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Q2 2019 was a landmark quarter for Prometic with a recapitalisation comprising the conversion of $228.9m of debt and $114.4m in new equity issuance. Over H1 total cash has gone from $7.4m to $81m, off set by total debt of just $9.2m. The net loss of $133.7m resulted largely from the non cash element of the loss on extinguishment of a loan of $87.4m.
ProMetic Life Sciences
The circular pertaining to the anticipated rights offer has recently been published and the shares are now trading ex-rights. The key terms are in line with previous guidance in that shareholders have the right to subscribe for up to twenty shares per each share held as at the 18 May 2019 record date, at a subscription price of 1.52 Canadian cents with the issue being capped at 4.93bn shares, equivalent to gross proceeds of C$75m.
Prometic’s Q1s showed a continued trend in reduced losses and cash burn following on from the 33% reduction in operational cash burn achieved in FY2018 (vs. a target of 10 to 15%). Speciality plasma sales and increased bioseparations volumes drove revenue growth of over 100% to $8.2m. Net losses were down 16.8% largely as a function of the increase in revenue from sales of goods of $4.0m, the decrease in R&D of $3.2m and the increase in the gain of foreign exchange of $2.9m. This was partially offset by the increase in finance costs expense of $3.1m to $7.4m.
The Corporation focussed on the biology of healing has this week completed a C$75m equity offering and conversion of some C$229m of debt leaving a balance of just C$10m. The Company has also proposed a Rights Offering subject to TSX approval. Shareholders will have the right to subscribe is up to 20 shares for every 1 held at the same transaction price of the recently closed deals, namely 1.52 Canadian cents, a discount of 76% to the current share price and 72% to our estimated theoretical ex rights price of 5.9 cents. The offer is capped at a maximum of C$75m which will result in a proportional scale back to all applicants, should demand exceed this threshold. The forthcoming AGM will seek shareholder approval for a share consolidation which we see as one of the stepping stones towards a potential NASDAQ listing later this year.
The Corporation focussed on the biology of healing yesterday announced that it had confirmed its decision to formally pursue Alström syndrome (AS) as a clinical indication for PBI-4050 following positive feedback from its recent meetings with regulatory authorities. These meetings have provided Prometic with clear clinical and regulatory guidance, which will enable the finalisation of the design of a pivotal placebo-controlled Phase 3 clinical trial, including agreement on multiple endpoints including liver and cardiac fibrosis.
The Corporation focussed on the biology of healing has had a busy November not only reporting Q3 results and highlights, and issuing improved financial guidance, but critically also agreeing amended terms with its long-term backers, thereby pushing out the maturity of its debt facilities (estimated at close to C$200m) to September 2024. The loans, ultimately controlled by Peter J. Thomson’s investment firm, Thomvest Asset Management include a C$100m facility that previously was due to expire in November 2019. This is a tremendously supportive move and Prometic’s focus on prudent cash management and prioritisation of core clinical objectives is alleviating balance sheet pressure whilst priming its relatively late stage potential blockbuster therapies to crystallise value in the near term.
The Corporation focussed on the biology of healing this week announced positive feedback from the FDA type-c meeting on the Ryplazim™ (plasminogen) BLA (biologics license application). We are reassured by the FDA’s agreement with the Company’s proposed action plan for the implementation of additional analytical assays and in-process controls related to the Ryplazim™ (plasminogen) manufacturing process.
This week’s Q2 update and conference call by Prometic highlighted just how important a part one of the Company’s smallest investigational indications (Alström Syndrome) is playing in driving its partnering and clinical strategy. Why is this?
The Corporation focussed on the Biology of healing has recently announced further data from the ongoing PBI-4050 study in Alström syndrome patients as well as 2017 results and an update on its other programs. The average treatment duration of PBI-4050, for the 12 Alström patients, has reached 52 weeks and further clinical activity in the heart and liver was observed with longer treatment exposure. We had already seen promising data on the liver and this has been corroborated by additional data with 9 out of 10 patients experiencing a reduction in liver fibrosis evidenced by a FibroScan® (liver stiffness) score that was reduced or stabilised. The subjects who received at least 36 weeks of treatment showed a statistically significant improvement in the measure of liver stiffness, from a mean of 10.2 kPa (kilopascals) at baseline to a mean of 8.1 kPa. Positive Liver MRI data supported this.
The Corporation focussed on the biology of healing recently hosted a Key Opinion Leader (KOL) event for Novel treatments of Idiopathic Pulmonary Fibrosis (IPF). Prometic is running two IPF research programs with the most advanced being the planned Phase 3 Pivotal study whose trial design was agreed with the FDA last month.
