Progress towards EU reg approval
| AGY is a long-established specialist in the prevention, diagnosis and treatment of allergies. It’s lead product, Pollinex Quattro is available in Europe only on a ‘Named Patient’ basis. However, protocols have been agreed with EU and US regulators for a programme of clinical trials to get full regulatory approval of Pollinex Quattro as a biological. AGY has reported positive outcomes from one of the trials required for EU approval. There remains a considerable valuation mis-match between AGY and its peers, which provides scope for considerable upside towards our risk-adjusted DCF valuation of 89p per share |
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| Market Data: Mkt Cap (£m): 156.1 Sector: Pharmaceuticals & Biotech |
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| Results: All doses (5,000-27,300 standardised units) of PQBirch produced a significant response compared to placebo, which was dose-dependent, thereby meeting the primary end-point. PQBirch was well tolerated and there were no safety concerns. |
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| Valuation: AGY has made considerable progress over the last 12 months towards de-risking its short course SCIT for target allergies in both Europe and the US. Despite this its valuation remains stubbornly below its peers, trading at an EV 4.0x to 9.7x lower, suggesting considerable upside potential ahead. |
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| Investment summary: Management is delivering on its goal to have its short-course allergy immunotherapy fully approved as a biologic in both Europe and the US. One-by-one the necessary trials are completing, keeping the regulatory filings on track for 2018. At some point the market will wake up to the growth prospects of the company and re-rate the shares more in-line with its peers. |
Allergy Therapeutics is a pharmaceutical group focused on allergy vaccination. Co. mainly sell its products in European countries and its pipeline of products in clinical development includes vaccines for grass, tree and house dust mite, as well as a peanut allergy vaccine in preclinical development. Co. sells a range of aluminium-free allergy vaccines and diagnostics. Co. sells both injectable and sublingual (oral) formats. The commonly prescribed are those for the treatment of pollen related allergies, particularly for allergies to grasses, weeds and trees. Co.'s vaccines trade under various brand names depending on the market, e.g. Pollinex Quattro, Polligoid and TA Graser Top.
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