Member Info for HunSen

Hey Scored, sounds interesting, will look out for your post. Thanks.

Morning Scored,
your point on Eton milestone payment is interesting, here is a snip from the agreement

"Under the terms of the licence agreement, Diurnal will receive a non-refundable upfront payment of $5.0 million, of which $3.5 million is in cash and $1.5 million is through the issue to Diurnal of 379,474 new Eton shares, and will receive an additional $2.5 million cash milestone payment upon first commercial sale in the US following regulatory approval and grant of Orphan Drug Status (currently anticipated in Q4 2020). "

So, the first milestone payment $5m was made, US regulatory approval is done and Eton have made sales, BUT, I'm not sure that they have Orphan status - which is the last condition to receive the next $2.5m milestone payment.

I'm not sure what's happening with Alkindi Orphan status?

Any ideas?

Something is definitely going on, this share has flat-lined (or worse) for me over the last year.

Such good prospects, perhaps it's time to deliver some decent news.

https://www.calvinepartners.com/diurnal-group-efmody-eu-approval

Another good write up

IMO the share is holding it's gains, considering we just had a placing which created 17% dilution (at just a 1% discount), to maintain the share price at the placing price is very encouraging. If we stood still, the share price should be around 55p
The market cap is now £116.7m, it's the dilution that has hit the actual gain, without the placing, the share price today would be 84p.

This may sound disappointing but institutions demonstrated their MASSIVE VOTE OF CONFIDENCE, providing the cash to hopefully get DNL over the finish line in terms of profit. This is the nature of biotech I think.

I personally think this will end with a takeover and I think maintaining this market cap shows this may be not too far off.

The market cap today is £116.7, to get us to 84p now, the market cap would need to be £141m, for £1, the market cap needs to be £168m - these are much bigger numbers but again, look a the vote of confidence from the II's.
We all know funds are needed to get the pipeline to market, either the company takes on debt (and the lenders get paid first) or the shareholders step up and fund the business - keeping the debt at zero.
Unfortunately this is is reality - but again, ask why the institutions are so confident? DNL are delivering.

The market cap, just 11 months ago on 30/06/2020 was only £38.7m - the actual increase is in the region of 200%.

I believe there is more to come, if you are confident, buy the dips and beat the placing.
GLA

https://www.sharesoc.org/seminar/sharesoc-webinar-with-diurnal-dnl-19-may-2021/

Adding to the case "for" takeover, the recent placing was at a 1% discount to the price on the date. The placing was taken up by institutions at that price. This shows their confidence.
As they have a better understanding, teams of researchers, and because there are so few shares to buy on the open market, I think they better understand this lifecycle.
Where as retail investors (including myself) did not take up the offer - for myself, that was due to having way too many shares already and not understanding this lifecycle.
I have said before that DNL has been consistent with their message and always delivered the plan. The CFO has "experience exiting companies".

I have been reading a little about the life cycle of Pharma companies, many are born and fail - DNL has survived. Investors have taken a risk, we have funded trials and new products. One view seems to be that an exit point rewards investors, who may go on to re-invest in future Pharma companies.
DNL has survived birth, it is now achieving growth and on the road to maturity and eventual decline (unless reborn).
Looking at US pharma companies "born" in 2005, only half are still active, 21% are bankrupt, and 30% have undergone an IPO or M&A (DNL has already reached IPO). DNL was founded in 2004 and has already passed this stage - history shows early stage pharma companies are taken by bigger fish.
The 21% risk of death (bankruptcy) has passed I believe, so the end game is now either to survival and rebirth (possibly DITEST) or M&A.
In the most recent DNL presentation, the CEO mentioned the CFO had experience "exiting" companies, so I believe this is most probably the route this company will take.
It is now my belief that an exit in it's self is a business plan to return value to investors (including those institutions still adding to DNL), structured exits also come in the form of licencing (as with Eton) with payments based on milestones.
So, my thoughts on DNL are that there is an "exit plan" that is now clear to me from the recent presentation.
Timing is key, DNL now has two licenced drugs with an addressable market of $2.3b (from my notes) and DITEST in the pipeline (with an agreed route forward) worth $5.1b (again from my notes).
So, if you were a big fish, looking from the outside, when is the time to start talking takeover?
The EV of the company is just £100m, for future earnings, it is clearly worth a premium and judging by the institutional take-up, I would say substantially more. With two drugs now at market, the company's ability to bring drugs to market must substantially de-risk DITEST for a potential acquirer.
These could be of interest, https://trinitylifesciences.com/wp-content/uploads/2019/05/Trinity_Whitepaper_Envisioning_A_Successful_Exit.pdf , https://www.ebe-biopharma.eu/wp-content/uploads/2019/02/EBE-Exit-Strategies-in-finance.pdf

My point here is to ask your view on what may happen next? Many investors state they are here for the long haul, but I think there will be an alternative exit - I would guess within the next year. There is opportunity down either path, but my thoughts are based on the facts above and the recent CEO presentation. Cases for and against this opinion welcome?
GLA.

