Fair question however again, there are several reasons why eXoZymes may exit its NCT Pharma entity.
Developing a drug and going through the FDA process is extremely risky and costly. Completing all 3 phases can cost hundreds of millions to billions of dollars, and there is no guarantee of FDA approval. Exiting earlier (Phase 1 or 2) will allow eXoZymes to mitigate some of the risk, recover the funds spent on R&D and have a significant return on investment.
eXoZymes' primary focus is on its cell-free biochemical manufacturing platform and all the associated R&D activities. It’s not focused on establishing global sales or distribution networks or managing multiple international regulators. Building this capability would dilute the company’s focus and be extremely expensive.
Exiting its NCT Pharma entity would deliver a multi-billion-dollar capital injection and thereby rapidly accelerate business activities/development as well as expedite other compounds in the pipeline. Remember, NCT Pharma analogues are just one target out of the hundreds that the platform can address.
The NCT pharma entity is going to license the technology from eXoZymes, so even after an exit, eXoZymes would likely receive royalty payments (5-10%) on production/sales. This means that the company still retains significant upside while reducing downside risk. Pharma yoyalty payments typically have very high profit margins with minimal expenditure.
Exits are some of the most common commercial strategies in biotech. Small biotech firms undertake the fundamental R&D, de-risk an asset to a certain point and then a large pharma acquires the entity and funds late-stage development and global rollout.
Nothing is stopping eXoZymes from doing a JV later in the FDA process however, in my YouTube interview with Damien Periman, the CCO, he explains why taking value upfront often makes more sense than having to wait years and carry the risk for the entire FDA approval process. eXoZymes will already have a JV partner for this entity who has expertise in preclinical and clinical activities.
Again, NCT Pharma analogues are just one of hundreds of assets.
Okay, I see it. When they can make royalty agreements, than this is a great Business model. Is it common, that R&D companies go that way and are able to make royalty agreements? 5-10% seems a bit optimistic to me.
Another point to consider is that, at its core, eXoZymes’ creates biochemical production solutions for a wide range of compounds. The company has just chosen to initially launch in the nutraceuticals and pharmaceuticals space because these markets are extremely high-value and operate with relatively low product volumes. Unlike industrial chemicals, which they can also serve, but these typically operate on lower margins that require high production volumes.
There are many pharmaceutical APIs and natural-compound that show strong promise in the lab but never actually reach commercialisation because they strggle to be manufactured efficiently or economically at scale. eXoZymes’ platform is designed to unlock these types of high-value compounds by creating a viable and scalable production solutions. eXoZymes' NTC compound is a perfect example of what the platform can achieve.
I'd say over the next 24 months, eXoZymes will launch its own developed assets via spin-outs and joint ventures. This will allow the company to demonstrate the platforms performance and commercial viability before they shift to technology-licensing agreements. This is also why I said, they'll develop a playbook as there is lots to learn in the rollout.
Once eXoZymes reaches the licensing stage, companies will engage them to undertake R&D and design production solutions for specific compounds. Traditionally, in the biotech space this takes years and costs many millions of dollars. By contrast, eXoZymes’ AI-driven process and innovative system, reduces timelines down to mere months and at a fraction of the cost.
Under these future licensing partnerships, eXoZymes would receive milestone payments for achieving certain R&D objectives as well as licensing payments tied to the production/sales of that targeted chemical.
In the nutraceuticals and pharmaceuticals space, licensing fees typically range 5-10%. If eXoZymes can provide the only scalable or economically viable solution, then they can negotiate from a position of strength.
The food flavors, fragrances and industrial chemicals sectors operate on smaller margins but they do have much larger production volumes. Licensing fees here range between 2-5%.
eXoZymes operates on a capital-light and low-operational cost model. They will eventually have high profit margins.
