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Allergy Therapeutics PLC

Allergy Therapeutics well-funded and making headway

Snapshot

The sell-off that followed the recent disappointment of Allergy’s PQ Birch jab means now might be a good time to invest, according to City broker finnCap

young girl with allergy

Quick facts: Allergy Therapeutics PLC

Price: 11.8 GBX

Market: AIM
Market Cap: £75.07 m
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  • Develops treatments for common allergies
  • Market share is growing
  • More than £30mln in the bank
  • Phase I read-out of Acarovac trial the next major inflection point

What the company does 

As the name suggests, Allergy Therapeutics PLC (LON:AGY), which is headquartered in Worthing, West Sussex and employs around 500 people, develops inoculations against common allergies. It has five products registered, as well as another five that are available on a named patient basis – this means they can only be prescribed by a doctor. Its most commonly prescribed vaccines are used to treat pollen-related allergies, particularly allergies to grasses and trees.

It has a strong presence in Europe, with established operations in Germany, Italy, Spain, Austria, Switzerland, the Netherlands and the United Kingdom, while in other markets, it often makes its products available through distribution partners. Its Pollinex Quattro vaccine for the treatment of seasonal allergic rhinitis (hay fever) from grass, tree or ragweed pollen allergy is already established in Europe.

The company has been pouring money into making injections rather than tablets. This has two major benefits, both of which are linked. Firstly, injections tend to yield improved clinical results versus tablets. As a result, they are preferred by physicians in places such as the US and Germany – some of the largest markets in the world.

Regulatory green light

Allergy recently confirmed phase III trials of its short-course inoculation for grass pollen-induced hay fever will get underway in the second half of 2020. This follows a successful round of meetings with both the German and American regulatory authorities that agreed the design and dosing of this pivotal study assessing the efficacy and safety of the aluminium-free immunotherapy. Insights gained from recent clinical work will also be incorporated into the latest batch of tests, Allergy said. The trials will be overseen by the US Food & Drug Administration and the Paul Ehrlich Institut in Germany.

Birch setback

In March recently received the results from the Phase III trial of PQ Birch – its injection designed to treat birch pollen-induced hay fever. Because of the subjective nature of studies, proving the benefit of allergy treatments is notoriously difficult. Despite biomarkers showing a clear effect on the immune system, patients didn’t report enough of an improvement in their logs for the primary endpoint (the main goal) of the trial to be met.

Commercial Headway

The commercial arm of the business continued to trade in line with expectations, gaining market share. The company remains well-funded to “progress its commercial and clinical programme into 2021”. As at the end of December Allergy had just under £32mln in the bank.

Blue sky

Phase III trials when they get underway next represent a major landmark for the company. More immediately, read-out from a phase I clinical assessment of its Acarovac dust mite allergy drug was expected by the end of June. Bosses will also be analysing the full PQ Birch data once it becomes available. The result of the recent study, whilst disappointing, doesn’t necessarily mean the end for the jab. There is still the possibility of another clinical trial, while the real-world data which is being collected by people who are using the treatment on a named-patient basis could add weight to its argument. 

What the broker says

finnCap's veteran analyst Mark Brewer said he has lowered his forecast for R&D spend by £15mln over the next two years to reflect the failue of the birch trial. He reckons the shares are worth 40p each (current price 9.22p).

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