Arecor Therapeutics
Little Chesterford, United Kingdom

Arecor is a revenue-generating clinical-stage drug developer. Its proprietary Arestat formulation platforms are the basis of an in-house and partnered pipeline of enhanced products with lower development risks and less onerous regulatory approvals.

www.arecor.com

Investment Perspective

The detailed data from the successful Phase I study of AT278, Arecor’s ultra-concentrated ultra-rapid insulin, clearly showed improvement and superiority over current fast-acting insulins. This, coupled with highly supportive commentary from a Key Opinion Leader (KOL) event, gives us rising confidence that Arecor’s diabetes franchise is well positioned to capture a meaningful share of the evolving diabetes care market. In-house programmes, AT278 and AT247 (ultra-rapid insulin), can address the needs of both higher dose requirements as the global obesity epidemic drives daily insulin doses upwards and emerging pump applications (artificial pancreas). Revising our rNPV model to reflect this improved confidence sees our valuation increase to £159.8m, or 574p per share (from £140.9m and 506p). We reiterate that Arecor’s development is materially de-risked and significant upside remains, both from the diabetes programmes and from specialty hospital products.

Market information

SymbolPrimary exchanges
ARECAIM London

Research

AT278 hits the sweet spot
Update | 31 May 2022
Ambitious, focussed, and delivering on its promise
Update | 25 Apr 2022
Formulation expertise exemplified in diabetes
Update | 20 Jan 2022

Recent News

Collaboration with top 5 global pharma company
16 Jun 2022
Arecor to host diabetes KOL webinar
18 May 2022
AT278 Phase I data at ATTD
28 Apr 2022
Final FY21 financial results
25 Apr 2022
Avacta
Wetherby, United Kingdom

Avacta is a UK-based biopharmaceutical company developing novel cancer immunotherapeutics and high performing diagnostics, based on its two proprietary platforms: Affimer and pre|CISION.

www.avacta.com

Investment Perspective

Avacta employs its two proprietary platforms, Affimer and pre|CISION, to create novel diagnostic and therapeutic products. The COVID-19 pandemic thrust its ability to develop an Affimer-based LFT (lateral flow test) diagnostic into the spotlight, even though we believe greater long-term value lies within Therapeutics applications. While the COVID-19 opportunity didn’t pan out as many investors expected, it did showcase Avacta’s diagnostics capabilities and Affimers’ potential. Lead therapeutic asset AVA6000 is progressing through Phase I and should confirm the clinical utility of pre|CISION. A wider portfolio of products is being readied to exploit the platform’s tumour specific activation, which should result in greater potency and less toxicity. News flow over the next 18-24 months provides multiple value-inflection points. Our valuation is £557m, equivalent to 219p/share, from £710m, 280p/share previously.

Market information

SymbolPrimary exchanges
AVCTAIM London

Research

AVA6000 set for third dose escalation stage
Lighthouse | 30 Jun 2022
FY21 results: a year of frustrations and opportunities
Update | 06 Apr 2022
AffiDX LFT sales paused to improve Omicron detection
Lighthouse | 10 Jan 2022

Recent News

LG Chem licence renewal triggers payment
30 Jun 2022
Second dose escalation in AVA6000 Phase I
29 Jun 2022
AffyXell expands partnership with GenScript ProBio
16 May 2022
London Therapeutics HQ established
11 May 2022
ANGLE
Guildford, United Kingdom

ANGLE is a specialist diagnostics company. Its proprietary Parsortix technology can capture and harvest very rare cells, including CTCs (circulating tumour cells), from a blood sample. The FDA approval for its clinical use to guide precision cancer care will open up further multiple commercial opportunities.

www.angleplc.com

Investment Perspective

ANGLE’s updates reveal dialogue with FDA for Parsortix’s approval for use in mBC (metastatic breast cancer) is continuing and constructive, first submissions for accreditation of UK and US clinical laboratories have been made, but development of the ovarian cancer LDT (Laboratory Developed Test) has been hampered by a delay to data read out from a key study (due to third-party supply issues) to H122. A new study comparing CTC harvest and downstream analysis against biopsies in mBC shows good correlation and indicates Parsortix use could materially benefit clinical diagnoses and treatments. The longer wait for FDA approval and first LDT roll-out prompt us to revisit our forecasts and valuation models. Our new valuation of £506m ($658m), or 215p/share compares to £581m ($755m), 248p/share previously.

