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 leveraging its Arestat formulation expertise to create an attractive and well-balanced pipeline of in-house and partnered products. These are novel formulations of existing drugs that offer clinically significant benefits, carry lower development risk, and have faster regulatory pathways to market. Investor attention is, rightly, focused on the attractive diabetes assets (the ultra-rapid insulins AT278 and AT247), but the Specialty Hospital products tend to be overlooked. This is understandable as commercial sensitivities limit information flow, yet the milestones and royalties have the potential to build into a valuable recurring revenue stream. Progress across the mix of in-house and partnered programmes should provide a meaningful blend of value inflection points. Our valuation is £179m, or 583p per share.

Market information

SymbolPrimary exchanges
ARECAIM London

Research

New deals and first royalties to aid growth; key data H124
Lighthouse | 01 Feb 2024
Sanofi deal for INBRX-101 validates Arestat technology
Lighthouse | 24 Jan 2024
Second in-house Specialty Hospital deal
Update | 07 Dec 2023

Recent News

Launch of Ogluo in the Netherlands
29 Feb 2024
Year-end trading update
01 Feb 2024
Update on INBRX-101
23 Jan 2024
Grant of key European insulin patent
18 Jan 2024
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 proprietary pre|CISION platform is key to the investment case, and further details on lead programme AVA6000, a tumour targeted form of the chemotherapy doxorubicin, continue to support key hypotheses. Data show that AVA6000 is selectively activated at the target tumour site, resulting in lower toxicities, improved tolerability, and greater potency. This has translated into promising, albeit early, signs of clinical activity. AVA6000’s clinical success will help to validate pre|CISION, and could unlock an extensive opportunity to repurpose a range of proven, but currently sub-optimal, therapies, and alongside the Affimer platform, could be used in novel diagnostic and therapeutic applications. AVA6000 has now completed the seventh, and final, cohort of the Phase Ia three-weekly arm, with patient screening started in the two-weekly arm in the US. Data will direct the format of a potentially pivotal Phase II trial. News over the next 18-24 months should offer multiple value-inflection points. Our updated valuation including the Coris acquisition is £672m (237p/share).

Market information

SymbolPrimary exchanges
AVCTAIM London

Research

Tailored tumour targetting with pre|CISION
Update | 14 Dec 2023
Momentum builds in Diagnostics and Therapeutics
Lighthouse | 28 Sep 2023
Diagnostics build-out continues with Coris acquisition
Lighthouse | 01 Jun 2023

Recent News

Proposed REX retail offer
28 Feb 2024
Proposed fundraise to progress Therapeutics
28 Feb 2024
Appointment of Head of R&D
19 Jan 2024
Appointment of Chief Business Officer
19 Dec 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’s investment case rests on where Parsortix’s position in mainstream cancer diagnostics eventually lands. The place of liquid biopsies is now established and, increasingly, the additional clinical value that CTC (circulating tumour cells) assays bring is becoming clear. Addressing the many, varied opportunities directly is challenging and time consuming, with numerous barriers to overcome. Management is creating industry awareness through its demonstration and acceleration activities, which should drive near- and medium-term revenues. Similarly, a progressively robust bank of clinical data across multiple common tumours is building credibility. We view the ability to perform ctDNA and CTC DNA analysis concurrently, from a single blood draw, on third-party NGS and PCR platforms as providing a major driver for adoption. Our DCF-based valuation of ANGLE is £174m, or 67p/share.

Market information

SymbolPrimary exchanges
AGLAIM London

Research

Building content to drive widespread adoption
Update | 30 Jan 2024
Moving in the right direction to capture growth
Lighthouse | 10 Nov 2023
Revenue building and growth opportunities are developing
Lighthouse | 07 Sep 2023

