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Synairgen reported an adjusted net loss of £1.7m, with period-end cash of £3.5m, augmented by a £0.84m R&D tax credit received in August, which provides a runway to the readout of the Phase IIa study of SNG001 in COPD patients that is expected in Q2 2020. The study is now 45% recruited and, with the pool of eligible COPD patients having also increased to over 200 ahead of the peak viral season, the trial is now expected to complete enrolment in Q1 2020, assuming a “normal” winter flu season. An interim blinded analysis of patients has already shown that viruses are causing exacerbations in the patients, which should provide the opportunity for the drug (inhaled interferon beta) to demonstrate a clinical benefit. We retain a 54p target price, with the prospect of this being increased on a successful licensing deal for Pharmaxis’ LOXL 2 programme in which Synairgen has a 17% carried interest. Pharmaxis confirmed in July that ongoing licensing discussions are taking place.
Kaspi.kz, the largest Paym ents, Marketplace and Fintech Ecosystem in Kazakhstan w ith a leading m arket share in each of its key products and services. GDR offering expected Oct 2019. In the first half of 2019, the Company generated total revenue of KZT226,862m (U.S. $598m), up 34% and net income of KZT77,001m (U.S. $203m), up 54%. Registration document approved for Helios Towers. The Group provides essential network services, flexible infrastructure solutions and reliable power supply to mobile network operators in five African growth economies. Revenue increased 7 per cent. year-on-year to US$191m (H1 2018: US$178m), with Adjusted EBITDA up 15 per cent. year-on-year at US$99m (H1 2018: US$86m) for the six months ended 30 June 2019.
Independent Oil & Gas (IOG): Corp Gas reception facilities acquisition and Harvey update | Netcall (NET): Corp Trading update – building cloud revenue | Quartix (QTX): Corp Fleet performance underpins H1 | Sopheon (SPE): Corp Trading update: sunshine and Cloud | Synairgen (SNG): Corp COPD Phase II clinical trial update
Interswitch, a Nigeria-based payments firm, has hired advisers to resurrect plans for a stock-market listing in London and Lagos later this year, which may value the financial technology company at $1.3 billion to $1.5 billion. Voyager AIR The Company will focus on the acquisition, leasing and management of primarily widebody aircraft, with asset management services to be provided by Amedeo Limited the IPO will comprise a Placing and Offer for Subscription of Shares to raise up to approximately US$200m.Roxi Music UK music streaming service plans London IPO as it goes up against Spotify. They have appointed investment bank Arden Partners for an initial public offering (IPO) on the London Stock Exchange later this year.
Avesoro Resources (ASO): Corp FY 2018 results | Europa Oil & Gas (EOG): Corp Holmwood revisited | PPHE Hotel Group (PPH): Corp Expanding presence in a major gateway city | Synairgen (SNG): Corp Phase II milestone – positive interim safety review
AIM Healthcare Index is up 10% year to date, outperforming the AIM All Share (+6%) and FT All Share (+7%), having suffered with the broader market pull back in Q4 2018, in which AIM Healthcare fell 18%. This compared with a 22% decline in the AIM All Share and 11% decline in the FT All Share. In the past quarter, the AIM Health sector has fallen 1%, not helped by the FDA’s rejection of Motif Bio’s NDA for iclaprim. However, there were 14 finnLife 50 stocks that exhibited double-digit percentage increases, most notable of which are Futura Medica (+112%), Avacta* (+82%), OptiBiotix* (+35%), hVIVO (+34%), Instem (+34%) and ANGLE* (+29%) in the past three months
Full-year results showed an adjusted net loss of £3.2m, some £1.3m better than forecast, with year-end cash of £5.3m and sufficient to more than cover the cost of the ongoing Phase IIa study of SNG001 in COPD patients. Although the enrolment rate is slower than we had hoped, due to the mild start to the respiratory virus season, we are hugely reassured by the fact that all patients enrolled are virus-positive, which increases the probability of SNG001 (inhaled interferon-beta) showing a drug-related effect. Enrolment is now expected to complete in the 2019/2020 cold and flu season rather than by year-end 2019. We retain a 54p target price, with the prospect of this being increased on a successful licensing deal for Pharmaxis’s LOXL 2 programme (in which Synairgen has a 17% carried interest), which is targeted by Pharmaxis during H1 2019.
