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’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.

Market information

SymbolPrimary exchanges
ARECAIM London

Research

Growth plans starting to stack up
Update | 14 Sep 2023
Pipeline and partnership progress plus upcoming catalysts
Lighthouse | 20 Jul 2023
Continued delivery with key AT278 data due in Q423
Update | 20 Apr 2023

Recent News

Progress of Phase I clinical study of AT278
02 Oct 2023
Interim H123 results
14 Sep 2023
AT307 positive FDA pre-IND meeting
07 Sep 2023
Tetris Pharma collaboration with Goodlife
04 Sep 2023
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’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.

Market information

SymbolPrimary exchanges
AVCTAIM London

Research

Momentum builds in Diagnostics and Therapeutics
Lighthouse | 28 Sep 2023
Diagnostics build-out continues with Coris acquisition
Lighthouse | 01 Jun 2023
Building on Therapeutic and Diagnostic foundations
Update | 10 May 2023

Recent News

H123 interim results
28 Sep 2023
Completion of AVA6000 sixth dose escalation and clinical update
19 Sep 2023
Completion of fifth dose escalation of AVA6000
21 Jun 2023
Second milestone in AffyXell JV
05 Jun 2023
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 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.

Market information

SymbolPrimary exchanges
AGLAIM London

Research

Revenue building and growth opportunities are developing
Lighthouse | 07 Sep 2023
Recent deals provide evidence of assay traction
Lighthouse | 21 Apr 2023
Pursuing a multi-faceted Parsortix commercial opportunity
Outlook | 13 Mar 2023

Recent News

Interim H123 results
07 Sep 2023
Launch of Portrait Flex assay
04 Sep 2023
Senior management appointments
05 Jun 2023
Pharma services contract with Artios Pharma
25 May 2023
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

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.

Market information

SymbolPrimary exchanges
AGYAIM London

Research

Annual report and accounts delayed, shares suspended
Lighthouse | 29 Dec 2022
Start of pivotal Grass MATA MPL Phase III trial
Lighthouse | 08 Dec 2022
Manufacturing pause takes it toll on revenues
Update | 28 Oct 2022

Recent News

Publication of open offer circular
27 Sep 2023
Unaudited preliminary FY23 results
27 Sep 2023
Phase I VLP Peanut PROTECT trial progress
26 Sep 2023
Satisfaction of FDI clearance conditions
22 Sep 2023
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 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.

Market information

SymbolPrimary exchanges
REDXAIM London

Research

Two key Phase II results on track for next 12 months
Update | 18 May 2023
ROCK solid start in cancer-associated fibrosis
Lighthouse | 11 May 2023
Fundamentals intact with catalysts on the horizon
Lighthouse | 04 Apr 2023

Recent News

Zelasudil (RXC007) granted FDA Orphan Drug Designation
21 Aug 2023
Extension to CLN
10 Jul 2023
Interim H123 results for the six months ended 31 March
17 May 2023
RXC007 preclinical data
11 May 2023
Futura Medical
Guildford, United Kingdom

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.

www.futuramedical.com

Investment Perspective

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.

Market information

SymbolPrimary exchanges
FUMAIM London

Research

Significant achievements position MED3000 for success
Outlook | 18 Sep 2023
Haleon to commercialise MED3000 in the US
Lighthouse | 17 Jul 2023
Key takeaways from Investor Seminar
Lighthouse | 26 Jun 2023

Recent News

MED3000 European patent granted until 2040
02 Oct 2023
Interim H123 results
18 Sep 2023
MED3000 approval in Saudi Arabia
09 Aug 2023
Board change
18 Jul 2023
Scancell
Oxford, United Kingdom

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.

www.scancell.co.uk

Investment Perspective

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.

Market information

SymbolPrimary exchanges
SCLPAIM London

Research

SCIB1 SCOPE study shows a striking 82% ORR
Lighthouse | 19 Sep 2023
Upcoming SCIB1 data could provide first proof of concept
Update | 05 Sep 2023
Modi-1 successful in first part of Phase I/II trial
Update | 21 Feb 2023

Recent News

Positive data from first stage of SCIB1 Phase II SCOPE trial in advanced melanoma
19 Sep 2023
Appointment of Head of Business Development
07 Sep 2023
Appointment of CFO
29 Aug 2023
Modi-1 trial open for expansion in CPI combination
31 Jul 2023
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’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).

Market information

SymbolExchanges
HCM/0013NASDAQ/AIM London/SEHK

Research

Surfing the ‘waves’ towards profitability
Outlook | 07 Sep 2023
Delivering on sharpened goals and priorities
Lighthouse | 01 Aug 2023
ASCO 2023: a growing body of evidence for fruquintinib
Update | 22 Jun 2023

Recent News

Submission of fruquintinib Japan NDA in mCRC
29 Sep 2023
Presentation of results from the Phase IIIb trial of savolitinib at WCLC 2023
12 Sep 2023
Completion of enrollment in tazemetostat China bridging study in r/r FL
12 Sep 2023
BTD granted in China for savolitinib in Gastric Cancer
29 Aug 2023