Finncap5 Nov 2020 08:20
On 15 October finnCap led a £80m fundraise for Synairgen* (AIM: SNG), which the company will use to: (1) fund a Phase 3 trial for SNG001 in hospitalised COVID-19 patients, (2) support SNG001 manufacturing and device scale up activities, (3) generate further data to support clinical, manufacturing and regulatory activities; (4) strengthen the balance sheet (5) net settlement of options.
? The Phase 3 study is due to commence in Q4 2020 and will be run by Parexel, with results expected in Q2 2021. The trial will be randomised, placebo-controlled and will enrol c.900 patients across c.20 countries in the Americas, Asia, UK and Europe. The primary endpoint will be the time to recovery of hospitalised patients receiving oxygen (OSCI=4) with confirmed SARS-CoV-2.
? Assuming that this trial replicates the results seen in the 100-patient Phase II trial, we would expect Emergency Use Approval (EUA) to follow shortly thereafter. Meanwhile, the Managed Access Programme (MAP) in the UK and Europe, run by Clinigen, could generate early commercial revenues.
? SNG001 aims to scale production of SNG001 from the current few thousand to c.100,000 treatments per month in early 2021. Benchmarking against existing treatments implies potential peak revenues of c.$300m per month in our opinion.
? We introduce new forecasts for 2020 and 2021 to reflect the costs of the Phase III clinical trial and manufacturing scale-up activities. We raise our SOTP target price to 420p, despite dilution, with the probability of SNG001 being commercialised for COVID-19 rising from 50% to 70%.
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