ProMetic Life Sciences Flash : Leading the search for IPF cure
The Corporation, with its ever-growing body of IP concerning the biology of healing, has entered 2018 considerably closer to significant commercial landmarks than at the same point last year.
ProMetic Life Sciences : Short squeeze in 2018
The Corporation focussed on the biology of healing this week released Q3 numbers which reflected the benefits of the first deal for its small molecule division recognising $19.7m of funding due from Shenzen Royal Asset Management. We had previously expected a similar quantum as a balance sheet item. We have therefore increased our FY2017 revenue expectation from $20m to $35.5m and have reduced our forecast net loss from $130.9m to $115.9m. Despite the expansion of the clinical program R&D/admin costs have remained remarkably stable, at between $30.9m (Q3) and $32.5m for the last 3 quarters vs $41.5m in Q4 2016. Of the $72m of R&D expenses recognised ytd some $24.6m relates to manufacturing and inventories are up at $32.6m vs $13.7m as at 31 December, with most of the increase represented by Plasminogen and blood plasma stocks. In yesterday’s conference call it was noted that the potential sale value of this inventory (subject to Ryplazim™ regulatory approval) is likely to be significantly higher than book value
In a month that has already seen a large step towards marketing approval for its first therapeutic, Ryplazim™, the Corporation focussed on the biology of healing has made two further important announcements this week. On Monday, Prometic revealed that it had entered into a binding letter of intent to secure a CAD $100m line of credit from an affiliate of one of its staunchest backers, Thomvest Asset Management.
The Corporation focused on the biology of healing announced that Health Canada has granted priority review status for the New Drug Submission (NDS) the company plans to file for its plasminogen replacement therapy Ryplazim™ for the treatment of patients with plasminogen deficiency. This is another priority review status for Ryplazim™, thus showing further validation by a regulatory authority of the potential value of this life-changing drug in the treatment of plasminogen deficiency. Last week, the U.S. FDA accepted Prometic’s Biologics License Application for Ryplazim™ having granted a priority review status.
The Corporation focussed on the biology of healing announced that the U.S Food and Drug Administration (FDA) has accepted its Biologics License Application (BLA) for its plasminogen replacement therapy (RyplazimTM) having granted a priority review status and set a Prescription Drug User Fee Act (PDUFA) action date for April 14, 2018, Ryplazim™ had previously been granted Fast Track, Orphan Drug and Rare Pediatric Disease designations by the U.S. FDA. The PDUFA date is essentially the date by which a definitive licensing decision is required. The priority review shortens the review period from 12 to 6 months. The review process will require further scrutiny, including a plant inspection. However, the combination of the outstanding safety and efficacy data published to date, and multiple designations give us confidence that the FDA’s recognition of this significant unmet need will result in marketing approval in H1 2018.
Fundamentally, there has been no letup in progress across both drug discovery platforms. PBI-4050 has made further advances with Idiopathic Pulmonary Fibrosis (IPF), Alstom syndrome, and Diabetes and Metabolic syndrome. The plasma platform has generated further positive long term clinical data on RyplazimTM , which has also received a Rare Pediatric Disease Designation from the FDA. On regulatory approval, RyplazimTM will be eligible to receive a rare pediatric disease priority review voucher. The financial markets, which have rewarded FibroGen and Galapagos handsomely for positive IPF data, however, continue to focus on the short delay in RyplazimTM approval as if such occurrences are very rare in the drug development industry. Despite a larger, more diverse and advanced clinical pipeline, Prometic’s market cap of C$1.1bn seems wholly unjustified in relation to FibroGen (US$4.5bn) and Galapagos (US$5.2bn). We expect the shares to at least recover to their previous peak of C$3.54 when RyplazimTM is commercially launched
The Corporation focussed on the biology of healing has this week updated on its Q2 highlights and financial results. Clearly investors’ current focus is on the anticipated launch of Ryplazim™ for plasminogen deficiency. Prometic is responding diligently to all FDA requests in relation to the BLA review and in the latest conference call revealed that it is confident of commercial launch in Q1 and expects to be launch ready before the year end. 48-week clinical data from plasminogen phase 2/3 trial (received after the BLA submission which included 12-week data), confirms no recurrence of lesions, no safety or tolerability issues observed.
