Radiopharmaceutical company $CU6 announced a major supply deal today.

ASX Announcement

On a generally strong day for risky stocks, the SP closed up 12% (having been up 16% earlier in the day).

While the announcement says nothing about the chances of success for the Cu-64 products currently in Phase 3 trials, the announcement represents a material de-risking of the commercialisation phase, post approval. Here's what's involved, and why it is significant.

Significance of the Theragenics Supply Deal

What it is: A large-scale copper-64 manufacturing agreement giving Clarity access to up to 2,000 patient doses per day from a single cyclotron, at a facility with 14 cyclotrons near Atlanta. This is Clarity's third US supply agreement, alongside SpectronRx and Nusano, creating a geographically distributed network.

Why copper-64's half-life is the key differentiator: At 12.7 hours (vs. ~68 minutes for Ga-68 and ~110 minutes for F-18), Cu-64 enables centralised batch manufacturing with a 48-hour shelf life. This allows a conventional pharmaceutical-style distribution model, something structurally impossible with competing isotopes with shorter half-lives.

Why this deal matters beyond the manufacturing itself: Theragenics already has a commercial sales force in prostate cancer (brachytherapy), meaning they bring existing clinician relationships, not just cyclotrons.

The timing signal: Companies don't lock in large-scale commercial infrastructure before FDA approval unless they have strong internal conviction about their trial data. Combined with AMPLIFY hitting enrolment targets and positive Co-PSMA data at EAU 2026, this suggests management confidence is high.

Competitive context: $CU6's approach of partnering with Theragenics (and previously announced deals covered below) to access the US market is in stark contrast with the vertically integrated supply chain pursued by incumbent $TLX. $CU6's capital-light approach comes at the expense of manufacuturing and sales margins, and its reliance on partners for control of operational delivery. On the flip side, this enables $CU6 to focus on its core capabilities of developing the fundamental science of the platform(s) and on regulatory development. (Interestingly, the CEO of $TLX has been quite focal on the importance of controlling your own destiny by being vertically integrated!)

Overall, then, how is the supply strategy is taking shape?

Clarity's three-node US supply network is geographically well-distributed, covering West, Midwest and Southeast, ensuring national coverage within Cu-64's 48-hour shelf life window:

• Nusano, West Valley City, Utah (West): isotope only; up to 18,000 doses/day
• SpectronRx, Indiana (Midwest): isotope and finished drug product; up to 400,000 doses/year; can distribute to all 50 states
• Theragenics, Atlanta, Georgia (Southeast): isotope only; up to 2,000 doses/day per cyclotron across 14 cyclotrons

However, there is, based on my understanding, some devil in the detail which is important to understand.

Overall supply capacity is not a constraint on CU6's bull case. The three-facility network has combined Cu-64 isotope production capacity of ~47,000+ doses per day, against a bull case demand estimate of perhaps 360–1,000 doses per day at maturity, a huge surplus. The critical nuance, however, is that Nusano and Theragenics supply raw isotope only, while SpectronRx is currently the sole facility producing finished, patient-ready 64Cu-SAR-bisPSMA doses, at up to 400,000 per year (~1,100/day).

Radiopharmaceutical manufacturing requires two distinct steps: cyclotron-based isotope production, followed by radiolabelling, i.e., chemically conjugating the Cu-64 to the SAR-bisPSMA targeting molecule to create the injectable dose. Given Cu-64's 12.7-hour half-life, these two steps need to occur in close geographic proximity, meaning the most likely commercial model is that Nusano and Theragenics eventually ship bulk isotope to regional SpectronRx finishing hubs for final drug product manufacturing.

The encouraging news is that SpectronRx is already well advanced in building exactly this kind of multi-node finishing network on its own account, with GMP-compliant facilities operating or under development in multiple Indiana locations, Connecticut, and a west coast site planned, providing geographic coverage that maps well onto the Nusano (Utah) and Theragenics (Georgia) isotope nodes.

The most likely remaining step (IMO) is that these facilities need to be contracted under the Clarity-SpectronRx agreement (which includes an option for regional hub expansion) and then FDA-validated specifically for 64Cu-SAR-bisPSMA finishing. This is a materially lower-risk execution task than building from scratch, but it is the one supply chain milestone that remains to be publicly confirmed as complete, and will be an important post-NDA execution priority for management to communicate clearly to investors.

However, with NDA-approval still some time away, overall the supply chain appears to be coming together nicely.

My View on Valuation Impact:

The deal doesn't change the probability of trial success; that remains the dominant value driver. But it reduces commercialisation execution risk, expands the peak revenue ceiling, and shortens time-to-revenue post-approval. It is a clear, positive, de-risking announcement. So, a 12% uplift in value today is probably a reasonable market response (perhaps tending to a slight over-reaction, given the bigger supply chain picture, as I understand it).

The bottom line:

Today's news adds nothing to the key questions as to whether $CU6's first products will pass the remaining US regulatory hurdles. However, if they do, it represents a material step forward on commercialisation.

Disc: Held

$CU6 today released the details of the analysis of the Co-PSMA data presented at the EAU Congress 2026. Shareholders and followers of this business might be forgiven for saying "what? again?" as this is the third ASX release in as many months regarding the outcome of this investigator-led trial. Equally, casual watchers might look at today's SP (down 5% at time of writing) and conclude "oh, it's bad news". Wrong. The further detail presented is positive news on all fronts.

