Thread by @MylesMcNulty

Whilst many scream, "avoid loss-making growth stocks like the plague!" (e.g. #AVCT!)...

@Merck ponders a $40bn T/O of oncology-focussed biotech, @SeagenGlobal.

In 2021, Seagen made a loss of $0.67bn, on revs of $1.57bn.

'22 rev forecasts: ~$1.7bn.

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reuters.com/markets/deals/…

$SGEN specializes in antibody-drug conjugates ('ADC') - a relatively novel form of targeted cancer treatment.

@avacta's targeted cancer treatment platform, preCISION, has the real potential of generating pro-chemotherapies that are MORE targeted than ADCs, and thus...

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...also potentially capable of delivering a more potent drug payload.

#AVCT will be announcing the results of the first preCISION prodrug P1 trial (AVA6000) in the next few months.

Success will mean the platform could be used to modify many other existing chemotherapies.

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What happens to #AVCT's SP, if it reports that it has delivered pro-doxorubicin to 15-20 patients, at a concentration (at the site of the tumour) that is 10x as potent as is achieved with standard dox... And that those patients did not suffer hair loss or other side effects?

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I'm very confident that an RNS of this sort lands in the coming months. It will be nothing short of industry-changing. A multi-billion $ mkt cap overnight.

The immense valuation Merck is willing to pay for Seagen (24x 2022 sales!) is a good reminder of the defensive...

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...nature of Health Care. Cutting edge biotech (above all, oncology-focussed) will always command astronomical valuations, regardless of wider markets.

Hence why I'm completely at ease with heavily lossmaking growth stock #AVCT accounting for a massive portion of my PF!

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