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Research: Healthcare
Acacia’s interim results highlight the group’s focus on commercialising key asset BARHEMSYS in the US market during 2020. With a new CMO qualified, management plans to resubmit its new drug application (NDA) to the US FDA before end September. If the FDA deems it a Class 2 resubmission, a new PDUFA date would fall in Q120, enabling a launch in H120. The US sales team is positioning itself for a prompt launch. Managing cash burn during the intervening period is essential as we forecast that c £40m will need to be raised in H120 (following approval) to fund operations, with additional future funding dependent on sales execution. With Acacia’s commercial focus concentrated on the US, it has changed its presentation currency from GBP to US$. We will reflect this in our financial model in due course, but retain our previous forecasts (GBP denominated) and valuation of €631m in the interim.
Written by
Acacia Pharma |
NDA resubmission before month-end |
Interim results |
Pharma & biotech |
5 September 2019 |
Share price performance
Business description
Analysts
Acacia Pharma is a research client of Edison Investment Research Limited |
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Acacia’s interim results highlight the group’s focus on commercialising key asset BARHEMSYS in the US market during 2020. With a new CMO qualified, management plans to resubmit its new drug application (NDA) to the US FDA before end September. If the FDA deems it a Class 2 resubmission, a new PDUFA date would fall in Q120, enabling a launch in H120. The US sales team is positioning itself for a prompt launch. Managing cash burn during the intervening period is essential as we forecast that c £40m will need to be raised in H120 (following approval) to fund operations, with additional future funding dependent on sales execution. With Acacia’s commercial focus concentrated on the US, it has changed its presentation currency from GBP to US$. We will reflect this in our financial model in due course, but retain our previous forecasts (GBP denominated) and valuation of €631m in the interim.
Year end |
Revenue (£m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/17 |
0.0 |
(6.5) |
(2.32) |
0.00 |
N/A |
N/A |
12/18 |
0.0 |
(16.2) |
(0.35) |
0.00 |
N/A |
N/A |
12/19e |
0.0 |
(16.8) |
(0.30) |
0.00 |
N/A |
N/A |
12/20e |
1.1 |
(48.3) |
(0.88) |
0.00 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Acacia’s lead asset, BARHEMSYS (repurposed amisulpride), is being developed for the management of post-operative nausea and vomiting (PONV). Following two complete response letters (CRLs) from the US FDA during the past 12 months, deficiencies with Acacia’s previous chosen contract manufacturing organisation (CMO) had been highlighted. The newly qualified CMO has a track record in both manufacturing amisulpride and undergoing regular, successful FDA inspections (c 60% of its current production is already US bound). With no concerns raised in the CRLs about the clinical and safety data package, we believe regulatory approval is likely to be contingent on the third-party CMO delivering.
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Research: Healthcare
Kazia Therapeutics’ FY19 financial results show cash of A$5.4m and an operational cash use of A$6.7m. The 20-patient efficacy cohort in the lead GDC-0084 Phase IIa study should report data in Q419. Kazia has announced a new trial collaborating with the prestigious MSK hospital in NY to look at GDC-0084 in PI3K mutated brain metastases in conjunction with radiotherapy. Initial efficacy data from the Cantrixil ovarian cancer Phase I is also due in Q419. Our base-case value, updated for year-end cash, is A$137m.