There is a lot of devil in the detail of these clinical releases, so in this straw I will summarise:

1. (recap) At a high level what we already know from the Dec-25 and Feb-26 releases
2. What's news and why it matters
3. Overall, so what?

1. What we already know

From the Dec-2025 announcement and the Feb-2026 abstract release, the key efficacy findings of the Co-PSMA trial were already well established. The study met its primary endpoint, demonstrating that 64Cu-SAR-bisPSMA detects significantly more lesions per patient than standard-of-care 68Ga-PSMA-11 in a low-PSA biochemical recurrence setting (PSA 0.2–0.75 ng/mL).

The following quantitative results were fully disclosed in the February abstract: mean lesions per patient (1.26 vs. 0.48, ratio 2.63, p<0.0001); total lesions detected (63 vs. 24); positive scan rate (78% vs. 36%); and management impact (44% of patients). The February release also introduced early diagnostic accuracy data in the form of true positive rates, reported at that time as 75% for 64Cu-SAR-bisPSMA vs. 39% for 68Ga-PSMA-11 (based on 28 evaluable patients with a standard of truth).

In short, prior disclosures had already established a clear efficacy advantage, particularly in low-PSA disease where current PSMA agents are weakest.

2. What's New Today? Why it Matters

Today's release adds several important layers of depth that elevate the dataset toward regulatory and clinical maturity. These additions fall into four categories.

2.1. Peer-review acceptance in European Urology

The Co-PSMA manuscript has been accepted for publication in European Urology, the official journal of the EAU with an impact factor of 25.2. This materially strengthens scientific credibility and external validation beyond the conference abstract, and is a meaningful milestone in the asset’s path toward regulatory submission. I'm not saying it is a part of the regulatory path, but peer-reviewed acceptance in a high quality journal gives an indication that the results stand up to expert, independent scutiny. In that respect, I take it as a leading positive indicator of regulatory success, or at least an improvement in the chance of success.

2.2. Revised and expanded diagnostic accuracy metrics

Today’s release provides a more complete and updated diagnostic accuracy profile. Two important points require careful attention here.

First, the true positive rate figures have changed from the February abstract. The earlier abstract reported 75% (21/28) for 64Cu-SAR-bisPSMA vs. 39% (11/28) for 68Ga-PSMA-11, based on 28 evaluable patients. Today’s release reports 71% (24/34) vs. 29% (10/34), based on a larger evaluable cohort of 34 patients. The expansion of the standard-of-truth denominator from 28 to 34 reflects the final, fully verified dataset and is the more reliable figure.

Second, today’s release introduces explicit false negative rates: 21% for 64Cu-SAR-bisPSMA vs. 65% for 68Ga-PSMA-11. While these figures were arithmetically derivable from the February true positive rates, their explicit disclosure — using the final, larger denominator — is both new and significant. False negative rates directly address the risk of missed disease, which is the key clinical limitation of existing PSMA imaging in the low-PSA setting and is likely to be a focus of regulatory scrutiny.

2.3. Granular lesion location breakdown

For the first time, today’s release provides a detailed anatomical breakdown of where additional lesions are being detected. This data was entirely absent from both the December and February releases and represents one of the most clinically actionable new disclosures.

Table: Location of recurrence: 64Cu-SAR-bisPSMA (24-hour) vs. 68Ga-PSMA-11

The biggest differential between the two agents is in the prostate fossa (56% vs. 22%) and lymph nodes (20% vs. 8%) — precisely the sites most relevant to salvage radiotherapy planning. This breakdown directly links the improved detection signal to actionable clinical decision-making, and explains the mechanism behind the 44% management change rate. It is also the type of granular, site-specific evidence that regulators and clinical guideline bodies require to support label claims.

2.4. Clearer regulatory pathway articulation

Today’s release provides more explicit positioning of 24-hour imaging as the mechanistic differentiator underpinning the performance advantage, alongside a clearer articulation of how Co-PSMA will be combined with the Phase II COBRA data and the anticipated results from the pivotal Phase III AMPLIFY trial in a future FDA submission package for the BCR indication. Collectively, this framing shifts the dataset from “strong abstract-level results” to a more complete, regulator-ready evidence package with clearer clinical and mechanistic context.

3. Conclusion - So What?

Overall, today’s disclosure does not change the fundamental efficacy story in Co-PSMA — the superiority of 64Cu-SAR-bisPSMA over 68Ga-PSMA-11 was already well established in both the December and February releases. However, the update delivers four meaningful additions: peer-review acceptance in a top-tier journal; a revised and expanded accuracy dataset (including an updated true positive rate from a larger evaluable cohort and explicit false negative data); a detailed anatomical lesion location breakdown that was entirely new and is the most clinically actionable addition; and a clearer regulatory submission roadmap.

Notably, the revision to the true positive rate figures (i.e., from 75% to 71% for 64Cu-SAR-bisPSMA and from 39% to 29% for 68Ga-PSMA-11) reflects a larger and more complete evaluable dataset and should be treated as the definitive accuracy figures going forward. The directional advantage for 64Cu-SAR-bisPSMA is preserved and strengthened on the false negative metric.

In effect, the update represents a de-risking and maturation step rather than a step-change in efficacy, moving the asset incrementally but meaningfully closer to regulatory readiness and real-world adoption, without altering the core investment thesis established by earlier releases.

Overall, pretty good news IMHO.

