$5.52
$12.94
bear $5.52
base $9.60
bull $12.94
margin of safety $4.00
market price* $72.09
Dianthus Therapeutics is a clinical-stage biotechnology company with no product on the market. Its lead drug, claseprubart, is an antibody that blocks a protein called C1s in the complement immune pathway and is designed for subcutaneous injection. It is being tested in three autoimmune nerve and muscle diseases: generalized myasthenia gravis (Phase 2 MaGic trial, 65 patients, positive top-line results reported in September 2025), chronic inflammatory demyelinating polyneuropathy (Phase 3 CAPTIVATE trial, which received an early "go" decision on its interim responder analysis) and multifocal motor neuropathy (Phase 2 MoMeNtum trial). Revenue is small, $2.0 million in 2025 and $6.2 million in 2024, and comes from licensing arrangements. Rights to claseprubart in Greater China are licensed to Tenacia Biotechnology (Hong Kong) Co., Limited. What the business earns today: nothing. Cash from operations was a loss of $129.1 million in 2025 and $78.2 million in 2024. After removing working-capital swings, deducting stock compensation as a real cost ($22.8 million in 2025 and $12.9 million in 2024) and deducting capital spending of about $0.2 million, owner earnings were about negative $168.8 million in 2025 (negative $4.37 per share), negative $90.7 million in 2024 (negative $2.72 per share) and negative $44.7 million in 2023. We cross-checked the 2025 figure by rebuilding it from the net loss ($162.3 million loss, adding back stock compensation and other non-cash items), which reproduced the cash-flow result. Years before the 2023 reverse merger describe a different entity and are not used. Because the earnings are negative, there is no earnings level to capitalize and no wasting intangible assets to consider. The main asset is cash. At June 30, 2026 the company held $110.5 million of cash plus about $1,079.9 million of investment securities, roughly $1.19 billion, after net financing inflows of about $750 million in the first half of 2026. That is roughly $21.25 per share on about 56.0 million weighted-average shares in the second quarter (including pre-funded warrants). The company also has about 7.2 million stock options outstanding with an average exercise price of $32.56, which we do not count as extra shares. Total liabilities were only about $41 million. How we value it. We credit the drug candidates with no value. Positive Phase 2 gMG data and an early "go" in CIDP are encouraging, but no approval, contract or revenue is secured, so under our approach they cannot be counted. What the shares are worth is therefore the cash on hand less the owner-earnings losses expected while the current trials are funded, over roughly the next two and a half years. After that our evidence runs out: whatever cash remains is counted at face value and nothing further is assumed, either way. Losses are discounted at 6%. Before the 2026 raise, the annual report said existing cash was expected to fund operations into 2028; the larger balance now extends that, but we do not credit anything beyond the period described. Base case: about $9.60 per share. Losses keep rising in line with spending on trials: about $115 million in the second half of 2026, $260 million in 2027 and $330 million in 2028, for a present value of about $650 million. Research spending rose about 75% in 2025 ($145.6 million versus $83.1 million), and second-quarter 2026 research spending of $48.7 million was well above the first quarter's $34.5 million. The loss growth assumed for 2026 (about 27% above 2025) is below the actual 2025 increase of about 86%, because first-half 2026 owner losses of roughly $100 million annualize to only about 19% above 2025. Bear case: about $5.52 per share. Spending keeps accelerating at the pace research costs have grown (about $125 million in the second half of 2026, $360 million in 2027 and $470 million in 2028) and the trials do not lead to a product, so the cash is consumed with nothing to show for it. Bull case: about $12.94 per share. Quarterly losses stay near the second-quarter 2026 level of about $50 million (about $100 million for the second half of 2026, then $200 million a year), because the Phase 3 CIDP trial is already under way. Even here the drug adds no value, since none of its potential is secured yet. The margin-of-safety price is set well below the bear case, because even the bear case rests on cash that is still being spent. What could make this wrong: the largest upside is that claseprubart is approved and sells, which we have deliberately not credited. Share dilution from options and any further capital raising would reduce the per-share figures. The 2023 per-share owner earnings are distorted by a low, merger-affected share count.