Reversal of the abnormal metabolism
We initiate research coverage of the shares of Vidac Pharma Holding plc with a Buy rating and a price target of EUR 4.90 (base case scenario). Our price target is based on the assumption that Vidac Pharma will get approval for its current core product VDA-1102-AK. We derive our price target from a three-stage discounted cash flow entity model (primary valuation method). In a Monte Carlo analysis, we have used alternative sales, earnings and other KPI scenarios and calculate equity values in a range between EUR 4.04 and EUR 5.40 per share. Based on our capital and earnings estimates for 2028e-33e, an economic profit model—which we used as a secondary valuation method—results in equity values of up to EUR 6.50 per share (discounted with the cost of equity), with a clear upward trend over time, illustrating the logic of a long-term investment in Vidac Pharma shares, in our view.
Established in 2012 by Dr Max Herzberg, one of the founding fathers of the Israeli life sciences industry, Vidac Pharma is a clinical-stage biopharmaceutical company specialising in oncology and oncodermatology therapies. The therapies developed by Vidac Pharma aim to fight cancer by reversing the abnormal metabolism of cancer cells. Clinical tests have shown that the overexpression of hexokinase 2 (HK2) and its binding to VDAC1 on the outer mitochondrial membrane of cancer cells is the key to their metabolic reprogramming to anaerobic glycolysis, which enables tumour cells to proliferate so drastically in the first place. An allosteric small molecule that modifies HK2 so that it cannot bind to mitochondria can therefore reduce glycolysis and induce apoptosis in cancer cells without affecting HK1-expressing normal cells.
Currently, Vidac Pharma has two drugs in the development pipeline: VDA-1102, an ointment for the topical, i.e. dermal treatment of patients with actinic keratosis (AK)—a potentially premalignant disease of the skin and main risk factor for the development of cutaneous squamous cell carcinoma (currently in Phase 2b)—as well as for the treatment of cutaneous T-cell lymphoma (currently in Phase 2a), and the active ingredient VDA-1275, which is being developed for the systemic treatment of solid tumours (currently in a preclinical Phase).
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