AlzeCure Pharma — Positive Phase Ib with ACD440

AlzeCure Pharma (Stockholm: ALZCUR)

Last close As at 21/11/2024

5.10

−0.18 (−3.41%)

Market capitalisation

SEK268m

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Research: Healthcare

AlzeCure Pharma — Positive Phase Ib with ACD440

AlzeCure has reported positive Phase Ib data for its topical treatment for neuropathic pain, ACD440, slightly earlier than expected (mid-2021). These data show that the drug was well tolerated and demonstrated an efficacy signal of its analgesic potential. Preparations for Phase II development are underway. Regulatory filling for a new study, expected by end-2021, should provide a better sense of the forms of neuropathic pain AlzeCure will pursue. We currently assume a partnering deal will occur during Phase II development, but note that having these positive Phase Ib data might bring this forward. In our initiation report, we had forecast $500m peak sales at 10% probability for ACD440’s potential use in neuropathic pain, which contributed SEK3.6/share (c 19%) to our valuation. We will review our assumptions when further details are released.

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Written by

Healthcare

AlzeCure Pharma

Clinical trial update

Pharma & biotech

21 April 2021

Price

SEK7.81

Market cap

SEK295m

Net cash (SEKm) at end-FY20

112.4

Shares in issue

37.8m

Free float

63%

Code

ALZCUR

Primary exchange

Nasdaq First North Growth

Secondary exchange

N/A

Share price performance

Business description

AlzeCure Pharma is a clinical-stage biotech company based in Sweden focused on developing small molecule drugs for the treatment of Alzheimer’s (symptomatic and disease modifying) and pain (neuropathic and osteoarthritic).

Analysts

Dr Jonas Peciulis

+44 (0)20 3077 5728

Dr Sean Conroy

+44 (0)20 3077 5700

AlzeCure is a research client of Edison Investment Research Limited

AlzeCure has reported positive Phase Ib data for its topical treatment for neuropathic pain, ACD440, slightly earlier than expected (mid-2021). These data show that the drug was well tolerated and demonstrated an efficacy signal of its analgesic potential. Preparations for Phase II development are underway. Regulatory filling for a new study, expected by end-2021, should provide a better sense of the forms of neuropathic pain AlzeCure will pursue. We currently assume a partnering deal will occur during Phase II development, but note that having these positive Phase Ib data might bring this forward. In our initiation report, we had forecast $500m peak sales at 10% probability for ACD440’s potential use in neuropathic pain, which contributed SEK3.6/share (c 19%) to our valuation. We will review our assumptions when further details are released.

Positive Phase Ib with ACD440

Year end

Revenue (SEKm)

PBT*
(SEKm)

EPS*
(SEK)

DPS
(SEK)

P/E
(x)

Yield
(%)

12/19

0.0

(50.9)

(1.35)

0.0

N/A

N/A

12/20

0.0

(71.4)

(1.89)

0.0

N/A

N/A

12/21e

0.0

(82.0)

(2.17)

0.0

N/A

N/A

12/22e

0.0

(86.1)

(2.28)

0.0

N/A

N/A

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles and exceptional items.

In our view, this positive outcome acts as validation of AlzeCure’s diversified pipeline and management’s approach. ACD440 is a topical reformulation of a VR-1 antagonist that AstraZeneca had pursued as an oral drug before the programme was discontinued, due in part to undesirable side effects from systemic dosing. AlzeCure appears to have overcome these issues with this topical reformulation, while retaining the analgesic efficacy seen with the oral formulation. We note that this placebo-controlled Phase Ib trial (24 healthy volunteers) was relatively inexpensive (SEK10–15m) and initiated in January 2021, demonstrating a quick return on its investment. This is one of two assets in its Painless platform and we anticipate updates from its preclinical TrkA-NAM programme later this year, with candidate nomination expected during H221. We maintain our valuation at SEK729m or SEK19.3/share and our forecasts are unchanged.

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