Abzena plc (LON:ABZA) focuses on the development of antibodies - functional proteins that form part of the body’s immune system – to modify and enhance the performance of certain drugs.
Every different antibody is tuned to recognise a specific foreign antigen, such as a virus or bacteria.
It works with a large number of research organisations to discover new antibody-derived treatments.
Specifically, it engineers animal antibodies for use in humans and produces de-immunised therapeutic proteins to prevent an adverse immune response.
Llama antibodies
Interestingly, one of its platforms has generated antibodies from llama cells, which can be used against virtually any antigen in the human body.
The llama antibodies have shown to be more stable and resistant that those engineered from other species.
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Targeted drug delivery
The group’s antibodies are used to optimise the therapeutic properties of biopharmaceutical drugs and treatments.
Linking a drug to antibodies can allow for targeted delivery to specific antigens such as cancer cells, thus reducing adverse side-effects to surrounding healthy cells as often seen in chemo- or radio-therapy treatments.
As per its business model, where the group’s modifications are included in a drug candidate, it could be entitled to receive further payments as the treatment develops.
There are 12 of these 'Abzena inside' products in phase I clinical trials, several of which are making strong progress towards commercialisation with key partners.
An eventful year for the group
The most advanced of the bunch is GS-5745, currently being developed by Gilead Sciences Inc (NASDAQ:GILD) and tested on a number of diseases, including cancer.
The US biotech firm has announced it will carry out further clinical studies of GS-5745. Interim Phase III data is expected in early 2017.
It has been an eventful year for the group, which also launched Denceptor Therapeutics, joint venture with the Baylor Institute of Immunology Research of Dallas, Texas.
On the manufacturing side of things, it landed a contract with Faron Pharmaceuticals (LON:FARN) to produce Clevegen, a potential treatment for cancer.
Making strong progress
N+1 Singer said the recent acquisitions showed the group was making strong progress since the interim stage.
The broker said it retained a positive stance and reiterated its target price of 107p.
Hardman and Co meanwhile, value the company at between £56-100mln, based on an enterprise value (EV) to sales multiple of three to four, compared to the current valuation of around £58mln. That implies a target share price of 153 in the next year, going up to as much as 176 by 2018, on a multiple of four EV/sales valuation.