The Corporation focussed on the biology of healing has updated on its plasminogen program whose phase 2/3 pivotal programme had already reported the satisfaction of all primary and secondary endpoints. At 48 week’s we were pleased to see that the same safety and tolerability profile was maintained, and that following the earlier resolution of ALL lesions, that recurrence had been prevented. “The 48-week clinical data will be submitted as a supplement to our BLA (Biologics License Application) filing, after Ryplazim™ (trade name for the congenital deficiency treatment) receives its expected accelerated approval in the fourth quarter of 2017.” Dialogue with the FDA continues with no queries raised to date regarding the underlying clinical data, and an inspection of the manufacturing facility has been scheduled for this Summer.
These words spoken by Dr John Moran, the Chief Scientific Officer at Thursday’s AGM aptly describes the milestones that Prometic is consistently accomplishing at a prolific rate. The same cannot be said about the share price which continues to belie the staggering potential, notwithstanding the underperformance of the biotech sector against the general market. Two distinct and highly scalable drug development platforms, focused on unmet/hard-to-treat conditions, thirteen therapeutics and growing, first market launch in late 2017 with an $8bn opportunity, five successful Phase II/III clinical trials, de-risked follow-on analogues and manufacturing capacity worth at least $700m annually by 2022. You can buy all this for a mere C$1.4bn ($1.1bn). In comparison, Allergan paid a potential consideration of $1.7bn in September 2016 for clinical-stage Tobira Therapeutics focused on just NASH and other liver diseases.
The Corporation focused on the Biology of healing has this week held its AGM. In the presentation given at the meeting, some time was devoted to ProMetic’s growing understanding of the role of Plasminogen in the body’s healing process. This potentially expands the addressable patient population exponentially beyond the 2,000 (circa 4 x more than originally anticipated) sufferers of congenital Plasminogen deficiency for whom Prometic is targeting a commercial launch in Q4 this year. Prometic has identified a market potential of US$8 billion for plasminogen with some arguably conservative assumptions. Let us take for example Acquired Acute Deficiencies such as Acute Lung Injury (ALI) for which Prometic is due to present ‘remarkable’ results from a gold standard animal market. This effects c. 190k patients per year in the US with a 40% mortality rate. Prometic’s market estimate included just over 100k patients for Acquired Acute Deficiencies. There are likely to be several more behind ALI. The potential size of the market is well in excess of the assumptions in our sum of the parts valuation which already suggests upside up to a share price of C$8.6.
This week’s announcement by the Corporation focused on the biology of healing confirmed that the FDA has concurred with the design of ProMetic’s design of the first of its PBI-4050's planned phase 2/3 clinical trials for Idiopathic Pulmonary Fibrosis (IPF) based on the efficacy data generated in the recently completed 40 patient Phase 2 open-label study. All patients in the study will be already receiving treatment with Boehringer-Ingelheim’ s (BI) nintedanib and further randomised to receive in addition either PBI-4050 or a placebo. ProMetic also intends to initiate a second phase 2/3 placebocontrolled trial to assess PBI-4050 as a monotherapy which would enrol IPF patients who have failed to tolerate nintedanib or pirfenidone.
The Corporation focussed on the biology of healing last week made two announcements, that between them underpin how efficiently the firm is advancing is Plasma Derived Therapeutics, whilst at the same time attracting valuable third party revenues from its proprietary technology platform, which is the backbone of the biologic drug discovery programme.
The Corporation focussed on the biology of healing recently reported full year results for FY December 2016. Net losses doubled to $110.7m, but within that were R&D expenses of $88.1m. We have drilled down into how ProMetic has been allocating its investment and seen that it is building a portfolio of valuable licensed drugs, the first of which is due to launch this year. Given the breadth of the pipeline there should be options to commercialise several candidates either in their own right or by various partnered routes.
The management is continuing to make judicious use of ProMetic’s IP to maintain investment in its growing pipeline and increase the addressable market without diluting shareholders. Today, it has potentially tapped up to $33m for just 25% share in a proposed JV with Shenzhen Royal Asset Management Co. (SRAM) for the development, manufacture and commercialisation of PBI-4050, PBI-4547 and PBI-4425 in the People’s Republic of China (excluding Hong Kong, Taiwan and Macau). This is a strong endorsement for PLI’s small molecules platform by a company which has an established track record in the second largest pharmaceutical market.
