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 is approaching a key point as the first of the regulatory filings for its novel erectile dysfunction (ED) treatment, MED3000, is expected within the next few months. MED3000 is a fast-acting gel that has proven clinical efficacy, a fast onset of action, and an attractive commercial profile. The ED market opportunity is sizeable, especially once MED3000 becomes widely available over the counter (OTC). Optimally addressing the various elements of the demographic segments and needs of the different geographies will, in our view, require careful selection of commercial partners. We expect the partnering discussions to start in earnest once the status of the regulatory approvals is known. Our DCF-based model, using conservative assumptions, values Futura Medical at £153.8m, equivalent to 60.9p a share.

Market information

SymbolPrimary exchanges
FUMAIM London

Research

AGM statement confirms MED3000 filings on track
Update | 29 Jun 2020
Nearing the critical point in Erectile Dysfunction
Outlook | 02 Jun 2020
MED3000: more detail on FM57 results
Lighthouse | 02 Apr 2020

Recent News

Trading statement
24 Jun 2020
Futura files for Further FDA Pre-Submission meeting
20 Apr 2020
Futura confirms receipt of US FDA Minutes
06 Apr 2020
FY19 results
01 Apr 2020
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 has two promising vaccine platforms, ImmunoBody and Moditope, that have the potential to treat many cancers, either as monotherapy or in combination with checkpoint inhibitors. The leading ImmunoBody programme, SCIB1, is in a combination Phase II study for metastatic melanoma. Moditope is also expected to enter the clinic, with a Modi-1 Phase I/II trial expected to start during 2021. A third platform, AvidiMab, antibodies that target glycans, can be highly specific to tumour cells and has generated significant industry interest. The expertise in inducing potent immune responses is now also being directed towards a potential COVID-19 vaccine. We value Scancell, using a risk adjusted DCF model, at £72.4m, or 15.6p a share.

Market information

SymbolPrimary exchanges
SCLPAIM London

Research

COVID 2nd generation vaccine opportunity is all upside
Update | 11 May 2020
Reasons to be cheerful
Outlook | 11 May 2020
US IND for SCIB1 gives Phase II study the green light
Lighthouse | 03 Feb 2020

Recent News

Publication highlights potential of Modi-1
24 Jun 2020
Cancer Research publication highlights potential of AvidiMab
12 Jun 2020
Development of vaccine against COVID-19
24 Apr 2020
SCIB1 IND application approved
03 Feb 2020
Hutchison China MediTech
Hong Kong, China

Hutchison China MediTech (Chi-Med), 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.chi-med.com

Investment Perspective

2020 is set to be the breakthrough year as Hutchison China MediTech (‘Chi-Med’) consolidates its position as a world-class innovator and developer of best-/first-in-class small molecule tyrosine kinase inhibitors (TKIs). The company’s phenomenal journey since inception twenty years ago means it is well-positioned to capitalise on its recent progress. Chi-Med has exploited its early-mover advantage in China to build a broad and innovative TKI pipeline and a credible domestic commercial presence, which provides the foundation for the future commercialisation of its China Oncology pipeline. It is preparing for a first in-house China launch in H220 and filing of two further China NDAs in 2020. Alongside, Chi-Med has established a US clinical and regulatory presence which is supporting imminent Global Innovation pivotal trial initiations and should clarify timing of first US/EU filing in the near-term. Ahead of these important catalysts, we value Chi-Med at £5.08/share or $32.99/ADS.

Market information

SymbolExchanges
HCMNASDAQ/AIM London

Research

General Atlantic invests $100m at 10% premium
Lighthouse | 25 Jun 2020
ASCO 2020: savo and suru data drives regulatory progress
Update | 04 Jun 2020
AACR 2020: first surufatinib/PD-1 combo data
Update | 30 Apr 2020

Recent News

US$100m equity investment by General Atlantic
25 Jun 2020
Fruquintinib granted FDA Fast Track Designation for mCRC
18 Jun 2020
US$95m Guangzhou land compensation agreement
09 Jun 2020
Continuation of China Phase III FRUTIGA study of Fruquintinib in 2L gastric cancer
04 Jun 2020
Mereo BioPharma
London, United Kingdom

