FREE

Hemogenyx Pharmaceuticals - Initiation of Coverage

Hemogenyx Pharmaceuticals (HEMO) is a preclinical-stage biopharmaceutical company focused on the development of its novel treatments which aim to transform the bone marrow transplantation procedure (BMT). A BMT is a potential life-saver for late-stage patients with blood diseases such as leukemia and lymphoma.

• Two product candidates could revolutionise bone marrow transplants

  BMTs (a specialised type of cell therapy) are a last resort for blood cancer patients for whom traditional chemotherapy treatments have failed. But preparation of patients (‘conditioning’) and the bone marrow transplant itself can be harmful and have low rates of efficacy, respectively. HEMO’s novel products, for both the Conditioning and Cell Therapy steps look to address and mitigate the limitations and dangers involved to change the way such transplants are carried out and to ultimately prolong survival. Proof of principle for both products has been achieved, with defined preclinical milestones set for the next c.14 months.

• Preclinical, immuno-oncology deals highlight upside potential

  Big pharma are increasingly looking to early stage candidates to fill their development pipelines, with immuno-oncology being a recent area of heightened interest. Recent in-licensing deals in the sector have seen upfront payments in the hundreds of millions of US dollars, with acquisitions and IPOs valued at over half a billion US dollars.

• Shares look highly attractive on a risk/reward basis

  Hemogenyx is capitalised at just under £15 million & looks to us to be one of the lowest valued biopharma development plays on the whole of the market with an EV of less than £13 million. Our very conservative DCF based analysis of the Conditioning Product alone suggests an initial target price of 18.15p, implying 332% upside. We therefore initiate coverage of Hemogenyx with a Conviction Buy stance.