The Corporation focussed on the biology of healing has recently provided further top line data from its open label Phase 2 clinical trial in subjects suffering from idiopathic pulmonary fibrosis (IPF), following completion of the study. The results (now based on 40 patients) confirm earlier evidence of efficacy (30 patients) as both a mono-therapy, and in combination with the currently marketed treatments for IPF, nintendanib or pirfenidone. The evidence suggests the potential to outperform both treatments in terms of stabilising respiratory function, and the safety and tolerability profile of PBI- 4050, now established across multiple trials for various indications, appears vastly superior to the current on-market drugs, both of which we understand have been shown to have a high incidence of gastrointestinal events.
California Capital Equity, LLC (CCE) has injected C$21.05m into ProMetic’s coffers via the exercise of all of its 44.8m outstanding warrants. Encouragingly CCE’s CEO, Dr. Patrick Soon Shiong stated that the “increased equity position in ProMetic represents a long term and strategic investment.” This investment underpins ProMetic’s funding for its busy R&D programme until late 2017. By this time we expect to see further data on multiple programs plus the launch of ProMetic’s first plasma derived therapeutic, plasminogen.
The shares have recovered their 12-month outperformance against S&P Biotech index since mid-December but they are still 36% below the absolute peak of 2016 (C$3.44). The company was a victim of fake news on insider selling but a reassuring statement in mid-December stopped the rot. We expect the shares to recover to at least the recent peak of C$3.44 as underlying fundamentals are unchanged and the clinical data generated by the lead programmes continue to be strong. This week it was announced that PBI-4050 has been granted orphan drug designation for the treatment of Alström Syndrome (AS) by the European Commission. At under C$1.4bn, the market is seriously undervaluing the drug platforms with at least 12 shots on goal. We estimate that the commercial launch of Plasminogen in mid-2017 could alone be worth at least the current market value given that not long ago Shire paid $5.2bn for Dyax, a developer of plasma kallikrein (pKal) inhibitors for the treatment of HAE, a debilitating and sometimes life-threatening rare genetic disease.
The Corporation focussed on the Biology of Healing recently presented an indepth update on its two flagship programs, Plasminogen (plasma derived) and PBI-4050 (small molecule), as well as on operations as it prepares to become a commercial producer of plasma derived proteins ahead of next years’ anticipated Plasminogen launch.
It has been another extremely news flow rich fortnight from the biopharmaceutical Corporation focussed on the biology of healing. We have had four separate pieces of news announced on the PBI-4050 programme, and Q3 highlights/results confirming that ProMetic is funded for at least another year and that the GMP manufacturing infrastructure is now in place to deliver revenue north of C$500m. We detail some highlights of the recent news below, and look forward to today’s analyst day which we are at in New York and which promises a deep dive into the commercial potential of the large and increasingly late stage development portfolio.
ProMetic continues to post positive and significant results from the multiple PBI-4050 clinical trials. The open IPF (idiopathic pulmonary fibrosis) Phase 2 clinical trial has shown early evidence of efficacy alone and in combination with one of the commercially approved drug for IPF. This follows news of significant results with metabolic syndrome & Type 2 diabetes, and liver fibrosis in H2/16 so far.
Following a succession of exciting results from trials of ProMetic’s antifibrotic candidate PBI-4050, investors can be forgiven for having forgotten about the Company’s most advanced clinical candidate Plasminogen. This week the program came right back into the spotlight with the announcement that the trial had successfully met its primary and secondary end points with a 100% success rate and even more encouragingly for patients a 100% clinical response rate with lesions healing within weeks of treatment.
The company has successfully achieved the primary and secondary endpoints with the intravenous plasminogen treatment in the Phase 2/3 clinical trial in patients with plasminogen deficiency. This means that it can continue along the Accelerated Approval Regulatory Pathway, commence filing plasminogen BLA modules in the coming weeks and remain on track for commercial launch in mid-2017.
In the space of two weeks, ProMetic’s potential blockbuster lead small molecule candidate PBI-4050 has delivered positive data from the clinic, from two open label Phase II trials. The latest data announced this week is from a study in the Metabolic Syndrome and Type 2 Diabetes study and confirms the efficacy reported at earlier points in the study with the significant reductions in HbA1c (glycated haemoglobin) originally observed at 12 weeks being maintained at 24 weeks. Significant reductions were also seen in waist circumference (a fundamental diagnostic criterion for metabolic syndrome) and Body Mass Index. What is perhaps less expected news, is the meaningful reduction in biomarkers, which when elevated are associated with cardiovascular and kidney complications. ProMetic will be upgrading the study to a placebo-controlled clinical trial this quarter.