Mereo BioPharma develops and commercialises innovative therapeutics addressing oncology and rare diseases. It also has specialty pharmaceutical products that it will partner. The assets are acquired or licensed in at clinical stages from large pharmaceutical companies. The portfolio consists of six compounds that are in clinical development.

www.mereobiopharma.com

Investment Perspective

Mereo BioPharma is developing a portfolio of rare disease therapies that have been sourced from larger drug players. An appropriate selection of these will be retained for self-commercialisation. The longer-term goal is the creation of a self-sustaining speciality pharmaceutical company that addresses orphan and rare diseases. In the near term these clinical assets are progressed to value-inflection points and then partners are sought. The partnering deals will likely be structured to provide funding for the continuing development operations, yet retaining a sizeable element of longer-term upside. The company has a cash runway extending to mid-2020. We have updated our rNPV model to 412p/share or $20.60/ADS (fully diluted).

Market information

SymbolExchanges
MPH/MREOAIM London/NASDAQ

Research

Private placement raises $70m (£56m)
Lighthouse | 04 Jun 2020
Funding deals worth up to $33m announced
Lighthouse | 11 Feb 2020
Additional ASTEROID data supports progression
Lighthouse | 15 Jan 2020

Recent News

Mereo strengthens management team
30 Jun 2020
Result of General Meeting
30 Jun 2020
FY19 results
16 Jun 2020
Completion of $70m private placement
04 Jun 2020
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’s €2.3m rights issue was materially oversubscribed, with bids for 273% of the offered shares. A total of 376.7m new shares, at €0.006, will be issued. The new funds provide the resources to continue to support its existing NBS and NBT businesses, and, importantly, invest in studies to explore attractive opportunities in severe depression and chronic neuropathic pain. Nexstim is carving out a promising, and sizeable, niche in depression; where the accuracy, reliability, and reproducibility of its navigated transcranial magnetic stimulation (TMS) technology is clearly differentiated versus the competition. Our updated Nexstim valuation, reflecting the fund raise and share dilution, is €32.2m (€0.07/share).

Market information

SymbolExchanges
NXTMH/NXTMSHelsinki/Stockholm

Research

€2.3m rights issue is 273% subscribed
Update | 02 Jun 2020
Hitting the right spot
Update | 22 May 2020
€2.3m rights issue to progress both NBS and NBT
Lighthouse | 04 May 2020

Recent News

Two European NBS System upgrade orders in June
26 Jun 2020
Permanent CEO and CFO appointments
16 Jun 2020
Final results of the successful rights issue
10 Jun 2020
Preliminary results of the successful rights issue
01 Jun 2020
Bonesupport
Lund, Sweden

Bonesupport is an orthobiologics company focused on developing and commercialising a pipeline of unique injectable drug-eluting, bioceramic bone graft substitutes based on its proprietary CERAMENT technology.

www.bonesupport.com

Investment Perspective

SEK 378m in (gross) proceeds from Bonesupport’s directed share issue will help it scale up and maintain necessary investment to drive CERAMENT’s growth trajectory. Bonesupport’s commercially driven strategy is delivering, with investment in new US sales territories converting into enhanced sales and new distributors now in place in key European countries. However, with the impact of the COVID-19 pandemic starting to be felt in Q120, guidance of 40+% annual revenue growth from 2020 will be off a lower base. H120 sales will be negatively impacted by postponed elective surgeries due to reprioritisation of healthcare resources; H220 is currently difficult to assess. Around 70% of proceeds will be directed into commercial activities, principally supporting CERAMENT G US launch (first approval could now occur in late 2020 following the De Novo FDA filing for chronic osteomyelitis in April) and in optimising infrastructure in Europe. We update our valuation to SEK41.5/share, or SEK2.62bn.

