Update Aug 11 2025.

FDA says SNT-5055 needs another phase 2. This breaks the idea. More money and time required. A phase 3 was expected but now another phase 2 with placebo is required. The thesis is broken. On the plus side, the company has other after assets so makes sense to have some residual value. Greater than zero, that is. Currently a 50% drop.

What learnings can we take? It's biotech, high risk, with very real chance of random failure even with good data which is the case here. SNT-5055 still has a chance to be developed, but it's more money and time required now. The other factor is the current US environment makes the FDA even more whimsical and delayed. One learning could be to fish in a different pond, or have more pans in the biotech oven, since some will inevitably fail. Perhaps I let the emotions in - was I attracted to the curing aspect? Do I know all this to start with? Yes, but it seems I must learn the lesson the hard way.

For me chalk this one up as going too far outside my area of focus - stick to my knitting, subject my ideas to higher hurdles and avoid this pond - it's more of a swamp!

Small biotech with focus on specialist chemistry (lysyl oxidase chemistry). Multiple drug candidates.

Goal seems to be to sell asset to big pharma after phase 3 results.

Overview:

   • Drugs developed in house

   • 4 out of 5 drug development funded non dilutively (some by aus/german government)

   • ~50% of registry in institutional hands

   • Private capital raise of $15m capital @ $0.06/share but could have taken double (30m)

   • Likely capital raise at completion of Myelofibrosis (SNT-5055) phase 2 in mid 2025 (~70m needed)

   • Myelodysplastic syndrome (MDS) studies starting in 2025

SNT-5055

Background:

Myelofibrosis - current standard of care (JAK inhibitors) work, but not really stopping disease (i.e. unmet need). Targeting mutation therapy still far away. SNT-5055 is different it's targeting lysyl oxidase, i.e. different mechanism to SoC. But this mechanism will likely have slower changes in spleen because it targets bone micro environment to start with not the spleen directly i.e. in combination with SoC or other JAK inhibitors likely.

   • Phase 2 underway, results positive so far, good toxicology and tolerance. Still question if symptom reduction will beat SoC

   • Full results of Phase 2 Q1, Q2 2025 pivotal registration study talk with FDA starts with output in June

   • Then likely capital raise after this or deal/partnership for phase 3 start

Phase 3, need minimum 300 patients, 6-12 months (likely longer). Still a risk the drug doesn't meet Total symptom score (TSS) requirements, this could be mitigated by phase 3 study length (drug seems to improve effect over time) or patient selection. Likely need 60-100m AUD for this, they will either raise capital or do partnership, or combination of both. Given there was overdemand in recent capital raise I think raise is likely (>50%).

Exit

Since most of register is specialist healthcare funds the only way they can exit is via sale to big pharma or sale of each drug piecemeal (not sure redistribution mechanism in this case).

If we focus on SNT-5055, the buyer must consider how it fits in with their current portfolio, the good thing is that SNT-5055 is different mechanism and adds to existing JAK inhibitors but also means more work required for buyer to understand and could be seen as more 'risky'. Novartis write-down of MorphoSys by $800m due to safety concerns also highlights the risk, and apparently Novartis was just interested in just the pelabresib asset. Sale of just SNT-5055, given long patent and SNT's multiple drug make-up seems a good option for both parties (strong residual value for SNT). Single asset would likely receive lower amount than the examples in presentations e.g. lower than $1.6-2.1b USD. With SNT-5055, unlikely anything happens prior to phase 3 given how it's quite different, but if there was strong interest, expect a partnership with SNT for the large stage 3 study - this could be a derisking event for SNT and would increase my valuation.