ProMetic’s potential blockbuster lead small molecule candidate continues to deliver positive data from the clinic, with a series of trials starting to translate the compelling pre-clinical studies into efficacy in humans. This week’s announcement confirmed a significant reduction in established liver fibrosis in 100% of the first five patients who completed 12 weeks of treatment in the open label trial. CMO John Moran stated in the subsequent conference call, that ultra-orphan Alström is the most stringent test of PBI 4050’s ability to control diabetes and fibrosis he could imagine. The five patients at various stages of progression showed a decrease in their ‘FibroScan’ Score of between 18% and 39%. The rapidity of this effect is remarkable and way beyond what ProMetic had hoped for. FibroScan is recognised as one of the most accurate non‐invasive tests of liver fibrosis. The drug’s potential to be a well-tolerated unique anti-fibrotic, that can also combat insulin resistance, is a very powerful proposition indeed.
ProMetic’s clinical trials continue to demonstrate significant value and today’s announcement is particularly significant given the number of organs targeted and the stringency of the test. The early efficacy results in the Alström syndrome phase 2, open-label study have demonstrated that all the first five patients who completed 12 weeks of treatment with PBI-4050 had a significant reduction of liver fibrosis. Based on the comments in the analyst call, these results are well above management expectations and the new data could open several new commercial avenues for PBI-4050.
Economic news ECB main refinancing rate The Governing Council of the European Central Bank (ECB) maintained its main interest rate at 0.00% in line with the market expectations. The deposit facility rate and the marginal lending facility rate were also left unchanged at -0.40% and 0.25%, respectively. US initial jobless claims Initial jobless claims in the US dropped 1,000 to 253,000 in the week ended 16th July, the Labor Department reported yesterday. Economists expected the claims to increase to 265,000. The four-week moving average fell 1,250 to 257,750 last week. US existing home sales Existing home sales in the US increased 1.1% m-o-m to a seasonally adjusted annual rate of 5.57 million units in June, from a revised 5.51 million units in May, the National Association of Realtors announced yesterday. The markets expected the home sales to decline to 5.48 million units. US leading index The Leading Economic Index for the US increased 0.3% m-o-m in June, after a 0.2% fall in May, the Conference Board said yesterday. The markets expected a 0.2% rise in index.
Q2/H1 results published recently by the Biopharmaceutical Corporation focused on the biology of healing, reflected intensified development activity, as its small molecule program hits the clinic on multiple indications and enrolment on its biotherapeutic candidates accelerates. R&D was up to C$35.8m from C$20.4m in H1. This was mitigated by a certain extent by an increase in revenues with net losses up to C$42.6m from C$34m. We leave our full year numbers unchanged. Following a successful bought deal at C$3.1 ProMetic finished the half with cash of C$64.3m versus C$29.3M at the end of 2015, following a bought deal at C$3.10. The company has guided that this gives sufficient cash runway until mid-2017. This could be extended in the event of a licensing deal. Based on the clinical pipeline, ProMetic is likely to have significantly advanced its candidates by this point and we highlight recent progress and what to look out for on the company’s more advanced candidates. However there are plenty more just behind.
Last night, ProMetic reported revenues of C$3.3m Q2/16, up 14% year-on-year taking the total for H1/16 to $8.5m, up 89% compared with the same period last year. However, what will drive the share price in coming months is the delivery of several corporate and clinical milestones including the completion of Plasminogen study enabling BLA filing to start in Q4/16.
The biopharmaceutical company focused on the ‘biology of healing’ has announced the completion of the enrolment of the adult patient population (50 adult patients) in its pivotal IVIG (Intravenous Immunoglobulin) phase III clinical trial for the treatment of primary immunodeficiency diseases (“PIDD”). Completion of the pediatric cohort of 25 children is anticipated to complete shortly. Five months ahead of target, this potentially brings forward a major revenue stream for ProMetic. The announcement suggests that the initial focus will be Canada where the consumption of IVIG per capita is second globally. The manufacturing advantages provided by the proprietary PPPSTM technology can help alleviate dependence on foreign plasma derived therapeutics and align local production with local demand.
The Biopharmaceutical Company focused on the biology of healing has over recent days provided encouraging updates on both its plasma derived therapeutics programme and on the development of its small molecule portfolio. Yesterday ProMetic has announced that the FDA has granted a Fast Track designation to ProMetic’s Plasminogen drug candidate, currently in a phase 2/3 clinical trial in patients suffering from congenital Plasminogen deficiency. The rolling review should greatly enhance the efficiency of ProMetic’s marketing application giving the Company an excellent chance of bringing Plasminogen to market during 2017. Importantly this is a ringing endorsement by the regulator in the light of astonishing results in compassionate use cases for an unmet medical need. A strong relationship with the FDA is as vital an asset as any chemical entity, and this may set the scene for further regulatory support for accelerating the development of ProMetic’s very deep pipeline of plasma products which are sitting in line just behind Plasminogen.
