A1M Pharma is a preclinical stage biotech company focused on establishing a treatment platform with ROSgard, a recombinant version of the endogenous A1M protein. The protein fulfils various important bodily functions, including working as a protector against free haemoglobin, an antioxidant, as a radical inhibitor and as a tissue‐repair agent. It can thus potentially be used in multiple therapeutic and diagnostic settings. The company currently targets two indications: kidney protection in radiation therapy (PRRT) and pre‐eclampsia (toxaemia in pregnancy), two areas with unmet medical needs. In 2018 the company is expected to enter a new phase, as it starts clinical trials with its product candidate ROSgard after the timely execution of the preclinical development plan.
Upcoming start of phase I after cash boost – Updated 24 May
Lower costs than expected in Q1
A1M Pharma reported Q1 2018 sales of SEK 0m and operating income of SEK -14.6m. This is an improvement on the SEK -15.7m in operating income seen during Q1 2017 and was also better than our SEK -18.2m estimate. The improvement is primarily attributable to lower R&D spending due to the delayed start of clinical studies.
ROSgard’s entry into clinical phase delayed
On 31 January, A1M announced that it had submitted an application to the Swedish Medical Products Agency to conduct a clinical phase I study with ROSgard. On 10 April, the company announced that it had received a request for additional information from the regulator. It is currently in the final stages of completing this request and we expect the study to start some time during the summer.
Preliminary data expected at the end of the year
Upcoming triggers relate to the initiation of clinical studies, with phase I expected to start in the coming months after an unexpected delay, followed by preliminary data during late 2018. Other triggers include the strengthening of the patent portfolio and potential partner discussions.
Start of clinical study imminent – Updated 26 February
Lower costs in Q4
A1M Pharma reported Q4 2017 sales of SEK 0m and operating income of SEK -15.0m. This is an improvement on the SEK -21.7m in operating income seen during the same quarter of 2016 and was also better than our SEK -18.3m estimate. The improvement is likely attributable to lower R&D spending and cost restraint during the quarter.
Preliminary data expected during the autumn
Upcoming triggers relate to the initiation of clinical studies, with phase I expected to start imminently, followed by preliminary data during H2 2018. Other triggers include strengthening of the patent portfolio and potential partner discussions.
Raising funds to enter clinic – Updated 6 February
SEK 83m rights issue announced
On 5 February, A1M Pharma announced a rights issue, which upon full subscription will provide the company with SEK 83m. The rights issue is subject to approval at an EGM on 23 February. Under the terms of the issue, one share entitles a subscription right for two new shares at a price of SEK 5.00 per share. The subscription period is between 7-21 March. The rights issue was expected considering the cash position and should be sufficient to cover expenses upon preliminary ph I results, expected in H2 2018. In order to fund daily operations until the offering has been completed, the company has raised SEK 7.5m in bridge financing.
Preliminary data expected during the autumn
Upcoming triggers in this primarily relate to the initiation of clinical studies, with ph I expected to start at the end of Q1, followed by preliminary data during H2 2018. Other triggers include initiation of ph I/II in PRRT, strengthening of the patent portfolio and potential partner discussions.
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On the verge of entering a new phase – Updated 23 November 2017
Emerging from research project to treatment platform
A1M Pharma is a preclinical stage biotech company focused on establishing a treatment platform with ROSgard, a recombinant version of the endogenous A1M protein. The protein fulfils various important bodily functions, including working as a protector against free haemoglobin, an antioxidant, as a radical inhibitor and as a tissue‐repair agent. It can thus potentially be used in multiple therapeutic and diagnostic settings.
Biological drug based on an endogenous protein
As ROSgard is a biological drug based on the endogenous A1M protein, it could mitigate the risk of safety issues in the coming clinical trials. In a preclinical setting, A1M Pharma has so far been able to demonstrate a solid safety profile in different animal models. It also has an extensive scientific foundation built on more than 40 years of university research on the A1M protein.
Clinical trials to commence in 2018
The company currently targets two indications: kidney protection in radiation therapy (PRRT) and pre‐eclampsia (toxaemia in pregnancy), two areas with unmet medical needs. We estimate the market opportunity within PRRT in the range of USD 560m‐1,960m and pre‐eclampsia at USD 1,200m‐3,200m. ROSgard should enter an adaptive phase I/II study in PRRT in 2018 followed by studies in pre‐eclampsia in H2 2019. We see a need for additional financing to finalise the PRRT study, the amount and timing depending on outstanding warrants and potential strategic partnerships.
Based on our fundamental DCF approach, with variations in sales growth, EBIT margin and WACC assumptions, we derive an equity value per share of SEK 11.0 to SEK 28.0.
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This report has been reviewed, for the purpose of verification of fact or sequence of facts, by the issuer of the relevant financial instruments mentioned in the report prior to publication. The review has led to changes of facts in the report. Completion date: 24 May 2018, 07:50 CET