BioPorto is a commercial-stage diagnostic company with a portfolio of antibodies and other products sold for research and diagnostic purposes. However, its lead strategic goal is development of a test for acute kidney injury (AKI) using the biomarker NGAL. The test should provide superior results to the standard of care (serum creatinine, sCr) in two hours versus 24 hours or more. We initiate at DKK1,078m or DKK6.93 per share.
The standard of care for detecting AKI is measurement of sCr, a metabolite that is constantly produced by muscle and filtered from the blood. Because of this, the concentration of sCr may take 24 hours or more to build up after kidney function is compromised. By comparison, neutrophil gelatinase-associated lipocalin (NGAL) is released from the proximal tubules of the kidney and can be detected in plasma and urine within two hours of injury. This enables intervention to prevent further kidney damage and can improve hospital patient throughput.
NGAL has been examined in a large number of studies going back to 2003, with varying results. BioPorto previously submitted an application to the FDA that was rejected in 2016. The study showed 70-79% sensitivity and 73-77% specificity for stage 2-3 AKI, roughly consistent with earlier results. Following FDA feedback, the company completed an expanded trial with 17 sites and over 500 patients (results undisclosed), which was submitted to the FDA for approval in July 2018; a decision is expected before the end of 2018.
AKI is a major complication associated with a range of serious medical conditions. Around 2% of hospital in-patients and 40% of intensive care unit (ICU) patients have AKI. We expect the ICU setting to be the first market targeted by the company with a label for risk assessment of AKI. We expect follow on indications to target the emergency department setting and following cardiothoracic surgery. The company has pre-existing distribution agreements with Roche and Siemens, through which we expect the product to be launched in the US.
We arrive at an initial valuation of DKK1,078m or DKK6.93 per basic share, driven mostly by NGAL. The company had DKK25.2m in sales of its products in 2017 and has guided to sales of DKK30m in 2018. We expect it to require DKK60m in additional capital before profitability in 2020.