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Allergy Therapeutics’ VLP Peanut vaccine ex-vivo study has successfully met all primary and secondary endpoints. These confirm the safety is as hoped, with clear indications of a material shift from a Th2-dominated (allergic) response to a Th1-dominated (tolerant) response in a dose-dependent manner. These results, together with prior preclinical data, will support an IND application with the FDA. A Phase I trial is expected to start in Q122, with results likely before end-2023. A successful clinical outcome would transform the lives of peanut allergy sufferers and be equally transformational for the company. Medium term prospects remain underpinned by the resilient performance of the European allergy business and the continued progress of the Grass MATA MPL programme, where results from the G309 exploratory field study are due before end-2021. Our valuation is £344.5m,or 53.8p per share.
| Year-end: June 30 | 2019 | 2020 | 2021E | 2022E |
| Revenues (£m) | 73.7 | 78.2 | 84.3 | 86.3 |
| Adj. PBT (£m) | (3.7) | 3.5 | (0.3) | (12.8) |
| Net Income (£m) | 3.5 | 6.9 | (0.2) | (13.0) |
| Adj. EPS (p) | 0.5 | 1.1 | (0.0) | (2.0) |
| Cash (£m) | 27.4 | 37.0 | 40.3 | 23.7 |
| EBITDA (£m) | 6.5 | 12.2 | 5.7 | (7.7) |
Update
21 September 2021
| Price | 34.5p |
| Market Cap | £221.4m |
| Enterprise Value | £181.1m |
| Shares in issue | 641.5m |
| 12 month range | 12.4-35.9p |
| Free float | 22.4% |
| Primary exchange | AIM London |
| Other exchanges | N/A |
| Sector | Healthcare |
| Company codes | AGY |
| Corporate client | Yes |
Company description
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
Analysts
Lala Gregorek
lgregorek@trinitydelta.org
+44 (0) 20 3637 5043
Franc Gregori
fgregori@trinitydelta.org
+44 (0) 20 3637 5041
Table of Contents
Allergy Therapeutics’ continuing strong performance in its European allergy business underlines the resilience of its commercial operations. However, central to our investment case is the R&D pipeline, where two novel programmes, Grass MATA MPL and VLP-based peanut vaccine, have the potential to transform the company into a global player. Positive results of the recent VLP Peanut 001 ex vivo biomarker study will form the basis of an FDA IND filing, leading to likely start of US Phase I studies in Q122. Results would be expected by end-2023, with Phase II proof-of-concept trials starting in 2024. The clear medical need for such a potentially life-saving treatment should see an expedited approval pathway agreed and first availability as soon as late-2026. Meanwhile, top-line results of the Grass MATA MPL G309 exploratory field study are expected by end-2021. These will guide the design of the pivotal Phase III study (G306) that will support FDA filing and approval. G306, a Europe and US trial, is expected to start in H222 and run over the 2022/23 allergy season. Our valuation is £344.5m (53.8p/share), with the commercial operations worth £89.7m, or 14.0p/share, and the R&D pipeline £210.3m, or 32.8p/share.
Allergy Therapeutics is a leading player in the European allergen immunotherapy (AIT) market. AIT also known as desensitisation, involves the repeated administration of specific allergens that over time provide protection against natural exposure to them. The AIT market is fragmented with many small regional players and a high degree of heterogenicity in clinical practice across geographies. However, rationalisation is happening, driven by the implementation of tougher regulatory standards, such as those of the FDA in the US and TAV (Therapieallergene-Verordnung) in Germany. These seek to ensure adherence to essential quality criteria regarding manufacture, clinical efficacy, and batch consistency. Against this backdrop, management’s continued investment in clinical and manufacturing infrastructure has seen sustained market share gains. FY21 performance (for the year-ending June) will be presented on 23rd September.
In this note we focus on the VLP Peanut 001 ex vivo biomarker study, carried out in conjunction with Imperial College London, where results were detailed in a recent key opinion leader presentation.
The VLP Peanut vaccine programme is the lead candidate employing the proprietary technology that Allergy Therapeutics licensed exclusively from Saiba AG and DeepVax GmbH. If successful, use of the VLP platform could be extended to other allergens such as mixed nuts, and then cat, mould, and house dust mite as well as venom and stings. Its potency and flexibility mean it could also be developed for uses as diverse as solid tumours (notably melanoma), asthma, atopic dermatitis, and psoriasis.
