CST: 26/08/2016 23:38:34   

Allergy Therapeutics plc: Interim Results for the six months ended 31 December 2015

171 Days ago

WORTHINGTON, UNITED KINGDOM--(Marketwired - Mar 8, 2016) - Allergy Therapeutics plc (AIM: AGY)

Allergy Therapeutics plc
("Allergy Therapeutics" or "the Company")

Interim Results for the six months ended 31 December 2015

Allergy Therapeutics plc (AIM: AGY), the fully integrated specialty pharmaceutical company specialising in allergy vaccines, announces unaudited interim results for the six months ended 31 December 2015.

Highlights

Financial highlights

  • Revenue increased by 12% at constant currency to £31.5m (H1 2015: £28.2m)* and reported revenue increased by 3% to £29.0m (H1 2015: £28.2m) 
  • R&D expenditure increased to £6.5m (H1 2015: £1.1m) as the two Phase II studies in Germany and the US were successfully progressed
  • Fundraising of £11.5m (gross) successfully completed with placing of 41,005,500 ordinary shares in the Company to invest in new product development, strengthen the balance sheet and accelerate growth 
  • Cash balance bolstered to £33.2m (H1 2015: £8.0m)

Products and pipeline highlights

  • Increasing market share in all major markets 
  • Spanish Alerpharma acquisition fully integrated 
  • US Phase II study for GrassMATAMPL (marketed in Europe as Pollinex Quattro Grass product) initiated in December 2015 - on track for data read out in H2 2016
  • PQ Birch204 Phase II study patient enrolment completed - results expected in H2 2016
  • Acquisition of Virus Like Particles ("VLP") technology licence for the development of a potential new injectable vaccine immunotherapy treatment for allergy sufferers, with peanut as the lead project
  • Positive house dust mite study results for Acarovac - July 2015

Post period end highlights

  • US Grass MATAMPL study fully recruited according to plan in February 2016

Commenting on the interim results, Manuel Llobet, Chief Executive Officer, said:
"The first half of this year has seen continued momentum with our product sales continuing to outperform the market with further market share gains across Europe. We delivered 12% revenue growth at constant currency. This double-digit growth against a (broadly) flat market has been driven by a combination of our winning proposition of lifestyle enhancing short course aluminium-free vaccines boosted by our successful sales strategy.

"Our business is gaining significant scale and momentum in Europe through both organic and acquisitive growth and we expect this to continue as we further invest in our commercial infrastructure and prepare to take our products over to the US. We eagerly await the data from two ongoing Phase 2 studies for GrassMATAMPL and PQ Birch204 which are both due to report later in 2016.‎"

* Constant currency uses prior year weighted average exchange rates to translate current year foreign currency denominated revenue to give a year on year comparison excluding the effects of foreign exchange movements. See table in financial review for an analysis of revenue.

Joint Statement from the Chairman and Chief Executive Officer

Operating Review

Overview

During the first six months of the year, the Company's revenues grew 12% (at constant currency) compared to 11% at the end of June 2015, and against flat or low growth markets in Europe. Allergy Therapeutics' robust level of double digit top line growth at constant currency is due to the benefits offered to patients of a short course, aluminium-free, therapy which is enabling the Company to outperform its competitors and grow its market share in Europe. Geographically, the major contributing markets to the Company's growth have been Germany and Spain, followed by The Netherlands, the UK and Austria.

Pollinex Quattro - increasing market share in Europe and paving the way towards the US market

The success of Allergy Therapeutics' immunotherapy concept is a key driver of shareholder value creation. Future sales growth will further de-risk the Company's strategic objective of significantly increasing its addressable market, as it prepares to replicate Pollinex Quattro's commercial success in Europe through its launch in the US market. Given that Pollinex Quattro is already established in Europe, the Board and management team are confident of commercial success in the US, where Pollinex Quattro will enjoy first mover advantage in the seasonal segment, and high barriers to entry, fulfilling a clearly defined market need.

