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Amryt's amendments to EB trial improve the likelihood of success, Shore Capital says

Amryt is refining the ongoing P3 trial, increasing the sample size and implementing more strictly defined eligibility criteria, which will cost more money but should, in the view of Shore Capital, enhance the probability of success
Skin disease
"We see the increase of trial size and introduction of more stringent inclusion/exclusion criteria as addressing some of the challenges encountered in ESSENCE," Shore says

Amryt Pharma PLC (LON:AMYT) saw sales of its cholesterol treatment Lojuxta surge in 2017 and is confident of further sales growth this year.

As announced in March, revenues from Lojuxta (lomitapide), which treats a rare life-threatening disorder that causes abnormally high levels of "bad" cholesterol, contributed €11.9mln in 2017, as against €800,000 or so in 2016, when the company only had the rights to the treatment for one month.

READ: Amryt in 'good position' to drive further expansion this year and beyond

The licensing of Lojuxta was largely responsible for the increase in the firm's revenues to €12.8mln in 2017 from €1.4mln in 2016.

The company has secured a number of distribution agreements across the territories where it has the licence for Lojuxta so it is in a good position to increase sales further.

The gross profit margin edged up to 58% from 57%.

The company only listed in April 2016 through a reverse takeover of Fastnet Equity and in common with most early-stage biopharmaceutical companies is currently loss-making.

In 2017, the loss before tax expanded to €26.14mln from €7.80mln the year before, reflecting an increase in research and development expenses to €10.56mln from €2.34mln the year before and a non-cash charge of €11.1mln relating to the contingent consideration (e.g. milestone payments) that arose as part of the acquisition of Amryt AG in 2016.

At the end of 2017, the group had cash on hand of €20.5mln, up from €8.3mln a year earlier after a successful fund-raising in October.

Since the end of the reporting period, Amicus Therapeutics has granted Amryt detailed access to the data from its landmark ESSENCE trial of SD101, a treatment for epidermolysis bullosa (EB).

Access to the data will enable Amryt to refine the protocol for its ongoing global Phase III (EASE) study of AP101, Amryt's lead candidate for the treatment of EB, a rare genetic skin disorder for which there is currently no approved treatment.

Fine tuning the protocol will result in a slight delay of the interim analysis, which the company expects to complete early in the final quarter of this year.

Assuming a positive interim analysis, Amryt expects read out of top-line data from its AP101 Phase III study in the second quarter of next year. The incremental cost of these changes is expected to be around €1mln.

"2017 marked a milestone for our lead development asset, AP101, as we commenced our pivotal Phase III trial, EASE, in March,” said Joe Wiley, the chief executive officer of Amryt.

“We continue to expand the company's growth opportunities, and Amryt remains well positioned to continue to make significant progress in 2018," he added.

Shore Capital said the numbers confirmed that 2017 performance was ahead of the broker's expectations.

“Lojuxta revenues of €11.9mln are ahead of our €10.6mln forecast, and reflect strong underlying demand in the in-licensed territories. Positive reimbursement negotiations at a national level and improved 'named patient access' together with the five new distributor agreements should support continued growth,” Shore observed.

“We note active reimbursement negotiations are ongoing in the UK, France, Spain and Turkey (c.250 patient opportunity), with positive outcomes possible during 2018F,” it added.

To take into account stronger Lojuxta revenues it has upgraded its revenue forecast for 2018 by 22% and reduced its net loss estimate by around 10%, even after accounting for increased operating expenditure relating to refinements to the EASE trial.

“We see the previously disclosed refinements to Amryt’s ongoing P3 EASE trial as improving the probability of success of the trial, as they were informed based on insights from the failed Amicus ESSENCE trial in EB,” Shore said.

“We see the increase of trial size and introduction of more stringent inclusion/exclusion criteria as addressing some of the challenges encountered in ESSENCE,” the broker added,

Shares in Amryt were up 0.1p at 17.75p in mid-morning trading; Shore reckons that the Lojuxta licence alone is worth 20p a share.

--- adds broker comment and share price ---

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December 21 2017
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December 20 2017

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