Moring Scored, All, yes, great news, and a few days ahead of schedule. I'm catching up on research this weekend and just looked at DNL.
From the AJ Bell (Shares Magazine) article, well worth reading in full, "once DNL has received approval from the EC for Efmody, it will provide the company's commercial cortisol replacement therapy franchise with critical mass, enabling DNL to build a strong and profitable European business through penetration of the combined addressable market for CAH and paediatric AI which is estimated to be worth over $300m in Europe alone."

Things seem to be coming together nicely now;
+ Efmody fully approved to sell in Europe
+ Sales team and route to market already in place (via Alkindi connections)
+ Covid-19 restrictions starting to ease allowing patients to access health care
+ Efmody moving towards the fastest available P3 route in the US

I believe the above is catalyst for very strong year on year sales growth as sales were muted by Covid-19 and the product range has doubled (more than doubled when you consider Alkindi is just for under 18's).

Lots of news still to come.
ALB.

I agree, there seems to be more trading activity of late, bigger volumes too. The SP is holding up very well after the placing, definitely a different feel to last time.

Company: Neurocrine Biosciences
Market cap - $9.1b
Turnover - $1.05b

History of acquisitions – yes
Endocrinology – yes (including a cortisol drug)
Development partnerships – yes

From website
Neurocrine Biosciences completed a Phase II study evaluating the safety, tolerability, pharmacokinetics and pharmacodynamics of crinecerfont in adult patients with classic congenital adrenal hyperplasia (CAH). The final results from this open-label, multiple-dose, dose-escalation study were reported in June 2020.

Comment: currently developing a competing product to Alkindi and Efmody which does not meet the same needs (from memory) this supresses androgens but does not replace cortisol.

Company: Ferring Pharma
Market cap - unknown
Turnover - €2.0b

History of acquisitions – yes (last in 2018)
Endocrinology – yes
Development partnerships – yes (last in 2018)

Limited information / time to research.

Company: Ipsen (SA)
Market cap €7.0b
Turnover €2.7b

History of acquisitions - yes
Endocrinology – yes
Development partnerships – yes

From website

“In April 2019, Ipsen acquired Clementia, a Canadian clinical stage biotech company focused on innovative new treatments for people with rare bone disorders and other diseases.
By bringing two passionate and patient-centric teams together, it significantly enhances our ability to treat rare disease in children and adults, specifically fibrodysplasia ossificans progressiva (FOP) – an ultra-rare, severely disabling disorder characterized by bone that forms outside the normal skeleton, in muscles, tendons or soft tissue as well as multiple osteochondromas (MO) – a rare, severely disabling, progressive, chronic disease in which multiple benign bone tumors develop on bones.”

Company: Endo Plc
Market cap $1.3b
Turnover $2.9b

History of acquisitions - yes
Endocrinology – yes
Development partnerships – yes

From annual report

License and Collaboration Agreements and Acquisitions
“We continue to seek to enhance our product line and develop a diversified portfolio of products through product acquisitions and in-licensing or acquiring licenses to products, compounds and technologies from third parties. The Group enters into strategic alliances and collaborative arrangements with third parties, which give the Group rights to develop, manufacture, market and/or sell pharmaceutical products, the rights to which are primarily owned by these third parties. These alliances and arrangements can take many forms, including licensing arrangements, co-development and co-marketing agreements, co-promotion arrangements, research collaborations and joint ventures. Such alliances and arrangements enable us to share the risk of incurring all R&D expenses that do not lead to turnover-generating products; however, because profits from alliance products are shared with the counter-parties to the collaborative arrangement, the gross margins on alliance products are generally lower, sometimes substantially so, than the gross margins that could be achieved had the Group not opted for a development partner.”

Comment: one route for DITEST could be a development partnership as described above.

I have been briefly researching the 4 companies listed on the DNL presentation on a scale of Large Pharma (the likes of Pfizer) > Large Speciality Pharma (the group researched here) > Small Niche Endocrinology (where DNL sits).

A very short brief on each company follows;

Continuing from the presentation notes, here are some further thoughts.

I noticed the CEO mention that the CFO had experience "exiting companies" and I didn't recall hearing that before, but after checking previous presentations, it has been said before.
On further research, the CFO was involved in the 2004 sale of Celltech to UCB for £1.5b.
My subsequent understanding of the history of smaller biotech is that once revenue generating they are acquired by larger organisations to fill their pipeline. I will look into the "Large speciality pharma" companies listed on the DNL presentation which list 4 companies in the endocrinology market.
In my opinion, the company has been kept very lean, has no debt and has a very loyal institutional following - a takeover would be a logical conclusion (as would continued growth into profitability).

