Member Info for kipper1960

Van, I read that message from CT differently. To me self funding P3 clinicals makes no sense. Instead I think CT means that that current partnership deal offers have not met his target and so he is talking to alternative partners. Ideally he wants to get 2 or 3 offers, to play one against others to get the best deal.

I also agree with that assessment. However, I would expect the deal for XF-73 Nasal to include significant cash up front and equity investment from the partner at a realistic valuation, that will also raise cash. That's why this type of deal is taking longer to close than a licensing deal only.

i wonder if the strange market behaviour (30% drop on a neutral rns) has anything to do with shore capital becoming the exclusive dealer. they have certainly not got off to a good start. maybe the previous joint broker - cavendish i think - are ****ed off and are playing with the market during their notice period? maybe someone with a better understanding of market makers than me has some ideas?

This is a superb update because it confirms XF-73 DERMAL as another string to DEST’s bow of productthat address a billion dollar market.

What I like in particular about this update is it shows DEST has shifted to a much more commercially oriented business since the appointment of CT. Even in a clinical update he has identified an application - DFI - that addresses a large market where there is a vacuum that existing products on the market do not fill.

I look forward to seeing independent figures that show the size of the DFI and serious wound management market, as this will impact the valuation of DEST as a business

Tatty, for what it’s worth, I am a heavy investor in DEST (for me) and the NIAID project did not really enter into my investment decision. In my option, the predominant value of DEST is in the XF-73 platform and in particular the XF-73 Nasal product that has already sailed through clinical phase 2 trials. If the NIAID trials of XF-73 Dermal for wound management turn out to be positive, this will be a huge bonus, as an endorsement for the XF-73 platform and to show the potential for the Dermal product.

I have no info as to the content or timing of the NIAID report.

OF - at the presentation in October, CT made no commitment to land the deal in Q423 - he said he would be working to ensure the right deal and not work to an arbitrary deadline. At the time I expected this to land in Q124 and I still have that view. I think the deal will be much more than a deal for XF-73 clinical trials (Ph. 3). I expect it to include some or all of a licensing agreement (for XF-73 nasal), payment for the clinicals, upfront payments and possibly the partner acquiring equity. So, a deal that will be pivotal to DEST and should result in a significant share price rerate. All IMHO - I've explained my reasoning in an earlier post. DYOR

Have a good weekend

I presume it is one of the institutional investors that invested in the fundraise last Feb. They will be sitting on a 100%+ profit. Their decision to sell will be based on their investment strategy and nothing to do with the performance of DEST (not the kind of II we need!). You are right that they are suppressing the SP. I’m not too fussed because I’m in it for the medium and long term, so these s/t trading fluctuations will become irrelevant.

The chairman and executive directors already have very large holdings, except CT himself, but he stands to get up to 2.4m share options depending on hitting targets. I’d like to see CT hitting those targets because it will do much more for the share price than him buying a few on the open market

Shore Capital are not new for DEST, but have gone from joint broker to exclusive broker. Any suggestions on the significance of this (if any)?

Very interesting article yesterday in Investors Observer, a US investor publication, on the subject of AMR. Read it here; investorsobserver.com/news/qm-pr/6833098473828586

Near the end of the article it lists the Top 10 Key Players in the AMR Market as follows: Astra Zeneca, Merck, Phizer, Novartis, GSK, Johnson & Johnson, Roche, BioVersys, Melinta and Destiny Pharma.

Wow, great to be mentioned in the same breath as big and well known pharmas. Clearly the team are doing a great job of spreading the DEST message, especially Stateside.

It’s a shame than Van200 has come on here to deramp; you’ve only got to read his earlier post (17/12/23) to realise he has zero understanding of the business

Rebess, I don’t think the market has priced in the XF-73 Dermal results because these were due end 2022, so by being over 12 months late it’s assumed zero value. Therefore, if the dermal results are negative there would only be a small SP retrace due to panicking from a few who don’t understand the fundamentals of the business; , whereas positive results would be a real bonus . As to how much either way is pure guesswork so I’m not going to try. I believe current valuation of DEST is based solely on the 2 products already successfully through 2b clinical trials (NCMT-M3 and XF-73 Nasal)

Thanks for posting this, Mike. Excellent article. I wonder if this has anything to do with the relatively high volume of Buys today

Sajy, not sure what planet you are on but do really expect the CEO of a public company to share with you confidential information about an ongoing commercial discussion?

XF-73 is a platform, from which numerous products can be created. XF-73 is to DEST what George Michael was to WHAM! Sell off the rights to the XF-73 and there is not much value left in DEST. If a larger company wanted full rights of XF-73, they would have to buy the company

Sorcerer, you make a really good point about the recent update being aimed at the potential partners. I was wondering why CT issued today’s RNS, when there was was no need to, especially when it would be regarded mildly negative by the market- but now it makes sense

4. Intellectual Property (IP). Destiny’s biggest asset by far is its IP. As a shareholder I needed convincing that their IP was protected to prevent the technology being “reverse engineered” by competitors. DEST have filed more than 80 international Patents to protect their IP, meaning that for each product under development, the technology is broken down into smaller segments, with a separate Patent applied to each segment – effectively creating multiple locks on every product.

