AdAlta Ltd (ASX:1AD)’s novel therapeutic product AD-214 is derived from its i-body platform, designed to address drug targets that traditional, larger monoclonal antibodies have not been effective in treating.
The company, which is developing AD-214 into a patient-preferred, low-cost inhaled formulation for treatment of Idiopathic Pulmonary Fibrosis (IPF), has been covered in a research report from Pitt Street Research.
AD-214 received FDA Orphan Drug Designation in February 2021 and completed its Phase I safety study for an intravenous formulation of AD-214 in July 2021.
AdAlta has now initiated an inhaled formulation program for AD-214, with positive early results.
The following is an edited excerpt of Pitt Street Research’s coverage of AdAlta in the context of its AD-214 platform.
AdAlta making good progress on AD-214
AD-214’s 5 milligram/kilogram intravenous multidose Phase 1 clinical cohort identified no dose-limiting safety issues.
Radiolabelled AD-214 studies showed rapid liver distribution indicating that inhaled delivery could deliver a much lower effective dose in IPF.
This would also be more convenient than intravenous dosing for patients and clinicians. AdAlta’s inhaled AD-214 formulation plans maintain its Phase II study timeline.
Moreover, there is a lot of interest in the inhaled route in the wake of COVID-19.
AD-214 can provide significant upside
Pitt Street Research believes that AD-214 can be game-changing in IPF treatment. The two existing drugs for IPF have limited efficacy, while AD-214 has shown that it can reduce fibroblast migration to the lungs.
It also appears to work on both ‘slow progressors’ and ‘fast progressors’ of IPF disease.
Pitt Street believes there is a billion-dollar opportunity for AD-214, initially in IPF, and, after that, in other fibrotic diseases.
GE collab progresses
The GE Healthcare collaboration has progressed to preclinical development and manufacturing for i-bodies binding to Granzyme B, a biomarker of response to immune-oncology drugs.
Given this biomarker’s potential to allow better patient selection for cancer immunotherapy, Pitt Street believes the GE collaboration is critical and opens up a market worth US$500 million – US$1 billion.
Valuation reiterated
Pitt Street Research says: “We continue to strongly believe in AdAlta’s prospects and are retaining our valuation range based on a probability-weighted discounted cash flow (DCF) approach at A$0.27 per share base case and A$0.49 per share bull case.
“Key risks we see in AdAlta include: 1) clinical risk; 2) timing risk; and 3) uptake risk.”
AdAlta shares today are trading at A$0.092.