Cancer Immunotherapies Will Benefit From Growing Checkpoint Inhibitor Adoption

Catalysts

About Scancell Holdings

Scancell Holdings develops novel cancer immunotherapies and oncology antibodies designed to improve survival outcomes in patients with solid tumors.

What are the underlying business or industry changes driving this perspective?

• Advancement of iSCIB1+ toward randomized registrational trials in advanced melanoma, supported by strong progression free survival data and a clear regulatory path, positions the company to convert clinical success into future product revenue and milestone income.
• Growing global adoption of checkpoint inhibitors as standard of care in melanoma and renal cancer increases demand for effective combination partners, creating a structural opportunity for iSCIB1+ and Modi-1 to enhance treatment regimens and expand addressable sales volumes.
• Shift in oncology toward off the shelf, scalable immunotherapies versus highly individualized vaccines supports broader market access for Scancell’s platforms, which can improve manufacturing efficiency and ultimately support healthier net margins as volumes scale.
• Progress of partnered GlyMab antibodies with Genmab, including anticipated development milestones and potential royalties, provides a recurring, capital light income stream that can narrow operating losses and support more sustainable earnings over time.
• Regulatory focus on progression free and overall survival endpoints, combined with Scancell’s use of widely available HLA testing to pre select responders, increases the probability of Phase III success, which can accelerate time to market and improve future earnings visibility.

Assumptions

How have these above catalysts been quantified?

• Analysts are assuming Scancell Holdings's revenue will decrease by 59.3% annually over the next 3 years.
• Analysts are not forecasting that Scancell Holdings will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Scancell Holdings's profit margin will increase from -260.5% to the average GB Biotechs industry of 31.7% in 3 years.
• If Scancell Holdings's profit margin were to converge on the industry average, you could expect earnings to reach £100.4 thousand (and earnings per share of £0.0) by about December 2028, up from £-12.3 million today.
• In order for the above numbers to justify the price target of the analysts, the company would need to trade at a PE ratio of 4868.9x on those 2028 earnings, up from -8.3x today. This future PE is greater than the current PE for the GB Biotechs industry at 10.3x.
• Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 7.47%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

• The company remains loss making with an annual loss of GBP 12.3 million and cash runway only into the second half of 2026. Any delay in partnerships, milestones or fresh funding for the Phase III iSCIB1+ program could force cost cuts that slow development and constrain future revenue growth and earnings.
• Success of iSCIB1+ and Modi-1 depends on positive Phase III and additional Phase II outcomes in competitive oncology markets where large players like Moderna, BioNTech and checkpoint inhibitor manufacturers are advancing their own regimens. Any underwhelming efficacy or safety signal versus these alternatives would reduce physician uptake, limiting long term revenue and margin expansion.
• The business model assumes significant future milestone and royalty income from Genmab and GlyMab Therapeutics, yet timing and probability of these payments are outside Scancell’s control. Slower than expected partner progress would leave the company more reliant on dilutive equity or debt financing, pressuring net margins and earnings.
• Although off the shelf platforms should be cost efficient at scale, late stage clinical trials, commercial scale manufacturing and potential global launches will materially increase R&D and administrative expenses. If pricing pressure or reimbursement hurdles in oncology limit uptake, rising costs could outpace revenue, keeping operating losses and negative earnings entrenched.

Valuation

How have all the factors above been brought together to estimate a fair value?

• The analysts have a consensus price target of £0.31 for Scancell Holdings based on their expectations of its future earnings growth, profit margins and other risk factors.
  
• In order for you to agree with the analysts, you'd need to believe that by 2028, revenues will be £316.9 thousand, earnings will come to £100.4 thousand, and it would be trading on a PE ratio of 4868.9x, assuming you use a discount rate of 7.5%.
  
• Given the current share price of £0.1, the analyst price target of £0.31 is 68.4% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.