$3.52
$5.51
bear $3.52
base $5.22
bull $5.51
margin of safety $2.50
market price* $20.30
Mineralys Therapeutics is a clinical-stage drug developer with one product candidate, lorundrostat, a once-daily pill that lowers blood pressure by blocking production of the hormone aldosterone. It targets people whose hypertension is uncontrolled or resistant despite two or three other medicines. The company has no revenue and has never sold a product. It licensed lorundrostat from Tanabe Pharma in 2020, and if it is approved it will owe Tanabe royalties from the mid-single digits up to 10% of net sales, plus up to $155 million of sales-linked milestones. The company completed five clinical trials and submitted its marketing application to the FDA in December 2025. The FDA accepted it with a decision date of December 22, 2026. How we value it. We value only what is secured or already proven. Owner earnings, meaning operating cash flow after stock compensation and working-capital swings, have been negative every year: about $(30) million in 2022, $(79) million in 2023, $(187) million in 2024 and $(164) million in 2025, or roughly $(2.4) per share in 2025. Operating cash burn was about $72 million in the first half of 2026. A business that loses money has no earnings level to capitalise, so its value is its net cash, less the cash it spends before its story is resolved. We credited no growth. An FDA approval has not happened yet, and future sales depend on prescribing uptake, payer coverage and a launch the company has never run. We left all of that out. Competitors AstraZeneca and Boehringer Ingelheim are running large hypertension trials of the same drug class, so we would not assume a share of the market either. Balance sheet (June 30, 2026). Cash and investments were about $661 million. The company owes $100 million of borrowings, drawn in the first half of 2026, with the principal falling due in the fourth and fifth years (about $50 million each). We valued it at face value. Net of that debt the company holds about $561 million, or about $6.35 per share on 88.4 million shares. This is the ceiling on what we can support today. Bear case: $3.52 per share. The FDA declines or delays approval on December 22, 2026. The company then spends about another year, roughly $150 million, on fixing and resubmitting, and still fails. It winds down at a cost of roughly $25 million. Cash spent through year-end 2026 is about $75 million. The business is worth zero, the company holds about $411 million after those costs, owes $100 million, and leaves about $311 million for shareholders. Base case: $5.22 per share. We spend about $75 million through the decision date. We assume roughly $25 million of wind-down costs and credit no sales, because no named contract or track record supports them. The business is worth zero, cash left is about $561 million, debt is $100 million, and the difference is about $461 million for shareholders. This is deliberately conservative. It treats the drug as worth nothing until it has actually earned something. Bull case: $5.51 per share. The FDA approves on schedule, and the company keeps its cash after the same $75 million of spending through year-end and avoids wind-down costs. The business is again worth zero on named evidence, cash is about $586 million, debt is $100 million, and the difference is about $486 million for shareholders. We have not credited launch revenue, since none is contracted. What we could not reconcile. Quarterly figures for the three months to June 30, 2026 show research expense of about $221 million, compared with about $38 million a year earlier, and a net loss of $241 million for the quarter. Operating cash flow for the first half was only about $72 million negative, so most of the increase did not consume operating cash. We could not trace this to a specific program from the filings available to us, and we assign it no value. If it bought a valuable asset, our figures are too low. If it commits the company to further payments, they are too high. What would make this wrong. Approval followed by strong prescribing would be worth far more than the cash we count, and none of it is in our numbers. On the other side, operating spending could rise faster than we assume as the company builds a sales team, and more shares would be issued under the at-the-market program, diluting per-share value. The 2020 licence to Tanabe also carries a large milestone obligation if sales succeed.