Initiating Coverage on Chimeric Therapeutics Limited (ASX: CHM)


December 16, 2021
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Chimeric Therapeutics Limited (ASX: CHM) is a clinical stage cell therapy company. CHM commenced trading on the ASX on 18 January 2021. The Company raised $35m through the issue of 175m shares at an issue price of $0.20. The Company currently has 333.4m shares on issue, 115.2m shares are classified as restricted and will be escrowed until 18 January 2023 (24 months post listing).

The Company was founded on the Chlorotoxin (CLTX) CAR-T licence and has since acquired the licence for an additional CAR-T candidate (CDH-17) which the Company will be seeking to develop with the goal of achieving approval and commercialisation. We note given the size and resources of the Company, if the clinical trials show promising outcomes we would expect the Company to seek to out-licence the technology to a large biotech company for further development and potential commercialisation or enter into a partnership.

On 1 December 2021, CHM announced it had obtained the option to acquire the exclusive licence to the CORE-NK platform, an allogeneic (off the shelf) natural killer cell platform that activates and expands healthy donor NK cells. The platform was developed and licence secured from Case Western Reserve University (CWRU). The platform has completed a Phase I clinical trial for NK cells in both blood cancer and solid tumours opening up the potential to expand the portfolio to blood cancers. The results from the Phase I clinical trial are yet to be published, with data expected to be published in mid-2022.

We have assigned CHM a valuation of $0.76 per share. We have valued CHM on a risk adjusted NPV basis for the CLTX candidate currently in a Phase 1 clinical trial for recurrent/progressive GBM. We have modelled sales in both Europe and US with a market penetration rate of 17% and peak sales of USD$2.92b. We have assumed a launch date of 2027 and assigned an 8% probability rate of the candidate receiving approval. We have not incorporated value from other cancer indications nor the other assets given the structure of the Phase I trials is yet to be complete. Given the potential for other cancer indications for treatment by CLTX CAR-T, the CDH17 CAR-T and the addition of the CORE-NK platform, there is significant upside potential for CHM.

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