“Rafael Holdings is a holding company that was spun-off from IDT in March 2018 with the following belongings:
1) Greater part interests in two promising pharma firms, Rafael Pharmaceutical (“Rafael Pharma”, “Pharma”) and Lipomedix.
2) A wholly owned venture centered on creating a pipeline of therapeutic compounds, The Barer Institute.
3) And a portfolio of commercial authentic estate qualities.
We feel that an expense in Rafael Holdings represents an particularly uneven opportunity in which a part of the company’s existing price is protected by its portfolio of true estate homes, LipoMedix and The Barer Institute, whilst its stake in Rafael Pharmaceutical is most likely value several, numerous multiples of its current current market cap. We also consider that the expenditure is hidden from the broader investment local community thanks its obscure composition, for this reason the intense valuation price reduction. As an example, the organization is categorized on Bloomberg as an “Investment Company” owing to its real estate assets fairly than a biotech organization wherever we believe the greatest amount of price disconnect exists. The “crown jewel”, Rafael Pharma, has offered at several clinical conferences, but generally as a privately held biotech enterprise. A further investigation and understanding of IDT/Howard Jonas is necessary to know that an possession desire in Pharma is achievable by an investment in Rafael Holdings.
Company History
Cornerstone Pharmaceuticals (renamed Rafael Prescription drugs in 2018) was launched in 2001 based on a premise recognized as Altered Metabolism of cancer cells, or the scientific analyze that most cancers cells develop electrical power otherwise than healthier cells. Based mostly on this groundbreaking scientific operate, Cornerstone’s founders set off to dedicate their occupations to studying the strategies that cancer cells deliver electricity.
In 2012, Howard Jonas was launched to a Cornerstone Pharma government, and soon after studying a lot more about the firm and its mission, he available his products and services as a board member. Various yrs into his volunteer provider, Jonas had turn out to be convinced of the company’s perform and was amazed by the scientific and medical scientific trials getting done at Wake Forest Baptist University. In want of money to additional its investigate, Howard agreed to fund the company’s upcoming in exchange for the ideal to individual a greater part stake in Rafael Pharma by IDT. In addition to IDT’s financial investment, Howard invested $15 million personally.
As trials progressed, it appeared that IDT could be sitting on an asset that could revolutionize cure therapies for difficult to deal with cancers and deadly ailments. In a Section I scientific trial at Wake Forest Baptist Healthcare Centre, Rafael dosed 18 sufferers with its direct compound, CPI-613, in blend with a typical chemotherapy regimen, Folfirinox, for clients with Stage IV metastatic pancreatic cancer. Of the 18 patients dosed, 4 seasoned a total reaction and 8 others experienced radiographic responses, so an aim reaction (total remission or partial remission) fee of 61%. As a comparison, Folfirinox by itself has a comprehensive response (CR) rate of fewer than 1% and an aim reaction price of 31.6%. A couple of the individuals that professional remissions from the Stage 1 demo have been vocal advocates for the corporation and drug in hopes of aiding other folks. You can go through just one of their amazing and inspirational testimonials on this blog site www.cpi613.com. Based on these unbelievable results, Rafael Pharma launched a Phase III trial to examine CPI-613 in 500 phase IV metastatic pancreatic cancer individuals at 70 locations and properly done the demo irrespective of the ongoing impacts of the COVID-19 pandemic.
Presented these interesting final results, Howard made the decision to spin-off Rafael Holdings from IDT in 2018 with about 50 percent of the mother or father business cash and all of IDT’s real estate belongings to fund long run trials.
Rafael Pharmaceutical
CPI-613 (Devimistat) is at this time conducting several clinical trials, such as the Phase 3 trial for very first line metastatic pancreatic cancer, a Phase 3 demo for acute myeloid leukemia (AML), a Phase 2 demo for relapsed Burkitt’s lymphoma, a Phase II Demo for Fist Line Regionally Superior Pancreatic Cancer, 5 added Phase 1/2 trials, and numerous preclinical studies. To date, CPI-613 has reached multiple remissions from some of the deadliest cancers, administered as both a one agent as perfectly as in mix with regular drug therapies.
