Kane is taking a unique approach to addressing human and animal health by developing technology to break up biofilms, the glue-like substance secreted by microorganisms that prevent their removal. Biofilms are implicated in a range of health concerns from periodontal disease, medical device-associated infections, hospital-acquired infections and food safety. As the first commercial use of its technology, the company has launched a series of products to prevent tartar build-up in companion animals.
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Kane Biotech |
Innovating solutions to address biofilms
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Pharma & biotech |
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12 March 2018 |
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Kane Biotech is a client of Edison Investment Research Limited |
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Kane is taking a unique approach to addressing human and animal health by developing technology to break up biofilms, the glue-like substance secreted by microorganisms that prevent their removal. Biofilms are implicated in a range of health concerns from periodontal disease, medical device-associated infections, hospital-acquired infections and food safety. As the first commercial use of its technology, the company has launched a series of products to prevent tartar build-up in companion animals.
Biofilms: Microbes’ first line of defence
Biofilms are the mixtures of proteins and carbohydrates secreted by bacteria and fungi that act as a glue to adhere them to a surface and provide a barrier against antimicrobials, disinfectants, and the immune system. These biofilms may form on living tissue such as the teeth and skin, or on hard surfaces in hospitals and food processing facilities, leading to the transmission of pathogenic species. Kane’s goal is to develop a suite of products targeting these niches in animal and human health, and to out-license these products.
Agreement with Dechra for veterinary products
Kane recently licensed the technology for its animal health products to Dechra, a worldwide manufacturer of veterinary products, for marketing in North American vet channels (Kane separately markets its own dental products in specialty stores). Kane received $500k on signing and is entitled to $2m in milestones plus royalties (subject to minimums). The dental health product, Vetradent, was launched in the US in October 2017, and an ear drop is targeted for H218.
Immediate applications for human health
Kane is also developing products for the treatment of inflammatory skin conditions and is targeting initiation of clinical trials in 2018. This technology is regulated in Canada as Natural Health Products and has potential applications for topical disorders such as athlete’s foot and seborrheic dermatitis. The company has stated that it intends to use Canada as a test market before expanding to the US. It is currently seeking partners for commercialization.
Valuation: EV of C$3.48m
Kane ended Q317 with C$2.53m in cash and no debt, implying an EV of C$3.48m. It reported revenue of C$952k for the first nine months of 2017 from sales and royalties (including the Dechra upfront) and a loss of C$1.90m. The company may be able to raise capital through licensing activity, but will require additional financing in 2018 at the current rate.
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Historical financials
Source: Kane reports |
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Research: Energy & Resources
SDX Energy has announced results from the SAH-2 well on the Sebou permit in Morocco (SDX 75%). SAH-2 is the seventh well in the company’s nine-well programme, and the fifth gas discovery. SAH-2 encountered 5.2 net meters across two pay zones, with average porosity of 33%. The well came in on prognosis but with a reservoir thickness above pre-drill expectations. This result will support the company’s previously announced planned production increase in Morocco to 8-10mmscfd by the end of 2018. We recently published a detailed update on our view of Moroccan gas sales and group valuation, which stands at a core NAV 58.3p/share and RENAV of 65.6p/share.