The VLP platform uses repeated 3D protein nanostructures that mimic the organisation and conformation of real viruses but, crucially, lack the viral genome. They are designed to have highly repetitive molecular structures on their surfaces and, as these patterns are a recognised characteristic of pathogenic microorganisms (such as viruses and bacteria), they evoke naturally strong immunologic responses. These VLPs (virus-like particles) are derived from the plant virus Cucumber Mosaic Virus (CuMV) and include tetanus toxin epitopes to form an immunologically optimised construct (CuMVtt).
The benefit of such a rationally designed VLP construct means their size (20–200 nm) and repetitive array structure result in potent immune response through:
The preclinical data to date has been encouraging, with studies showing that a single recombinantly produced allergen of Arachis hypogaea (either Ara h 1 or Ara h 2) confers immunity against a complex allergen mixture, including all the 12 major allergens (and isoforms) found in peanuts. The selected allergens are immunogenic, but not reactogenic, and fail to activate human mast cells. The absence of reactogenicity is a key clinical attraction for any allergy vaccine, as severe allergic reactions are both feared and potentially dangerous. Animal studies showed an attractive safety profile, with no vaccine-related allergic reactions, and a highly promising efficacy profile, with reduction of systemic and local allergic effects on challenge with the whole allergen extract.
The VLP Peanut ex vivo biomarker study, P001, was undertaken in collaboration with Imperial College London to help shape understanding of likely clinical potential. P001 used blood samples from six peanut allergy patients, three were from children (aged eight to ten years old) and three from adolescents (aged 12 to 15). An extensive array of functional and molecular biomarkers was used to evaluate the hypoallergic potential and the potency of the immune response induced. The results showed a significant 24-fold reduction in basophil activation and histamine release, a clear demonstration of the VLP’s hypoallergenic nature and immunological potential. As peanut allergy is one of the most common food allergies, and a leading cause of severe and fatal food-induced anaphylactic reactions, it was important to establish hypoallergenicity of the VLP Peanut vaccine ahead of dosing in human trials.
Additional findings from the study showed that compared with recombinant peanut extract, VLP Peanut +/- MCT (microcrystalline tyrosine) adjuvant:
These finding support the view that VLP Peanut produces a shift in the immunological response from a T-helper type 2 (Th2)-dominated response (IgE mediated) to a Th1-dominated response (IgG mediated) in a dose-dependent manner. Such a ‘rebalancing’ of the immune response should result in a clinically meaningful reduction in symptoms when exposed to the allergen, with the likelihood of the effect being sustained for lengthy periods.
The P001 data package, together with further preclinical multiple dose toxicology studies that have established the dose ranges for subcutaneous administration, will form part of the Investigational New Drug (IND) application with the FDA. The planned Phase I study, known as PROTECT, is expected to start in Q122. The format of this study will be determined in dialogue with the FDA but will likely use a stepwise protocol, with the first stage involving non-allergic volunteers, then proceeding to skin prick tests in peanut allergy patients, before embarking on subcutaneous injection in peanut allergy sufferers. Assuming smooth progress, top-line results could be available by end-2023.
The FDA’s requirements for regulatory approval will be determined once clinical trial results are available, however, the Palforzia (Aimmune Therapeutics) approval process provides a useful context. Palforzia’s efficacy was demonstrated by a randomised, double-blind, placebo-controlled study conducted in the US, Canada and Europe in c 500 individuals known to be peanut allergic (PALISADE). Safety was assessed in two double-blind, placebo-controlled studies in approximately 700 peanut-allergic individuals (PALISADE and RAMSES). As a condition of approval, to mitigate the risk of anaphylaxis, a Risk Evaluation and Mitigation Strategy (REMS) is in place, which includes elements to assure safe clinical use.
The Phase II proof-of-concept trials for VLP Peanut could start in 2024 and, given the clear medical need for an effective and long-acting vaccine, we expect a helpful and collaborative dialogue with the regulatory agencies. The life-saving potential would suggest an expedited approval pathway could be likely which, if successful, could result in the first availability of VLP Peanut as soon as late-2026.
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