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Immunodiagnostics for kidney transplants

Verici Dx 20 January 2022 QuickView
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Verici Dx

Immunodiagnostics for kidney transplants

Healthcare

QuickView

20 January 2022

Price

49p

Market cap

£69m

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Code

VRCI

Listing

AIM

Shares in issue

141m

Business description

Verici Dx is a biotechnology company focused on the development of immuno-diagnostic tests for kidney transplantation. Two tests are in clinical validation trials: Clarava, for pre-transplantation immune profiling, and Tuteva, which tests for rejection events post-transplant.

Bull

Clear market opportunity supported by demand from both clinicians and researchers.

Very little, if any, competition for Clarava and Tuteva.

Plans for commercialisation in 2022 well underway, pending clinical validation.

Bear

Company is subject to research and development risk.

The COVID-19 pandemic may affect clinical validation timelines.

If commercialisation is slower than expected, the company could require further funding before reaching break-even/profitability.

Analysts

Harry Shrives

+44 (0)20 3077 5700

Jacob Thrane

+44 (0)20 3077 5700

Verici Dx is an immunodiagnostics company focused on the development of tests for the kidney transplantation market. These tests use next-generation RNA sequencing to create a defined risk profile for transplant patients, allowing the tailoring of immunosuppressive therapy and identification of rejection events. The company has two lead products, the pre-transplant test Clarava, and a post-transplant early prognostic called Tuteva, both of which are in clinical validation trials. A third product, Protega, is under development for the prediction of fibrosis and long-term graft failure. Data for these trials are expected to be reported in Q122, with plans in place to commercialise both products quickly afterwards.

Strong need for kidney transplant diagnostics

Globally, approximately 95,000 kidney transplants are performed each year, with an estimated 37–50% of subjects displaying evidence of a post-transplant rejection event. Clinical acute rejection (cAR, 10–15%) occurs in the first year post-transplantation and can be treated with a change in immunosuppressive therapy. Subclinical acute rejection (subAR, 27–40%) or silent rejection usually occurs within one year of transplantation and often goes unnoticed due to the lack of surveillance biopsy programmes in transplant centres. Verici Dx aims to develop tests to understand how a patient’s immune system is likely to respond to organ transplantation and the risk of both cAR and subAR events, as well as long-term damage from fibrosis.

Pre- and post-transplant testing

Verici Dx’s technology is licensed from Mount Sinai and underpinned by the extensive scientific research of Professor Barbara Murphy. Clarava uses blood-based, RNA immunophenotyping to deliver a pre-transplant risk profile of early acute rejection and can provide a tailored immunosuppressive therapy strategy. Clarava is a first-of-its-kind prognostic and, if approved, currently has no competition on the market. The company’s second product, Tuteva, provides real-time, post-transplant prognostics to identify acute cellular rejection, including hard-to-detect subAR. Current post-transplant standards of care focus on identifying organ damage after it has occurred, often through painful and expensive biopsies.

Close to commercialisation

As of January 2022, Clarava and Tuteva have completed testing requirements in clinical validation trials, with results expected to be published in Q122. In preparation for commercialisation, Verici Dx gained a Clinical Laboratory Improvement Amendments certificate of registration in July 2021 to allow its state-of-the-art test labs in Tennessee to start operations if clinical validation results allow commercialisation. In January 2022, Verici Dx also obtained a Current Procedural Terminology code, a key component for US reimbursement, for Clarava and Tuteva. The last reported cash position (December 2021) was $10.3m and management expects to begin generating revenue in 2022, both of which should support further development of the Verici Dx platform.

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The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

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Frankfurt +49 (0)69 78 8076 960

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1185 Avenue of the Americas

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United States of America

Sydney +61 (0)2 8249 8342

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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been prepared and issued by Edison. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2022 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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