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

Arecor is successfully progressing its in-house pipeline, with both key diabetes programmes, AT247 (ultra-rapid insulin) and AT278 (ultra-concentrated ultra-rapid insulin), undergoing Phase I studies. Recent AT278 data demonstrated the promising profile, which is especially suited to high-dose insulin users and will be further explored in an upcoming Phase I study in Type II diabetes. AT247 data from a US insulin pump trial is expected shortly and will similarly guide its likely role in the nascent, and commercially important, insulin pump market. The recent acquisition of Tetris Pharma, supported by a £6m equity raise in August, brings near-term revenues and longer-term operational flexibility. Updating our rNPV model for H122 results and the acquisition generates an Arecor valuation of £177m, or 581p per share.

Market information

SymbolPrimary exchanges
ARECAIM London

Research

Specialty Hospital products formulation collaboration
Lighthouse | 10 Nov 2022
AT247 Phase I pump data confirms promising profile
Lighthouse | 11 Oct 2022
Broadening opportunities and preparing for the future
Update | 21 Sep 2022

Recent News

Second AT278 trial to commence in Type II diabetes
22 Nov 2022
Insulin product patents granted in Japan and South Korea
22 Nov 2022
Exclusive Specialty Hospital formulation collaboration
10 Nov 2022
Tetris Pharma launches Ogluo in Germany
01 Nov 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

Diagnostics M&A-led growth strategy is ready to Launch
Lighthouse | 18 Oct 2022
Building Tx and Dx portfolios from proprietary platforms
Lighthouse | 29 Sep 2022
AVA6000 set for third dose escalation stage
Lighthouse | 30 Jun 2022

Recent News

Result of the Open Offer
08 Nov 2022
Avacta to present at Theranostics FAP summit
31 Oct 2022
Result of placing
18 Oct 2022
Proposed placing, open offer and issue of convertible bonds
18 Oct 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

Post-FDA approval commercial momentum is building
Lighthouse | 29 Sep 2022
£20m raise funds commercialisation through to mid-2024
Lighthouse | 15 Jul 2022
Parsortix FDA clearance marks a key transition point
Lighthouse | 26 May 2022

Recent News

Multiple downstream analysis techniques for CTCs
02 Nov 2022
Parsortix poster at ISLB meeting
24 Oct 2022
Streamlining of operations to increase cash runway
18 Oct 2022
First regional distribution agreement
12 Oct 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 has quantified the potential near-term revenue impact from the voluntary UK manufacturing pause. Whilst this is only expected to last around six weeks, FY23 revenues are expected to be 13-18% below current consensus expectations. This is unfortunately due to the interruption occurring during the peak production period, which is undoubtedly disappointing given management guidance of a return to near double-digit growth in FY23. This setback puts increasing pressure on the pipeline to deliver next year, with important readouts expected for both VLP Peanut and Grass MATA MPL; both are expected to initiate key clinical trials this year. Our valuation is lowered to £260.8m, or 38.4p/share, with the commercial business DCF reduced to £45.9m or 6.8p/share and our pipeline NPV unchanged.

Market information

SymbolPrimary exchanges
AGYAIM London

Research

Start of pivotal Grass MATA MPL Phase III trial
Lighthouse | 08 Dec 2022
Manufacturing pause takes it toll on revenues
Update | 28 Oct 2022
On the starting blocks towards key data expected in 2023
Update | 29 Sep 2022

Recent News

Key updates on Grass MATA MPL and VLP Peanut
08 Dec 2022
Appointment of Interim CFO
21 Nov 2022
UK manufacturing to resume in mid-November
28 Oct 2022
Result of GM
17 Oct 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

New data draws attention to promising fibrosis assets
Update | 07 Oct 2022
All the ingredients for success now in place
Update | 29 Jun 2022
Jazz Pharmaceuticals $5m milestone triggered
Lighthouse | 15 Jun 2022

Recent News

Poster to be presented at IBD Nordic Conference
17 Nov 2022
RXC004 Phase II combination arms to open enrolment
10 Nov 2022
Poster on RXC007 potential in fibrotic diseases at AFDD
07 Nov 2022
Poster on Phase I RXC004 combination arm data at SITC
03 Nov 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

During 2022 Futura Medical successfully delivered on several key MED3000 related events, including the highly positive FM71 longer-term clinical data, which are needed to enter the US market and importantly reinforced MED3000’s differentiated and rapid onset of action. In addition, a number of commercial deals were executed, notably the European and UK deal with Cooper Consumer Health. The next steps are EU launches (due to start during H123), FDA marketing clearance (potentially by end Q123), and securing a US partner. These should be the final elements in converting MED3000 into a revenue generating OTC product for ED, transforming Futura Medical’s prospects. Pending visibility on both US and European launches, our updated model conservatively does not include any near-term MED3000 related revenues. Our Futura Medical valuation is now £270m, equivalent to 94p per share.

