Allergy Therapeutics (LON:AGY) has renewed momentum - as its announcement this morning showing a kick-start to its US growth ambitions aptly demonstrated.
Following what it called "productive" talks with the all important US Food and Drug Administration (FDA), the pharma group is to resume its clinical programme of grass allergy product Pollinex Quattro in a bid to take it through to a market launch in 2019.
It is a milestone, not least as it draws a line firmly under past problems with the pipeline.
In 2007, the FDA put a stop to the development of Pollinex after one patient had an adverse reaction to the grass allergy injection.
Those familiar with the story will know the firm now has the financial wherewithal to start this process again and to advance the development pipeline, having raised £20mln via a placing in March this year.
"We've really de-risked the proposal from the one we outlined in the fundraising," finance director Ian Postlethwaite told Proactive.
It now sets in train clinical trials, scheduled to start in September this year, with contract research organisation Inflamax set to run the studies, which represents a further de-risking.
Postlethwaite is optimistic that the product will hit the US markets at the right time, when the market may be more receptive to a European type model.
The firm is already an established provider of allergy vaccines in Europe but this will mark its first foray into the US.
Currently, the market across the pond is very different in that manufacturers sell bulk products to individual US allergists, which then make up their own products. But there is a shift now taking place, as Postlethwaite explained, as evidenced by a couple of European players recently having vaccines registered in the US.
Allergy has already spent U$100mln on the Pollinex programmes and also in the pipeline are similar treatments for ragweed and tree pollen.
Unlike grass, these are not funded, but Postlethwaite notes that only a phase III trial is still required for ragweed and a phase II for the tree candidate.
One option he says is available to the company would be to out-license these products - a growing trend in the pharma world.
It is worth noting that Allergy, via its core European business, is cash generative. It recently funded the purchase of Spanish vaccine specialist Alerpharma from its own coffers.
The interim results revealed the group posted double digit revenue growth, due to increased market share, bringing it to just over £30mln and an operating profit of £7.5mln, up 13% on the year earlier.
On the balance sheet, the group improved the cash position to £8mln compared to £5.2mln in the first half of 2014.
Panmure Gordon in a note following the results in March issued a target price of 33p and gave an upbeat assessment of prospects.
“The company continues to take market share from its competitors and despite exchange rate head winds, the business is taking advantage of its product differentiation,” analyst Savvas Neophytou said in the note.
Shares added 4.24% to 21.50p today.