Renovo (LON:RNVO) gave a re-assuring assessment of prospects as the growing biotechnology group gears up for a very important year in its development.
The guidance on Juvista, its potential blockbuster treatment for scarring, remains unchanged, which means we will receive the data on the EU phase III REVISE study by the middle of next year.
The financial results, meanwhile, were interesting for the fact they revealed that finance director David Blain has successfully reined in the company’s cash consumption.
Renovo burned through £13.4 million in the 12 months to September 30, against a forecast range of £15-20 million. It has £51.8 million in the bank and said it will be sitting on at least £30 million when the REVISE data is finally released.
Of course the company’s preliminary results statement, unveiled earlier today, was more of a historic document charting the major events of a largely successful year.
However there were also some important nuggets of new information. One of the bullet points reveals the group has produced three conformance lots of Juvista.
This to the lay observer will mean little – in fact I almost missed it. However it is a fairly important milestone that shows the product can be manufactured on a commercial scale.
That Renovo passed this particular landmark without incident or adverse comment is as good as it gets. A stumble here had the potential to delay or even de-rail Juvista’s progress.
More interesting perhaps are professor Mark Ferguson’s comments on one of Renovo’s other creations -Juvidex, a topical product that accelerates healing and reduces redness.
Chief executive Ferguson said talks with potential partners are well advanced and a deal could yet be unveiled by the planned deadline of the end of this year.
“We are in very advanced licensing discussions - plural,” Ferguson told Proactive Investors shortly after the release of results.
“We are in discussions with a number of companies. We previously announced we would complete a cosmetic deal for Juvidex by the end of the year.
“That is still possible. It may come in early 2011 but things are very advanced. We have a short-list of global companies.”
Ferguson said any deal would involve a “single digit royalty”, though there would be no upfront or milestone payments.
“A decent partner could have the product in a big brand by 18 months to two years,” Ferguson added.
“That would generate significant royalties – single digit millions – inside the next couple of years.
“So we are concentrating with Juvidex on a royalty-based deal in a global brand.”
Separately, Ferguson wouldn’t be drawn on when exactly in the first half the Juvista results would be published.
He said the H1 2011 deadline gave him enough “wiggle room” to factor in hiccups during the data analysis process, such as an illness to one of the plastic surgeons recruited to assess and score the data and photographic evidence.
It is a major undertaking to compile, interpret and assess the information drawn from more than 350 patients in a study that took place in 56 centres in ten different countries. “I’ve given us room to manoeuvre (with the deadline),” he added.
A successful outcome of this first phase of the late stage trial will set in motion three smaller trials, including one that will assess Juvista’s safety, which will run concurrently.
“(The trials start) in the second half of 2011 and finish H2 2013. We will file our dossier with the European regulators in H2 2013,” Ferguson said.
Finance director Blain revealed the group has garnered an influential following among American institutional investors.
Yesterday, RA Capital of the US announced it was a 7 percent shareholder in the company. JP Morgan has also recently come on board as has Swiss group UBS, though Goldman Sachs and Gartmore have used the recent strength of the share price to reduce their respective holdings.
Shares in Renovo have almost doubled in value over the past three months.