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Allergy Therapeutics PLC: DEEP DIVE

Allergy Therapeutics delivers “stronger than expected” first-half growth as it awaits PQ Birch trial data

Allergy Therapeutics is a long-established specialist in the prevention, diagnosis and treatment of allergies
young girl with allergy
OVERVIEW: AGY The Big Picture
The company is valued at just shy of £100mln
  • Develops treatments for common allergies

  • Market share is growing

  • More than £30mln in the bank

  • Phase III readout of PQ Birch trial (Q1 19) the next major inflection point


What it does

As the name suggests, Allergy Therapeutics PLC (LON:AGY), which is headquartered in Worthing, West Sussex and employs around 500 people, develops inoculations against common allergies.

It has five products registered, as well as another five that are available on a named patient basis – this means they can only be prescribed by a doctor.

Its most commonly prescribed vaccines are used to treat pollen-related allergies, particularly allergies to grasses and trees.

It has a strong presence in Europe, with established operations in Germany, Italy, Spain, Austria, Switzerland, the Netherlands and the United Kingdom, while in other markets, it often makes its products available through distribution partners.

Its Pollinex Quattro vaccine for the treatment of seasonal allergic rhinitis (hay fever) from grass, tree or ragweed pollen allergy is already established in Europe.

The company has been pouring money into making injections rather than tablets.

This has two major benefits, both of which are linked. Firstly, injections tend to yield improved clinical results versus tablets. As a result, they are preferred by physicians in places such as the US and Germany – some of the largest markets in the world.


How it’s doing

The company recently revealed another year of revenue and market share growth as it ended 20128 financially well-resourced.

turnover grew by 10.6% in the 12 months ended December 31, with the main contributions to sales coming from Germany, Austria, Switzerland and the Netherlands.

Its most popular products were the group's ultra-short course, aluminium-free treatments such as Pollinex and Pollinex Quattro (pollen) as well as Acarovac (dust mite) and Venomil (wasp sting).

At the period-end, the company had cash of £31.6mln, up from £25.8mln. The figures were in line with market forecasts.

"This is another period of revenue growth and continued gain in market share for Allergy Therapeutics, in line with our mid and long-term strategy,” said chief executive Manuel Llobet.


Blue sky

Significant progress is expected in the clinic this year.

Top-line results from the Phase III trial of its PQ Birch jab are expected in the first quarter, while a read-out from a Phase I assessment of Acarovac is expected sometime in the next six months.

Meetings with the US Food & Drug Administration and the German regulator in relation to its PQ Grass trials are scheduled for the first three months of 2019.

On top of that, a phase III trial of its PQ Grass vaccine is pencilled in for the second half of the year.

“The group is making good progress across its clinical pipeline, with a number of key developments anticipated for the first half of this year,” said CEO Llobet.


What analysts say

“AGY is approaching an exciting period,” said Hardman & co analyst Martin Hall.

“It has a clear vision, is gaining market share from competitors, and is leading the race to have its subcutaneous-administered products fully approved and regulated as biologicals – first in Europe and then in the US, where the regulators are demanding change.

“Read-out from the EU Phase III PQ Birch trial in 1Q’19 will provide the next major value inflection point.”

Speaking after the recent first-half results, City broker finnCap added: “The six-month trading update to 31 December 2018 demonstrates stronger-than-expected growth.

“The stock trades at a c.65% discount to its peer group in terms of EV/Sales as the market anxiously awaits the Phase III PQ Birch data.”

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Allergy Therapeutics PLC Timeline

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