Good questions were asked during the presentation, including which countries are showing the fastest growth for Alkindi - the answer UK and Germany. While these launched first, it is also encouraging that these "risk adverse" countries are taking up Alkindi quickly.

Related to covid delays, the process for prescribing in the UK is through "specialist clinics" which I believe are associated with certain hospitals throughout the UK. Patients are referred direct to these clinics, so this delay will now be reduced.

In terms of news flow, plenty of strong news due for the remainder of the year.

ALB

Sorry, hit the wrong key; timeline continued...

News flow outlook;
Q2 2021 - conclude SPA plan for Efmody in USA
Q2 2021- submission of DITEST IND in US
Q3 2021 - start DITES MAD study
Q3 2021 - first launch of Efmody in Europe
H2 2021 - start Efmody P3 study in USA.

These are the points I listed from the presentation, the video should be available online shortly and is well worth watching.

ALB

Hi Albino,
yes, I thought it was an interesting presentation. My notes include the following (in slide order);
- good number of large investors
- experienced board, including CFO with "experience exiting companies"
- Efmody expected to launch Q3
- DITEST route to US approval agreed
- DNL (niche), large speciality companies Endo, Ipsen, Ferring, Neurocrine (could these target DNL for acquisition)?
- Alkindi launched in UK, Germany, Austria, Sweden, Denmark, Norway, Iceland, Italy. Price agreed in Netherlands.
- Plans in place for remaining EU launches, the same commercial infrastructure will be used for future launches.
- Other distribution agreements reached.
- Alkindi (US) orphan status expected to be confirmed Q2 (any time) - launched to patients in Nov 2020
- Alkindi approved in Australia (for all ages), Israel, China and Turkey - Japan pending.
- Efmody launch due Q3 in Europe, commercial infrastructure already in place.
- UK approval expected after a similar timeframe to EU process (meaning unclear on slides - 180 days?).
- ROW agreements will use data from the EU trials.
- US FDA Special Protocol Assessment agreement due Q2, expected to be a 12 month trial (the shortest available I believe) with a patient recruitment phase beforehand. Endpoints close to agreement.
- EU extension for Efmody estimated end 2023 / start 2024 raising EU addressable market to $2.1b combined
- US extension depends on initial approval, estimated Q2 2025
- Competition close to P3 approval?? Crinecerfont recruiting for P3 trial BUT don't provide all the benefits of Efmody.
- P1 DITEST complete (proof of concept, 24 patients), primary endpoint met testosterone levels of a healthy young male.
- Next DITEST phase due to start H2 2021
- Pipeline is $9.6b addressable market

News flow outlook;
Q2 2021 - conclude SPA plan for Efmody in USA
Q2 2021- submission of DITEST IND in US
Q3 2021 - start DITES MAD study
Q3 2021 -

More very rough maths - DYOR.
Alkindi pricing in the UK https://www.sunderlandccg.nhs.uk/wp-content/uploads/2020/07/Alkindi-information-leaflet.pdf average of £3,697 per child, per year.
There are roughly 14.2m under 18's in the UK, and using the figure of 1 in 10,000 being affected by CAH (source NHS, states between 1 in 10k and 1 in 18k - using the former to allow for non classic CAH). The sales opportunity in the UK is around £5.25m from 1,419 patients.

As there are risks associated with the old method of dosing, I would expect UK take-up to be quick. I would also expect the same for Europe, my VERY rough calculations are as follows;

There are around 223m under 18's in Europe, 22,380 will be affected by CAH and assuming a similar price to the UK, this would generate £23.4m in revenues.

EU and UK together £28.7m. I think this figure should be quite achievable considering the safety improvements from Alkindi. What is really interesting is that the 2023 forecast turnover for DNL is £29.1m. This could be achieved from the UK and Europe alone, without the US, China and the rest of the world. And, from Alkindi alone (without Efmody).

My maths are rough and I have assumed a larger incidence of CAH to account for late onset CAH which affects 1 in 200 (I believe) at some point in life. I will review my maths for US and China at some point and post them later.

I'm not one for ramping, I prefer to discuss the facts, so I am quite encouraged by the potential sales here. The key though is GP take-up and prescription, hopefully the lower risk of Alkindi will help.

ALB

Looking at the Eton update, here are some really rough numbers;

One month's treatment is around $374, so they should get 12 (full) month revenue of $448,800 (100 patients) with the goal of 400 by year end would give full year $1.795m (400 patients).

Not too bad considering restrictions. The above are really rough and I need to do some more work on what DNL receive.

ALB