The clinical development programme for Pollinex Quattro Grass in the US is now progressing well. In December 2015, Allergy Therapeutics announced the initiation of the Phase II study (G204) for grass allergy and the Company continues to expect to file for US FDA approval at the end of 2018. Following approval, the launch of Pollinex Quattro Grass in the US would enable the Company to enter into a market for specific immunotherapy potentially worth $2 billion. Like its core adoptive European markets, the US allergy immunotherapy market has historically been serviced by subcutaneous rather than sublingual compounded vaccines. Allergy Therapeutics is therefore confident that the availability of an FDA-approved subcutaneous vaccine will facilitate a fast penetration and broad acceptance of the product among the prescriber base.

Regulatory affairs - moving the pipeline forward

Allergy Therapeutics' regulatory department has made good progress throughout the period, including with the German TAV (Therapy Allergy Ordinance) process for the Pollinex Quattro Birch (PQB) vaccine clinical development programme. In November, the Company announced completion of patient enrolment of the PQB 204 Phase II study with headline data expected in the second half of 2016. The target sample of 350 patients was successfully achieved and the active phase of the study is now complete. The endpoint of the trial is the change in total rhinoconjunctivitis symptoms score after treatment relative to the placebo. The optimal dose established from the trial will be selected and examined further in the PQ Birch phase III study, due to start in the first quarter of 2017. The completion of the phase III study is expected to fulfil the requirements for the initial clinical programme under the TAV of the Paul Ehrlich Institute (PEI), the German Biologics Agency, and lead to marketing authorisation approval of this subcutaneous immunotherapy (SCIT) in 2019. Allergy to birch pollen is a significant health issue with around 6 per cent of the population in Europe being skin-prick positive for the allergen.

The Company has maintained a proactive dialogue with the regulatory authorities in its key markets including Germany, Italy, Spain and Austria.

Progress with new high value projects 

Allergy Therapeutics' organic growth strategy has been enhanced during the period by a number of high value projects which will further leverage the Company's operational infrastructure and scientific know-how. These projects seek to replicate the success of the Company's short course and ultra-short course immunotherapies in other related areas such as Perennial Allergic Rhinitis and Food Allergies, and develop further vaccine formulations using the Micro Crystalline Tyrosine (MCT) adjuvant system. These projects will open up new areas of the immunotherapy treatment market and increase the Company's total addressable market, fivefold, to c. $15 billion p.a., including:

  • VLP - peanut allergy

Taking the newly-acquired Virus like Particles (VLP) technology license for the development of Polyvac Peanut, a new potential injectable vaccine immunotherapy treatment for allergy sufferers, into Phase I clinical trials. As previously announced, food allergy represents a significant and strategically important new area for the Company, with peanut allergy treatments alone being an $8 billion p.a. addressable market, globally.

Peanut allergy affects an increasing number of sufferers with a significant unmet need. Polyvac Peanut could be the first subcutaneous vaccine to address this segment, delivering a sustained immunological response and bringing relief to peanut allergy sufferers around the world.

  • Acarovac Quattro - dust mite allergy

Progressing the in-house development of Acarovac Quattro, a treatment for perennial dust mite allergy, through Phase I clinical trials and to launch in Spain on a named patient basis targeted for 2017. Acarovac Quattro uses the same technological platform as Pollinex Quattro and will bring to the perennial segment unmatchable attributes in terms of patient convenience. The product will reduce the current number of annual injections required compared to current products in the market, providing a unique, natural, biodegradable, alternative depot vaccine, boosted by the MPL adjuvant Monophosphoryl Lipid A, which Allergy Therapeutics holds exclusive rights to use in allergy vaccines. The development of Acarovac Quattro builds on the success of the already launched Acarovac Plus vaccine in the Spanish market as a Named Patient Product (NPP).

In July, during the Adjuvants in Allergy Conference in Amsterdam, Dr Albert Roger, Director of the Allergy Unit at Hospital Germans Trias i Pujol, presented the results of a prospective observational one-year follow-up study comparing the safety, tolerability and long-term effectiveness of Acarovac Plus using Dermatophagoides pteronyssinus (house dust mite) in 30 patients with allergic rhinitis and/or asthma. Tolerability was demonstrated, along with a reduction in symptom scores of more than 50 per cent during follow up visits after one year. This novel efficacious mite SCIT product underpins EU wide product development plans for Acarovac Quattro. House Dust Mite is the world's most common cause of allergy and is estimated to affect over 90 million people in Europe, North America and Japan alone. With a $3-4 billion per annum global addressable market, house dust mite represents another significant and strategically important area for the Company.