Disc: Held in RL

Pre-commercial company $CU6 announced that the abstract for the upcoming conference presentation for the CoPSMA trial has bee released today.

ASX Announcement

The market has gotten a little excited over this with the SP up 17% at time of writing. So in this straw I set out my thoughts, having analysed the release.

TLDR: It is good news. On its own I judged the SP reaction to be overdone, however, that it maybe can be understood because I don't think the market is properly relfecting the risk value of the business. So a large jump in SP really only closes some of the gap IMHO.

First some background.

BACKGROUND: Where does this trial sit compared with $CU6’s own trials?

Co-PSMA is a small, investigator-led Phase II study conducted at a single centre that directly compared Copper-64 SAR-bisPSMA against the current standard Gallium-68 PSMA-11 in men with low prostate-specific antigen biochemical recurrence after prostatectomy. The investigator is Prof. Louise Emmett at St Vincent’s Hospital Sydney, and the paper will be given as an oral presentation at the upcoming European Association of Urology Congress.

Its purpose was to test whether Clarity’s product detects more true cancer lesions in a challenging early-recurrence setting. It provides head-to-head superiority data and clinical utility signals, but it is not a registration-enabling study.

CLARIFY and AMPLIFY, by contrast, are large, multi-centre, sponsor-run trials specifically designed to support regulatory approval. These are the leading trials that $CU6 is running, and through which it is aiming to commercialize Cu-64 SAR-bisPSMA. They are structured to meet formal regulatory requirements for diagnostic accuracy, reproducibility and statistical robustness across multiple sites and readers. While Co-PSMA strengthens the differentiation case, it is the outcomes from CLARIFY and AMPLIFY that will ultimately determine the likelihood of registration.

What is New in Today’s Release Compared with Earlier Announcements?

We have already had quite a bit of detail about these trial results released in December. So one key question is what, specifically, is new in today's release? And what bearing if any should have that have on valuation.

The new abstract release does not change the headline outcome that the Co-PSMA study met its primary endpoint, but it adds important quantitative detail.

It now discloses the precise magnitude of superiority over Gallium-68 PSMA-11, including exact lesion detection rates, confidence intervals, statistical significance, confirmed true positive rates, and - importantly - the proportion of patients whose treatment plans changed after imaging (this is likely to be a major consideration bearing on ultimate registration approvals, because the add value of a me-too diagnostic agent is whether or not is changes the treatment pathway).

This moves the disclosure from a general statement of statistical success to a clearly defined and robust effect size, strengthening the credibility of the superiority claim.

In terms of impact on the likelihood of eventual approval of Copper-64 SAR-bisPSMA, the data incrementally reduces clinical and differentiation risk but does not materially alter the regulatory pathway. Co-PSMA remains a small, supportive Phase II study rather than a pivotal registration trial. The results enhance confidence in diagnostic performance and potential commercial positioning, but regulatory success will ultimately depend on the larger, approval-directed studies.

My Overall Takeaway

The near term valuation catalysts lie primarily in AMPLIFY and CLARIFY, and so strictly, I'm not sure how much you can read across from this CoPSMA trial into those (I need to give this further thought and investigation). Of course, it does offer a promising sign for the eventual use of the diagnosis in low prostate-specific antigen biochemical recurrence after prostatectomy, but this will of course require its own registrational trial. So, if prior to today, we considered the likelihood of that pathway ulimtately being approved as 60%-65% (which is where I have it based on the December disclosures), then the incremental detail today perhaps nudges that up to 65%-75%.

Again, the optimist in me would like to read across that it strengthens the evidence base that 64Cu-SAR-bisPMSA is going to emerge as an important platform more generally for diagnosing prostate cancer across the lifecycle and across the patient journey. That's the super Bull thesis for $CU6, and it is why I hold $CU6. Today's news is one paragraph of one chapter of that thesis.

My more sober assessment is in contrast to Exec Chair Alan Taylor's more upbeat assessmentin the release. Of course he knows infinitely more than me, but I know that the pathway to realising material value here is long, and won't be straigtforward.

So, good news, but on its own, I don't think it is enough for me to increase my current holding. I continue to evaluate every new piece of data for this business, as it does have the potential to be an ultimate blockbuster and today is a supportive sign.

A HOLD for me.

Disc: Held (3% RL)

$CU6 burned $25m in the last Q, up from $23m in prior Q. With $226m left, that's about two years runway - plenty of time for multiple significant developments currently in the pipeline.

Last year's $203m placement agilely timed at $4.20 shows the benefit of having a former investment banker as an Exec Chair of this kind of business.

Disc: Held (RL 2.75%)

Radiopharma company $CU6 have this morning announced the latest clinical trial progresss of 64Cu‑SAR‑bisPSMA .

ASX Announcement

The Investigator-Initiatied Co‑PSMA Phase II trial provides statistically significant superiority of 64Cu‑SAR‑bisPSMA over the current Standard of Care, 68Ga‑PSMA‑11 in lesion detection at low PSA levels. This confirms the biological rationale and reinforces earlier data (PROPELLER, COBRA). While the result materially improves confidence in efficacy and diagnostic differentiation, it remains a supportive, not pivotal, dataset.

My Assessment

The NDA path still depends on Phase III outcomes (CLARIFY, AMPLIFY) and CMC readiness. These are in progress and don't report until 2026.

