#DDDD $DDDD $LBPS $LOAC

http://thepharmaletter.com/article/platforms-versus-products-in-the-life-sciences-sector

'One common such weakness is often the failure of management teams to differentiate between the value of technology-derived marketable assets from the value of a pure platform technology.'

4d Pharma has many 'derisking' routes.

#DDDD $DDDD $LBPS $LOAC

This is unlike many platform companies. Each derisking is likely to come with a significant re-rate.

Potential sources of derisking:

#DDDD $DDDD $LBPS $LOAC

1) A $347.5m payment from Merck for any 'indication' in the combined work on bacterial vaccines

2) A sponsor for early stage MRx0518 trials, after receiving FDA 'Breakthough Therapy' designation

3) Finding a Blautix P3 partner and receiving payment

#DDDD $DDDD $LBPS $LOAC

There are also other potential routes to market related to 4d Pharma's vast pipeline.

This has two effects:

1) Validating 4d Pharma's MicroRx drug discovery platform

2) Providing a route to funding, which reduces dilution risk to shareholders.

#DDDD $DDDD $LBPS $LOAC

Due to the breadth of work 4d Pharma is not a typical 'platform' company.

There is a very clear and diversified derisking pathway, which is beneficial for the company and shareholders.

In fact, 4d are already making progress towards this.

#DDDD $DDDD $LBPS $LOAC

My friend @AimHardy explains this here - the MRx0518 P1A results have already gone some way to validating the platform, and derisking the pipeline. https://twitter.com/AimHardy/status/1326838383583301632

#DDDD $DDDD $LBPS $LOAC

The Merck deal being agreed provides a potential source of funding at some point in the future.

And there are chances of a Blautix P3 deal.

This big picture view explains how 4d has moved in recent times to derisk the business.

#DDDD $DDDD $LBPS $LOAC

And here comes the point of this thread:

Any of these derisking routes coming to fruition enables reinvestment into other areas of the business and a positive feedback loop.

Investors can hold a greater percentage of the company, due to less dilution.

#DDDD $DDDD $LBPS $LOAC

4d Pharma have been and are entering a news-rich time in the next few years which enables - through a variety of routes - the business to become self sustaining.

Apart from dilution, why is this important?

#DDDD $DDDD $LBPS $LOAC

A) Early stage biotech frequently suffers from having to constrain focus on a few different treatments - a source of funding alleviates this to some degree

B) With one source of funding, other sources of funding become exponentially easier to find.

#DDDD $DDDD $LBPS $LOAC

The best example here are the three central nervous system (CNS) treatments below.

Research continues to find promising links between the gut and the brain.

While potentially extremely lucrative, this research is only possible when well capitalised.

#DDDD $DDDD $LBPS $LOAC

Why am I investing now and not after the business has been derisked?

The price I'd have to pay then would likely be significanty higher.

On the cash-rich and experienced NASDAQ, news of Merck payments, a P3 deal or an FDA fast track cause large rises.

#DDDD $DDDD $LBPS $LOAC

4d Pharma's investment thesis is so compelling NOW because:

1) We can see the undervaluation vis-a-vis peers
2) We can see the routes to derisking
3) We know (and have received external validation of) 4d's platform, thus their long-term staying power

#DDDD $DDDD $LBPS $LOAC

No one needs me to explain for the nth time that the market capitalisation does not reflect any of this.

Through a number of routes 4d Pharma may become a self-sustaining business in the next 3-4 years.

#DDDD $DDDD $LBPS $LOAC

This enables all the benefits that provides - greater investment, easier funding, and brand recognition.

All of these are key to achieving a market capitalisation over and above £5 billion, as management I am sure are aiming for eventually.

#DDDD $DDDD $LBPS $LOAC

There is risk here, as with any AIM company. What makes 4d Pharma unique is the sheer number of ways in which that risk can be mitigated.

It takes one success out of many for the route to a blue-sky valuation to clear.

That is why I am so optimistic.