HotStockRockets15 Dec 2016 20:03
We tipped Amryt Pharma (AMYT) pre-consolidation at an effective 18.4p earlier this year and until last week it all went quiet. Now it has roared into life and the shares are 18.5p-20.5p. So what happened? And what next?
First, it announced that it has secured a €20m debt facility from the European Investment Bank (EIB) on, what broker house Stifel says, are very attractive commercial terms. Stifel says that the facility will not only extend the company's funding until well into 2019, but also provide funding for development of acromegaly product AP102 and potential launch funding for Episalvan in partial thickness wounds.
Amryt remains on track to initiate Phase III trials of Episalvan in epidermolysis bullosa (EB) in 1Q17 with results expected in mid-2018 and launch possible in 2019. The EIB funding is non-dilutive and mitigates funding risk.
Then Amryt announced that it has agreed to license the orphan drug Lojuxta (lomitapide) from Aegerion Pharmaceuticals Inc. for Europe and the MENA region in exchange for royalties and sales milestones. Lojuxta was approved in the EU in 2013 and according to Amryt currently achieves material sales in its licensed territories. The deal is expected to be immediately cash generative for Amryt.
The deal makes strategic and financial sense, accelerating Amryt's move to become a commercial stage company. It capitalises on the experience of Amryt's Chief Medical Officer (CMO), Dr Mark Sumeray, who led clinical development and regulatory approval of lomitapide whilst at Aegerion.
So there is now no funding risk. There are cashflow coming in and massive upside from Episalvan with a pregnant newsflow over the next three months.
The stance is to buy, if you can, at up to 20p with a target to sell of 27p. This tip has taken longer than anticipated to start the pulses racing but it is now "on fire".
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