Recent News

Potential utility in precision oncology
22 Jan 2024
DNA sample-to-answer molecular solution
04 Jan 2024
Contract announcement with Eisai Inc
02 Jan 2024
Parsortix unlocks opportunities for drug discovery
11 Dec 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’s unique and differentiated ROCK inhibitor portfolio, targeting diverse and underserved fibrosis indications, is central to its investment case. The Phase IIa trial of its lead asset, selective ROCK2 inhibitor zelasudil (RXC007) in idiopathic pulmonary fibrosis (IPF), is due to read out top-line data in H124 and will inform subsequent clinical development plans. This potentially includes expansion into broader interstitial lung diseases (ILDs) and cancer-associated fibrosis. Its second ROCK asset, GI-targeted pan-ROCK inhibitor RXC008 for fibrostenotic Crohn’s disease has now started a Phase I study, with initial safety data in healthy volunteers expected by end-2024. Other key data points in 2024 include Phase II checkpoint inhibitor combination data for porcupine inhibitor RXC004 in Wnt-ligand dependent tumours, expected H124, which will be a prelude to partnership discussions. Continued execution on business development opportunities within the pipeline has led to a third deal with Jazz Pharmaceuticals, focused on KRAS, and bringing in a $10m upfront payment, which has extended the cash runway into 2025. Our rNPV-based valuation is £386m ($463m), equivalent to 99p per share. .

Market information

SymbolPrimary exchanges
REDXAIM London

Research

Ready to ROCK as RXC008 enters the clinic
Update | 28 Feb 2024
Up to $870m KRAS deal marks third Jazz collaboration
Lighthouse | 07 Feb 2024
Anticipating clinical momentum and catalysts in 2024
Update | 19 Dec 2023

Recent News

First participant dosed in RXC008 Phase I trial
28 Feb 2024
Statement re Press Report
14 Feb 2024
Jazz Pharmaceuticals acquires KRAS programme
07 Feb 2024
FY23 Results
15 Dec 2023
Futura Medical
Guildford, United Kingdom

Futura Medical is the developer of innovative sexual health products; its core strength is in its research, development, and commercialisation of topically delivered gel formulations. Lead product Eroxon (MED3000) is the first clinically proven topical gel to treat erectile dysfunction (ED) 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

Eroxon continues to build, further new launches expected
Lighthouse | 06 Feb 2024
Significant achievements position MED3000 for success
Outlook | 18 Sep 2023
Haleon to commercialise MED3000 in the US
Lighthouse | 17 Jul 2023

Recent News

Eroxon to be available on prescription
14 Feb 2024
Trading update
06 Feb 2024
Appointment of joint Corporate Broker
06 Feb 2024
Futura extends collaboration with Cooper Consumer Health
15 Jan 2024
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 biotechnology company focused on the adaptive immune system, with four distinct technology platforms: two promising oncology vaccine platforms (Moditope and ImmunoBody), and two antibody technologies (GlyMab and AvidiMab). These have the potential to treat many solid cancers, either as monotherapy or in combination with other agents. Modi-1, the first Moditope programme, is progressing in a Phase I/II trial targeting hard-to-treat solid tumours, and further efficacy data, notably in combination regimens, are due during 2024. The lead ImmunoBody programme, currently SCIB1, has already demonstrated impressive response data in the ongoing Phase II study in metastatic melanoma, with a transition to the next-generation iSCIB1+ expected in coming months. The broad acting GlyMab antibodies are generating exciting preclinical data; a first partnering deal with antibody expert Genmab was executed in October 2022, and further deals are possible. AvidiMab technology could be increasingly employed to enhance avidity and potency. Our risk adjusted NPV valuation for Scancell is £304m, or 33p per share, with significant upside from multiple upcoming catalysts.

Market information

SymbolPrimary exchanges
SCLPAIM London

Research

Heading into important 2024 clinical catalysts
Update | 31 Jan 2024
Successful upsized placing raises over £10m
Lighthouse | 01 Dec 2023
Business update and FY23 results
Lighthouse | 31 Oct 2023

Recent News

Change of auditor
20 Feb 2024
H124 interim results
30 Jan 2024
Update on SCOPE trial: MHRA approves third cohort with iSCIB1+
17 Jan 2024
Result of the Open Offer
19 Dec 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

FY23 results point to strong financials and fundamentals
Lighthouse | 29 Feb 2024
Fruquintinib clinical and commercial updates
Lighthouse | 12 Feb 2024
Landmark FDA approval for fruquintinib
Lighthouse | 13 Nov 2023

Recent News

FY23 results & business update
28 Feb 2024
Phase III fruquintinib data in 2L gastric cancer presented at ASCO Plenary Series Session
07 Feb 2024
Inmagene exercises option to two candidates
02 Feb 2024
Elunate (fruquintinib) Hong Kong Marketing Approval for treatment of mCRC
30 Jan 2024