The dual-market approach for NCT really stands out as a smart risk mitigation stragegy. Targeting both nutraceutical and pharma markets from the same R&D feels like a no-brainer when you consider how much capital usally gets burned on single-path development. The fact that 11 CMOs confirmed they already have the necesary infrastructure is huge. That validation alone suggests the scale-up path is far more straightforward than most biotech plays at this stage.
You’re bang on mate! It’s wild to think those programs are just 4 opportunities out of the 100s that eXoZymes can solve for.
Given you’re into AI infrastructure, I'm sure you'd find eXoZymes' integration of AI and computational design fascinating. It essentially allowed them to build their NCT module in 5 months and at a fraction of the cost of traditional Synbio companies. This kind of development program is literally unheard of in the industry.
eXoZymes’ R&D timelines and costs will only improve as their model is trained on more data.
That exozymes built the NCT module within 5 months with helps of AI tells me, that this could be mimicked quickly by one of these CMOs. Sorry, I am sceptical.
Thanks for sharing your thoughts mate however, this assumption fundamentally misunderstands the role of CMO’s and eXoZymes' advantages.
The technology can’t be mimicked by CMOs and eXoZymes’ 5 month development speed is a direct result of their proprietary innovations and advantages, which have created an extremely challenging barrier to entry.
CMOs are manufacturers, not R&D companies. They don’t have the focus or specialist teams to replicate the complex technology that eXoZymes has developed.
eXoZymes’ platform has required a decade of development to optimise enzymes into Exozymes, along with the associated cofactors and reagents. It's not as simple as copying them. Many of the company’s core innovations are patent protected, creating a significant barrier for any organisation attempting to copy their process. Anyone trying to mimic their process would invite immediate legal action.
The 5 month development speed of their NCT module was only possible because the company’s AI model was trained on years of proprietary data. Without that dataset and lab work, developing a comparable module is effectively impossible.
There are countless other points I could go into however, you should first read my initial eXoZymes report to actually better understand the company and what they have innovated.
Not sure, whether I understand the exit strategy correctly... Why would they sell good business areas?
Fair question however again, there are several reasons why eXoZymes may exit its NCT Pharma entity.
Developing a drug and going through the FDA process is extremely risky and costly. Completing all 3 phases can cost hundreds of millions to billions of dollars, and there is no guarantee of FDA approval. Exiting earlier (Phase 1 or 2) will allow eXoZymes to mitigate some of the risk, recover the funds spent on R&D and have a significant return on investment.
eXoZymes' primary focus is on its cell-free biochemical manufacturing platform and all the associated R&D activities. It’s not focused on establishing global sales or distribution networks or managing multiple international regulators. Building this capability would dilute the company’s focus and be extremely expensive.
Exiting its NCT Pharma entity would deliver a multi-billion-dollar capital injection and thereby rapidly accelerate business activities/development as well as expedite other compounds in the pipeline. Remember, NCT Pharma analogues are just one target out of the hundreds that the platform can address.
The NCT pharma entity is going to license the technology from eXoZymes, so even after an exit, eXoZymes would likely receive royalty payments (5-10%) on production/sales. This means that the company still retains significant upside while reducing downside risk. Pharma yoyalty payments typically have very high profit margins with minimal expenditure.
Exits are some of the most common commercial strategies in biotech. Small biotech firms undertake the fundamental R&D, de-risk an asset to a certain point and then a large pharma acquires the entity and funds late-stage development and global rollout.
Nothing is stopping eXoZymes from doing a JV later in the FDA process however, in my YouTube interview with Damien Periman, the CCO, he explains why taking value upfront often makes more sense than having to wait years and carry the risk for the entire FDA approval process. eXoZymes will already have a JV partner for this entity who has expertise in preclinical and clinical activities.
Again, NCT Pharma analogues are just one of hundreds of assets.
Okay, I see it. When they can make royalty agreements, than this is a great Business model. Is it common, that R&D companies go that way and are able to make royalty agreements? 5-10% seems a bit optimistic to me.