ANGLE (AGL): Corp New use of Parsortix | Independent Oil & Gas (IOG): Corp Core project funding update | President Energy (PPC): Corp Turbocharging growth | Synairgen (SNG): Corp Finals – Phase II patient selection as good as it gets | Tekcapital (TEK): Corp Significant fair value uplift | Tristel (TSTL): Corp Interims underpin full-year outlook
Circassia Pharma (CIR.L) - specialty pharmaceutical company focused on respiratory disease transferring from the Main Market. No funds being raised. Due 4 Feb. Greenfields Petroleum (TSX-V:GNF) production focused company with operated assets in Azerbaijan seeking AIM dual listing including $60m private placement. Mkt cap $12.6m CAD. Expected late January 2019.
Avesoro Resources (ASO): Corp Q4 and 2018 operating results | Iofina (IOF): Corp Market update | Kingswood Holdings (KWG): Corp Ex-CEO builds solid foundation, new CEO to execute | Synairgen (SNG): Corp Phase 2-ready asset | Taptica (TAP): Corp FY 2018 in line and awaiting acquisition news | 4imprint (FOUR): Corp At least at the upper end of the range
Synairgen (SNG): Corp Positive Pharmaxis LOXL2 Phase I data
AIM Healthcare Index fell 10% in the past three months, compared with an 8.5% decline in the FT AIM All Share. The performance stats in the past month were more balanced, with AIM Health down 1.5% compared with a 3% decline in the AIM All Share. Despite this, ten finnLife 50 stocks showed positive gains with four rising by 15%+: namely Tiziana Life Sciences (+89% – FDA clearance to start Phase I trial with foralumab, an orally delivered antibody, and the announced intention to IPO on NASDAQ); Sinclair Pharma (+46% – agreed takeover); Omega Diagnostics (+28% – strategic update); and Creo Medical (+28% – product launch). Conversely, Diurnal shares fell c.80% on the back of a failed Phase III trial for Chronocort in chronic adrenal hyperplasia
Synairgen raised £2.9m, primarily to fund a larger Phase IIa study for its lead product, SNG001, in chronic obstructive pulmonary disease (COPD). Although we expect Synairgen to receive its share (c.17%) of any upfront payment that Pharmaxis receives from licensing its LOXL2 inhibitor in fibrotic diseases, which is targeted for H2 2018, the company cannot wait for such payment given the need to have clinical investigators in place prior to the approaching 2018/19 respiratory virus season. Not only should this generate proof of concept efficacy data given the additional powering of the study rather than only proof of mechanism, but it should also increase the prospect of partnering the asset, better inform the design of the subsequent Phase IIb trial and increase the value of any such licensing deal. We are leaving our rNPV valuation unchanged at £57m, but given the dilution from additional shares, the target price moves to 53p. A successful Phase IIa trial would increase the value of SNG001 to c.£100m, implying an uplift in value of c.£60m for a Phase IIa trial cost of c.£5.5m, illustrating that the risk-reward remains skewed to the upside.
BCA Marketplace (BCA LN) Strategic delivery + strong trading performance drives significant beat | Fulcrum Utility Services Limited (FCRM LN) Delivering further strong profit growth | Synairgen (SNG LN) Biomarker data confirms target engagement, important year ahead |
Synairgen (SNG): Corp SNG001 shown to be safe in COPD patients
RA International is a leading provider of services to remote locations in Africa and the Middle East looking to join AIM raising £18.8m and 56p, market cap of £97.2m. Expected 29 June Cake Box Holdings—franchise retailer of cakes with a growing store base across the UK looking to join AIM, Sell down of £16.5m, Mkt Cap £43.2m. Mar18 FY rev £12.8m, underlying earnings £3.7m. Due 27 June. Mind Gym. Behavioural science business that uses scalable proprietary products to deliver human capital and business improvement solutions to large corporations. Offer TBA. Due 28 June Yellow Cake will use its expertise to generate value through the ownership of physical U3O8 (Uranium) together with a range of activities and opportunities connected with owning physical U3O8. Acquiring supply contract for up to $170m. Due Early July. Knights Group— UK regional legal and professional services businesses. FYApr18 rev £34.9m and adjusted operating profit was £6.8m excluding Turner Parkinson (acquiring on IPO). Offer TBA, expected 29 June. TransGlobe Energy Corporation—an independent international upstream oil and gas company with headquarters in Calgary, Canada is looking to join AIM. No Capital to be raised, market cap of £131m. Expected 29 June Strongbow Exploration (TSX:SBW) intends to dual list on AIM. Holds rights to the South Crofty underground tin mine, a former producing tin mine located in the towns of Pool and Camborne, Cornwall . The project is estimated to require the Company to raise £25 million over the next 18 months to progress to a production decision. Offer TBS. Due June.
