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ImmuPharma plc
US licensing deal: Major Opportunity Within LupuzorTM Unlocked

ImmuPharma announced a major US licensing deal on 28 November 2019 with Avion Pharmaceuticals (“Avion”), a US specialty business that has a focus on Rheumatology, Women’s health (Lupus afflicts women more) Dermatology and other therapeutic areas. Avion have a strong marketing and commercialisation operation (with over 100 specialist sales reps). Avion has exclusively in-licensed LupuzorTM for the US market for Lupus (SLE) and other indications and agreed to fund an international Phase III clinical trial for up to US$25m. In addition, Avion will pay up to US$70m in milestones and a royalty stream tiered to 17% has been agreed. We have always believed that ImmuPharma could deliver such a successful deal for the US market (given the track record of the previous deal executed with Cephalon). This deal with Avion was aided by the strength of the clinical data (and safety profile) from the Phase III trial announced last year. Our detailed analysis of the respective cohort data, driven by the performance of the peptide in the auto ds-DNA antibody positive patients validated our assumptions of the value of LupuzorTM. We now see LupuzorTM as having the ability to generate blockbuster sales in the US (US$1bn+) alone (previously US and EU combined) – which when coupled with a royalty stream of up to 17% on revenues, could see an annual royalty to ImmuPharma’s bottom line of US$170m per year. What is particularly impressive about this deal is not only ImmuPharma’s ability to identify and execute a new licensing partner for LupuzorTM but also the opportunity available for ImmuPharma to find new distribution and marketing partners outside the US for LupuzorTM, for e.g. in Europe, where a new trial would not even be required given Avion’s funding commitment. This means that there is a distinct possibility that further licensing deals could follow bringing in an attractive additional royalty stream, and additional upfront and milestone payments. Outside of LupuzorTM, we believe that ImmuPharma has the potential to generate news-flow on its other pipeline assets including Nucant and UreKa. Based on the financial assumptions for this deal, and a lower risk profile (reduction in risk premium in our DCF model) we increase our target price (which is 50% discounted) from 76p to 100p / share. BUY.

  • 05 Dec 19
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ImmuPharma plc
Biogen Update on Aducanumab Likely to have a Major Impact on Sector re-rating, with Strong Read Across for LupuzorTM

Yesterday, Biogen made a significant announcement for its shareholders and the broader sector alongside a strong set of Q3 results. Biogen announced that its Alzheimer’s drug, Aducanumab (monoclonal antibody), which it had been developing for early stage Alzheimer’s disease, and that had recently failed two Phase III (named: ENGAGE and EMERGE) clinical trials for futility (announced in March 2019), had gone on to demonstrate a strong signal of efficacy. In a subgroup of patients who elected to continue treatment at a higher dose, allowing sufficient exposure to the drug, it was clearly demonstrated that Aducanumab was able to achieve a statistically significant reduction of clinical decline in early Alzheimer’s Disease patients in a study called EMERGE (Biogen also stated that it believes that a sub-group of patients in ENGAGE also support the positive data seen). This is the first time that in the history of Alzheimer’s drug development, that a clinical study has demonstrated this type of effect. Further analysis of the ENGAGE study for Biogen does, we believe, potentially demonstrate a strong read-across for Lupuzor™, wherein Lupus patients who were ds-DNA positive (a sub-group – of European patients) and who were given Lupuzor™, a statistically and clinically meaningful reduction in Lupus disease symptoms were seen. Biogen believes that the lessons learnt from the EMERGE trial (with Aducanumab) could have positive implications for a number of other trials that the company is conducting in indications such as Tau-targeted Alzheimer’s, Parkinson’s disease and amyotrophic lateral sclerosis (ALS). The receptiveness of the FDA in advice to Biogen, to file for regulatory approval for its Alzheimer’s drug Aducanumab, is a clear signal that regulators are willing to be pragmatic about how they assess clinical data from ‘failed’ trials in diseases where there is a significant unmet or poorly met medical need. We continue to expect positive updates from ImmuPharma from its pipeline and reiterate our BUY rating and a Target Price of 76p.

  • 23 Oct 19
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ImmuPharma plc
Lupus Momentum Building – AstraZeneca, Roche and Alexion with Lupus indications – big market potential, big pharma approach – how will this fit with Lupuzor™?

The Lupus field continues to experience renewed upward momentum, especially in the past few days with a new update from Roche for its drug Obinutuzumab in Lupus Nephritis, an organ specific complication of Lupus. This follows AstraZeneca’s announcement (29/08/2019) of having met its primary and secondary endpoints in its second Phase III study in Lupus with antibody product Anifrolumab in the TULIP II study (see TLSD research report dated: 09/09/2019). We note in a recent broker call with the CEO of AstraZeneca, Pascal Soriot, stated that AstraZeneca was excited about the opportunity to file for Anifrolumab with the FDA. This is despite having completed the Phase III TULIP II study with an endpoint that we believe is not generally accepted by FDA – he went on to state that AstraZeneca was yet to discuss next steps with US FDA, however, he believed the ‘chances of approval on existing data are good, considering the unmet medical need and the limitations of current treatment’ (read: Benlysta). We believe that AstraZeneca will rely on presenting all its data from the TULIP II study, as well as a previous Phase II study that was successful. We await data from both the TULIP I and TULIP II studies – And re-iterate this situation is not dissimilar to ImmuPharma for its novel drug Lupuzor™.

  • 23 Sep 19
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