The Biopharmaceutical company focused on the biology of healing on Wednesday gave an extended presentation at its Annual and Special meeting of shareholders. The key messages were the variety of angles from which its products are progressing towards the market place, and the infrastructure foundations being laid so that once approvals are received, the company will be able to quickly flick the manufacturing switch to meet the demand to treat largely previously unmet clinical needs.
ProMetic has always had the potential to deliver substantial value given the distinctive capabilities (scalable drug platforms) and the opportunity (unmet medical needs). In the past, progress was held back by insufficient capital. In recent years, however, the management has made judicious use of the rising share price to access equity markets at low cost, expand the pipeline and retain full ownership of IP created. Last week’s announcement of an underwritten C$60-69m equity raise at C$3.10 per share at a cash cost of 5% is a good example of this. The expected payback on each fundraise is exponential as it is usually deployed to progress clinical trials, introduce new drugs or indications and/or expand manufacturing capacity. The number of shots on goal continues to climb, yet only two of these need to convert to justify our target price of C$6.74.
The Biopharmaceutical Company focused on the biology of healing has announced a fundraising via a bought deal, at C$3.1 per share, to raise a minimum of C$60m in gross proceeds. Combined with the March $30m follow on financing by Thomvest, this provides ProMetic with significant firepower to progress and expand its rapidly accelerating clinical program and broaden its manufacturing capabilities related to plasma derived therapeutics. Our updated forecasts now project a year end cash balance of C$37.6m and this does not make any provision for any licensing deals that might be signed during 2016. The exercise of heavily in the money warrants which expire in early 2017 would generate further funds of C$21m.
In the second positive update on its small molecule programme this month (the earlier preclinical data on liver disease being flagged in our Research Note of 20 April), the biopharmaceutical Company focused on the biology of healing has this week provided strong positive confirmatory data from ProMetic’s expanded open label clinical trial studying type 2 diabetes and the metabolic syndrome. This gives us cause to be optimistic about the forthcoming programme of multiple placebo controlled trials where diabetes is involved including cystic fibrosis with diabetes, chronic kidney disease with diabetes and Alström syndrome.
The Biopharmaceutical Company focused on the biology of healing, last week published new pre-clinical data supportive of ProMetic’s lead small molecule candidates anti-fibrotic capabilities, this time in the liver. In various NASH animal models (Non-alcoholic steatohepatitis) PBI-4050 demonstrated an anti-fibrotic effect. Encouragingly the anti-fibrotic effect has been successfully reproduced in human hepatic stellate cells (“HHSC”) during in vitro preclinical experiments. PBI- 4050 was found to down-regulate key fibrotic biomarkers considered to be driving the fibrotic process in NASH. HHSC when in a quiescent state represent 5-8% of a human liver, but when the liver is damaged the cells activate, triggering a process that leads to scarring and cirrhosis.
The Biopharmaceutical company focused on the biology of healing, last week reported FY December 2015 results. Revenues at C$24.5m were just ahead of our expectations. Encouragingly product sales made up the majority of this (a record C$21.4m up 98%) with service revenues diminishing in importance as Prometic seeks to commercialise its own extensive commercial property. Consequently R&D investment has now hit the $50m level and overall net losses of C$56.8m were 8.4% less than our projection. Prometic has benefitted from investment inflows both pre and post-year end, finishing the year with cash of C$29.3m plus receivables of $8.4m and completing a Q1 $30m financing on what we consider to be very advantageous terms.
ProMetic Life Sciences has reported YOY revenue growth of 34% to C$14.1m in the final quarter of 2015, reflecting strong growth in product sales. Full year revenue increased by 7% to $24.5m. At the conference call yesterday afternoon, the management confirmed that the company is on track to meet its clinical trial, regulatory and product pipeline milestones for 2016. It is also looking to add to licensing agreements for plasma-derived and small molecule drug candidates. The key attraction for investors is the growing pipeline of clinical trials; only two of the ten drugs in the pipeline need to be successful to meet our target price of C$6.74.