First insights into Pharmaxis’ Phase I safety data of its anti-fibrotic LOXL2 inhibitor programme, in which Synairgen retains a 17% interest in all future financial payments, shows that Pharmaxis is on track to license this asset in H2 2018. Pharmaxis informed potential partners attending the recent BIO 2018 conference in Boston on data emerging from the Phase I clinical studies, which have demonstrated a best in class profile and clean safety profile. The Phase I trial and Phase II-enabling toxicity studies are due to complete in Q3 2018 with final commercial partnering discussions to follow. We retain a 35p target price, based on a sum-of-the-parts riskadjusted DCF, which would rise by c.28p and c.9p on successful completion of upcoming safety data for Synairgen’s inhaled interferon beta for COPD (SNG001) and LOXL2, respectively.
Full-year results reflected the £5m milestone payment from Pharmaxis in late 2017, with adjusted pre-tax profits of £1.7m, which compared with a loss of £3.25m in FY 2016. Year-end cash was c.£0.3m better than forecast at £6.8m, providing the company with a cash runway well into 2019, which should cover the H1 2019 readout of its Phase IIa trial for SNG001 in COPD and a possible milestone payment in 2018 from Pharmaxis, relating to the 17% retained interest in the LOXL2 programme. Cash balances are considered to be more than adequate to complete the Phase IIa trial in COPD patients, the first stage of which commenced in February. The safety data readout is expected in Q2 2018, paving the way for a larger 80-patient study, which should complete in the 2018/19 virus season with results in H1 2019. We retain a 35p target price.
Synairgen (SNG): Corp Year-end cash ample to complete Phase IIa | Water Intelligence (WATR): Corp Acquisition of an underperforming franchise
1Spatial (SPA LN) Good FY update driven by core geospatial business | Burford Capital (BUR LN) Déjà vu or something new? | Curtis Banks Group (CBP LN) FY17 results as expected, on a positive trajectory | Oxford BioMedica (OXB LN) Full year results highlight strong bioprocessing revenue growth | Synairgen (SNG LN) Full year results; SNG001 Phase II ongoing | Zinc Media Group (ZIN LN) Mixed picture |
The re-negotiation of its collaboration with Pharmaxis in December (a £5m upfront payment and 17% carried-interest in the LOXL-2 inhibitor programme) fully funds the Phase IIa trial for SNG001 (inhaled interferon-beta) in COPD, which has now started. With the near-term funding risk for the COPD programme eliminated, we introduce 2018 forecasts and a new target price of 35p based on a sum-of-the parts DCF. Should the pilot safety assessment for SNG001 in COPD and the Phase I trial for LOXL2 (fully funded by Pharmaxis) complete successfully in mid-2018, Synairgen’s target price could be expected to increase to c.70p, inclusive of the c.10p anticipated milestone from Pharmaxis should it license LOXL2, as it has indicated it will seek to do.
Synairgen* (SNG): First patient dosed in COPD Phase IIa study (CORP) | Transense Technologies* (TRT): Interim results, good momentum into 2H (CORP) | SimiGon* (SIM): USAF contract extension (CORP)
TruFin—holding company of an operating group comprising three growth-focused FinTech and banking businesses operating in three niche lending markets: supply chain finance, invoice finance and dynamic discounting. Offer TBC, expected late Feb Polarean - The medical drug-device combination companies operating in the high resolution medical imaging market. Offer TBC. Due 22 Feb Block Energy—a NEX Listed UK based oil exploration and production company whose main country of operation is the Republic of Georgia, looks to join AIM end of February 2018. Offer TBC OnTheMarket—Intention to float on AIM to raise c.£50m which will be used to fund the growth of the OnTheMarket.com portal, already the third biggest UK residential property portal provider. Offer raising £30m at 165p with mkt cap of £100m . Due 9 Feb.