  • Immunomodulators and adjuvants

Various feasibility studies are in progress in the fields of immunomodulators and adjuvants; specifically including the use of symbiotics in allergy response and MCT as an adjuvant system with other vaccines for treating infection and illness. The Company presented data relating to the use of this patented adjuvant technology at the World Vaccine Congress in November 2015. The data supported the use of depot adjuvant MCT in novel vaccine candidate formulations including malaria and influenza. The data was established following active collaboration with Oxford University, The Jenner Institute and Public Health England.

Inorganic growth strategy and successful integration of M&A 

The Company's acquisitive growth strategy has continued to progress on track, with the successful integration of the recently acquired Spanish company, Alerpharma, into the Company's Spanish Operations. Alerpharma is now fully integrated, and the optimal operational platform has been established for Allergy Therapeutics to become a leading company in the important specific immunotherapy Spanish market.

The Company continues to assess a number of inorganic opportunities against a rigid set of qualifying criteria.

Equity fundraising

In order to capitalise on the continued momentum across the business, the successful organic and acquisitive growth strategies and management's objective of further accelerating the pace of increasing market share the Company completed a fundraise in November 2015, raising £11.5m (before costs) by placing 41,005,500 New Shares, representing approximately 7.5 per cent of the Company's existing ordinary share capital. The placing was oversubscribed and will enable Allergy Therapeutics to capitalise on growth opportunities and diversify into adjacent and complementary areas, with the aim of achieving a five-fold step-change in the Company's total addressable market to approximately $15 billion p.a. as detailed above.

Increased manufacturing efficiencies and automation

Additionally, work has been ongoing in the Company's manufacturing facilities to enhance processes for efficiency and compliance. The use of bar codes to check and reconcile named patient vaccines, controlled issue to packing lines and a redesigned diagnostic despatch process have all been implemented. Allergy Therapeutics also recorded its first successful batch release by the PEI for machine-filled Pollinex Quattro Tree with Grass. This enables the Company to transfer a large percentage of manufacturing for Pollinex Quattro away from a manual process and this switch will be made starting in autumn 2016.

Pride in patient care 

The Company has worked to ensure as many of its diagnostic licences as possible can be retained in Germany. This retains its intellectual property and has enabled the Company to reintroduce 31 allergens during 2015 which are now available for all markets. Having a broad range of well-standardised and characterised allergy diagnostics has been a strategic priority for Allergy Therapeutics in order to provide the best possible service to its customers. Pioneering works on development of the proteomics and allergomics concepts (published in the World Allergy Journal in August 2015) underpins the Company's track record in the scientific advancement of its product portfolio, reinforcing its focus on patient care and commitment to invest both in existing and future products to ensure patients receive the treatment they deserve.

Excellence in customer service

The Company's Supply Operations in Worthing have been working on customer service to ensure the best possible response for customers. This was one of the Company's key strategic objectives in 2014-15 and it has culminated in 100 per cent customer service satisfaction in November 2015, with an average customer service achieved of 99 per cent for named patient vaccines delivered on time. The Company has been servicing increased demand and has had no out of stock allergens for vaccine manufacture during the first half year. The Company has targeted on time delivery, which include Pollinex or Venomil to affiliates/distributors, at 99-100 per cent and is fulfilling this objective.

Financial Review

Reported revenues for the first half of the financial year were £29.0m (H1 2015: £28.2m), representing a growth of 3 per cent, despite low to flat markets in Europe, reported after taking into account currency movements; the negative impact on revenues from the weakening Euro being £2.5m. At constant currency, revenue growth is 12 per cent for the period, with first half revenues of £31.5m (H1 2015: £28.2m). This double digit sales growth has been driven primarily by the Company's improving trading performance as it continues to increase its market share in all of its main markets, supported by the acquisition of Alerpharma in June 2015 which added approximately 3 per cent of the reported sales growth.

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