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Silence Therapeutics Share Discussion Threads
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|"Success in business can often hinge on opportunities taken (or indeed spurned).
Yes, you require a good product, or stellar technology and, of course, decent management.
But sometimes company-defining moments come down to happenstance and then having the lead-lined stomach to take the plunge.
Silence Therapeutics (LON:SLN) has done just that – taken the plunge - with its US$9.6mln acquisition of an 8.4% stake in Arrowhead Pharmaceuticals (NASDAQ:ARWR).
Whether it proves to be a pivotal investment only time will tell. At the very least it looks like a well-timed transaction.
Less than six months ago, when Arrowhead was valued at just shy of US$730mln, buying a shareholding of this scale was inconceivable (not mention too expensive).
Then fate and poor luck intervened (for Arrowhead at least). In November it cancelled three clinical programmes for drugs designed to tackle liver disease, which caused the stock to tumble to a low of US$1.20 from that August high-point of US$8.22.
Silence will have been looking on with interest – not least because the two companies are in the same area of research; they are pioneers in RNA interference (RNAi). This is the cellular process of silencing unwanted or harmful genes.
The two companies also use similar delivery mechanisms – GalNAc liver technology - so there ought to be areas where the pair can collaborate.
The investment starts the ball rolling in this regard – it is a conversation opener.
“Any number of scenarios are possible from mergers, takeovers, cross-collaboration, licensing and at default level maybe nothing,” said Silence’s chief executive Ali Mortazavi.
“We have taken a worst case that we are left we with a passive investment.”
The UK firm is not alone in having taken a view on Arrowhead and backed that hunch with cold hard cash.
The giant Amgen handed over an initial US$56.5mln in September to buy into RNAi therapies being developed to tackle cardiovascular disease as part of a deal worth US$617mln in staged payments.
It is worth noting the equity investment at US$7.16 a share provided support for a US$500mln valuation of Arrowhead.
Amgen’s interest lies with the firm’s GalNAc technology, which is unaffected by November’s decision. In fact, analysts say the platform has significant untapped potential.
If the market has spotted the value still inherent in Arrowhead it has been slow to react. Silence has been far quicker to cotton on. “We are in the field and so are much more knowledgeable about what’s happening,” said Mortazavi.
Technologies such as Silence’s and Arrowhead’s are undergoing clinical and preclinical assessment yet the market has assigned both discount valuations.
Yet the CRISPR gene editing technology, still very much in its infancy, is receiving billions of dollars of investment cash from big pharma, while listed companies are valued between $500mln and $1bn.
This is frustrating for those operating in RNAi, though it is also helped create the “extraordinary circumstances” that allowed Silence to make its move.
“A lot of different stars aligned at the same time and Arrowhead fell right back into our zone,” said Mortazavi.
“There wasn’t [just] one single reason we did this. At its best this could be a very, very important moment in RNA interference and the ability to actually be able to capture something.
“These opportunities don’t come around very often and they may be defining moments.”
One should remember Silence is first and foremost a drug development company, not an investment vehicle.
“We are going down the development path ourselves. You must not forget this,” said Mortazavi.
Indeed, the company continues to use its own IP and know-how to progress its liver-targeted preclinical pipeline.
In addition, it is expecting pivotal clinical results from its out-licensed phase III and phase II programmes in mid-2018.
The share price, up 4%, suggests the market likes the Arrowhead deal. Equally, investors don’t seem to be getting too carried away.
And neither is boss Mortazavi: “We are in a place where any number of things can happen, including nothing.”|
|A good assesment Callum. This is stage 1 of some type of collaoration. Either way visa vis net cash and SLN's market cap stock price looks £1 wrong price to me. And I don't mean 0!|
|Anyway, just topped up with another 1000 shares even though ADVFN is showing it as a sell.|
|Below is a link as to why SLN are paying so much less for Arrowhead shares than Amgen;
Cause is trials abandoned due to FDA liver toxicology issues with their key candidate drugs. Now we know SLN has a new focus on liver at moment. Could this be a way of resurrecting these drug candidates with a SLN delivery mechanism?|
|Amgen is backing Arrowhead, having bought in at end-September, just before the Arrowhead year-end. Arrowhead paid a lot more than Silence for the shares, paying $7.16 for the 3m shares it bought (price given in Arrowhead 10-K).
|I've bought some more on the back of that announcement.
I think there's a very positive statement on market value from AM in there "We believe that the recent technological advancements in RNA therapeutics have been underestimated and undervalued."
Arrowhead stock looks to be up over 20% in the pre-market, so the pyjama traders seem to be viewing this as a precursor to acquisition, but the Arrowhead market cap is quite a bit bigger than Silence's by my calcs, even at Friday's close price.
I wonder if Silence are looking to get a licensing deal out of this - i.e. if this is one of the companies that it thinks might need to use one of its patents.
If we are headed for consolidation then the Silence stake may end up being bought out by a bigger player who is looking to buy Arrowhead, so there's some option value in there as well.|
|Two wrong don't make a right in my view. Arrowhead lost $80m last year alone. But who knows.|
|Waterloo - clearly a precursor to a combine between the 2. Universally positive to me.|
|Does anyone follow this? Beyond saying they have limited confidence in their own platform, what on earth is this about? Back to scatter guns probably. Not one for me.|
|Thanks Rogen8, I guess I can call myself patient after over a decade of holding SRP/SLN.
Said a few years back, in the bottom drawer and hopefully one day they'll deliver the goods in this field.
Wait on some more it is then.|
|Waterloo posted cautious comments on the SUMM board before the shares doubled. SLN have a good management team and experience board, it's a waiting game|
|OMG been a long time since I have been here and still a couple of handles I recognise.
I still hold these in the bottom drawer from well before the heady days before I left for down under (9 years ago).
Kept a small eye out and really dont know what is going on/outlook etc, but hopefully something will turn up eventually. Good luck all.
|Thanks for this Waterloo but you could actually look at this as a positive for SLN in that the failure of their delivery mechanism just highlights the proven track record safety profile of SLN's delivery mechanisms.|
|'Silence has confirmed the potential of its delivery platform for in vivo gene editing'...
looks like a leap forward for Silence. Certainly very good news indeed|
|A bit technical for me, but that RNS sounds like good news...|
|I don't think I'll be running just yet.
"Safety problems have not shown up to date in the company's other RNAi drugs, which are all delivered into patients differently from revusiran, Maraganore said. He added that he still expects to have three drugs approved and on the market by 2020."
... but certainly a reminder of the other side of the coin for biotech from the SUMM experience.|
|Decent volume today. Are we getting a bit of the SUMM slipstream?|
|Well that's why we buy into biotech I suppose - hoping to get a new treatment through to commercialisation or have someone with deep pockets buy in to help progress a potential treatment. SLN's turn may come...
In the meantime it can't do any harm to have a reminder of what can happen.|
|Looking at todays announcement from SUMM, doesn't it just make you envious. Surely our turn will come!|
|Canaccord Genuity today reaffirms its buy investment rating on Silence Therapeutics PLC (LON:SLN) and raised its price target to 249p (from 233p).|