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Research: Healthcare
Ahead of its FY22 results, Arovella has released its quarterly activities report, reiterating key developments and milestones achieved in the closing quarter of the financial year. While the key highlight was the signing of the manufacturing agreement with Q-Gen for its chimeric antigen receptor-invariant natural killer T (CAR-iNKT) programme ALA-101, initiation of commercial activities (with the launch of ZolpiMist in Australia) was another major milestone. Arovella also secured the US patent for Anagrelide (an under-development oral spray formulation for solid tumours), which expands on its existing patents in Europe, Japan and Australia. Additionally, Arovella announced its first ESG report, based on the World Economic Forum’s framework. The cash balance stood at A$6.1m at the end of Q422.
Arovella Therapeutics |
Recap of a busy quarter |
Quarterly activity report |
Pharma and biotech |
1 August 2022 |
Share price performance Business description
Analysts
Arovella Therapeutics is a research client of Edison Investment Research Limited |
Ahead of its FY22 results, Arovella has released its quarterly activities report, reiterating key developments and milestones achieved in the closing quarter of the financial year. While the key highlight was the signing of the manufacturing agreement with Q-Gen for its chimeric antigen receptor-invariant natural killer T (CAR-iNKT) programme ALA-101, initiation of commercial activities (with the launch of ZolpiMist in Australia) was another major milestone. Arovella also secured the US patent for Anagrelide (an under-development oral spray formulation for solid tumours), which expands on its existing patents in Europe, Japan and Australia. Additionally, Arovella announced its first ESG report, based on the World Economic Forum’s framework. The cash balance stood at A$6.1m at the end of Q422.
Year end |
Revenue (A$m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
06/20 |
0.5 |
(3.6) |
(0.03) |
0.0 |
N/A |
N/A |
06/21 |
0.3 |
(3.4) |
(0.01) |
0.0 |
N/A |
N/A |
06/22e |
0.4 |
(7.5) |
(0.01) |
0.0 |
N/A |
N/A |
06/23e |
2.4 |
(5.8) |
(0.01) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
The last quarter of FY22 was marked by several new developments in the company product pipeline. Most noteworthy was the signing of a manufacturing agreement with Q-Gen (cell therapy manufacturer) to complete the second step in the manufacturing process of iNKT cells (April 2022). As of now, Q-Gen is focusing on completing the technology transfer process to manufacture ALA-101. Arovella intends to convert the current agreement with Q-Gen into a master manufacturing services agreement, which should support the extension of the manufacturing contract to later stages of clinical trials (refer to our previous report for more details).
Importantly, Arovella also progressed to the commercial stage following the launch of ZolpiMist (its most clinically advanced asset) in Australia during the quarter by its licensing and distribution partner STADA Australia. This marks the first global launch of ZolpiMist, and we note that the drug has also received regulatory approval in Chile (out-licensed to Teva in Mexico, Brazil and Chile). STADA holds the option to expand distribution into New Zealand.
In other developments, Arovella announced the United States Patent and Trademark Office decision to grant the US patent for its cancer treatment Anagrelide (part of its legacy OroMist platform). The patent will offer protection until end 2035 and adds to the existing patents already obtained in Europe, Japan and Australia. Given its pivot in strategic focus, Arovella will seek to further develop Anagrelide through co-development partnerships (research or out-licensing).
In Q422, net cash used in operating activities was A$2.04m including the full and final legal settlement fee (A$549k) to HC Berlin Pharma. With the legal overhang gone, management expects a reduction in quarterly burn rates. The cash balance at end Q422 stood at A$6.1m.
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Research: TMT
The continuation of component shortages and further COVID-19 disruption reduced the amount of product XP Power could ship in H122, weighing on gross margins and adjusted operating profit. At the same time, customer demand remains strong and the company has a record order backlog. With component availability improving, XP is already seeing better financial performance and expects a much stronger H2. We have revised our forecasts to reflect H122 results and the strengthening US dollar, resulting in an 8.7% cut to our FY22 normalised EPS and a 0.5% increase for FY23.
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