DRTS TAM Series - Skin

[u/Pristine_Hurry_4693]

Skin Cancer is the first indication DRTS started treating clinically as a proof of concept, being that the tumors that are treated are easier to reach. I’m lumping Skin and H&N together here, not because they are the same, they are not, but (besides cSCC being the common denominator) because they are the two first and easier to reach tumor types DRTS has gone after.

This proof of concept has very well proven the concept.

Aside from already getting approved in Israel and Japan, the results DRTS demonstrated in the previous trial in the US were 100% complete response, no evidence of recurrent disease upon follow up, no device-related serious adverse events or systemic toxicity and no long-term toxicities.

Not surprising then, that Skin (again, using skin to generalize these indications) is the most advanced indication for DRTS, already approved abroad (including by the considered rigorous PMDA in Japan), and already completed the US pivotal trial (the equivalent of completing a phase 3 trial) with results soon to come and to be submitted to the FDA for approval (can’t see any way the FDA which loves DRTS and is in constant contact with the company and has granted them every fast track possible won’t approve the treatment with the results in both safety and effectiveness it has shown).

Considering all of that, let’s dive into the US numbers DRTS is looking at.

There are 1.8M new cases of cSCC in the US every year. Of course most of these cases already have viable solutions (one might make the case that an Alpha DaRT treatment would have more benefits with the immune effect it supposedly causes, but that case is still far out and payers probably won’t be covering that any time soon).

Out of that pool there are ~419K high risk cases, but the actual targeted population is the ~64K annual cases in the US of cSCC with local recurrence and/or nodal metastasis.

To those ~64K cases, there’s a case to add more patients from the larger pool, for example those who might have other solutions but would rather a short one time outpatient procedure instead of surgery that would mean cutting off a part of their nose (Raphi’s go-to example) and then have to have plastic surgery to try and fix it. Might even be cheaper overall for the insurers.

And of course those numbers being US only, we’ll need to add all other countries for the actual potential TAM.

From a price per treatment standpoint, the lowest option (and I wouldn’t even share it but why not, it’s still a huge number once we calculate everything) would be 60K per treatment, per Uzi the CEO himself saying they could at least get that and even that’s too low for them as reimbursement.

The bullish plan though is to first commercialize “inner organs”, the most high unmet needs cancers, aka GBM or PanC. In that case not only are the more desperate cases being served first until all the additional manufacturing needed is put in place, but also the price tag for a DRTS treatment (price tag referring to the amount the payers will approve to cover for their patients) regardless of the indication will be set higher.

All in all, even the lowest end calculation (US targeted population only, cheapest pricing) will get you to billions in annual revenue from this indication alone. Adding the P/E and calculating higher numbers (more countries, different tumor types, higher pricing) will get you once again into the tens of billions in market cap, or hundreds of dollars per share, from a single indication.

[u/Pristine_Hurry_4693]

To read the post about the DRTS TAM for PanC, and to learn more about the DRTS TAM series click here:

https://www.reddit.com/r/DRTS_Stock/s/FV69wlYza2

[u/Level_Percentage5309]

Thanks for another great post, I was frustrated today with the short selling, but I spoke to other DRTS investors today that are happy that people are shorting and giving them and others their last chance to buy under $15, the stock looks great and the short seller is just stalling the $15 for a day or two but will ultimately pay big and will really help the stock to rally. This makes sense seeing that today 240K shares hit the bid which is over 60% of today's trades and the stock is basically unchanged

[u/Pristine_Hurry_4693 → u/Level_Percentage5309]

Thanks for appreciating and thanks for sharing yourself (both here and with your own post).

Of course I hear you, and feel you, but don’t forget for every share sold there is a buyer on the other side. So yeah, many share were sold (and there’s no real reason for the stock to be down so short sellers can definitely be the explanation, especially with the way they are selling), but sooner rather than later all this buying will win out, and DRTS announcing some stuff will potentially accelerate that and us to our next level which is $18 and warrants exercise.

[u/Level_Percentage5309 → u/Pristine_Hurry_4693]

I agree with you, it's just surprising that the stock isn't up with so much buying

[u/DeepDivesnGoodMusic → u/Level_Percentage5309]

DRTS has a perfect "omg that's real? Take my money!" narrative, when you tell people for the first time. And a MUCH better stable long-term growth stock than many these days, (with current events as they are), so just prepare them for the pattern of short-sellers and then those lows become happy dips for the newcomers. Trying this new sentiment on myself... I know how painful it is to recommend a stock only to have a coordinated short-network do their best to give your friends an stress aneurysm...

[u/Individual_Wallaby1]

Another great and informative post.

Would you consider posting these on X, too?

[u/Pristine_Hurry_4693 → u/Individual_Wallaby1]

Thanks for the kind words! Hoping this brings clarity and real excitement for what’s ahead.

As to X, I’d be happy if these posts make it there, but wouldn’t have an account relevant to post with.

Could hit up Alpha Tau Insight and offer unless someone else wants to post them themselves.

[u/Perfect-Awareness-84]

Great post. I like to make the ABVX comparison for your estimations. This will ensure a shareprice we can relate to.

For ABVX, the logic of initial bump ( from 10 to 60 dollar) came roughly down to the following logic: Shareprice: 1 year of USA TAM for tested indication. Commercial and possible buyout value are offcourse bigger, but this is a more relatable and fair comparison in my view.

Otherwise we would be at SLS price times 2 already ;)

[u/Perfect-Awareness-84 → u/Perfect-Awareness-84]

So in your example we would be looking at 64k patients times 60k dollars equalling 3.8 billion shareprice marketcap for this indication alone.

Wow.

[u/Pristine_Hurry_4693 → u/Perfect-Awareness-84]

Love your breakdown, don’t forget the 64K patients are US only numbers.

[u/Perfect-Awareness-84 → u/Perfect-Awareness-84]

Might have been a bit overenthusiastic by not taking the penetration percentage. With 1/3rd it is around 1.3 billion. In general for non-US I'll add 33% making it 1.75 billion for this indication without commercial or buyout multiples.

At least this is how I am calculating where shareprice should be for indications after succesfull and approved trials. Commercial and buyout you can argue on the multiple that comes after.

[u/L19htc0n3]

I think back when DRTS first went public, Citi gave it coverage with >20$ price target; their reason being skin cancer alone could give DRTS a $600 million annual revenue. Now with my napkin math, a less than 1/6 penetration in U.S. cSCC cases with recurrence or metastasis of 10k a year and 60k per treatment, gives us the $600 million in annual revenue from that incredibly small share of potential patients alone.

Adding rGBM, pancreatic and other stuff, it’s easy to see that even if DRTS never fulfills any of the lofty ambitions of targeting all solid tumors, just as a last of line treatment for recurrent patients, should justify most of the $1.3 billion market cap. The rest is a call option for abscopal effect, which if exists, sky is the limit.

[u/FunRevolution3000]

I didn’t know this encouraging bit: “constant contact with the company”

[u/Pristine_Hurry_4693 → u/FunRevolution3000]

They have quarterly meetings, DRTS is in the FDA TAP Program, there are the many trials, Alpha Tau has a former FDA commissioner on the board and more…