Synairgen has announced revised terms to its collaboration agreement with Pharmaxis and the LOXL2 programme. The group has no further financial obligations for the programme and will be paid £5m consideration plus around 17% of future partnering revenues. The group announced in September that it intends to progress SNG001 (inhaled interferon beta) into clinical development for the treatment of COPD with a short Phase II trial designed for the winter 2017/2018. The group will use the £5m consideration to fund the development of SNG001. New opportunities to expand the group’s pipeline continue to be assessed. Our recommendation and Target Price remain under review. We will review both in due course.
Advanced Medical Solutions (AMS LN) In line FY trading update | Infrastructure India (IIP LN) NAV declines further - financing discussions continue | IQE (IQE LN) Apple investment in VCSELs highlights upgrade potential | ReNeuron Group (RENE LN) Interim results and IND approved to commence Phase IIb in stroke | Severfield (SFR LN) Significant Google contract confirmed | Synairgen (SNG LN) Revised terms with Pharmaxis | Tribal Group (TRB LN) Financial performance materially ahead | Vernalis (VER LN) Trading update highlights Tuzistra® XR run-rate below expectations
Iofina* (IOF): H2 production set to exceed guidance & IO#7 update (CORP) | Omega Diagnostics* (ODX): Short-term headwinds (CORP) | Byotrol* (BYOT): Interims – H2 weighted with deal flow (CORP) | Synairgen* (SNG): £5m payment from Pharmaxis (CORP) | Keywords Studios (KWS): Doubling up (BUY) | Altitude Group* (ALT): Taking AiM (CORP) | CityFibre* (CITY): Further demonstration of the model – Aberdeen (CORP)
Pelatro— The precision marketing software specialist. Due 19 Dec. Raising £3.8m new money plus £0.6m vendor sale. 62.5p. Mkt cap £15.2m. HYJun17 revenues increased to US$1.55m from US$0.2m and profit before tax increased to £1.0m from a small loss in the comparable period. Fusion Antibodies— Sch1 from the Belfast based contract research organisation providing services to biopharmaceutical and diagnostics companies that are involved in the development of antibodies for both therapeutic drug and diagnostic applications. Offer to raise £5.5m for the Company and £1.075m for selling shareholders at 82p with market cap of £18.1m. Due 18 Dec Erris Resources PLC—a mineral exploration and development company currently focused on two geographic areas. Offer TBC, expected 21 December 2017 CIP Merchant Capital—Closed ended investment Company. Sector focus oil & gas, healthcare, pharma, and real estate. Offer TBA. Due 21 Dec Panthera Resources— The Company was established to act as a holding company for Indo Gold Limited, an unlisted Australian registered company. The Company aims to explore and develop gold assets in India and West Africa. Offer TBC, expected 20 Dec Sumo Group—one of the UK's largest independent developers of AAA-rated video games providing both turnkey and codevelopment solutions, including initial concept and pre-production. Offer TBC. Due late Dec Pelatro—provider of proprietary software solutions to enterprise-level customers for various aspects of precision marketing for use in B2C applications. Offer TBC, expected 19 December 2017 Fusion Antibodies—contract research organisation providing services to biopharmaceutical and diagnostics companies that are involved in the development of antibodies for both therapeutic drug and diagnostic applications. Raising £5.5m at 82p plus £1.075mn vendor sale. £mkt cap £18.1m Due 18 Dec. Sirius Petroleum—RTO. Becoming an operating company in the Ororo Field in Nigeria. Raising £7.2m/ Mkt Cap £35.6m. Due 19 Dec. Bushveld Minerals—RTO of Bushveld Vametco and therefore 78.8% of Strategic Minerals Corporation, the intermediate holding company that owns a 75 per cent. interest in the Vametco Vanadium Mine. Eqtec—Company with access to a proprietary advanced gasification technology used in industrial size power plants to convert waste into synthetic gas to generate electricity. Raising £1.6m. Mkt Cap £8.7m. Due 21 Dec. Volex VLX.L—The global provider of cable assemblies is proposing to move from the main market to AIM on 19 January. £71m market cap. FYMar18E rev £241.5m and £7.19m PBT Miriad Advertising—Global video advertising company incorporated in 2015 and is engaged in the development of native invideo advertising. 2016 rev £0.7m and £7.3m operating loss. Offer TBA. Expected 19 Dec. OnTheMarket—Intention to float on AIM to raise c.£50m which will be used to fund the growth of the OnTheMarket.com portal, already the third biggest UK residential property portal provider. Expected valuation £200m to £250m.