5. Shareholder Value. I believe that DEST will be an acquisition target for a much larger pharma company. As discussed, AMR is hot topic for WHO and many governments, including UK, are giving AMR high priority because of the human and financial cost of not having an effective solution. AMR is strategically important for many (all?) large pharmaceutical companies and the XF platform is already proven to be an effective part of the solution. Having control of the development, manufacture and distribution of multiple XF based products will be extremely attractive to a large pharma (not forgetting other products in the pipeline, such as NTCD-M3, for the prevention of recurring C-Difficile, that is currently at the clinical trial Ph. 3 design stage). In just the past month, Astra Zeneca has acquired 2 clinical stage pharmaceuticals; Icosavax (upto USD 1.1b) and Gracell (upto USD 1.2b). Due to the potential sales of XF product, the eventual value of DEST must be in the same ball park. However, I think it will be 1 – 3 years before that happens because there is still significant risk involved until the Ph.3 trials for XF-73 are well underway. And this risk is reflected in the current MCAP. A partnership with a major pharma to fund the Ph. 3 trails will significantly derisk the business and this should be reflected in the SP when that is announced.

3. XF-73 Nasal. XF-73 is the lead product from the XF platform, targeting the prevention of post-surgical infection from Staphylococcus aureus, a leading cause of surgical site infection. The market for XF-73 Nasal is huge. The risk of being infected with MRSA or another Staphylococcal strain is high for a third of the population who carry this bacteria and who have to undergo radical surgery; approximately 14 million people per year in the US alone. Currently pre-surgical treatments, such as Mupirocin, are becoming less effective due to AMR, so the demand for a more effective treatment is high.

As stated in RNS 17/10/2023, in an independent study reporting on the efficacy of XF-73 against 2,527 isolated Staphylococcal cases from around the world, XF-73 was effective against ALL cases tested, including ALL MRSA cases and is effective against ALL tested antibiotic resistance. These independent results endorse the extremely positive XF-73 Phase 2b Clinical Trial results, reported in Q1 2021.

Of course, a drug is not ‘proven’ until it has successfully completed Ph. 3 clinical trials and these have yet to be specified (still waiting for a partnership agreement announcement), let alone completed. “Surgical site infections are serious complications that occur in a significant number of patients post-surgery and can lead to severe life-long morbidities and can even be life-threatening. In addition to the impact on health, surgical sites infections cost approximately 10 Billion USD in the US alone”. The approach of XF-73 is to reduce Staphylococcal surgical site infections through nasal decolonisation. The Ph. 2b clinical trials achieved a 99.5% reduction in Staphylococcus aureus bacterial nasal carriage. The key target for Ph. 3 is the same as that of Ph. 2b, although it will be with a much larger sample of patients and from a different category of surgery. With such a high success rate of this target in 2b trials (99.5%), I very confident of achieving a similar level of success with the large sample in Ph. 3 (although I am no expert in the field!).

In conclusion, the demand for an effective drug to prevent post surgical infection is simply massive, current treatments are increasingly less effective due to AMR and all studies so far indicate that XF-73 is a highly effective treatment.

I have been invested in Destiny Pharma since pre-IPO and have researched and followed the company closely. Happy to share the key points of my research with any long term investors and provoke some serious discussion; this is based on information already in the public domain and from the XF Update meeting on 21/10/23. DEST is the best long term investment opportunity in MY portfolio and here’s the reasons why.

1. Leadership Team. The change of leadership team and BOD announced in July 23 was pivotal, transforming the company into one much more commercially oriented, focused on L/T shareholder value. Chris Tovey, who joined as CEO this year has vast experience growing businesses in the pharma space, including being COO of GW Pharma from Oct. 2012 until it was acquired by Jazz Pharma in 2021. GW had a market cap of USD 0.26 bn in Sept 2013, and was acquired by Jazz for USD 7.2bn in 2021 – impressive growth by any standards. As reported in the RNS (20/10/23) CT can earn share options of more than 2.4m shares based on performance; so he is highly incentivised. Between CT and the non-execs there is a huge amount of commercial experience in Pharma and many high level contacts, so that there is no chance of DEST going under the radar of anyone that matters. A question I ask myself is why does Tovey, an ex- COO of a multi-billion dollar pharma want to head up little old Destiny Pharma with a market cap of less than GBP 70m? He MUST see something very special and exciting.

2. AMR. Simply put, Anti-microbial Resistance (AMR) is a bacteria’s ability to resist the effect of an antibiotic, making the drug much less effective. It is now one of the biggest global health issues; The World Health Organisation has declared antimicrobial resistance to be one of the top ten global public health threats facing humanity. FDA, MHRA, EMA and many other health agencies and governments are developing strategies to counter AMR. Not finding a solution over the next couple of decades comes at a massive cost, measured in 10s of millions of lives and trillions of dollars. Destiny Pharma have developed the XF drug platform that provides a mechanism that reduces the ability of bacteria to become resistant to the action of the drug. Potentially XF is a platform to create a new range of antibiotics that bacteria cannot resist. Many large pharmaceutical companies will be looking to play a significant role in the AMR space.

Correct, Brooko. In particular, Van2000 talking complete bollx.

Sajy, I agree with you that an acquisition is the most likely exit route for DEST. In my experience, licensing agreements are very complex and restrictive . Upfront payments, payments for trials, minimum royalties, territory etc. It is especially complex for DEST because its main asset is the XF-73 PLATFORM, from which there could be many products (dermal, nasal, wound management, ++++) and each product would need a separate licensing agreement. Much simpler for a big pharma to acquire the company and they then have full control of the commercialisation of the platform without the need for these complex licensing agreements. Additionally a big pharma will already have well established manufacturing, marketing and sales channels and so can bring DEST products to market much more quickly if they have full control. Its all about how much they will pay, having to balance potential product sales against risk (bearing in mind no Ph 3 trials completed). I think you are in the right ballpark suggesting a $1b price tag, which equates to a SP around £8, i think, so x 10 from today. I don't think CT would accept much less than this figure (but what do I know!)