Arovella Therapeutics Ltd (ASX:ALA) has maintained its $30.5 million valuation and A$0.05 share price target from Edison Investment Research, following the launch of ZolpiMist, the spray version of Ambien for insomnia to the Australian market.
Notably, ZolpiMist is the most advanced asset in Arovella’s pipeline of drugs being developed under its legacy OroMist platform.
The company’s shares are currently trading at $0.23 with a market cap of $15.4 million.
The following is an extract from Edison’s research update:
In a positive development, Arovella announced on 22 June that ZolpiMist, its most clinically advanced asset, has been launched in Australia earlier than anticipated (previously expected in Q322) by licensing and distribution partner STADA Australia.
This marks the first global launch of ZolpiMist, although we note that the drug has also received regulatory approval in Chile (out-licensed to Teva in Mexico, Brazil and Chile).
STADA holds the option to expand distribution into New Zealand. Arovella is incorporating a child-resistant lock on its ZolpiMist dispensers and approval by the Australian regulators will trigger a A$40,000 milestone payment and a 10% royalty on sales (in addition to the supply price).
For ALA-001, Strides has cited a change in market dynamics as the primary reason for its decision to cease development.
Arovella has communicated that it is restructuring the formulation group to match the reformulation projects, although it is unclear whether it will continue development with another partner.
As a reminder, the development and licensing agreement was signed in November 2018 for developing and commercialising ALA-001 for the US market.
The development was being funded by Strides, with Arovella providing the formulation, in exchange for an upfront payment of US$0.4m (A$0.56m), combined milestone payments of US$0.6m (A$0.83m) and royalty payments on commercial sales.
As the drug is still in the pre-clinical stage, Arovella expects no implication on cost or immediate revenue inflows, although we anticipate that future income potential and/or timelines may likely be affected if the company chooses to continue development with a different partner.