The AIM Healthcare index has shown positive returns in all but three out of the past 11 years (2007, 2008 and 2011), growing at a CAGR of 7.6% over the period. This compares with a CAGR of -0.3% for the broader FT AIM All Share, +0.6% for the AIM 100 and +3.5% for its more senior FT All Share Health index. Sector growth and relative performance to the AIM All Share index has accelerated over the past five years; the sector having risen 19.19% CAGR since 1 Jan 2012. This compares with 6.8% growth in the AIM All Share and 6.1% in the FT All Share. This outperformance can be attributed to the increasing success amongst the Healthcare constituents which have progressed their business plans to a point where substantial value has been/is being created and where many companies have successfully scaled their businesses to sustain future growth. We highlight four companies that have different business models but exemplify the opportunities that are increasingly becoming evident within the sector.
Synairgen reported interims to 30 June 2017. An adjusted pre-tax loss of £1.5m was in line with the expected £3.6m forecast for FY 2017, with net cash of £3.1m at 30 June 2017. Perhaps more relevant is the pipeline update. It was confirmed that LOXL2 (Idiopathic Pulmonary Fibrosis and NASH) will enter the clinic in Q4 2017 with expected results in mid-2018. The company has also provided new findings from its analysis of AstraZeneca’s INEXAS trial, concluding that interferon beta (SNG001) has the potential to be used to treat exacerbations following a respiratory viral infection of Chronic Obstructive Pulmonary Disease (COPD) and to that extent has indicated its intention to commence a study in the 2017/2018 cold season. We make minor changes to our forecasts and leave the target price under review pending clarity over funding of the SNG001 COPD trial.
Avingtrans^ (AVG): HTG acquisition transforms the medium-term opportunity (BUY) | Hotel Chocolat (HOTC): Marginal increase to forecasts (HOLD) | Synairgen* (SNG): Interims and portfolio update (CORP) | InnovaDerma* (IDP): Widening the distribution network (CORP) | Fulcrum (FCRM): Strong H1, confident outlook (BUY) | K3 Business Technology* (KBT): Getting on with it (CORP)
Synairgen will commence a Phase I trial with PXS-5382A, its lead compound from its LOXL2 inhibitor programme, in Q4 2017 following the completion of pre-clinical development. Data is expected mid-2018. The timelines are in line with expectations. Our recommendation and Target Price are currently under review. We will review both in due course.
Somero Enterprises* (SOM): Interims in line, US market seeing some improvement (CORP) | Orchard Funding * (ORCH): Pre-close growth and stability (CORP) | PPHE Hotel Group* (PPH): New rooms, hotels, funds and opportunity (CORP) | Synairgen* (SNG): LOXL-2 ready for Phase I clinical trial (CORP) | Trakm8* (TRAK): AGM told that FY 2018 trading is in line (CORP)
Topic of the quarter: Many recent news articles have highlighted the growing opiate addiction rates across the world, particularly in the US where new president Donald Trump has declared a national emergency with regard to prescription drug abuse. We look at the underlying trends in this growing space and potential opportunities for investors in the coming years both here in the UK and in the US.