The business expects multiple important milestones this calendar year, led by its Stage III Metastatic Pancreatic Most cancers demo. The Phase III demo was totally enrolled this earlier August, 18 months in advance of plan. In Oct, the Food and drug administration granted speedy observe acceptance, and the firm is anticipating the details browse-out in Q3 of this 12 months. If productive, the treatment method would come to be standard of treatment and CPI-613 would potentially turn into a $5+ billion per yr Revenue sign for Pancreatic Most cancers alone. At a 3-6x Income a number of, which is a historic range that big Pharma would pay back for an oncology asset like this one, Rafael Holdings’ 50% stake in Rafael Pharma would be valued at around $7.5-$15 billion, or 12x-23x the current industry cap. This ignores all of the other indications for CPI-613 and the other assets owned by Rafael Holdings, which could include substantial benefit to the corporation.
At the globe-renowned JPMorgan Health care Convention this earlier January, Rafael Pharma CEO, Sanjeev Luther, disclosed facts for the first time from its Compassionate Use Cohort in Metastatic Pancreatic Most cancers. Seven Initially-Line clients and 19 Next-Line Individuals have been treated with CPI-613, displaying a 71% response rate in initial-line and 53% reaction price in 2nd-line. There are also four verified CR’s in compassionate use out of the 1st 27 individuals. This “unheard of” information, as described by Rafael Pharma’s Management group, confirms the effects from the previously Phase I trial.
Ono Pharmaceutical Out-Licensing Arrangement
Rafael Pharma’s June 2019 introduced Out-Licensing Settlement with Ono Pharmaceutical to accelerate medical advancement and commercialization of CPI-613 in Japan and other Asian nations was a single of the key milestones that amplified our confidence and consolation as Rafael Holdings shareholders. Beneath the phrases of the settlement, Rafael Pharma acquired a a single-time upfront payment of $12.9 million and up to an additional $150.3 million if particular enhancement and commercial milestones are obtained. We imagine Rafael Pharma has previously obtained a part of the milestone payments subsequent Ono’s graduation of its Period I study of CPI-613 (ONO-7912 in Japan) for people with Pancreatic Cancer six months ago. The commencement of this trial and partial milestone payment is indicative of Ono’s self esteem in the drug and conviction of achievement. If profitable, Rafael Pharma will also get very low double-digit royalties based on Revenue in Japan, South Korea, Taiwan, and ASEAN (Association of Southeast Asian Nations) countries which would make on major of the higher than figures and valuation outlining the price creation opportunity.
Globe Course Management Workforce
A single of the essential features that has ongoing to excite us problems the caliber of people working for Rafael Holdings and its different subsidiaries. Rafael Pharma Board Members incorporate Dr. Richard Axel, a environment-renowned chemist at Columbia College and former Nobel Prize winner in Physiology and Drugs, and Dr. Chi Van Dang, the Director of the Abramson Most cancers Middle at the University of Pennsylvania and one of the world’s primary authorities on most cancers metabolic rate. 68% owned LipoMedix is led by CEO, Alberto Gabizon. Gabizon is the co-inventor and co-developer of Doxil, a multiple myeloma procedure that generates hundreds of millions in Earnings for each 12 months. And Rafael Holdings therapeutics venture, The Barer Institute, is named just after Sol Barer, the co-founder of Celgene, an asset obtained by Bristol-Myers for $74 billion in 2019. Barer has agreed to use his identify and connections to sort and try and replicate the good results of Celgene inside of of Rafael Holdings. The Barer Institute has presently reached collaborative investigation agreements with main experts in the field of cancer at primary academic institutions.
Most excitedly having said that, was the recent employing of Ameet Mallik to turn into Rafael Holdings Main Executive Officer. Mallik will sign up for Rafael Holdings on Could 1st from Novartis in which he is at present the U.S. Head of Oncology. It is hard to picture that the major oncology govt at just one of the world’s most significant pharmaceutical firms would go away a “cushy” task producing hundreds of thousands to acquire the helm at a little biotech organization less than 1% of his existing employer’s size unless of course he felt it was a “once in a lifetime” prospect. Mallik’s employment settlement will give him equity in whichever the potential at Rafael appears to be like like (we imagine that Rafael Holdings and Rafael Pharma will merge to come to be a pureplay biotech with increased float and far more liquidity). We estimate that RFL stock would have to have to appreciate additional than 5x from current stages for Mallik to “breakeven” on the transfer and to account for the prospect price tag of transferring from a $15 billion Earnings organization inside of Novartis.”
