.
Now working with 12 GBq in the sickest patients – great results from a single dose. Clinicians want to provide an extra two doses – Safety Review Committee wanted this - very unusual and are now doing.
Found to be highly efficacious safe in late-stage patients because it is only the hopeless cancer cases they have been allowed to treat. AT asks: what about early stage patients?
CU6 has a radioactive platform. Currently in Ph 3 for diagnostics and Ph 2 in therapy.
Focus on one asset. CU6 have a further 10 opportunities in preclinical.
Same product for imaging and therapy. Key if the ‘cage” - has potentially very broad application.
"Investing at asset level – that is what CU6 is doing and will continue to do."
"Safety and efficacy – that is what CU6 has. Can transform this market but not limited to current prostate cancers."
“Bayesian view – prove out something gather information probability of success changed over time by doing great science.”
Competitors – big pharma and there have been many recent transactions - $4b Actinium and is a generic
Point Biopharma was bought by Liley – AT told them it will fail as was inferior product and it failed
“Cu6 - Isotopes easier to make – today ASX announcement about US supplier shores this up.”
“CU6 is investing more money in their platform since it is blockbuster - even for the diagnostic let alone the therapy.”
On the time frame for when commercialise and will be revenue generating? AT would not be drawn.
“Have been on every side of the table – about being empathetic, podcasts, announcements but do not have a focus on retail. Important to have sophisticated investment institutions on register."
"Focus: so many opportunities, CU6 is hedging bets. Focus to drive results. 64Cu-SAR bisPSMA in Ph 3 and Bombesin is a fast follower."
Radion pharma is hot sector and CU6 “is the only one left”. $130m in the bank $2.5B m/cap So can bring to clinical development. “R&D tax halves the price of doing the work when done in Australia."
"Is a no brainer– payoff is in billions. Can do very cheaply. Great model. Smartest people in the world have in the organisation.”
Who fell by the wayside in the radio pharma race? Big transactions taken place over the last year – they have been driven by strategy. Point Biopharma purchase was a strategy to compete with Pluvicto. They rushed into the development paying $1.4b and it did not work! Data just released and it is inferior to Pluvicto. AT gave further examples.
Question about foray into alpha particles: AT indicated that CU6 wanted to do things better. There is a lot of excitement around Alphas – they are higher energy. A lot of Alpha marketing going on – however AT is a little skeptical. CU6 thinking is they have the cage molecule so why not make an alpha product. Thomas Rumdalh on the Board had alpha expertise. Used to treat old men with late stage disease. Thought if market want alphas then CU6 can produce a superior one. AT stressed this is part of pre-clinical program and does not take away from Cu67. Alphas might give opportunity for late stage patients. Actinium is hard to get however. Safety is also a concern. Novatis does not have an alpha strategy. JJ used actinium and had to stop as was killing patients.
Upcoming new in next 6 months? Secure – taking the world by storm. Wants the next 3 patients dosed quickly. There is call from Clinicians for more product – AT would love to see more earlier stage patients getting drug. Diagnostics – would like to see Phase 3 clinical trial detecting lesions much earlier. Curative outcomes in really stage diseases wanted.
Question around patent protection: Can use the urea targeting Telix and Novartis products as they are generic. Outside of the urea targeting part the rest is all CU6 IP. So the product is considered new and has a further 15 years of patent to run. CU6 patent attorney is Davies Collison Cave and an operative from them works a one day per week at CU6.
Question. With only 64 staff can CU6 carry through on their workload by themselves? AT indicated there was only him there at the start. CU6 has done it all from a chelator – which is all their own proprietary position. Is a hot market with many players and CU6 want to be in this radio pharma space. New area and niche and CU6 will continue to build out. CU6 owns everything. Partnering – never done before – have to be careful don’t get IP leakage. Never say never – will see If a deal came along that can’t say no to then would do. At this point don’t want to shift value out of the business.
Question around radioactive supply: Cu 64 can be easily made. Potentially 4 suppliers in Aust alone. 2 dedicated cyclotrons that supply to CU6 now. Novartis product lutecium – comes from Nuclear reactors – so can never own supply chain. Low millions cost for a cyclotron. Cu64 can make at the one facility and will be doing this with Northstar later this year. In 5 – 10 years time as a stand alone radio pharma company them CU6 might have a small number of cyclotrons in the US supply product from single site and distribute to US and Europe and then Asia. Sole focus now in US and Australia. Focus on clinical development but later on supply of radioactive materials
One take home investors seem not to understand? Is all about strategies – have adopted what Strawamn does with investing - understand the business – know the market. Be very commercially focused. Many said "impossible". Work around the clock. Have an area of expertise and stick to it. Have bright people, smartest in the world. Stick to knitting. Have not acquired companies. Love the science. Making sure we are number 1.
In summary there is a lot to like about the company and its driving force Alan Taylor. Not hard to see why CU6 has a market cap of around $2.5b. Huge potential. If there would not be selling just yet.