Synairgen reported full year results to 31 December with net cash of £4.8m, some £1.2m higher than expected, which can be attributed to lower R&D (timing-related) and better-than-expected working capital. As indicated in late April, Synairgen intends to conduct a thorough analysis of all data arising from the AZ Phase IIa study with the intention of providing an update in the next 1-2 months. The possibility of using inhaled Interferon-beta (IFN-beta) in COPD, given the recently published data indicating the link between colds and exacerbations in COPD, suggests the analysis to be warranted. In the meantime, the company will progress LOXL2 for IPF, which is scheduled to enter clinical trials in H2. Year-end cash is expected to be £1.4m and sufficient to complete Phase I trials. Our target price remains under review pending the outcome of the IFN-beta data analysis.
Synairgen* (SNG): FY 2016 results and better year end cash (CORP) | Patisserie Holdings (CAKE): Good H1 results (BUY) | Sound Energy (SOU): Sidi Moktar update (HOLD) | Ideagen* (IDEA): Strong trading update (CORP)
CareTech (CTH): Half-year trading on track to deliver FY (BUY) | Synairgen* (SNG): AZD9412 (inhaled interferon beta) rights returned to Synairgen (CORP) | Servoca* (SVC): Resilient performance, confident on H2 (CORP) | Vipera* (VIP): Large contract underpins growth expectations (CORP) | Europa Oil & Gas* (EOG): FEL 2/13 – new prospectivity identified (CORP)
Flowtech Fluidpower* (FLO): Placing to raise £10m (CORP) | Synairgen* (SNG): LOXL2 slated to enter Phase I in H2 2017 (CORP)
The prospect of Hilary Clinton creating an oversight panel with the power to impose a set of harsh enforcement rules to control aggressive pricing of pharmaceuticals in the US fell away with the election of Trump, leading to a 16% bounce in the NASDAQ Biotech index and an 8% increase in the US Pharma & Biotech index, some of which has already been given back.
Proactis* (PHD): Accelerating prospects (CORP) | Synairgen* (SNG): AZD9412 clinical trial update (CORP) | Hurricane Energy (HUR): Selection of subsea technology providers (BUY)
SCISYS* (SSY): Strong H1 enjoys growth from all divisions (CORP) | eServGlobal* (ESG): Corridors of opportunity (CORP) | Hurricane Energy (HUR): 2016 interim results (BUY) | The Mission Marketing Group* (TMMG): Good interim results (CORP) | Cambridge Cognition* (COG): Interims show a company being noticed (CORP) | Synairgen* (SNG): Interims in line with expectations (CORP)
In light of the Brexit vote, we reflect upon the implications for the NHS and the wider healthcare industry. We take a pragmatic approach to how the referendum result will affect staffing, recruitment, clinical trials, drug pricing and small company grant funding in the coming months and years.
Synairgen*: Prelims and report on LOXL2 progress (CORP) | Seeing Machines*: Major contract manufacturer takes 12% stake (CORP) | The Mission Marketing Group*: Strong final results (CORP) | Hardide*: Trading update (CORP) | Tailings: Analyst interview
Synairgen’s FY 2015 results were better than expected, with lower than forecast R&D expenditure resulting in adjusted pre-tax losses of £2.4m. AstraZeneca’s (AZN) Phase IIa trial of AZD9412 is on track to report in 2017, and this is a significant value inflection point. Equally important is the revelation that the company expects to enter the clinic with its LOXL2 inhibitor for idiopathic pulmonary fibrosis (IPF) in 2017 – an area of high unmet need and of great interest to large pharma, exemplified by the August 2015 deal in which BMS paid US$150m upfront (as part of a potential US$1.25bn deal) to gain exclusive access to Promedior’s Phase II asset in IPF.
The main highlights for Synairgen in 2015 were the research collaboration with Pharmaxis and AstraZeneca commencing its Phase IIa trial of AZD9412 (formally SNG001). News flow from both is expected in 2017 with the former commencing clinical trials and the later announcing data. The group has also announced positive, albeit very early, data from its collaboration with Pharmaxis this morning. Synairgen continues to screen for new opportunities and expects to establish at least one in the coming year. We remain at Buy and look forward to additional development updates and further pipeline additions in due course.
