The 38% rise in the share price of ReNeuron Group PLC (AIM:RENE) probably hasn’t come as a huge surprise to those that follow the stem cell specialist.
There was quite a lot to unpack from Monday’s announcement – one in which it said its exosome technology had delivered therapeutic proteins to a hard to access region of the human brain.
Ultimately this could help unlock the potential of treatments for conditions such as stroke as well as Parkinson’s and Huntington’s diseases.
However, there is a long and potentially expensive road to traverse to get the technology out of the lab (where it currently resides), into the clinic and, eventually, to patients.
Early portents good
And while the early portents are good – ReNeuron said the latest data were extremely compelling – the chance of success at this stage are still comparatively low, based on what we know about the development of new treatment approaches of this kind.
This is why the shares are up just over a third in value and have not doubled or tripled in worth.
At this point it is probably helpful to describe in layman’s terms what exosomes actually are and what they do.
Put simply they are very powerful mediators that carry all the signalling and the machinery necessary to change the behaviour of a cell.
The line created by ReNeuron comes from its CTX technology and has been developed to carry the therapeutic proteins mentioned above.
Targeted approach
Not only this, the payload is delivered to an exact destination - an area of the brain called the corpus striatum.
And that latter part is key. For while drug developers have identified proteins that can help treat neurological illnesses, they often do not last long enough inside the body to be effective.
Pumping up the dose can counteract this problem; however, it also causes unwanted side effects.
Using exosomes appears to have overcome the problem of proteins to the right place in significant numbers.
The pre-clinical study carried out by researchers at the University of Salamanca, Spain, showed this is very clearly the case.
While the results were garnered from animal-based models (rather than humans), the excitement generated inside ReNeuron was evident in the vocabulary used in the stock market announcement.
“Extremely compelling” and “clear pre-clinical proof-of-concept” were two phrases that jumped off the page upon first glance at the regulatory news release assess the Salamanca results.
Bullish assessment
Life sciences companies aren’t usually given to such rhetoric.
“These data are the foundation of one of the main corporate programmes at ReNeuron and highlight the possibility to deliver other payloads using the same principles and technology platform, providing improved tissue distribution and specificity,” said ReNeuron’s chief scientific officer, Dr Stefano Pluchino.
The company has signed a number of collaboration agreements similar to the one it has with Salamanca University, while drug companies are also taking a look at the technology.
Commenting on Monday’s data release, chief executive Olav Hellebø said it represented a “key milestone” for ReNeuron’s exosome delivery technology.
It had, he added, established “clear proof of concept” for the approach. And it had done so using an animal model that more accurately imitates conditions in the human brain than other lab-based methods of analysis.
“In 2020 we refocused the business on our exosome platform, as well as our retinal disease programme and iPSC [induced pluripotent stem cell] platform, and these results show just how significant the potential is for exosomes to become a novel means of delivering third-party biological drugs to the brain and other regions of the body,” Hellebø said.
“This is exciting news for the major pharmaceutical and biotechnology partners that we have collaboration agreements with and underpins the commercial opportunity that our platform provides."
Exosomes form one leg of ReNeuron’s three-legged stem cell business. Its human retinal progenitor cell line is being developed to treat a blindness-causing disease called retinitis pigmentosa. The programme is currently at the phase IIa stage.
Its CTX cell line is at the phase IIb stage as a treatment for people who have suffered an ischaemic stroke.
In early afternoon trading, the shares were up 38% at 131p, valuing the business at just over £75mln.
In a recent note, research house Edison said the business was worth £190mln, suggesting that even at these elevated levels, the company’s potential is still not fully understood.
Edison reckons that deals with pharma companies involving either or both the eye treatment and exosomes could provide significant future value kickers.