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Currency in SEK
Last close As at 25/03/2023
SEK11.00
▲ −0.22 (−1.96%)
Market capitalisation
SEK581m
Research: Healthcare
IRLAB Therapeutics has provided an update on upcoming development milestones for its central nervous system disease-focused pipeline. While the Phase IIb study of pirepemat in Parkinson’s disease related falls (PD-falls) continues to open new clinical sites in Europe, patient enrolment has been slower than anticipated. The company expects recruitment to be complete by end-2023 with top-line results in H124 (previously H223). We believe IRLAB’s announcement represents a more cautious approach to development in FY23 following the recent disappointing update on mesdopetam and the overall macroeconomic environment. Considering pirepemat has previously demonstrated encouraging preliminary signs of efficacy in a Phase IIa study, we do not expect the adjusted timelines to affect the drug’s potential. Our valuation and forecasts remain under review and we will update them following the FY22 results on 23 February.
IRLAB Therapeutics |
Cautious update on portfolio timelines |
13 February 2023 |
Share price performance
Business description
Analysts
IRLAB Therapeutics is a research client of Edison Investment Research Limited |
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IRLAB Therapeutics has provided an update on upcoming development milestones for its central nervous system disease-focused pipeline. While the Phase IIb study of pirepemat in Parkinson’s disease related falls (PD-falls) continues to open new clinical sites in Europe, patient enrolment has been slower than anticipated. The company expects recruitment to be complete by end-2023 with top-line results in H124 (previously H223). We believe IRLAB’s announcement represents a more cautious approach to development in FY23 following the recent disappointing update on mesdopetam and the overall macroeconomic environment. Considering pirepemat has previously demonstrated encouraging preliminary signs of efficacy in a Phase IIa study, we do not expect the adjusted timelines to affect the drug’s potential. Our valuation and forecasts remain under review and we will update them following the FY22 results on 23 February.
Portfolio update |
Year end |
Revenue |
PBT* (SEKm) |
EPS* |
DPS |
P/E |
Yield |
12/20 |
0.4 |
(91.4) |
(1.92) |
0.0 |
N/A |
N/A |
12/21 |
207.9 |
91.1 |
1.76 |
0.0 |
6.2 |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
In addition to the change in pirepemat’s development schedule, IRLAB now expects its preclinical assets, IRL757 and IRL942, to be Phase I ready by end-2023 and H124 respectively. Both assets were originally expected to begin Phase I trials in FY23. The newly nominated candidate IRL1117 will continue to progress through in-house R&D activities during 2023. IRLAB has previously demonstrated its ability to bring internally generated assets to the clinic (mesdopetam and pirepemat), therefore we expect the delays in the preclinical pipeline are again due to macroeconomic factors and the company’s slightly more cautious approach to R&D.
Pirepemat demonstrated preliminary signs of efficacy in a Phase IIa study (n=32) in patients with PD (50% reduction in fall frequency) and dementia and appears to be well tolerated at clinically relevant doses (600mg). Importantly, pirepemat had no negative effects on cardiovascular function, thus its tolerable safety profile makes it ideal for use in combination with other PD treatments. These data, in our view, highlight pirepemat’s potential in PD-falls, and we retain a positive outlook for the Phase IIb trial despite the slow start to patient enrolment.
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Research: Healthcare
Midatech announced on 9 February a private placement to certain US institutional investors to raise US$6m (£5m) in gross proceeds. The issue will comprise 10.3m ADS units (or ADS-equivalent pre-funded warrants, or a combination thereof) at US$0.58/unit along with attached A and B warrants and is expected to close on 15 February 2023. We note that the placement is subject to price adjustments, with the floor price set at US$0.3/unit (or if approved by shareholders, at US$0.1/unit), which would increase the number of pre-funded warrants issued. The placement is likely to be highly dilutive to existing shareholders (70.5% at the base issue price on exercise of pre-funded warrants), although it is crucial to support Midatech’s operations as a going concern, in our opinion. As a reminder, Midatech’s proposed acquisition of Bioasis was recently turned down by shareholders, leaving the company with cash to last only until mid-March 2023. With austerity measures in place and the proposed £5m funding, management expects the cash runway to extend to December 2023, past key data readouts for MTX110 in DIPG (Q223) and GBM (Q323).
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