Another point to consider is that, at its core, eXoZymes’ creates biochemical production solutions for a wide range of compounds. The company has just chosen to initially launch in the nutraceuticals and pharmaceuticals space because these markets are extremely high-value and operate with relatively low product volumes. Unlike industrial chemicals, which they can also serve, but these typically operate on lower margins that require high production volumes.
There are many pharmaceutical APIs and natural-compound that show strong promise in the lab but never actually reach commercialisation because they strggle to be manufactured efficiently or economically at scale. eXoZymes’ platform is designed to unlock these types of high-value compounds by creating a viable and scalable production solutions. eXoZymes' NTC compound is a perfect example of what the platform can achieve.
I'd say over the next 24 months, eXoZymes will launch its own developed assets via spin-outs and joint ventures. This will allow the company to demonstrate the platforms performance and commercial viability before they shift to technology-licensing agreements. This is also why I said, they'll develop a playbook as there is lots to learn in the rollout.
Once eXoZymes reaches the licensing stage, companies will engage them to undertake R&D and design production solutions for specific compounds. Traditionally, in the biotech space this takes years and costs many millions of dollars. By contrast, eXoZymes’ AI-driven process and innovative system, reduces timelines down to mere months and at a fraction of the cost.
Under these future licensing partnerships, eXoZymes would receive milestone payments for achieving certain R&D objectives as well as licensing payments tied to the production/sales of that targeted chemical.
In the nutraceuticals and pharmaceuticals space, licensing fees typically range 5-10%. If eXoZymes can provide the only scalable or economically viable solution, then they can negotiate from a position of strength.
The food flavors, fragrances and industrial chemicals sectors operate on smaller margins but they do have much larger production volumes. Licensing fees here range between 2-5%.
eXoZymes operates on a capital-light and low-operational cost model. They will eventually have high profit margins.
Okay, thanks for the insights! very much appreciated!
The dual-market approach for NCT really stands out as a smart risk mitigation stragegy. Targeting both nutraceutical and pharma markets from the same R&D feels like a no-brainer when you consider how much capital usally gets burned on single-path development. The fact that 11 CMOs confirmed they already have the necesary infrastructure is huge. That validation alone suggests the scale-up path is far more straightforward than most biotech plays at this stage.
You’re bang on mate! It’s wild to think those programs are just 4 opportunities out of the 100s that eXoZymes can solve for.
Given you’re into AI infrastructure, I'm sure you'd find eXoZymes' integration of AI and computational design fascinating. It essentially allowed them to build their NCT module in 5 months and at a fraction of the cost of traditional Synbio companies. This kind of development program is literally unheard of in the industry.
eXoZymes’ R&D timelines and costs will only improve as their model is trained on more data.
That exozymes built the NCT module within 5 months with helps of AI tells me, that this could be mimicked quickly by one of these CMOs. Sorry, I am sceptical.
Thanks for sharing your thoughts mate however, this assumption fundamentally misunderstands the role of CMO’s and eXoZymes' advantages.
The technology can’t be mimicked by CMOs and eXoZymes’ 5 month development speed is a direct result of their proprietary innovations and advantages, which have created an extremely challenging barrier to entry.
CMOs are manufacturers, not R&D companies. They don’t have the focus or specialist teams to replicate the complex technology that eXoZymes has developed.
eXoZymes’ platform has required a decade of development to optimise enzymes into Exozymes, along with the associated cofactors and reagents. It's not as simple as copying them. Many of the company’s core innovations are patent protected, creating a significant barrier for any organisation attempting to copy their process. Anyone trying to mimic their process would invite immediate legal action.
The 5 month development speed of their NCT module was only possible because the company’s AI model was trained on years of proprietary data. Without that dataset and lab work, developing a comparable module is effectively impossible.
There are countless other points I could go into however, you should first read my initial eXoZymes report to actually better understand the company and what they have innovated.
Okay, that makes more sense now. Will read your report. Thank you very much for your reply.
No stress mate, always happy to help.
I'd recommend joining the discord group as conversations are more fluid and there are other eXoZyme investors.