“Edison’s accessible and high-quality research gives us the opportunity to communicate an independent perspective of Tyman to a wide variety of potential stakeholders.”
Currency in GBP
Last close As at 02/06/2023
GBP1.23
— 0.00 (0.00%)
Market capitalisation
GBP83m
Sareum’s FY22 results (to end-June 2022) provided both a financial and operational update on the company’s progress with its developmental pipeline. Encouraging progress has been made with SDC-1801 and the company has filed an exploratory clinical trial application (CTA) to initiate a UK-based Phase Ia/b study. Subject to regulatory approval, management intends for Phase Ia of the trial to commence in Q4 of CY22. Additionally, the company continues to progress its preclinical pipeline through the development of its immunoncology asset SDC-1802 as well as explore strategic options for its clinical oncology asset SRA737. With a gross cash balance of £4.3m at the end of FY22, Sareum expects to have sufficient funding to take SDC-1801 through the Phase Ia portion of the study. We see regulatory approval to initiate the SDC-1801 Phase Ia trial as the next major catalyst for Sareum.
Sareum Holdings |
SDC-1801 poised for the clinic
Pharma and biotech |
Spotlight - Update
25 October 2022 |
Share price graph
Share details
Business description
Bull
Bear
Analysts
Sareum Holdings is a research client of Edison Investment Research Limited |
||||||||||||||||||||||||||||
Sareum’s FY22 results (to end-June 2022) provided both a financial and operational update on the company’s progress with its developmental pipeline. Encouraging progress has been made with SDC-1801 and the company has filed an exploratory clinical trial application (CTA) to initiate a UK-based Phase Ia/b study. Subject to regulatory approval, management intends for Phase Ia of the trial to commence in Q4 of CY22. Additionally, the company continues to progress its preclinical pipeline through the development of its immunoncology asset SDC-1802 as well as explore strategic options for its clinical oncology asset SRA737. With a gross cash balance of £4.3m at the end of FY22, Sareum expects to have sufficient funding to take SDC-1801 through the Phase Ia portion of the study. We see regulatory approval to initiate the SDC-1801 Phase Ia trial as the next major catalyst for Sareum.
|
Historical financials
Source: Company data |
SDC-1801 CTA submitted
The CTA filing of Sareum’s lead TYK2/JAK1 inhibitor marks a significant milestone in the development plan for SDC-1801. The company is awaiting approval from the UK Medicines and Healthcare Products Regulatory Agency before initiating a Phase Ia assessing the safety and tolerability of SDC-1801 in healthy subjects. If successful, the results would provide support to initiate Phase Ib of the study in 2023; however, management has communicated further funding options will need to be explored to support this.
Clarity over SRA737 provides focus
Following GlaxoSmithKline’s (GSK’s) $1.9bn acquisition of Sierra Oncology in July 2022, Sierra has returned the rights to Sareum’s out-licensed CHK1 asset SRA737 (held in partnership with the CRT Pioneer Fund, CPF), which is being investigated for the treatment of solid tumours. While this was a setback for Sareum, SRA737’s development had been in limbo so, in our view, the decision provides clarity for Sareum to now explore other strategic options. The company and partner CPF now have an opportunity to assess future development or licensing plans for SRA737, leveraging the compound’s existing positive clinical data.
Subscriptions bolster FY22 cash position
During FY22 Sareum raised c £3.6m, after expenses, through three equity issues to high-net-worth individuals in July, August and December 2021. The financing is intended to further support the clinical development of SDC-1801.
TKY2 approval provides encouragement
On 9 September 2022 the US FDA approved Bristol Myers Squibb’s first-in-class tyrosine kinase 2 (TYK2) inhibitor Sotyktu (deucravacitinib) for the treatment of moderate-to-severe plaque psoriasis in adults, making it the first selective TYK2 inhibitor to be approved for any indication. Sotyktu’s approval was based on the results from the Phase III POETYK PSO-1 and POETYK PSO-2 trials, with both studies reaching primary endpoints on efficacy and safety. Importantly, the drug showed no material toxicology issues, which have been a particular concern regarding the JAK class of drugs (which includes JAK1, JAK2, JAK3 and TYK2) recently, resulting in black box warnings. We see this development as positive for the progression of SDC-1801, with potential read-across that provides regulatory feasibility for the clinical utility, application and safety of TYK2 inhibitors. Additionally, SDC-1801’s dual mechanism of action may offer differentiation over Sotyktu’s single targeted therapy. The psoriasis market also represents a sizeable opportunity for Sareum, with global sales of psoriasis drugs estimated to reach c $30bn by 2028 (source: EvaluatePharma).
Financials
Sareum’s FY22 operating loss was £2.6m, up from £1.7m in FY21, attributed to higher R&D expenses related to late-stage pre-clinical activities and preparatory activities for the initiation of clinical trials for SDC-1801. The company received an R&D tax credit of £0.2m in December 2021 and expects to receive a further £0.4m in December 2022. We believe R&D and operating expenses will likely continue to increase as the pipeline approaches the clinic.
The company’s cash balance at the end of FY22 was £4.3m, supported by three equity issues in July, August and December 2021, which raised total gross proceeds of £3.9m (£3.6m after expenses). Sareum’s annual cash burn for FY22 was £2.1m and we believe spending in FY23 is likely to be materially higher as assets approach clinical trials, reflected in management’s communication that it has sufficient cash to complete the Phase Ia portion of SDC-1801’s upcoming clinical trial and accelerate preclinical work on SDC-1802; however, further funding will be required to initiate the Phase Ib portion for SDC-1801. Additional funds may be secured either through partnerships and/or equity issues to advance the programmes further. We anticipate that Sareum may evaluate out-licensing opportunities for SDC-1801 following Phase Ia, leveraging the data from the study to potentially secure a partnership deal.
|
|
Sequana Medical reported that the POSEIDON North American pivotal study of its implantable alfapump device in patients with recurrent and refractory ascites (RRA) due to liver cirrhosis met the primary efficacy endpoint, and that safety results were in line with expectations. These positive results should pave the way for the company to file a US premarket approval application with the FDA in H223, in line with prior guidance, which we estimate can lead to US market launch in mid-2024. The alfapump device was shown to lead to significant reductions in the need for RRA patients to undergo burdensome therapeutic paracentesis (TP) procedures, which should lead to improved patient independence and quality of life, given the limitations of current treatments as discussed in our Outlook report. We expect the rising prevalence of non-alcoholic steatohepatitis will result in the target market for RRA patients in North America increasing at an upper single-digit CAGR over the next decade, providing a robust commercialisation opportunity for alfapump in RRA.
Get access to the very latest content matched to your personal investment style.
