OXURION - Company Note: Changing dynamics in diabetic retinopathy: all eyes on pKal

Oxurion is a biopharma company with an early stage clinical pipeline focused on developing innovative back-of-the-eye medicines.

• A setback on the PlGF phII lead drug. OXUR experienced a setback on its lead asset THR-317 (PlGF) in phase II for application in diabetic retinopathy (DR). The company announced disappointing topline results on the combination of THR-317 with Lucentis not revealing a clinical vision benefit over Lucentis in standalone. OXUR has another PlGF phII trial ongoing in a rare disease, MacTel1, with data YE19/1Q20. Today, there is high uncertainty on PlGF likely pushing this pathway backwards.
• Lowering TP, but flagging the pKal Buy opportunity. Big gains were/are being achieved in the VEGF field with Lucentis/Eylea broadly applicable in eye pathologies. Both are facing patent cliffs in the coming years and biosimilars are preparing for market entry. In the branded space, pharma/biotech have invested in new drugs either improving the VEGF SOC solutions or targeting new pathways. Plasma kallikrein (pKal) could represent a new opportunity after several disappointments. To date, two companies have published encouraging phase I efficacy and safety results including OXUR with THR-149. OXUR’ competitor KALV that has a pKal drug in phII for DR/DME backed by Merck should bring news in the coming 6 months (option license decision 1H20). We consider this as an independent early stage proof of potential reinforcing OXUR’ phI data.
• We lower our TP to € 3.7/share (DCF/SOTP – EV € 142M) from € 6.0/share with Buy maintained. SOTP-wise THR-149 DR accounts for € 2.02/share (old € 0.94/share), THR-317 DR+MacTel1 for € 0.15/share (old € 1.90/share), THR-687 DR for € 0.39/share (old € 0.94/share) and JETREA remains for € 0.08/share. Cash estimate for YE19 takes up € 1.25/share (old € 2.22/share) (HY19 results on 05/09/2019).