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.
Arecor’s innovative and lower risk pipeline is making tangible progress; at partners where assets are under licence, and internal in-house development of the proprietary diabetes and specialty hospital programmes. The growth potential is becoming better defined as the first partnered asset approaches commercialisation. While near-term revenues will continue to include a variable milestone element, over the medium-to-longer term, income streams will be comprised of success-based milestones coupled with recurring sales-based royalties or equivalent. Upcoming catalysts include key Phase I data in Type II diabetes for AT278 (ultra-concentrated rapid insulin), anticipated milestones from partners, and the prospect of further licensing agreements for its proprietary assets as well as technology partnerships. Ahead of these catalysts our Arecor valuation remains £176m, or 575p per share.
| Symbol | Primary exchanges |
| AREC | AIM London |
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.
Avacta’s two proprietary platforms, Affimer proteins and pre|CISION, are central to its plans to create novel diagnostic and therapeutic products. Recent operational and strategic developments during 2022 lay the foundations for unlocking value from its Therapeutics and Diagnostics divisions. Further data from lead asset AVA6000 should confirm the clinical utility of pre|CISION, with a wider portfolio being readied to exploit the platform’s tumour-specific activation. An M&A-led growth strategy, leveraging both internal capabilities and the Affimer platform, should create a self-sustaining Diagnostics business. News flow over the next 18-24 months provides multiple value-inflection points. Our valuation is £641m, equivalent to 228p/share.
| Symbol | Primary exchanges |
| AVCT | AIM London |
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.
ANGLE successfully navigated a number of regulatory and clinical hurdles during 2022, including breakthrough FDA product clearance for Parsortix, and highly positive ovarian cancer data. Key elements are now largely in place to help deliver on Parsortix’s significant potential within the evolving liquid biopsy field. To realise this, ANGLE is pursuing a multi-pronged strategy to make Parsortix broadly available to industry and patients. The near-term focus is on growing the Pharma services business, attracting industry partnerships for downstream analysis, and completion of the remaining LDT development work. Any one of these could be transformational if successfully executed, and together should lead to multiple layers of future revenue growth. Our updated DCF-based valuation is £253m, equivalent to 97p per share.
| Symbol | Primary exchanges |
| AGL | AIM London |
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.
Trading in Allergy Therapeutics’ shares has recently been restored following suspension in January 2023. Publication of the FY22 Annual Report and accounts confirms preliminary results announced in September 2022. H123 interim results (to end-December 2022) reported revenues of £39.9m (H122: £48.7m) with a pre-R&D operating profit of £0.5m (H122: £12.5m) owing to lower gross margins (65% vs H122: 74%) and higher operating costs. The H123 net loss was £8.5m (H122: profit of £6.7m). Cash at 31 December 2022 was £15.2m and in April a £40.75m loan facility was agreed, which is planned to be refinanced via equity. The company has outlined that additional funding will be required from around September 2023. In the clinical pipeline, both the Phase III G306 grass allergy and the Phase I PROTECT peanut allergy trials are ongoing, with data from G306 expected in Q423. Our valuation and forecasts are currently suspended.
| Symbol | Primary exchanges |
| AGY | AIM London |
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.
Redx Pharma has an impressive portfolio of ROCK programmes, with a clear focus on serious and debilitating fibrotic diseases. The lead compound, RXC007, is a next-generation ROCK2 inhibitor in Phase IIa trials for IPF (idiopathic pulmonary fibrosis). Top-line results, expected in H124, should provide invaluable data on its clinical, and commercial, potential and guide future studies. RXC008, a highly novel GI-targeted ROCK inhibitor, is progressing towards IND/CTA submission by end-2023 for fibrostenotic Crohn’s disease. A second clinical asset, RXC004, a porcupine inhibitor for Wnt-ligand dependent solid tumours, is completing Phase IIa studies in combination with a CPI with the results from these important trials expected by end-2023. Cash of £34.6m (end-March 2023) provides a runway into Q1 2024, beyond RXC007 Phase II data. Our updated rNPV-based valuation is £363m, or 109p/share.
| Symbol | Primary exchanges |
| REDX | AIM London |
Futura Medical is a small pharma with a novel proprietary transdermal delivery system, DermaSys, and a lead programme, MED3000, the first clinically proven topical gel to treat erectile dysfunction that is approved OTC (without a prescription) in the US and Europe.
An impressive stage has been set by Futura Medical for successful commercialisation of MED3000 (Eroxon in Europe), with consumer healthcare giant Haleon now secured as the ideal US commercial partner. Initial European launches via partner Cooper Consumer Health in the UK and Belgium have exceeded expectations, providing confidence in Eroxon’s potential, with the focus now on expansion of retailers, new launches, and repeat orders. Whilst there are no details on US launch timings, we believe preparations will take some time, and hence conservatively do not expect US launch until 2025. However, precise timings do not impact our overall investment case, with the sales potential for MED3000 more critical. The market for erectile dysfunction (ED) treatments remains significant, and as outlined by ED key opinion leaders, MED3000 is ideally placed to overcome the limitations of mainstay PDE5s. Our Futura Medical valuation is increased to £363m, equivalent to 121p per share.
| Symbol | Primary exchanges |
| FUM | AIM London |
Scancell is a clinical-stage immuno-oncology specialist that is developing two innovative and flexible antibody (AvidiMab and GlyMab) and two therapeutic vaccine platforms (Moditope and ImmunoBody) with the potential to treat various cancers.
Scancell is a clinical stage immunology specialist. It has two promising oncology vaccine platforms, Moditope and ImmunoBody, 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, is progressing in a Phase I/II trial targeting hard-to-treat tumours with further efficacy data due 2024. The lead ImmunoBody programme, currently SCIB1, is in a Phase II study in metastatic melanoma, with a transition to the next-generation iSCIB1+ expected later this year. The broad acting GlyMab antibodies are generating exciting preclinical data, and a first partnering deal with Genmab is already in place and further deals are possible. AvidiMab technology will be increasingly employed to enhance avidity and potency. Our risk adjusted NPV valuation for Scancell is currently £300.1m, or 36.7p/share, with significant upside from multiple upcoming catalysts.
| Symbol | Primary exchanges |
| SCLP | AIM London |
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.
HUTCHMED’s clearly articulated strategy is delivering, with consistent clinical and commercial execution marking its continuing transition from a development stage company into a profitable commercial organisation. Growth in Oncology/ Immunology revenues, defined investment priorities, and a global partnering strategy should all contribute to achieving a FY25 breakeven target. HUTCHMED aims to expand its marketed portfolio of oncology drugs in China from three to six or seven by FY25, addressing blood disorders as well as solid tumours. First global launch of an in-house product, by partner Takeda, could occur in 2024, subject to a positive FDA approval decision in November. Our updated HUTCHMED valuation is $5.74bn ($32.95 per ADS), £4.78bn and HK$44.75n (549p or HK$51.40 per share).
| Symbol | Exchanges |
| HCM/0013 | NASDAQ/AIM London/SEHK |