Overall, my "gusesstimate" of NDA probability‑of‑approval is around 66% prior to today's supportive news. While the news slightly de-risks the broader trials, it is not material enough for me to add to my position (2.7% RL). This is mainly due to the incomplete readout of this IIT. For example, it is not clear from the release what accuracy verification / reader-blind data protocols were in place - these details will be important when the FDA consider this additional information. It will be interesting to read the full account of the study when this is available.

So, good news, I expect the market will react positively, however, I'll not be taking any action today as a result.

Disc: Held in RL and SM

The interview with Dr Taylor is now up, and the transcript is here CU6 Transcript 2025.pdf

Clearly the products in development, SAR-bisPSMA in particular, have a huge potential market, and (taking Alan at face value) minimal competition, with medium term commercial opportunity (~2 years or so). He was very keen to stress the big picture stuff, but I didnt do a great job at pinning him down on more specific stuff.

It's great that have some clear air in terms of their immediate funding, and the enthusiasm is clear, but from the outside I have a lot of trouble assessing the odds, magnitude and timing of success -- let alone whether the $1.2b market valuation is fair or not.

Other than to guess that *if* their tech is as good as is pitched, and they dont experience any major executional blunders, then yeah, it's probably worth a lot more than it is today. But even then it'll be a couple of years before much of that is clear, and no doubt one or two more raising along the way.

Anyway I think it represents exciting potential, but for now it'll sit in my "too hard basket".

Here's the AI summary:

Company Overview

• Clarity is an Australian biotech focused on next-generation cancer diagnostics and therapies using copper isotopes.
• Originated from University of Melbourne research, now in late-stage clinical trials.
• Core programs target prostate, breast, and neuroendocrine cancers.

Flagship Program: Prostate Cancer (SAR-bis PSMA)

• Built a bispecific molecule (SAR-bis PSMA) that outperforms first-generation PSMA agents.
• Advantages:
• Greater sensitivity (detects smaller lesions earlier).
• Longer half-life isotope (Copper-64, 12.7 hours vs 1–2 hours for current agents).
• Enables central manufacturing, broad distribution, and flexible imaging windows.
• Market Opportunity:
• Current PSMA diagnostic market ≈ US$2B.
• Clarity estimates potential > US$5B.
• Large unmet need: ~600,000 US patients with recurrent prostate cancer cannot be imaged using current standards.

Clinical & Regulatory Progress

• Running two Phase 3 diagnostic trials (Clarify and Amplify).
• Received three FDA fast-track designations (two diagnostic, one therapeutic).
• Conducting head-to-head clinical trials vs current standard (Gallium PSMA) – early results show 2–5x stronger tumour-to-background ratios.
• Therapy side: Copper-67 isotope for targeted radiotherapy.

Funding & Financial Position

• Recently raised ~$200M at a premium, adding to ~$280M cash reserves.
• Prior raises (IPO $92M, 2023 $121M).
• Current market cap ≈ $1.2B.
• Funds to complete Phase 3 trials and prepare for commercialization.
• Quarterly R&D spend ≈ $16M, mostly on clinical trials (not manufacturing).

Commercialisation Strategy

• 2-year horizon to potential market entry, pending trial success and FDA approval.
• Partnering with established manufacturers (e.g., Spectrum) – Clarity will not produce isotopes itself.
• High-margin product: pricing guidance around US$5,000 per dose.
• Focused first on prostate cancer, while maintaining pipeline in breast cancer and neuroendocrine tumours.

Market & Competition

• Current competitors (e.g., Lantheus, Telix) rely on short half-life isotopes with poor sensitivity.
• Clarity believes its product is differentiated and defensible (patent life 13–14 years).
• Acknowledges risk of new entrants but sees little direct competition near-term.

Capital Markets & Strategy

• Dr Taylor emphasised adaptability and resilience, not reacting to short-term share price moves.
• Notes biotech volatility: external market events and index movements can drive share price swings unrelated to fundamentals.
• Strategy is to stay focused on core programs, push through clinical milestones, and prepare for revenue generation.

Key Takeaways

• Clarity is transitioning from R&D to commercialisation, with strong confidence in its lead prostate program.
• The company has a large cash buffer, global partnerships, and regulatory support.
• If successful, SAR-bis PSMA could redefine prostate cancer imaging and therapy, addressing a multi-billion-dollar market with significant unmet need.

Interesting interview with CU6 CEO, Alan Taylor by Michael Frazis. The interview undertaken towards the end of March.   As everyone knowns in the last few months it has suddenly got very hard for biotechs, particularly for non-revenue companies like CU6.  Stock price wise, TLX and NEU have fared better, having products in the market and both being cash flow positive.     

Clarity Pharmaceuticals, with chairman Dr Alan Taylor

Some points from the interview:

• AT outlines the science case for CU6 including:

i)                        Currently they have 3 FDA fast track approvals.

ii)                      comment on sensitivity of 2 competitors with products in the market (Telix and Lantheus), stating their prostrate diagnostic sensitivity is a poor 30 – 40%.   CU6 claims their Cu64 product gets contrast (sensitivity) up to 15 times better than the competition with equal specificity.