Market information

SymbolPrimary exchanges
FUMAIM London

Research

On the cusp of MED3000 commercialisation
Update | 10 Nov 2022
Interims highlight positive first signs in key markets
Lighthouse | 13 Sep 2022
FM71 achieves all primary and secondary endpoints
Lighthouse | 31 Aug 2022

Recent News

Application to the US FDA for MED3000
03 Oct 2022
Interim H122 results
13 Sep 2022
Highly positive FM71 Phase III data
31 Aug 2022
MED3000 Collaboration in EEA, UK & Switzerland
23 May 2022
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

FY22 results highlight clinical and corporate progress
Lighthouse | 28 Oct 2022
Optimum partner secured for first antibody deal
Lighthouse | 25 Oct 2022
First Moditope oncology vaccine enters the clinic
Lighthouse | 13 Jun 2022

Recent News

Vaccitech technology licenced to advance Modi-2
07 Nov 2022
First patient dosed in expansion phase of ModiFY
31 Oct 2022
FY22 results for year ended 30 April 2022
28 Oct 2022
Directorate changes
26 Oct 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 ambitious near- and medium-term growth plans, centred on its novel oncology products, to initially create a sizeable commercial organisation addressing Greater China whilst also building the appropriate infrastructure to address key global markets. The first product wave – Elunate (fruquintinib), Orpathys (savolitinib) and Sulanda (surufatinib) – are expected to post FY22 revenues of $160-$190m in China. The second and third waves of innovative programmes are progressing through development, with highly encouraging clinical profiles. This note details the status and relative importance of the key programmes and complements our September 2022 Outlook. Our valuation is $5.51bn/ £4.59bn/ HK$43.08bn, equivalent to $31.89/ADS or 531p/HK$49.83 per share.

Market information

SymbolExchanges
HCM/0013NASDAQ/AIM London/SEHK

Research

A sharper focus on the path to profitability
Lighthouse | 21 Nov 2022
Fruquintinib should continue to bear fruit
Lighthouse | 21 Nov 2022
FRESCO-2 data support broad uptake in later-line mCRC
Update | 21 Sep 2022

Recent News

Strategy to focus on late-stage pipeline regulatory approvals
15 Nov 2022
Top line data from FRUTIGA China Phase III in 2L gastric cancer
14 Nov 2022
Initiation of China Phase II/III of fruquintinib+ sintilimab for advanced RCC
27 Oct 2022
Initiation of China Phase II/III of sovleplenib for WAIHA
10 Oct 2022
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

MaxCyte’s H122 total revenue of $21.2m grew 56% year-on-year, with core Cell Therapy and Drug Discovery revenues up 46.5% to $19.2m, prompting management to increase FY22 guidance to c 30% core business revenue growth. Guidance for the inherently lumpier programme-related revenues from Strategic Platform Licences (SPLs) remains at c $4m for FY22. First regulatory filings for the most advanced SPL asset, CRISPR Therapeutics’ exa-cel (CTX001) should occur in Q422, meaning a first approval decision could come as early as 2023. With the prospect of future commercial launches, a growing number of SPL partners (now 17) and clinical progress across the SPL stable, MaxCyte is investing in people, processes, products, and infrastructure to support this, to further consolidate its leading position in non-viral cell delivery and engineering, and to expand into new markets. Our updated valuation is £980m ($1.27bn) or 964p/$12.53 per share.

Market information

SymbolPrimary exchange
MXCT/MXCT.LNASDAQ/AIM London

Research

Vertex Pharmaceuticals secures exa-cel SPL
Lighthouse | 29 Sep 2022
Strategic investments to support partners & future growth
Update | 06 Sep 2022
Robust Cell Therapy performance lifts FY22 guidance
Lighthouse | 23 May 2022

Recent News

SPL with Curamys
05 Dec 2022
Q322 results
09 Nov 2022
SPL with Vertex Pharmaceuticals
28 Sep 2022
New Maryland headquarters
21 Sep 2022