Respiratory medicine has been a major success story for the UK pharmaceuticals sector. In this report we provide an update on the current market dynamics in asthma and COPD, and on four key product development companies in our small & midcap universe: Skyepharma, Synairgen, Vectura and Verona Pharma. The unmet need in respiratory disease remains high, and with significant market changes expected in 2016 and beyond we believe that the subsector offers rich investment opportunities across generics, novel treatments, drug roll-outs and geographical sales expansion.
Cranswick (CWK LN) | Euromoney Institutional Investor (ERM LN) | Grainger (GRI LN) | ITE Group (ITE LN) | Renishaw (RSW LN) | Respiratory Sector | Skyepharma (SKP LN) | Ten Alps (TAL LN)
The main highlights for Synairgen in 2015 were the research collaboration with Pharmaxis to develop a compound to treat idiopathic pulmonary fibrosis (IPF) and AstraZeneca commencing a Phase IIa trial of AZD9412 (formally SNG001), the group’s lead inhaled interferon beta programme for virus-induced exacerbations in respiratory diseases. News flow from either isn’t expected until 2017, leading us to believe that 2016 will be a quiet year for the group unless a new opportunity is established. Our revised target price of 47p is based solely on AZD9412 however, Buy.
The main highlights for Synairgen in 2015 to date have been the research collaboration with Pharmaxis and AstraZeneca commencing its Phase IIa trial of AZD9412 (formally SNG001). News flow from both is expected in 2017 with the former commencing clinical trials and the later announcing data. We look forward to additional development updates and further pipeline additions in due course. We maintain our 49p price target and Buy recommendation.
The People’s Operator*: Positive trading update (CORP) | Quixant*: Well positioned to deliver in second half (CORP) | Constellation Healthcare*: Strategy progressed and earnings enhanced (CORP) | Synairgen*: Interims in line (CORP) | Trifast^: AGM trading update (BUY)
Synairgen’s research collaboration with Pharmaxis to develop a compound to treat idiopathic pulmonary fibrosis (IPF) is a positive development and provides insight into the group’s first ‘new opportunity’. IPF is a rare disease and an indication we previously flagged as an interesting area for Synairgen. Pharmaxis/Synairgen’s approach offers a different mechanism of action from recently FDA approved IPF treatments and as such offers a differentiated approach. The first clinical trial is expected to commence in 2017 and we look forward to development updates in due course. We maintain our 49p price target and Buy recommendation.
Synairgen*: Breathing well in line with strategy (CORP) | Arcontech*: Healthy prelims – more to come (CORP)
ATTRAQT Group (ATQT LN) First technology partnership should open up opportunities | BBA Aviation (BBA LN) Mixed H1 | Latchways (LTC LN) Full year expectations unchanged | Lookers (LOOK LN) Preview – buy Lookers ahead of interims on 12 August | Restore (RST LN) Small bolt-on acquisition | Sinclair IS Pharma (SPH LN) Full year trading update | Synairgen (SNG LN) Research collaboration with Pharmaxis | Tetragon Financial Group Ltd (TFG NA) Taking volatility in its stride
The commencement of the Phase IIa trial of AZD9412 (formally SNG001) by AstraZeneca following the global license agreement in June 2014 is very encouraging. Data is expected in early 2017. We look forward to the data and in the meantime maintain our 49p price target and Buy recommendation.
Synairgen*: AstraZeneca commences AZD9412 Phase II trial in severe asthma (CORP) | The Mission Marketing Group*: Trading update (CORP) | Ideagen*: Prelims (CORP) | Amino Technologies*: Interims, placing and acquisition (CORP) | Staffline: EPS up 45% – strong momentum continues (BUY) | Gemfields*: Initial ruby resource – Montepuez mine (CORP) | Weatherly International*: Q4 operating results (CORP) | Fenner: Trading update (HOLD) | Sound Oil: Initiation of coverage – analyst interview (BUY)
In a deal worth up to $225m in contingent milestone payments plus up to mid-teen royalties on potential future net sales, Synairgen has licensed SNG001 (inhaled IFN-beta) to AstraZeneca (AZN) for all respiratory indications. With the deal encompassing the global asthma and COPD markets, we believe SNG001 has blockbuster potential. We estimate regulatory approval could be in FY 2022E. Factoring in our detailed revenue projections through to 2025 (extended from 2024) results in an equity value of £123m, or 127p a share.
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