If Lupuzor, the Immupharma PLC (LON:IMM) drug, is approved, it could achieve multi-billion dollar sales a year, suggests house broker Northland, which has started coverage.
It is a potential blockbuster, said the broker, which targets 171p for the share, underlining the potential upside, since the shares are currently at around 35p.
What's more, as well as for life-theatening auto-immune disease Lupus, the drug has also shown promise in several other major chronic inflammatory indications.
Phase III trials underway
Phase III trials are now taking place at up to 45 sites in the US and Europe, involving 200 patients, and pharma company analyst Vadim Alexandre noted the study was "expected to generate top line results before the end of 2017".
"Should the trial prove successful, we estimate that ImmuPharma could strike a major licensing agreement with a commercial partner. Very few AIM-listed drug development companies have late-stage clinical assets of similar calibre."
In regulatory terms, the drug is in a strong position, already having received fast-track status from the all powerful US FDA, which speeds up the drug’s approval process by shortening review periods.
"Lupuzor has also received FDA approval to complete its trials under Special Protocol Assessment (SPA) which effectively guarantees that the regulator will accept the trials’ results if they are positive," also highlights Alexandre.
SLE the most severe form of Lupus
Systemic Lupus Erythematosus (SLE), the most severe form of the disease, which Lupuzor is targeting, is debilitating and painful. It sees the body's immune system turn against itself for reasons still not fully understood.
Symptoms include headaches, abdominal pain, chest pain, depression, psychosis, and in some cases death.
It can affect various organs, including the heart and liver and is much more common in women, appears most often in African-Americans, Asians and Hispanics. It is estimated 5mln people globally have it.
Only one other treatment
Only one treatment - Glaxo's Benlysta (belimumab) has been approved over the last 50 years - and Northland notes this has proven to be a disappointment, in that it is only marginally effective while also being associated with significant side-effects.
"Nonetheless, due to the unmet medical need in SLE, Benlysta has had significant success in the market. The drug generated over $400m in sales in 2015, with forecasts predicting annual sales to hit $1bn by 2020.
"We estimate that Benlysta provides a lower limit proxy for the future market potential of Lupuzor, especially given that Lupuzor may prove to be a better and safer drug," said Alexandre.
In addition, Benlysta is currently priced at US$35,000 per patient per year and is relatively expensive to produce and the amount of drug needed to treat patients is much higher than for Lupuzor, said the analyst.
"We estimate that Lupuzor, being a small peptide, will cost far less to manufacture and consequently could be priced at a significant discount to Benlysta."
Notably, to add to its potential, recently, ImmuPharma presented new evidence, which supported Lupuzor for several other major disease indications, including rheumatoid arthritis, Crohn’s disease, and asthma.