Ellex offers products across the glaucoma severity spectrum, with Tango positioned as a primary therapy for earlier stages and iTrack providing further intraocular pressure (IOP) reduction when needed. 2RT provides the potential to tap into the underserved early ARMD market.
Ellex Medical Lasers |
Treatments for chronic eye diseases
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Healthcare equipment |
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28 March 2018 |
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Ellex offers products across the glaucoma severity spectrum, with Tango positioned as a primary therapy for earlier stages and iTrack providing further intraocular pressure (IOP) reduction when needed. 2RT provides the potential to tap into the underserved early ARMD market.
Tango leading SLT share in non-invasive glaucoma
Elevated IOP damages the optic nerve in glaucoma patients. When topical therapy fails to control IOP, non-invasive procedures like SLT can be used. Sales of Ellex’s Tango family of yttrium aluminum garnet (YAG) SLT lasers grew 35% in H2 CY17. Ellex’s total glaucoma device revenue (including iTrack) rose by 37% to A$19.3m in H2 CY17 and is tracking for further growth, supported by favourable demographics and increasing adoption of non-pharmacological treatment methods.
iTrack showing robust growth in surgical glaucoma
When further IOP control is needed, MIGS procedures using devices such as Glaukos’s iStent or Ellex’s iTrack can be used. iTrack has US clearance for use in a procedure (Ab-Interno Canaloplasty) that catheterizes, dilates and flushes the eye’s Schlemm’s canal, to improve ocular drainage flow and reduce IOP. In a two-cohort study (n=48), iTrack reduced IOP by 30% at 12 months. Unlike iStent, iTrack does not need to be performed in conjunction with cataract surgery for reimbursement and does not involve the permanent implantation of a device. In H2 CY17, iTrack sales were up 65% in the US and 30% outside the US, to A$5.2m (globally).
2RT provides untapped opportunity in early ARMD
Ellex’s 2RT intends to treat early ARMD by applying a nanosecond pulse laser to areas above and below the macula (central portion of retina), to stimulate the formation of matrix metalloproteinases (MMP) molecules without causing injury. MMPs are believed to assist in the turnover of cellular waste material. Data from the 36-month double-masked study (n=292) that began in 2012 in early ARMD are expected in mid-2018. If the treatment can reduce further vision loss or the need for invasive anti-VEGF therapies, Ellex plans to roll it out in Europe and other markets, although the approval pathway for the US has not been announced.
Valuation: EV of A$118m
Ellex had A$38m in H2 CY17 total sales (including its other ophthalmic units) and a net loss of A$2.4m, and it expects to incur a mild loss over the next 12 months as it builds its iTrack market presence. Ellex raised A$23m in November 2017 and had A$9.7m net cash at end CY17 (A$25.2m gross cash minus A$15.4m in debt).
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Consensus estimates
Source: Bloomberg |
EDISON QUICKVIEWS ARE NORMALLY ONE OFF PUBLICATIONS WITH NO COMMITMENT TO WRITING ANY FOLLOW UP. QUICKVIEW NOTES USE CONSENSUS EARNINGS ESTIMATES.
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Disclaimer
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Disclaimer
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Together with its Q417 results announced last week, 4SC also reported progress with its R&D activities. All three lead assets – resminostat, 4SC-202 and 4SC-208 – remain on course to be developed for specialty dermato-oncological indications. New details include an update on the 4SC-202 development plan and the news that 4SC’s Japanese partner, Yakult Honsha, joined 4SC’s pivotal resminostat study and will enrol patients in Japan. Our valuation is largely unchanged at €349m or €11.4/share (€11.3/share previously).