The spin-out of Tiziana Life Sciences PLC’s StemPrintER technology “should create added incentive to own the shares”, according to highly regarded H.C. Wainwright healthcare analyst Raghuram Selvaraju.
Reiterating his ‘buy’ recommendation, Selvaraju said the LSE listed shares were worth £5 each, while he valued NASDAQ quoted depositary stock at US$25.
In both cases, the price targets were at a significant premium to the current share price, which in London was £1.13, and in New York US$6.27.
Announcing the demerger last week, Tiziana said its StemPrintER and SPARE genomics-based personalised technology had the “potential to become an essential prognostic tool” in the fight against breast cancer.
The former showed superiority over the market leader, Oncotype DX, owned by Exact Sciences (NASDAQ:EXAS), when it came to predicting the recurrence of the disease in ER+/HER2- postmenopausal patients.
More than 800 women took part in the study to be presented in a poster session at the American Society of Clinical Oncology (ASCO) virtual conference.
A second poster describing results of the prediction of distant recurrence using a next-generation StemPrintER model, named SPARE, showed even more refined accuracy than standard markers.
The StemPrintER demerger is intended to allow the newly independent group to secure funding to accelerate the development of the tests.
It will also ensure the independent entity can focus solely on the personalised medicines market.
H.C. Wainwright’s Selvaraju flagged up the potential hidden value of the StemPrintER business, pointing out that Genomic Health, whose sole technology was the aforementioned Oncotype DX, was sold in a US$2.8bn cash-plus-stock transaction.
Selvaraju has conservatively ascribed a value of US$280mln to StemPrintER, or 10% of the headline cost of Exact’s purchase of Genomic Health.
Given the current Tiziana market capitalisation is US$216mln, the market would appear, based on Selvaraju’s analysis at least, be missing the economic potential StemPrintER.