Shard Market Eye: Amryt Pharma


Progressing to plan
Amryt Pharma was established as a platform to acquire, build, develop and commercialise a range of drugs targeted at niche, orphan diseases, thereby creating a Specialty Pharmaceutical business. The company has published its first set of results since flotation, and announced the granting of a new patent in the US affording its lead drug, Episalvan, greater protection. The company is led by a strong management team with considerable pharmaceutical experience. Amryt is waiting for regulatory authorisations in the EU and US to initiate pivotal Phase III clinical trials with Episalvan in patients suffering from epidermolysis bullosa.

► Strategy:  Management aims to acquire and develop more orphan drug assets that target significant commercial opportunities to create a Specialty Pharma company. The acquisitions of Birken and Som were the first steps in delivering this strategy and others are likely to follow as and when appropriate
► Interims:  Amryt has published its first financial report since its corporate
re-structure and share Placing in April 2016, when it raised €12.6m gross. The underlying EBIT loss was €1.3m, with a monthly cash burn rate of €0.5m. At 30th June 2016, Amryt had €11.7m/£10.1m net cash on its balance sheet
► Patents:  Amryt announced that it has been granted a US patent for its lead drug, Episalvan, for use in the treatment of Epidermolysis Bullosa, which will provide marketing protection until 2030. This is in addition to the already issued European patent and adds to Amryt’s growing family of patents.
► Risks:  As with all drug companies, the main risk is that a product fails in clinical trials. However, Amryt’s lead drug Episalvan already has EU regulatory approval which makes it largely de-risked. Rising cash burn on R&D investment will require further capital, some of which could come from licensing partners
► Investment summary:  The traditional pharmaceutical model of developing and commercialising new drugs that target very large patient populations is being superseded by the model that targets orphan diseases – rare conditions in less than 200k patients in US. Amryt is in this latter category. Specialty pharma companies are interesting in their own right and are also attractive to bigger players. The EV leaves plenty of scope for upside compared to quoted peers.


Corporate update

Interim results – Key features
► Reverse takeover – On 18th April, Amryt Pharmaceuticals undertook a successful takeover of Fastnest Equity plc and renamed the new entity Amryt Pharma plc
► Share placing –  During the reverse takeover, the company raised £10.0m gross (€12.6m) through the issue of 41.7m New Ordinary Shares at a price of 24p per share
► Acquisition – Concomitantly, Amryt, completed the acquisitions of Birken AG and SomPharmaceuticals
► Sales –  Product sales for Imlan, a 100% natural skin care product, were €161,000 from the time of acquisition, predominantly from Germany. The pro-forma forecast for the full year remains at €0.9m
► Operating loss – The underlying EBIT loss in the period was €1.3m. The reported loss of €4.1m loss contained €2.8m of one-off items associated with the reverse take-over and the acquisitions of Som and Birken
► Cash reserves – The cash balance at 30 June 2016 was in line with expectations at €11.7m/£10.1m. The monthly cash burn is of the order of €0.5m per month
► EPS – The underlying loss per share was -3.48p.
► EMA submission – Amryt has submitted a pivotal Phase III protocol for the use of Episalvan in patients affected by the skin disorder called Epidermolysis Bullosa (EB) to the European Medicines Agency (EMA)
► FDA meeting – A meeting with the FDA has been scheduled for early 4Q 2016 to consider this Phase III study protocol
► Acromegaly – Application made to the FDA for orphan designation for AP102 for the treatment of acromegaly with a response expected in Q4, 2016


Patent granted in US
Amryt has been granted a US patent for its lead drug, Episalvan, for use in the treatment of Epidermolysis Bullosa (EB), which will provide marketing protection until 2030. Episalvan has already been granted a patent in Europe which expires in 2030. These patents add further protection to the company’s growing family of patents. In January 2016, Episalvan also received EMA regulatory approval for its use in the treatment of partial thickness wounds.
Episalvan is known to have anti-microbial and anti-inflammatory effects and is able to enhance the healing process of the skin. A key feature of the formulation of Episalvan is that it provides an important air and water barrier to the wound. The product not only increases wound healing but also forms a barrier between the wound and the dressings. This significantly reduces the opportunity for dressings to stick to the wound and damage the skin, which is a common and painful occurrence for EB sufferers.
In three Phase III clinical trials, Episalvan has been shown to be safe, efficacious and well tolerated in partial thickness wounds.

Epidermolysis bullosa

EB is a rare genetic skin disorders that affects an estimated 1 in 17,000 live births. EB occurs when structural key proteins of the skin that anchor the different skin layers to each other, are missing. This causes friction, ultimately blisters, shears and burn-like pain. The condition is always painful, disabling and life threatening and could be fatal in infancy in its most severe forms. People enduring EB suffer from itching and have hard-to heal-wounds. Children affected by this condition are called butterfly children, reflecting the fragility of their skin, as delicate as the butterfly’s wings. We estimate that the global addressable EB market is worth $1.37bn.
Types of epidermolysis bullosa
There are a number of variants within three different types of EB – Simplex (EBS), Dystrophic (DEB), and Junctional (JEB) – with severity increasing with each type. Simplex EB is the most common and least severe and occurs in an estimated 70% of cases. In contrast Junctional EB is very severe and results in low life expectancy, but is extremely rare. Amryt is targeting all three types, but expects greater use of Episalvan for the more severe types.
There is no cure for EB. The standard of care is to use bandaging/dressings in an attempt to protect the skin and prevent friction which leads to blisters, and to prevent infection. Bandaging is changed every 3-4 days and in some severe cases might involve hours of laborious and painful work. The aim of currently available treatments is to prevent complications, help the itching, and ease the pain.
Pivotal Phase III clinical trials in EU and US
Amryt is in discussion with EU and US regulatory bodies in order to have its pivotal Phase III trial protocol in the treatment of EB suffering patients accepted.
► The pivotal Phase III protocol has been submitted to the EMA for approval
► A meeting with the FDA has been obtained for early 4Q 2016 to consider the Phase III study protocol
► A clinical research organisation (CRO) has been identified to conduct the trial
► Trials are expected to start recruiting patients 1Q 2017
► Trials are estimated to be completed in about 18 months, headline outcomes available in 1H 2018

Application for orphan designation for the acromegaly product AP102 has been made with the FDA. A response is expected by the end of 2016.
Moreover, an in vivo pre-clinical study with AP102 in diabetic rats is currently running, with results due in a few weeks’ time. This study is expected to support an application for orphan designation in Europe from the EMA.


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