Corium International — Update 19 May 2016

Corium International — Update 19 May 2016

Corium International

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Written by

Maxim Jacobs

Corium International

Redefining the possibilities of drug patches

Pharma & biotech

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19 May 2016

Price

$3.61

Market cap

$80m

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Share details

Code

CORI

Listing

NASDAQ

Shares in issue

22.2m

Business description

Corium is a drug delivery company developing transdermal delivery systems for established pharmaceuticals. The company has two platforms, Corplex and MicroCor, and has employed this technology in three marketed products (Crest Whitestrips, Fentanyl and Clonidine patches) and nine development programs.

Bull

Revenue generating, proven technology.

Two unique platforms.

Expedited bioequivalence development pathways.

Bear

Cash flow negative.

Earliest internal program launch in 2019.

Additional capital needed to reach profitability.

Analysts

Maxim Jacobs

+1 646 653 7027

Nathaniel Calloway

+1 646 653 7036

Corium is a specialty pharmaceutical company focused on the development of advanced transdermal drug delivery technology. The company receives revenue from three partnered products (including Crest Whitestrips) and is now developing products internally. It has two platforms (Corplex and MicroCor) that enable the formulation of poorly soluble drugs and biologics respectively, both of which were previously intractable. There is the potential for four 505(b)2 approvals in 2019-21.

Internal pipeline focused on CNS diseases

The company is developing a series of transdermal formulations of established drugs for Alzheimer’s and Parkinson’s. The most advanced programs are donepezil and memantine patches based on the Corplex technology, which recently completed Phase I studies. Corplex is a unique tech that enables the sustained delivery of drugs that are too insoluble or non-permeable for traditional patches.

FDA approves bioequivalence pathway for Corplex donepezil

In May 2016, the FDA agreed to an approval pathway for Corplex donepezil based on bioequivalence to Aricept ($3.5bn peak sales), the most widespread Alzheimer’s treatment, enabling a 2019 commercial launch. The patch formulation of the drug avoids the GI side effects and compliance issues associated with the pill. The company is seeking similar FDA guidance for Corplex memantine.

MicroCor PTH a patch to replace the Forteo needle

The company plans to initiate a Phase IIb trial of its patch for osteoporosis following partnering discussions in 2016. The system delivers the same drug as Forteo ($1.4bn 2015 sales), via the MicroCor technology. MicroCor uses soluble microneedles capable of immediately releasing biologics or other drugs that are normally reserved for subcutaneous injection. The six-month Phase IIb and a one-year Phase III indicated by the company should support a 2021 launch.

Valuation: EV of c $77m

We believe the company’s current EV of c $77 is low considering this is a revenue-generating company ($34m TTM) with a history of successful product development entering multiple $1bn+ markets. We believe the out-licensing opportunity of the PTH program alone could account for a substantial fraction of this valuation. The company’s $54m in cash should provide a runway into mid-2017.

Consensus estimates

Year
end

Revenue
($m)

PBT
($m)

EPS
($)

DPS
($)

P/E
(x)

Yield
(%)

09/14

42.4

(9.9)

(0.99)

0.0

N/A

N/A

09/15

40.9

(28.4)

(1.52)

0.0

N/A

N/A

09/16e

33.1

(38.2)

(1.68)

0.0

N/A

N/A

09/17e

51.8

(27.3)

(1.18)

0.0

N/A

N/A

Source: Company reports, Bloomberg

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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

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 9258 1161

Level 25, Aurora Place

88 Phillip St, Sydney

NSW 2000, Australia

Wellington +64 (0)48 948 555

Level 15, 171 Featherston St

Wellington 6011

New Zealand

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

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 9258 1161

Level 25, Aurora Place

88 Phillip St, Sydney

NSW 2000, Australia

Wellington +64 (0)48 948 555

Level 15, 171 Featherston St

Wellington 6011

New Zealand

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