• FDA employs 18,000 people it turns out that only 1,000 have been terminated and according to Alan many of them being asked to return. (The recent NEU Phase 3 FDA meeting was not postponed and presumably speaks to a functioning FDA).
• Its obvious CU6 is financially in a bind, needing soon to raise capital. Whilst they have $100m as at the end of March, this will only get them to around halfway into next year. They are, assuming continued scientific success, 2 – 3 years away from commercialisation and revenue.
• AT made the point that CU6 is around 60% is owned by the top 20 shareholders with mainly institutions represented.  The inference by AT, is they are likely to be a more amendable to a capital raise than a predominantly retail shareholder base.  (State Street became substantial yesterday).
• AT said of CEO of Telix Chris Berenbrauch Telix:  “He reached out to me to partner with him”. (Cannot imagine AT and CB ever happily power sharing)
• Clarity is currently 6% shorted. AT says Phil King (Regal) of Opthea-step-in-dog-shit fame, is one of the CU6 shorters. (The games people play)

Of course the success of CU6 all hinges on their continuing to deliver on their clinical trials. And the market’s continued confidence in them. Who really knows.

Interesting watching the chatter vaporise around Clarity.

The speccy biotech's share price has plummeted from almost $9 to $2.13 in months as the hype has settled.

Shouldn't the high conviction types be going in hard ?

Where's all the love gone ?

"It's a deal! It's a steal, It's the sale of the century! It's chicken soup!" (quote from Lock, Stock, &..)

Anyways, I'm genuinely sorry fo the peeps that succumbed to the bbq/lunch hype and bought at the peak.

A few years ago that was me, and it was one of the best investing lessons I've ever had.

I'm extemely grateful it happened at the beginning of my investing journey and not now.

Obviously it's a long road, and the company may still commercialise and start selling its miracle cure.

I hope so, but until it de-risks and starts selling the stuff, it's still on the watch list for me.

Alternatively, we could see cap raises and this drawn out likely over years.

Would have made more of a return probably just buying a broad based etf at the beginning of the story.

An interesting article from Endpoints, a biopharma newsletter out of the US:  

#ASCOGU: Pfizer’s prostate cancer data leak shows promising results in early-stage study

It describes a potential new treatment for prostate cancer that Pfizer is taking to Phase 3.   Not good news for ASX listed CU6 or TLX, should Pfizer be successful. Particularly since the drug is a non-radiopharmaceutical, and the urologist keeps the patient rather than pass on to a nuclear medicine doctor. So if this potential new oral drug if ever commercialised would make it very hard for TLX and CU6. Though the diagnostic part of the CU6 and TLX businesses you would think would survive. 

No doubt this is just one of many new drug ideas nipping at the heals not just CU6 and TLX, but any drug incumbent.   Add into the equation the opaqueness drug development in China that the West knows little about and you have a dangerous investment landscape.  

Of course this is not just confined to drug development. As an example, the previously unassailable Google is now looking very wobbly with the AI challenge and may end up like a Yahoo or like a stone-dead Netscape is not out of the question.

No wonder investors will pay 32 times forward earnings for Wesfarmers to get hold of Bunnings and all things that feed the Australian residential real estate obsession.   Though some cluey bastard right now is probably working on how to get a drone with an attached bag of nails from a shipping container at Moorebank to your backyard.  

Any investing is dangerous. And all the time you have management are blowing in your ear with cutesy stories about how great everything is going to be. And all this other stuff is going on around you that you know nothing about and is just going to kill your retirement plans.  A dangerous world all right. But no reason to give up! 

Clarity Pharmaceuticals has piqued my interest lately. Recently I was diagnosed with prostate cancer and I am a potential beneficiary of this new technology, if the trials are successful and the imaging is approved.

PSMA PET/CT is currently the most accurate imaging test for detecting prostate cancer in men. It has been a game changer as it can detect very small prostate antigen specific cancers that may be missed by other scans and it can more accurately stage cancers.

Clarity Pharmaceutical’s 64Cu SAR-bisPSMA promises another level up in accuracy. In my case the cancer is confined to the prostate… for now! This new technology has the potential to pick up metastatic spread of prostate cancer more accurately and before it becomes a problem.

According to a note shared by James Mickleboro from The Motley Fool, Bell Potter is bullish on the prospects for Clarity in 2025, particularly given the impending release of the final data from the SECuRE trial.

“SECuRE is a Phase I/IIa theranostic trial for identification and treatment of participants with prostate-specific membrane antigen (PSMA)-expressing metastatic castrate-resistant prostate cancer.

Commenting on the company, the broker said:

Clarity Pharmaceuticals has continued to produce high quality interim data readouts from its numerous clinical trials during 2024. In 2025 we anticipate a flood of new data led by headline readouts from the pivotal study in prostate cancer imaging (CLARIFY) and perhaps more importantly, final data from SECuRE being the therapy trial also in prostate cancer.

Earlier data from imaging studies indicates 64Cu SAR-bisPSMA is able to detect cancerous lesions in lymph nodes at a far earlier stage than the standard of care. Similarly, PSA50 data from the SECuRE trial is highly anticipated and is expected to be highly supportive of further development of this drug candidate.

Bell Potter currently has a speculative buy rating and $10.00 price target on its shares.”

Don’t be complacent!

I’d like to take this opportunity to remind all my Strawman mates out there who are over the age of 50 to make sure you have a PSA blood test every year. If you are over 50 and haven’t been tested yet, don’t delay! Make an appointment with your GP today, get a blood test, then rinse and repeat annually. It’s important to establish a trend in PSA results.

I’ve had yearly PSA blood tests for over a decade now. I had no symptoms of prostrate cancer and the rising PSA levels were the only alert I had. This led to follow up testing. An annual PSA blood test can save your life. Don’t be complacent. See the stats below.

