Teardown: Oncotelic Joint Venture with Dragon 

 

 

On April 4th, 2022, OTLC, Oncotelic has announced the completion of a Joint Venture with Dragon Overseas Capital, a Golden Mountain Partners affiliate. The announcement marks a bold strategic shift for Oncotelic and paves a clear path to rapidly develop OT-101. The CEO of Oncotelic, Dr. Trieu sounded jubilant and relieved to see the enormous cost burden of drug development shift to the Joint Venture, Dr. Trieu said “This JV unburdens the Company of the high cost of drug development”. The purpose of the Joint Venture is to bring drugs/therapies to the market as quickly as possible.  

 

The Structure: 55% Dragon Overseas Capital 45% Oncotelic 

 

Location: The JV will be based in Hong Kong 

 

Commitment: Dragon made a commitment to invest $27.6 million to prioritize and accelerate the development of DIPG and get it approved from the FDA 

 

The Upside: Oncotelic will receive $50 million upon FDA approval of DIPG, in addition Oncotelic will retain all the upside of the joint venture.  

 

The going rate of Vouchers 

We have seen a wide range of prices for Vouchers, the price of a voucher depends on the rarity, severity and number of patients that could benefit from a drug, so it’s in the best interest of Dragon to get DIPG out in the marketplace so they can grab a bigger share of the potential Value since Oncotelic will receive only $50 million and Dragon get to keep the rest. 

 

 

 

FDA’s Priority Review Voucher Programs 

Congress created Priority Review Voucher (PRV) programs to encourage pharmaceutical companies conduct research and develop drugs for certain rare pediatric diseases, and as required by the law, the GAO examined the PRV program’s effectiveness in the marketplace and the price at which a Voucher is being sold to another pharmaceutical company willing to manufacture and bear market risk, the GAO found that the highest price ever paid for a Voucher was a whopping $350 million! 

 

How much is your baby worth?  

Gene therapy has made a tremendous progress and delivered lifesaving drugs that were truly a miracle, however, the cost of these drugs has raised some eye brows. FDA recently approved the Most Expensive Drug in the world! The drug/therapy is for Children born with a rare disease called muscular dystrophy, the cost of the drug is $2.1 million, it's not a typo! We’ve written extensively about this drug, please click here to learn more 

 

The Strategy going forward: 

Dr. Maida in a recent interview with Daily Stock Deals discussed company’s strategy at a great length – click & watch the interview Dr. Maida mentioned that OTLC is in talks with 4 different pharmaceutical companies for a potential partnership to develop other drugs. The partnership structure can be different with each company but the goal remains the same – conducting trails, getting FDA approval and getting the drugs on the pharmacy shelves.  

 

The Joint Venture with Dragon was a great first step, however, Oncotelic has a number of other drugs in various stages of development and we think the company potentially could partner to develop other cancer drugs, combination therapies for existing FDA approved drugs and drugs under the orphan drug development protocol with industry partners, regardless of the path and the nature of partnerships, the future of OTLC looks highly promising, therefore, we think investors should keep OTLC on their radar!  

 

 

 

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