Early stage pharma stocks can often prove a difficult proposition for investors. There are significant medical risks involved in getting a drug successfully through a clinical trials programme. On top of that there are financial challenges to be met and the whole process can take a lot longer than initially planned. However Immupharma (AIM: IMM) appears to be well on top of these issues.
Phase III trial underway
Its lead drug Lupuzor is already in a pivotal phase III study which the company has sufficient funds to complete. The last of 200 patients entered the trial last month. After a year of treatment the patient’s symptoms are measured and compared with those prevailing when they entered the trial. So the results will be known in the first quarter of 2018.
For success Lupuzor has to demonstrate relief from at least four symptoms. Patients can present with as many as twenty and the trial has recruited those with at least six symptoms. This product has the potential to be a ‘blockbuster’ with revenues in the billion dollar plus range, which compares with Immupharma’s current market cap of £70 million.
Lupuzor treats Lupus, an immune system disease which is currently only addressed by GSK’s Benlysta, a c.$400 million product. Benlysta has a side-effect profile which inhibits its prescription in many cases, while Lupuzor acts differently in the body and has no reported side-effects to date. So with Benlysta also costing $35,000 a year as a maintenance therapy, there’s a clear market opportunity. There’s also the possibility of the product being fast-tracked by the FDA if the trial is successful.
With adequate funding to see the trial to completion, Immupharma has its options open. There have been approaches from potential partners, but the company looks to be in a strong position. It also has a broader product portfolio with an anti-cancer drug ready to enter phase II trials. Extra funding would be needed for this but Chairman Tim McCarthy sensibly says he is not aiming to raise fresh equity while Lupuzor is close to a major value creation point.
Immupharma shares have doubled since we wrote about the company last March but still seem well worth taking a positive view on.