I’ve got plenty of mates out there to share my issues with…more than I realised! If you’re one of us and you are struggling to deal with it, or just want to chat about it, feel free to DM me. There is lots of great support out there!

Worldwide, prostate cancer is the second most commonly diagnosed cancer and the fifth leading cause of cancer death among men, with an estimated 1,414,000 new cancer cases and 375,304 deaths in 2020. https://www.prostate.org.au/risk-and-symptoms/facts-figures/#:~:text=Prostate%20cancer%20is%20the%20most,of%20all%20newly%20diagnosed%20cancers.

“Nearly 72 Australian men are diagnosed every day, with 1 in 5 at risk of being diagnosed in their lifetime, according to the estimates. This is because your risk of prostate cancer increases as you get older.

Of the Australian men predicted to be diagnosed with prostate cancer in 2024:

• 416 (1.8%) will be under 49
• 3,233 (12.3%) will be 50–59
• 9,559 (36.3%) will be 60–69
• 9,584 (36.3%) will be 70–79
• 3,572 (13.6%) will be over 80

Disc: Not held, but on my watch list

Listening to the Alan Taylor interview and Strawman comments got me thinking more about risk.

As an individual Alan Taylor is pretty impressive. Coming from a modest background where his Maltese parents busted themselves to send him to Waverly College, he went on to win the university medal at SU in applied science, completed a science Phd and spent 15 years in investment banking. As a young man he reached reserve grade NRL with Eastern Suburbs. I am sure he has plenty of faults, however this guy is clearly not just another blabber-mouth CEO phony.    

Many investors take the line Biotechs are too risky, and this is true. However if you think about Alan Taylor at CU6, John Pilcher at NEU, Matt Callaghan and Howie McKibbon at BOT -  all have clearly articulated the business hurdles, how they intent to overcome them and what the prize at the other end looks like.  And they have not come across, nor can I find evidence they are spivs. Promoters yes -and they have to be.

Contrast this with so many previously called by some as “safe” industrial stocks, a few of which have recently crashed.  The Star Entertainment Group (SGR) with gross breaches of the regulatory framework including money laundering.  Lifestyle Communities (LIC), in many ways can be argued is a species of Ponzi scheme.  Its business model being based on increasing asset revaluations, taking on debt and duping gullible retirees into fee traps.  Johns Lyng Group (JLG) for whom a large part of their business is built around a nefarious link between owing strata management companies that get JLG to quote overpriced building maintenance works, and then gull sleepy strata committee members to accept the rip-off quotes.   

Essentially these business models have been built, in part on a lie. Lies management spent considerable time and effort concealing from investors.  

CU6 may or may not live up to expectations. Maybe the above thinking about CU6 is both too simple and wrong.  However, as an investor if you have the time at least you can get some understanding of the Science Risk and can take some comfort the Spiv Risk is likely fairly low. 

@Strawman - a great meeting with Alan.

He's not the first to draw the analogy between pharma and resources. In fact, some of the world largest resource and pharma companies have studied each others' R&D / Exploration and Development processes to gain learning into better capital allocation and decision processes. (As an aside, I find it interesting that 75% of my career has been in either resources or pharma. The reason I prefer healthcare to invest in, is that the IP protection means that prices aren't commoditised when it counts - i.e., the early revenue years!)

In previous straws and posts, I've said I wasn't considering investing in $CU6. However, as a result of my early position in $TLX, I have been doing a lot of research into radiopharma in oncology. Much of what Alan said in the meeting confirmed and added to my understanding. I am now shifting in my thinking.

In the event that CLARIFY and even more importantly SECURE continue their early initial promise, and should NDAs be granted in due course, the pre-existing products in the market are doing the hard work of building the market of clinicians using these products to diagnose and treat. Should clearly superior products become available, then of course switching products in an existing market and associated workflows, is an easier thing. Because of this, should $CU6 get both the Cu64 and Cu67 products approved for prostate, we'd be look as a very different valuation from today, with the potential for very rapid adoption - particularly if there are positive stats in differentials in patient outcomes.

It was interesting to hear about the clinician demand to get more patients on Cu67, and the relative benefits of the longer half-life both in the imaging and therapy modes (Alan's mentioned this before on investor calls and other podcasts). $TLX have tried to spin their very short half-life issue as a benefit around speed of treatment. They have knocked the idea that a patient might be imaged a day after dosing for better S/N due to the inconvenience of have to be in the process for longer. But given what these patients are dealing with in terms of important life decisions, and potentially earlier failed lines of treatment, I'm not so convinced.

$CU6 is still not aligned with my usual risk appetite. After all, an adverse reaction or series of less promising results, could dampen the outlook quite quickly. However, as Alan says, it is all about understanding the probabilities. I'm not far off from concluding that a small speculative investment might be justified for me.

I'm glad we have some companies like these on the ASX to consider. More work to do! But a great meeting.

The meeting with Clarity was originally scheduled for tomorrow morning -- before I realised it was a long weekend!

I've pushed it back to Tuesday morning at 11am AEDT (all details on the meetings page, and we'll send an email reminder tomorrow night).

Hope everyone is having a nice weekend.

Clarity how it’s share price compares?

