Crossject has developed a deep pipeline of products that are based on its proprietary needle-free injection system, ZENEO, across a variety of indications. The benefits of ZENEO include no need for needles, as well as a simple and quick (~1/10th of a second) delivery of the drug. Its first commercial product, ZENEO Methotrexate for rheumatoid arthritis, should reach the market in 2017. We value the company at €11.96 per share, which is based on the value of four of its nearer-term disclosed programmes.
According to Crossject, around 200 injectable compounds meet the criteria for use in the ZENEO platform, providing a deep well of markets to target, though Crossject is focused on acute treatments. Also, unlike powder-based injection systems, no reformulation of the reference product is needed.
ZENEO Methotrexate is expected to be commercialised in H217. Over the course of 2018 and 2019, Crossject expects to launch proprietary versions of sumatriptan (acute migraine), L15 (an undisclosed niche product), adrenaline (anaphylactic shock), midazolam (epileptic seizures), naloxone (opioid overdose) and apomorphine (Parkinson’s disease) through a series of regional partnerships.
As Crossject is focusing on including already approved drugs in its ZENEO platform, the clinical development programme is extremely abbreviated through a 505(b)2 process. For example, Zogenix was able to get its needle-free version of sumatriptan approved simply through bioequivalence and device usability studies. In total, the cost to develop a product is estimated at €4-6m per compound.
Using a risk-adjusted NPV method valuing Crossject’s disclosed nearer-term products (methotrexate, sumatriptan, adrenaline and midazolam), we value the company at €81.1m or €11.96 per basic share. As of 2015 year-end, the company had €5.2m in cash. It expects to receive an additional €3.1m in grants in 2016 and has also recently announced an equity line, which could provide up to ~€10m. Between now and projected profitability in 2018, we forecast a total funding need of €15m for all projects. This would be mitigated in part by additional upfront payments from partners, as well as milestone payments on product approvals.