Market information

SymbolPrimary exchanges
AGLAIM London

Research

Parsortix FDA clearance marks a key transition point
Lighthouse | 26 May 2022
FY21 results: prepared for commercial success
Lighthouse | 28 Apr 2022
FDA approval awaited, LDT data expected H122
Update | 17 Jan 2022

Recent News

Breast cancer spread accelerates during sleep
27 Jun 2022
Repeat Pharma Services business
22 Jun 2022
Predicting immunotherapy response in SCLC
16 Jun 2022
Potential role of invasive cellular protrusions
14 Jun 2022
Allergy Therapeutics
Worthing, United Kingdom

Allergy Therapeutics specialises in the diagnosis and treatment of allergy. The existing European business generates c £80m annual sales. Near-term R&D efforts are focussed on the Pollinex Quattro platform, whilst in the medium-term the VLP platform is highly promising.

www.allergytherapeutics.com

Investment Perspective

Allergy Therapeutics continues to execute on its clearly defined three pillar strategy for growth in both the near- and mid-to-longer term. In Europe, interim results demonstrate continued robust performance. Key pipeline programmes Grass MATA MPL and VLP Peanut have also made significant progress, with both set to start major clinical trials this year. These high value and well differentiated assets underpin future entry into the commercially important US market. Cash of £41m, plus the £10m credit facility, should be sufficient to fund the planned Grass MATA MPL Phase III trial and VLP Peanut Phase I study, and so reach material value inflection points in 2023. Our £341.6m (53.1p per share) valuation suggests the pipeline value is under appreciated.

Market information

SymbolPrimary exchanges
AGYAIM London

Research

Solid commercial performance with major R&D upside
Outlook | 03 Mar 2022
FDA green lights VLP Peanut vaccine Phase I trial
Lighthouse | 26 Jan 2022
Commercialising and developing a differentiated portfolio
Update | 13 Jan 2022

Recent News

Data at EAACI 2022
01 Jul 2022
CFO to step down
26 May 2022
Data at WAO-BSACI
25 Apr 2022
H122 interim results
03 Mar 2022
Redx Pharma
Alderley Edge, United Kingdom

Redx Pharma specialises in the discovery and development of small molecule therapeutics, with an emphasis on oncology and fibrotic disease. It aims to initially progress them through proof-of-concept studies, before evaluating options for further development and value creation. Existing earlier-stage collaboration partners include AstraZeneca and Jazz Pharmaceuticals.

www.redxpharma.com

Investment Perspective

Redx Pharma continues to deliver, with H122 results highlighting broad progress across the pipeline. The lead assets, RXC004, a porcupine inhibitor for oncology, and RXC007, a ROCK2 inhibitor for fibrosis, are advancing through Phase II and Phase I trials respectively, with further value inflection expected during 2022-23. Milestone receipts from AstraZeneca and Jazz Pharmaceuticals are tangible evidence of further progress with partnered programmes. Selection of RXC008, a GI targeted ROCK inhibitor as the next development candidate demonstrates earlier stage development is similarly bearing fruit. Our new rNPV-based valuation, updated to reflect H122 results and the May £34.3m (gross) equity raise, is £458m (vs £434m), or 138p/share.