The best crafted model in the world is just that, a model. I find valuing biotech stocks particularly difficult and there is added complexity on the ASX. As one Straw-person put it recently (I will paraphrase), a biotech’s share price is directly proportional to the number of old boys in agreement at your long boozy Friday lunch. Cynical, yes but honestly there are pre-clinical biotech’s that are valued purely on TAM and hope while other revenue generating companies that are making millions and growing at greater than 25% YOY are hammered for missing guidance by a whisker. 

I noticed a lot of talk about Clarity on my Strawman feed. I was curious to look at this biotech a little closer. I am absolutely no expert and I have merely taken a cursory glance, so please correct me if I am wrong and critique away. 

My first impression is that it seems to be valued very highly for a pre-clinical stage company. While it seems like great tech – potential revenue seems to be years away. It also plays in the difficult space of cancer. I tend to avoid this space as I find that this is well outside my comfort zone.

I am all for investing in early stage biotech companies, if I understand the science and if there is a bargain to be had. The key to success is getting in early before it is priced for success and perfection. 

In this straw I have pitted Clarity Pharmaceuticals head to head against 3 other ASX bio-techs that I am more comfortable and familiar with (and invested in). This is a quick and dirty check to see if I am interested in digging further into Clarity. 

Clarity’s technology basically injects special molecules (copper based) into patients to bind to specific targets on cancer cells. PET scans then pick up this energy from injected molecules to help locate and target cancer treatment more effectively. Theoretically there is a more targeted treatment and less damage to non-cancerous cells. 

So Clarity has 3 platforms currently in various trial stages but mostly in the safety trial phases, 1 and 2. These platforms are largely targeting prostate, breast cancer and neuroblastoma. Certainly big areas of need and potential revenue if successful. The other companies in the head to head comparison, unlike Clarity, have FDA approved products or drugs which are already revenue generating. 1).Neuren is collecting royalties and milestone payments from Acadia for its lead FDA approved drug Daybue ^TM 2). Polynovo is currently selling Novasorb ^TM world-wide and collecting revenue from BARDA trials and 3). Botanix is collecting very small but growing royalties from its Japanese counterpart for sales in Ecclock ^TM . Botanix is also about to start selling its first and only FDA approved drug Sofdra ^TM into the market Q3 this year. 

 Table 1: Clarity is Pre-Clinical unlike Neuren, Polynovo and Botanix. Neuren has already had 3 successful phase II trials and waiting for Phase III trials. Botanix also is waiting for Phase III trials for Rosacea and Acne and 2b for anti-microbial. 

Clarity Pharmaceuticals: A market cap comparison

A quick review of Clarity shows a market cap (at time of writing) of about AU$1.88billion. Remembering this is a pre-clinical company with only products in phase 1 and 2 so far. It is not generating any revenue yet has a similar market cap to Polynovo AU$1.74 billion and Neuren AU$2.07billion.

Table 2. Comparison of Market Cap

Clarity has negative Earnings per Share (EPS) and Return on Equity (ROE). While its compatriots Polynovo and Neuren are selling products/drugs into the market and have positive and growing EPS. While Neuren’s ROE has sky rocketed this FY due to approval of Daybue ^TM by the FDA. This astronomical rise will not continue but should level out over the next few years and have reasonable increasing % royalty returns. 

EPS growth is also estimated to increase for Botanix according to Bell Porter’s latest analyst report. Although this is merely speculation and educated guessing as Sofdra ^TM is a brand new drug for the US market. However there is a precedent with its lead drug currently being sold in Japan and growing strongly YOY. Hence the 122% EPS growth prediction isn’t outlandish. 

So for every dollar I invest I have can choose to buy a company that is generating positive returns or is about to or I can invest in Clarity which is loss making and will be several years away from generating any earnings, if ever. 

Table 3. Comparison of Cash on Hand, P/E and Revenue 

Clarity Pharmaceuticals: A sales comparison

Comparatively CU6 does have significant cash on hand following $120 million dollar raise in the first half of 2024. However bio-techs are notoriously cash burning with most examples of drugs and products costing between $50-$300 million to bring to market. It is pretty clear with $136 million cash left on hand that Clarity will have to raise again in upcoming years. Raises in bio-techs usually cause significant dilution for long-term holders. 

Polynovo with a similar market cap has enough cash on hand to fund revenue growth of near 36% annually. This is now self-funded and the company had its first net profit after tax in the 1H of FY 24. Further dilution and raises are very unlikely unless there is an upcoming acquisition that makes financial sense to bolt on to Polynovo’s portfolio of products. 

Neuren has seen large annual growth this FY and royalties and milestones as well as cash on hand of $228 million will be sufficient to self-fund two phase three trials. Whether Neuren does this on their own or is acquired is anyone’s guess but Jon Pilcher has confirmed that the upcoming trials are likely to cost between AU$50 million and $100million and take approximately 3 years to get its second drug NNZ2591 to market. If this occurs Neuren and trials are successful it will keep 100% revenue generated. 

Botanix is funded $80 million to take its lead drug Sofdra to market launch. Whether this company becomes self-funded or will need to raise again remains to be seen. Q3 this year will give us insight into the future trajectory of this company. Being on the eve of becoming revenue generating and better yet Botanix will keep approximately 95% of all revenue with only a small royalty going to Bodor the original creater of  Sofdra. 

So I can invest in Neu and PNV with similar market caps to Clarity and get access to self-funded revenue generating companies that have positive NPATS. Or I can invest in Botanix which has a much lower market cap, admittedly untested and higher risk but also soon to be revenue generating. Whereas Clarity is not revenue generating and yet has a higher market cap than Botanix and is years from making profit. 

