Trinity Delta view: Avacta’s H122 results confirm operational progress in both the Therapeutics and Diagnostics divisions. AVA6000, the lead Therapeutic asset, remains the largest single element of our valuation model; continuing clinical progress bodes well as it not only represents an important value driver for Avacta, but successful proof-of-concept would validate the wider pre|CISION platform and boost appreciation of its potential utility. Reassuringly, the drug development collaborations (leveraging the pre|CISION and Affimer platforms) are also advancing. In Diagnostics, Avacta has embarked on building a broad yet focused IVD product portfolio. Our Avacta valuation is £557m (equivalent to 219.1p per share), with news flow over the next 18-24 months expected to provide multiple value-inflection points.

Avacta Group PLC Avacta Group PLC

• 29 Sep 22
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Trinity Delta view: Arecor’s broad operational progress includes the imminent top-line data for AT247 and preparations for initiation of the next AT278 trial in H222, whilst also securing another formulation deal and an acquisition. We believe the in-house diabetes assets have highly promising, differentiated profiles that could be particularly suited to emerging pump applications and high insulin users, and as such are key value drivers. The highly complementary Tetris Pharma purchase offers a low-cost, low-risk way to secure longer-term value for Arecor’s development efforts in Speciality Hospital Products and will allow selected future niche products to be marketed directly across Europe, providing an optimal set-up to crystallise value. Our valuation and forecasts remain under review.

Arecor Therapeutics PLC

• 08 Sep 22
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Trinity Delta view: There are several clear strategic benefits underpinning the Tetris Pharma acquisition, in our view, which we believe offers a low-cost, low-risk way to securing longer-term value for Arecor’s development efforts in Speciality Hospital Products and acceleration of revenue generation from Ogluo roll out. Currently Arecor’s formulation expertise is employed to create a portfolio of proprietary and partnered clinical assets. The partnered assets generate development and commercial milestones, plus royalties or equivalent on sales. The Tetris Pharma acquisition will allow selected future niche products to be marketed directly across Europe, providing an optimal set-up to crystallise value. Importantly, we view the in-house diabetes insulins, AT247 (ultra-rapid) and AT278 (ultra-concentrated ultra-rapid) as the key value drivers. These continue to progress well with their commercialisation strategy unchanged. As usual, we suspend our valuation and forecasts until deal completion.

Arecor Therapeutics PLC

• 01 Aug 22
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Trinity Delta view: Continuing progress of AVA6000 is an important value driver for Avacta with this programme representing the largest single element of our rNPV model. A successful proof-of-concept would result in a material uplift in our AVA6000 valuation. Importantly, this would also provide validation to the broader pre|CISION platform, leading to a wider appreciation of its potential utility. Our current Avacta valuation is £557m (equivalent to 219.1p per share), with AVA6000 valued at £51.9m (or 20.4p per share), and the remaining pre|CISION platform comprising £261.2m (or 102.7p per share). News flow over the next 18-24 months should also provide multiple value-inflection points.

Avacta Group PLC Avacta Group PLC

• 30 Jun 22
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Trinity Delta view: The Jazz milestone is a welcome boost to recently enlarged cash resources but, more importantly, is further tangible evidence of the progress being achieved across a broad front. Redx Pharma has always sought to maximise the value of its discovery programmes, but with the inherent risks managed actively. This has resulted in a well-balanced clinical pipeline, with a mix of in-house and partnered programmes. It is the expected progress from these that should provide a stream of news flow over the next 12-18 months. We view May’s impressive equity raise as a testament to the strength of the investment case, which supports a wider appreciation of the equity story. Our rNPV model is currently under review following this placing and we will issue a revised valuation as soon as practicable.

Redx Pharma Plc Redx Pharma Plc

• 15 Jun 22
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Trinity Delta view: Successfully raising money against a challenging environment for the sector, coupled with the current macroeconomic backdrop, is a testament to strength of the Redx Pharma investment case. Doing so without a share price discount and raising more than expected suggests the quality of the equity story is beginning to be truly appreciated. The fund raise removes a financial overhang, providing an extra year of cash runway through to key data points. We believe Redx Pharma has a well-balanced clinical pipeline of in-house and partnered assets that should provide a stream of news flow over the next 12-18 months as development progresses. The quality of the discovery engine should also deliver three wholly owned IND assets by 2025. We intend to review our rNPV model following this placing and issue a revised valuation as soon as practicable.

Redx Pharma Plc Redx Pharma Plc

• 07 Jun 22
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