Midatech has announced that the first patient in the Phase IIa study for its transbuccal insulin (MSL-001) has been treated. MSL-001 is the lead programme from the gold nanoparticle (GNP) platform and represents the largest element within our rNPV model, valued at £67.3m (242p a share). Our rNPV model, excluding the proposed DARA BioSciences acquisition, suggests a current value of £134.7m (485p a share).
The first patient in the Phase IIa study of MSL-001, Midatech’s lead GNP (gold nanoparticles) programme, has been treated. MSL-001 (insulin buccal soluble film) is a transbuccal delivery form of insulin that is being developed in partnership with MonoSol Rx. The insulin is stabilised in a GNP construct that is employed in MonoSol’s proven PharmFilm technology, where a postage stamp-sized strip is placed against the inside of the cheek and the GNP insulin construct passes through the oral mucosa into the bloodstream (avoiding first-pass metabolism). This would act as a needle-free alternative to prandial (meal-time) insulin injections.
The Phase IIa trial will examine 12 type I diabetic patients in an open label, crossover seven arm study comparing MSL-001 against subcutaneous rapid acting insulin (Humulin). The trial, which aims to establish the pharmacodynamic and pharmacokinetic profile, is being performed in Perth, Australia and is expected to last around five months. The Phase I study in 27 volunteers showed encouraging results with rapid and consistent absorption (maximum effect was seen at c 28 minutes, compared with c 40 minutes for Novo Nordisk’s NovoRapid comparator). We expect MSL-001 to be out-licensed to a larger player for future development.
Since the acquisition of DARA BioSciences remains a proposal, we value Midatech in isolation. Our valuation of £134.7m (which equates to 485p per share) is based on the rNPV model of the pipeline alone, discounted using our standard rate of 12.5%. This excludes a contribution for the inherent value of the GNP technology platform, with additional upside potential when the preclinical programmes progress into the clinic and the partners/funding for the later-stage compounds are secured. Assuming pipeline progress is maintained, the newsflow for key programmes over the next 12-18 months should result in a number of value-inflection points.