The Biopharmaceutical company is due to report FY Dec 2015 results on March 30 with a conference call to be hosted the following day. With revenue guidance of $24m issued in December 2015 we expect no surprises in terms of numbers. We look forward to updates on the plentiful clinical pipeline, of which some of the recent progress has been touched upon by news releases this year.
The scalability of ProMetic’s drug platforms is shining through as the number of clinical trials accelerates. On Tuesday, it added Scleroderma to the list of PBI-4050 targets, raising the total PBI-4050 pipeline to six indications. Preclinical trials at Vanderbilt University has confirmed significant reduction of overproduction of collagen and fibrosis, and now the company will be conducting a double-blind placebo-controlled Phase II clinical trial in patients suffering from scleroderma.
The biopharmaceutical company took the opportunity this week to outline its milestones for 2016. Prometic’s shares have not escaped the turmoil that has engulfed global markets of late with the shares down some 32% over the last month. We believe the fundamentals for the business remain compelling and that this may be an opportunistic entry point. The milestones discussed focused on three core programmes.
We are now entering the business end of the drug development phase as the advancement in clinical trials increases the success rate of applications and approvals. The company plans to conduct six Phase II or Phase III trials this year. In total, nine drugs are in the pipeline, of which six are targeting rare diseases. Each of these nine drugs provides exponential value jumps, especially the orphan drugs which continue to attract multiples of billions of dollars from the large pharmaceutical companies. The story doesn't end here; ProMetic's two scalable platforms are capable of developing more drugs at low costs. In this respect, the market capitalisation of C$1.56m (US$1.1bn) reflects a fraction of the potential value. The recent drop in the share price, having reached a peak of C$3.54 in November 2015, offers a buying opportunity. We have raised our target price to C$6.7 to reflect a 20% success rate of receiving approvals on at least one drug from each of the two platforms: PBI-4050 and PPPSTM.
ProMetic announced this week that the next orphan indication to be investigated as part of its lead PBI-4050 small molecule programme would be cystic fibrosis (CF). The focus of the double-blind placebo-controlled phase II clinical trial will be on pancreatic fibrosis, glucose intolerance and diabetes in CF patients.
Last week ProMetic announced that it had closed patient enrolment in its phase II open label study in patients suffering from type II diabetes and metabolic syndrome and will transition to a pivotal placebo-controlled phase II study in patients suffering from type II diabetes.
ProMetic last week released Q3 numbers and provided its customary update presentation. Plasminogen is currently stealing most of the headlines, having jumped several hurdles to be used to successfully treat a critically ill baby, and now being prepped to enter clinical trials for the massive chronic wound care market. ProMetic’s partner in this programme has significant expertise on the subject and the presentation showed impressive photos of successful treatment in patients. Meanwhile lead candidate PBI-4050 makes progress on multiple fronts with first in human data on efficacy expected before the year end.
Shire is paying at least $5.9bn for Dyax, the rare disease specialist which that has one drug in clinical trials to treat hereditary angioedema (HAE), with potential to generate sales of up to $2bn annually. ProMetic's market valuation of C$1.2bn looks harsh in comparison. It has two distinct platforms, plasma protein and small molecule, six ongoing clinical trials with more to come next year and combined potential sales exceeding $10bn annually. Indeed, in May this year, ProMetic selected C1-INH (C1 Esterase Inhibitor) as its next fourth plasma-derived drug candidate for the treatment of HAE. We maintain our BUY Buy recommendation with a target price of C$4.26.
Some ten months after submission, ProMetic Life Sciences has today announced that the FDA has cleared its Investigational New Drug application for IVIG (intravenous immunoglobulin) for the treatment of primary immunodeficiency diseases (PIDD). Despite the relatively long approval period, ProMetic is well prepared to move quickly with the majority of clinical sites for the proposed pivotal Phase III study already prepared. We understand the target date for first sales remains 2018. Given that IVIG is a well-established treatment currently manufactured by considerably less efficient plasma fractionation techniques, we consider the likelihood of a successful trial to be high.
ProMetic has today announced that it has held a successful pre-IND meeting with the FDA to discuss ProMetic's proposed clinical development program for PBI-4050 in patients with IPF (Idiopathic Pulmonary Fibrosis). ProMetic has been given the go ahead to file an IND (expected to be filed Q1 2016) with a view to initiating a placebo based pivotal clinical trial in the US. This would seem to leapfrog a step in the timeline whereby ProMetic was previously first seeking to expand its current open label exploratory Canadian study into the US.
