Evgen Pharma plc (LON:EVG) – BUY*: Orphan Designation granted
Market Cap: £23m; Current Price: 31.5p; Target Price: 97p (up from 79p)
FDA grants Orphan Designation for stabilised sulforaphane in SAH
Yesterday Evgen announced that the US Food & Drug Administration (FDA) has granted the Company orphan drug designation for the use of stabilised sulforaphane for the treatment of subarachnoid haemorrhage (SAH).
The Company's SFX-01, a synthetic and stabilised version of sulforaphane, is currently in a Phase 2 trial in the UK.
Orphan drug designation gives SFX-01 the potential for US market exclusivity (for seven years from the date of marketing approval) as well as several other possible advantages including reduced approval timelines.
Evgen also indicated that recruitment in the Company’s Phase 2 study of SFX-01 in SAH is on track.
In light of the new Orphan Designation, we increased our Target Price from 79p to 97p—as indicated by our DCF model. Previously we adopted the average between the peer group value and our 97p DCF output.
NORTHLAND CAPITAL PARTNERS VIEW: The granting of orphan drug designation represents a major milestone for Evgen. SFX-01 is a novel class of drug for the treatment of SAH. The drug could be the first step-change improvement in the treatment of this condition in more than 20 years. The granting of Orphan Designation demonstrates that the US FDA sees SFX-01 as a priority treatment.
James Latham plc (LON:LTHM) – BUY*: AGM statement
Market Cap: £130m; Current Price: 663p
Trading in line
Yesterday James Latham plc issued an AGM statement.
Revenue for the first four months of the current financial year, namely April to July 2016, was 3% higher than the same period last year. This is largely the result of product mix but also higher volumes traded, with more orders delivered from the group’s warehouses.
Margins were higher than for the same period last year.
Overall the Company is trading in line with full year market expectations.
Since the year end the group completed the purchase of a new site in Yate at a cost of £5.2m. Fitting out is expected to cost an additional £1.2m and the group expects to relocate into this site by June 2017. The Company has increased capacity to meet growing demand for its specialist panels.