Black Diamond Therapeutics, Inc. (BDTX) stock intrinsic value fair value estimate & owner earnings analysis

Black Diamond Therapeutics is a clinical-stage cancer drug developer with no products for sale. Its lead program is silevertinib, an oral, brain-penetrant drug aimed at cancers driven by EGFR mutations, including lung cancer and glioblastoma (an aggressive brain tumor). The company also out-licensed a second drug, BDTX-4933, to Servier in early 2025, receiving $70 million up front. Servier now leads development of that program, and Black Diamond is eligible for up to $710 million of further milestone payments plus royalties on any eventual sales. How we valued it. The company has never had a recurring profit stream. Owner earnings per share (cash from operations less working-capital swings, stock compensation and capital spending) were about -$2.00 in 2020, -$3.47 in 2021, -$2.49 in 2022, -$1.89 in 2023 and -$1.34 in 2024. 2025 shows +$0.49 only because of the one-time $70 million Servier payment; without it, 2025 would have been about -$0.73. We therefore treat the business as having no earnings level to capitalize. What it does own is cash and investments: $128.7 million at the end of 2025 and about $110.5 million at June 30, 2026, or roughly $1.93 per share on about 57.4 million shares. The value of the company is that cash, less what will be spent before any drug produces something we can point to. What we left out. The $710 million of Servier milestones and royalties depend on Servier's trials succeeding. For silevertinib, no approval, partner deal or pivotal trial exists yet. None of that is guaranteed cash, so it is worth $0 in every case here. It is real upside that our numbers do not pay for. Bear case ($0.29 per share). The company carries out its current plan, including a new randomized Phase 2 trial of silevertinib in about 150 newly diagnosed glioblastoma patients that it was preparing to begin in the second quarter of 2026, with an interim progression-free survival analysis expected in the first half of 2028. Management says its capital lasts into the second half of 2028, so we assume about $100 million of today's cash is spent over roughly two and a quarter years, with nothing recovered. After discounting at 6%, about $16 million remains, which is $0.29 per share. Base case ($0.73 per share). Spending continues at the first-half 2026 pace, about $18.2 million of cash used in operations per half-year, or roughly $36 million a year, until the glioblastoma interim analysis in the first half of 2028. About $42 million of today's cash is left after discounting that spending at 6%, which is $0.73 per share. No credit is given for any drug succeeding. Bull case ($1.10 per share). Costs keep falling, as they have for years: research spending dropped from $96.8 million in 2021 to $33.6 million in 2025 and was $14.4 million in the first half of 2026 versus $19.8 million a year earlier. If annual spending falls to about $25 million, roughly $63 million of today's cash remains after two years, or $1.10 per share. We do not assume a partner for silevertinib. Management says it is exploring one, but nothing is signed. What would make this estimate wrong. Any of the following would raise value well above these figures: silevertinib producing convincing glioblastoma or lung cancer results, a partnership deal, or Servier reaching a milestone. Those are outcomes we cannot name with evidence today. In the other direction, the company could spend faster than plan or need to issue more shares, which would push value toward the bear case. In 2025 the company also recorded a $7.3 million non-cash write-down of lease-related and equipment assets, which does not affect the cash figures above. Accounting notes. 2025 cash from operations was $29.6 million, entirely because of the $70 million Servier payment; we excluded that from any run-rate. Per-share figures for 2019 are not comparable because the company had only about 2 million shares before its 2020 public offering.