Market information

SymbolPrimary exchanges
REDXAIM London

Research

All the ingredients for success now in place
Update | 29 Jun 2022
Jazz Pharmaceuticals $5m milestone triggered
Lighthouse | 15 Jun 2022
£34.3m raise extends runway through key data points
Lighthouse | 07 Jun 2022

Recent News

Preclinical data at ECM 2022
27 Jun 2022
H122 interim results
23 Jun 2022
Pan-RAF inhibitor to enter clinic
15 Jun 2022
Poster on RXC004 at ASCO 2022
30 May 2022
Futura Medical
Guildford, United Kingdom

Futura Medical is a R&D-driven small pharma with a novel proprietary transdermal delivery system, DermaSys, and a lead programme, MED3000, in development for erectile dysfunction.

www.futuramedical.com

Investment Perspective

Futura Medical’s H121 results provide a timely reminder of the progress achieved this year. MED3000 was approved in Europe, with the CE Mark granted in April 2021. Collaboration agreements are in place for China and the Far East, Brazil and Mexico, and the Gulf/Middle East. The US regulatory pathway has been established, with the confirmatory FM71 study now underway. The £12m equity raise in May removes a major uncertainty, providing a cash runway beyond expected US OTC approval (as early as Q123). The next major event should be announcement of the first European partner(s), followed by first MED3000 launch expected during H222. Updating our model to reflect this progress generates a Futura Medical valuation of £264m, equivalent to 92p per share.

Market information

SymbolPrimary exchanges
FUMAIM London

Research

Major MED3000 deal for Europe with Cooper Health
Lighthouse | 23 May 2022
FY21 results reassure on cash runway and hint at EU deal
Lighthouse | 26 Apr 2022
Menarini to commercialise MED3000 in South Korea
Lighthouse | 23 Mar 2022

Recent News

MED3000 Collaboration in EEA, UK & Switzerland
23 May 2022
FY21 results
26 Apr 2022
Collaboration with Menarini Korea
23 Mar 2022
US regulatory and commercial update for MED3000
20 Dec 2021
Scancell
Oxford, United Kingdom

Scancell is a clinical-stage immuno-oncology specialist that is developing two innovative and flexible therapeutic vaccine platforms. ImmunoBody and Moditope induce high avidity cytotoxic CD8 and CD4 responses, respectively, with the potential to treat various cancers.

www.scancell.co.uk

Investment Perspective

Scancell is an oncology-focussed clinical stage immunology specialist. It has two promising vaccine platforms, ImmunoBody and Moditope, and two antibody technologies, GlyMab (anti-glycans) and AvidiMab, with the potential to treat many solid cancers, either as monotherapy or in combination. Modi-1, the first Moditope programme, has started Phase I/II trials targeting hard-to-treat tumours. The lead ImmunoBody programme, SCIB1, is in a Phase II combination study in metastatic melanoma. The broad acting glycan antibodies are at earlier stages of development and will likely be partnered for clinical studies. AvidiMab technology will be increasingly employed to enhance avidity and potency, with the Phase I COVIDITY COVID-19 vaccine programme the most high-profile beneficiary. Our Scancell valuation, using a risk adjusted DCF model, is £237.4m, or 29.1p per share.

Market information

SymbolPrimary exchanges
SCLPAIM London

Research

First Moditope oncology vaccine enters the clinic
Lighthouse | 13 Jun 2022
A fresh impetus in delivering immune-oncology vaccines
Outlook | 12 Apr 2022
CTA approval confirms H221 COVIDITY Phase I start
Lighthouse | 30 Jul 2021

Recent News

Scancell to produce TCB antibodies
23 Jun 2022
Phase 2 SCIB1 trial expanded
15 Jun 2022
First patient dosed in Modi-1 Phase 1
13 Jun 2022
Modi-1 Phase 1/2 trial open for recruitment
11 Apr 2022
HUTCHMED
Hong Kong, China

HUTCHMED, a Hong Kong-based biopharmaceutical company, is on track to become a global leader in the discovery, development, and commercialisation of innovative, highly selective oral tyrosine kinase inhibitor therapies for oncology and immunological indications.

www.hutch-med.com

Investment Perspective

HUTCHMED has successfully raised c US$537m (or HK$4.17bn) through its Hong Kong IPO and global offering. The new funds enable management to execute their ambitious near- and medium-term growth plans. As well as progressing the second and third wave of innovative programmes through clinical trials, the proceeds will be used to bolster the China Oncology commercial organisation and further develop the equivalent global infrastructure. A sister note detailing the recent clinical data for the key late-stage assets is published alongside this note. We upgrade our valuation to US$8.84bn (US$52.12 per ADS), £6.8bn and HK$69.0bn (802p or HK$81.30 per share) to reflect the raise and recent clinical news.