P/E comparisons

Clarity has no P/E ratio as it has no earnings (except R and D tax rebates). Polynovo has a high P/E 127. However paying $2.52 a share allows access to a company growing revenue at 54.9% STLY. Including BARDA this revenue increases to 65.6% growth on STLY. By comparison Polynovo has a very high P/E and shares seem to be fully valued whereas Neuren has a low P/E for a biotech of 13.18. 

Polynovo seems reasonably valued compared to other successful pharmaceutical company's such as Pro Medicus, whos P/E sits at 191 with much lower growth rates of 23.8%. This makes sense given Polynovo is such an early stage company and Pro Medicus is much more mature. 

While Neuren seems grossly undervalued with such a low P/E to get access to a growing royalty and milestone revenue stream with an impending priority review voucher thrown in. There is also a second future drug potential on the horizon that doesn’t seem to be contributing to valuation currently. 

Botanix will be interesting to watch but the wait is not far away and the company is ridiculously cheap with impending US revenue due shortly.  

Investing in Polynovo gives you access to this:

Investing in Neuren Pharmaceuticals gives you access to this:

In the last 12 months Neu has grown its EPS from AU$0.0015 to AU$1.23. This was a EPS 12 month trailing growth of 84569.93% due to the FDA catalyst approval of Daybue. The EPS of course will not continue at this rate. 

PE ratio for NEU is 13.18% to buy into this growth. The ROE has been 35% in this time. A good company is considered to have an ROE of 15-20%. 

Investing in Botanix gives you access to:

Royalties of AU$800 K annually growing at an estimate of 122% according to Bell Porter. Possible projected revenues of US$ 20-$90 million (200,000 units x $490) in FY2025 

Management Comparisons

Table 3. CEO compensation and % of tightly held shares 

 Clarity is certainly a tightly held shares 35.88% being owned by management and the CEO owning 0.75% of the company. Collin Biggin also seems to take a reasonable salary for his position. 

There is a lot of speculation about a Neuren buyout. However there is also some protection from hostile takeovers with 13.06% of the company being held by company management. Jon Pilcher takes a very reasonable salary and a majority of his compensation is performance based (59.8%). He also has a 0.3% ownership stake in the company. 

Swaomi Raote for all his years of experience is also only drawing an average salary with a 52% performance based compensation. While his % proportion of company ownership is not disclosed when I looked at Simply Wall St. 

Howie McKibbon draws an average salary and has the shortest CEO tenure of any of the company's. He was however appointed by Vince Ippolito Executive Director and the two had worked together for many years across different dermatology company's. His compensation is also very heavily performance based. A good sign for shareholders.

Analyst Insights: A comparison

Analysts are in agreement that clarity is a buy and a strong buy according to the 3 analysts covering this stock. Polynovo and Neuren and Botanix are largely also touted as strong buys. 

Management teams are largely in agreement with analysts and having been buying stock through 2023. However, Clarity has had lots of stock issued and exercised. PNV has seen Chairman fork out large amounts of his dollars to buy stock in 2023. He did have one sale during this period. Neuren’s former director Dr. Trevor Scott also sold some Neuren shares at retirement. However there has also been plenty of management purchases. 

There have been no sales of stock by Botanix management that I am aware of. 

Who owns these shares: a comparison

 Clarity has yet to have the big end of town hold large % of its shares. One can speculate and argue this is why the price has shot up but I wouldn’t be that cynical. Polynovo and Neuren have a common top 3 investors. We all saw what happened with PNV share price and Neuren’s SP is not fairing so well currently. It will be interesting to keep a watch of substantial holder notices for both company's in the future. 

Botanix has largely flown under the radar of these giants and it is a very tightly held company with 17.3% ownership by management. Remembering Botanix and Clarity have both essentially been pre-revenue company's until now so they will not have the same investment appeal for large funds. 

SUMMARY

My overall take-away is Clarity is certainly one to watch. I certainly would not have faith investing in the company in the short to medium term. Others clearly disagree and with a price target of $10.00 a share. If you invested 12 months ago you would have achieved a 568% return on your money. So excellent if you were lucky enough to ride this wave. Will it last? Time will tell. 

I will watch with interest. I will stick with my measly yearly returns of 34-101% in by current biotechs which are revenue generating and growing at good cadence for now. 

So whether there were some long lunches and nods and winks who can say. This is all my opinion, DYOR but a $1.88 billion market cap is certainly interesting. Hopefully the tech eventually helps to improve lives and I would consider buying if the technology passes phase III and if it ever hits a reasonable price. 

My brother is a wealthy "dumb money" retail FOMO trader and his broker and his broker's friends know it. Since he worked out the hard way how the game works, we've been using the tips that come to him as a forecast for organized pump and dumps. Droneshield was the last strong signal we got, at $0.60. The second signal we got was in the run-up to the second DRO capital raising.

Well last week we got our next strong signal, Clarity Pharmaceutical. Looks like the brokers exhausted their dumb money clients getting the price from the ~$2.50 to $6.00 range and now need to help them exit. Two separate sources have now told us "$15 by the end of the year, I can arrange a meeting with the CEO for you".

That's a "friendly tip" to take a $1.9bn stock losing $40m a year with zero revenue to $6bn on the back of a wink and a nudge.

All very deniable of course.