We believe it is time to think seriously about the size of commercial opportunities as various clinical trials and production capacities in plasma proteins converge. As things stand, four locations around the globe will have a combined annual capacity to process 1.35m litres of plasma using ProMetic's PPPSTM platform by 2018. On current count, these could produce at least six proteins worth theoretically over $4bn annually. Lest we forget, the Therapeutics division will initiate three clinical trials (two in the US and one in Europe) in Q4 having received confirmation that PBI-4050 was safe and well tolerated in the first 12 patients with metabolic syndrome with associated type 2 diabetes. We raise the value of PBI-4050 by 10% to C$1.1bn, which raises our target price to C$4.26. The recent sell-off, which has cut market value to C$1.1bn, presents a fantastic bargain. BUY.
The Biopharmaceutical Corporation has recently updated on Q2 and post period end activities, underlining the recent deals made to expand plasma processing capacity, at relatively little extra cost, thereby paving the way to accelerate the already exciting drug and biopharmaceutical development programme and establish production capacity not only for scale up in clinical work, but also for the near term commercialisation of products likely to come to market.
The biopharmaceutical corporation has today given a clear signal of intent that it is on the pathway to convert its rich pipeline of plasma derived therapeutics, into a multi-centre production operation. The focus for 2015 and 2016 is very much on gaining approvals for multiple candidates which are currently in or imminently due to enter the clinical phase, and we expect no slow-down of development activity in the foreseeable future. However what we do expect is for manufacturing and sales of plasma derived drugs, and hence meaningful revenues to become an increasingly important part of the business mix.
The latest addition to the Biopharmaceutical Corporation’s development pipeline seems poised to allow Prometic access to a rapidly growing US$1.1bn market expected to nearly treble to over US$3bn over the next 5 years. Prometic last week announced that it had selected C1 Esterase Inhibitor (C1-INH) as its next plasma-derived drug candidate to be developed. The C1-INH protein is most commonly used for the treatment of hereditary angioedema (“HAE”), a rare genetic disorder in which C1-INH is lacking.
The Biopharmaceutical Corporation reported its Q4 and FY2014 highlights on 30th March, supplemented by a conference call the following day. The conference call highlighted the progress that the company has made in its clinical pipeline as well setting out further steps it is taking to progress its candidates, new indications and further plasma protein derived therapeutics.
Further to the announcement of 4 February 2015 confirming that the biopharmaceutical Corporation had been cleared by Health Canada to commence trials in patients with idiopathic pulmonary fibrosis (IPF), ProMetic Life Sciences yesterday announced that PBI-4050 had been granted orphan drug status by the United States Food and Drug Administration. The designation provides the drug developer with a seven year period of U.S. marketing exclusivity upon marketing approval for the designated indication, as well as with tax credits for clinical research costs, the ability to apply for annual grant funding, clinical research trial design assistance and the waiver of prescription drug user fees. Within its busy pipeline this is the second orphan designation the company has received, and we would expect more to come.
The biopharmaceutical corporation ProMetic Life Sciences announced today that it had received an $11.4 million purchase order for the supply of affinity resin from an existing client, a global leader in the biotherapeutics industry. This is the second purchase order resulting from the license and long-term supply agreement previously announced on July 8, 2013. The affinity resin will be manufactured by ProMetic at its Isle of Man facility and supplied to the client throughout the second half of 2015 and the first half of 2016. ProMetic's client will use the resin for large-scale purification of a therapeutic protein product manufactured in large quantities.
Further to the 4th December 2014 announcement that its orally active lead drug PBI-4050 was due to commence a clinical program designed to evaluate the benefit of PBI-4050 in patients affected by the metabolic syndrome and resulting Type 2 diabetes, the biopharmaceutical corporation announced at the end of last month on 26 January 2015 that Clinical Trial Application clearance had been received from Health Canada. We expect enrolment to commence shortly. According to the International Diabetes Federation (IDF), worldwide, 80 per cent of people with Type 2 diabetes are overweight or obese at the time of diagnosis. Furthermore the IDF predicts that the number of diabetics worldwide will increase from 300m to 600m by 2035 placing huge pressure on health authorities. PBI-4050 is also undergoing clinical trials for Diabetic Kidney Disease and Idiopathic Pulmonary Fibrosis following a successful Phase 1 trial last year.
On the same day as announcing its entry into the final for the Cantech Letter Life Sciences Stock of the Year, the Biopharmaceutical Corporation revealed it had entered a strategic alliance with Russia’s GENERIUM Pharmaceuticals, a vertically integrated biotech company providing patients with affordable drugs and diagnostics for treatment of diseases with high medical need.
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