Market information

SymbolExchanges
HCM/0013NASDAQ/AIM London/SEHK

Research

A genuinely global R&D-driven biopharma business
Lighthouse | 03 Mar 2022
Strategic collaboration for Tazverik in Greater China
Lighthouse | 10 Aug 2021
ASCO 2021: Moving towards combinations
Update | 06 Jul 2021

Recent News

Tazverik approved in Hainan Pilot Zone in China
01 Jun 2022
CRL for surufatinib from US FDA
02 May 2022
Update on status under HFCAA
31 Mar 2022
2021 Annual Report and Notice of AGM
23 Mar 2022
Nexstim
Helsinki, Finland

Nexstim is a targeted neuro-modulation company that has developed a proprietary navigated rTMS platform for use in diagnostics (NBS) and therapeutics (NBT). NBS is used in planning brain surgery while NBT is focused on depression and chronic pain. FDA approval for depression was given in 2017, and the focus is on commercial roll out in the US, Europe and Asia.

www.nexstim.com

Investment Perspective

Nexstim delivered its first ever profitable period in H221 and is guiding towards continued revenue growth and a positive operating result for FY22. Profitability and partnerships are central to FY22 strategic objectives. The recent Magnus Medical and PNC Management Services deals are trailblazers for a new technology licencing revenue stream and a deeper partnership business model for the US NBT therapy business respectively. The former deal includes a $4m upfront payment which addresses Nexstim’s prior funding shortfall, and its structure means that in the near-term, the company is able to direct its internal resources towards supporting global growth in diagnostics, US NBT partner clinics, and ex-US opportunities for the therapy business. Our updated model values Nexstim at €58.1m (€8.69 per share).

Market information

SymbolExchanges
NXTMH/NXTMSHelsinki/Stockholm

Research

First steps on path towards longer-term profitability
Update | 02 Mar 2022
Admirable execution on 2021 strategic goals
Update | 12 Jan 2022
Accelerated protocols could be a game changer
Outlook | 19 Aug 2021

Recent News

FY21 financial results
28 Feb 2022
Technology licenced to Magnus Medical
14 Feb 2022
Patient registry reaches over 300 completed treatment sessions
03 Feb 2022
Results of pilot study in chronic pain Helsinki University Hospital
15 Dec 2021
MaxCyte
Gaithersburg, United States

MaxCyte has a patented flow electroporation platform, which can transfect a wide array of cells. It generates revenues from the sale and lease of equipment, disposables and licence fees from an impressive client list. Key programmes with several clients are gaining greater visibility and approaching material value-inflection points. These will trigger a stream of milestone fees.

www.maxcyte.com

Investment Perspective

FY21 revenues were up 30% to $33.9m, demonstrating continued robust growth in MaxCyte’s core Cell Therapy and Drug Discovery businesses (+37% to $31.4m), with management guiding to 22-25% core business revenue growth for FY22. Programme-related revenues from Strategic Platform Licences (SPLs) are inherently lumpier ($2.5m received in FY21; c $4m expected for FY22) but should begin to smooth as the frequency and size of milestone receipts increase as the underlying programmes progress through the clinic, driving more significant potential revenue growth from 2023+. End-December 2021 cash of $255m provides ample resources for investment in consolidating and expanding MaxCyte’s leading position in non-viral cell delivery and engineering. Our valuation is £1.06bn ($1.39bn) or 1,050p/$13.64 per share.

Market information

SymbolPrimary exchange
MXCT/MXCT.LNASDAQ/AIM London

Research

Robust Cell Therapy performance lifts FY22 guidance
Lighthouse | 23 May 2022
Sustained FY21 growth with significantly more potential
Update | 06 Apr 2022
Opening the next chapter
Outlook | 09 Mar 2022

Recent News

Q122 results
09 May 2022
CFO departure and preliminary Q122 revenue
13 Apr 2022
Q421 and FY21 financial results
22 Mar 2022
Cenk Sumen named Chief Scientific Officer
10 Mar 2022