Market information

SymbolPrimary exchangeCurrency
BONEXOMX StockholmSEK

Research

Swings and roundabouts
Update | 29 Jun 2020
SEK 378m raised through directed share issue
Lighthouse | 28 May 2020
Accelerated FDA pathway for CERAMENT G
Lighthouse | 23 Mar 2020

Recent News

FORTIFY patient enrolment finalised earlier than original plan
15 Jun 2020
Own sales organisation in the Netherlands
08 Jun 2020
Completion of SEK 378m directed share issue
27 May 2020
Q120 interim report
08 May 2020
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; with an impressive client list. Additionally, a novel mRNA mediated CAR technology, known as CARMA, is being explored in various cancers, including solid tumours.

www.maxcyte.com

Investment Perspective

The potential of cell therapies is starting to become clear, and MaxCyte’s technology lies at the heart of many of these next-generation treatments. The pivotal role its platform plays is shown by ten major partnership agreements formed with leading cell therapy players over the past 18 months. These can earn pre-commercialisation milestones in excess of $800m, transforming MaxCyte’s medium- and longer-term revenues as the underlying programmes advance through clinical development. CARMA, MaxCyte’s proprietary cell therapy platform, is nearing a key inflection point, with Phase I data from its lead asset due in 2020. Management is targeting CARMA to be self-financing by 2021. We raise our valuation to £260m (340p/share), from £195m and 341p, with the core business alone valued at £158m (206p/share).

Market information

SymbolPrimary exchange
MXCT/MXCSAIM London

Research

ASCO poster shows encouraging data for MCY-M11
Lighthouse | 02 Jun 2020
Enabling cell therapies to progress
Outlook | 26 May 2020
CRISPR-Cas9 gene editing pioneer secures licence
Lighthouse | 07 May 2020

Recent News

Result of special meeting and issue of equity
21 May 2020
MCY-M11 poster to be presented at ASCO 2020
14 May 2020
License agreement with Caribou Biosciences
07 May 2020
Result of offering
01 May 2020
Kind Consumer
London, United Kingdom

Kind Consumer has developed a novel nicotine delivery device that mimics the important aspects of cigarette smoking. Uniquely, the Voke device is registered as a medical product, yet it can still be sold easily (General Sales List). Management aims to market Voke directly in the UK, ahead of licensing out for other geographies.

www.kindconsumer.com

Investment Perspective

Kind Consumer is poised to introduce Voke, a novel nicotine delivery device, into the UK market. Voke closely mimics the key aspects of cigarette smoking, but without tobacco’s harmful effects. The notable recent shifts in consumer acceptance of such novel devices suggest market adoption will be positive. The development, regulatory, and production processes have now been completed. Management is seeking funds to execute its commercialisation plans. Our rDCF valuation, using modest assumptions for the UK only, yields a value of £154m.

Market information

SymbolPrimary exchangeCurrency
N/APrivateGBP

Research

No smoke but plenty of fire
Initiation | 11 Oct 2017

Recent News

Appointment of new CEO
01 Jan 2019
Further funding to support manufacturing facilities and commercial launch of Voke
15 Aug 2018
BAT and Kind Consumer announce new approach to commercialise Voke
05 Jan 2017
BerGenBio
Bergen, Norway

BerGenBio is a clinical-stage, biopharmaceutical company based in Bergen, Norway and Oxford, UK. It is developing innovative therapies for aggressive cancers by way of inhibiting the AXL signalling pathway. The lead oncology compound, bemcentinib, is in multiple Phase II trials.

www.bergenbio.com

Investment Perspective

BerGenBio is focused on developing bemcentinib in oncology, but an unexpected fast route-to-market has presented. Bemcentinib was selected for the UK Government-funded Phase II ACCORD-2 trial for the treatment of COVID-19. Data from the study is expected in Q3/Q4 20 and bemcentinib could advance rapidly into a Phase III study by end-2020. BerGenBio is planning a pivotal Phase IIb/III study in NSCLC with bemcentinib combined with pembrolizumab, and randomised studies in AML. The cash position of c NOK850m is strong, after raising NOK500m (gross) in May, so it now has the financial resources to advance bemcentinib and the rest of its pipeline appropriately. We raise our valuation of BerGenBio to NOK4.43bn (NOK50.3/share).

Market information

SymbolPrimary exchanges
BGBIOOslo

Research

AXL-erating towards new opportunities
Outlook | 29 Jun 2020
NOK500m raised to drive bemcentinib progress
Lighthouse | 05 May 2020
Bemcentinib fast-tracked into COVID-19 trial
Lighthouse | 30 Apr 2020

Recent News

Interim Phase II clinical and translational data in checkpoint inhibitor refractory NSCLC patients
26 Jun 2020
First COVID-19 patient dosed with bemcentinib in ACCORD trial
02 Jun 2020
Q120 results
19 May 2020
NOK500m raised in oversubscribed private placement
05 May 2020