Risk Adjusted Net Present Value: What is the current valuation of Fusion Pharmaceuticals’s FPI-1434

The revenue for FPI-1434 is expected to reach an annual total of $65 mn by 2039 in the US based off GlobalData’s Expiry Model. The drug’s revenue forecasts along with estimated costs are used to measure the value of an investment opportunity in that drug, otherwise known as net present value (NPV). Applying the drug’s phase transition success rate to remaining R&D costs and likelihood of approval (LoA) to sales related costs provides a risk-adjusted NPV model (rNPV). The rNPV model is a more conservative valuation measure that accounts for the risk of a drug in clinical development failing to progress.

FPI-1434 Overview

FP1-1434 is under development for the treatment of solid tumors, colorectal cancer, lung cancer, head and neck cancer squamous cell carcinoma, endometrial cancer, cervical cancer, ovarian cancer, triple-negative breast cancer, adrenocortical carcinoma (adrenal cortex cancer), uveal melanoma, human epidermal growth factor receptor 2 negative breast cancer and epidermoid carcinoma. The drug candidate comprises of monoclonal antibody conjugated to alpha particle-emitting cytotoxic isotope Actinium-225. It is administered through parenetral route. The therapeutic candidate acts by targeting cells expressing insulin-like growth factor-1 receptor (IGF-1R). The drug candidate is developed based on Fusion’s fast-clear linker technology.

Fusion Pharmaceuticals Overview

Fusion Pharmaceuticals is a clinical-stage biopharmaceutical company which develops targeted alpha-particle radio therapeutics for the treatment of cancers. It offers pipeline products such as FPI-1434, FPI-2059 and FPI-1966. The company’s pipeline products treat multiple cancers like head and neck bladder cancer, colorectal cancer and gastric cancers. It aslo include mono therapy and combination therapy. Fusion Pharmaceuticals carters its products under brand Keytruda. It has its operations in the US and Canada. Fusion Pharmaceuticals is headquartered in Hamilton, Ontario, Canada.

The company reported revenues of (US Dollars) US$1.5 million for the fiscal year ended December 2022 (FY2022), an increase of 1.5% over FY2021. The operating loss of the company was US$88 million in FY2022, compared to an operating loss of US$82 million in FY2021. The net loss of the company was US$87.6 million in FY2022, compared to a net loss of US$81.1 million in FY2021.

For a complete picture of FPI-1434’s valuation, buy the drug’s risk-adjusted NPV model (rNPV) here.

GlobalData

GlobalData, the leading provider of industry intelligence, provided the underlying data, research, and analysis used to produce this article.

To create this model, GlobalData takes into account factors including patent law, known and projected regulatory approval processes, cash flows, drug margins and company expenses. Combining these data points with GlobalData’s world class analysis creates high value models that companies can use to help in evaluation processes for each drug or company.

The rNPV method integrates the probability of a drug reaching a clinical stage into the cash flow at that time, which provides a more accurate valuation, as it considers the probability that the drug never makes it through the clinical pathway to commercialization. GlobalData’s rNPV model uses proprietary likelihood of approval (LoA) and phase transition success rate (PTSR) data for the indication in the highest development stage, which can be found on GlobalData’s Pharmaceutical Intelligence Center.