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Amryt Pharma on the fast-track to commercial success

Published: 08:10 09 Dec 2016 GMT

Wiley
Team captains: CEO Joe Wiley (left) and chairman Harry Stratford, who was with the now giant Shire in its formative years.

It can take years for a small, aspiring drug developer with a promising compound (and a plan) to cross the Rubicon to commercial success.

Amryt Pharma PLC (LON:AMYT) has passed that landmark in a quick-fire 18 months.

More than that, it has managed two acquisitions, two stock market listings and raised €43mln.

Oh, and it has put a heavy-hitting team together that supports a very ambitious growth strategy.

A clue to that strategy can be found among the board and senior management.

One names jump out – that of Harry Stratford, the chairman, who was with Shire in its formative years.

Remember Shire started on the road to becoming the €47bn giant it is today by acquiring and developing drugs for orphan ailments.

These are rare diseases and disorders where the regulatory process is truncated to get the new drug to an area of unmet medical need.

They are niche markets with small patient groups, but lucrative niches all the same. Just ask Shire.

Stafford chairs a senior team that oozes capital markets and mergers and acquisitions experience, so one shouldn’t be too surprised the company is sprinting along the fast-track.

Chief operating officer Rory Nealon completed 14 acquisitions in 12 years at Trinity Biotech and boss Joe Wiley had 20 transactions to his name in a career that spans two decades.

Meanwhile, having chief medical officer Mark Sumeray on board was crucial to Amyrt landing its latest.

On Monday the company, which is quoted on both AIM and in Dublin, said it had in-licensed a cash-generative cholesterol drug.

Its agreement with Sumeray’s former employer, NASDAQ-listed Aegerion Pharmaceuticals, brings into the portfolio the product LOJUXTA, known generically as lomitapide.

Amryt is being allowed to sell the treatment in the Europe and certain other territories, including Turkey and Israel, in return for a royalty payment and small commercial milestone payments based on hitting certain sales targets.

LOJUXTA is used to treat a condition called Homozygous Familial Hypercholesterolemia (HoFH), a rare but life threatening disorder that impairs the body's ability to remove ‘bad’ LDL cholesterol from the blood.

This typically leads to aggressive and premature narrowing and blocking of arterial blood vessels.

Sales of the drug, which comes in capsule form, were €21mln (US$22mln) in the third quarter, with 15% of those revenues coming from outside the US, including the territories now licensed by Amryt.

CEO Joe Wiley thinks LOJUXTA has the potential, in time, to generate revenues of €50mln annually here in Europe.

The infrastructure is already there and Amryt has hired key staff ex-Aegerion to aid the roll-out.

“It is a commercially sustainable product that nicely balances our portfolio with now both commercial stage and development drugs,” said CEO Wiley. 

This was the second deal in just three days for the busy Amryt team.

Last Friday it said it had landed a €20mln European Investment Bank debt facility that will help fund a late stage clinical study of a potentially breakthrough treatment for a rare skin disease.

The cash will pay for a phase III trial of Episalvan, to demonstrate efficacy and safety, which is expected to get underway in the first-quarter of 2017.

Early data from patients with Epidermolysis Bullosa (EB) will be available by mid-2018 with full commercial launch of the product expected the year after.

EB is an inherited disorder where the skin becomes very fragile. The market for the new treatment is thought to be worth US$1.5bn a year.

The funding package is important as it spares investors dilution that would have come if Amryt had issued shares to bankroll the development of Episalvan.

The loan, which can be drawn in three tranches, will also pay for the early development of AP 102, created to tackle a very rare neuroendocrine disease.

According to Wiley, AP 102 is very much the sleeper in the portfolio.

The real value, probably still not recognised by the market, resides with Episalvan, originally developed by German specialist Birken.

The product is approved for use in adults in a type of gash or ulcer called a partial thickness wound.

It is a case now of proving the treatment works for EB.

It does have competition in the EB market in the form of a drug coming to the market developed by NASDAQ-listed Amicus Therapeutics.

Some experts say Amicus’s product has a slightly inferior profile to Episalvan, yet it is valued by analysts at €326mln (US$350mln).

Amyrt’s market capitalisation currently stands at €48mln, so there’s a valuation disconnect there.

The anomaly hasn’t escaped CEO Wiley and the team, who longer term may look to list the business on NASDAQ (while keeping its stock market quote here).

Wiley cites the example of GW Pharma, which made just that transition, as illustrating how success in a phase III trial can transform a business and its share price.

American investors have been behind an 80% appreciation in GW’s market worth in the year-to-date.

Strategically, there are more deals on the horizon, Wiley said.

Following Shire’s buy-and-build blueprint it will look at niche drugs in the late stages of clinical development, or better still products already on the market.

In fact, there may be mileage in aping the Aegerion deal by bringing treatments approved in the US here to Europe, the Amryt CEO said.

“There’s a tremendous opportunity there,” Wiley observed.

“The vast majority of money is raised in US, yet many of the American companies don’t get the European model. We see an opportunity there; a big opportunity.”

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