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Evgen Pharma Plc

“Investors appear not to have fully recognised the value of Evgen Pharma” says Beaufort Securites

Evgen Pharma LON:EVG a clinical stage drug development company focused on cancer and neurological conditions, yesterday announced that it has received a positive interim safety review from the independent Data Safety Monitoring Board (‘DSMB’) for the Group’s Phase II SAS trial of SFX-01 for subarachnoid haemorrhage (‘SAH’) indication. The DSMB review was part of the SAS trial protocol and was triggered by the 20th patient being dosed (post haemorrhage) for a minimum of 7 days whilst in hospital care. The review resulted in a recommendation to proceed as planned, allowing continuation of dosing after discharge from hospital and up to 28 days. The SAS trial is a randomised, double-blind, placebo controlled study in which a total of 90 patients will be enrolled; 45 patients will receive SFX-01 and nimodipine and 45 patients will receive placebo and nimodipine. 26 patients have now been enrolled in the study to date. Aneurysmal SAH is a rare brain haemorrhage which accounts for one in every 20 strokes in the UK and c.600,000 worldwide each year, with current standard of care, nimodipine, has a different action and been generic for over 20 years during which time there have been no significant clinical advances in the treatment of SAH. The primary endpoints of the trial include safety, pharmacokinetics (cerebral spinal fluid) and efficacy which will be announced during the H1 2018.

Beaufort Securities view: Evgen has passed an important milestone for the clinical development of its SFX-01 in SAH by receiving a positive first interim safety review. This allows it to continue dosing after patients have been discharge from hospital for up to 28 days. Evgen’s lead product, SFX-01, is a synthetic and stabilised version of the naturally occurring plant compound sulforaphane, a known anti-cancer agent and neuro-protective. The orphan drug designation received in August 2016 for the treatment of SAH gives SFX-01 the potential for US market exclusivity for 7 years from the date of marketing approval. Within its interim results announced on 5 December 2016, the Group confirmed that the SAS trial was recruiting patients as planned, while the STEM trial had opened its first site in Europe for recruitment, with both expected to report in the H1 2018. Considering £5.5m cash held at 30 September 2016, given estimated monthly burn of around £330k during 2017, there should be sufficient funding to complete its current clinical trials and lay the foundations for the follow-on Phase III trials, as may be necessary. Orphan status for SAH, however, offers a prospective route to commercialisation in a market that is prospectively valued at US$1.7bn, just 12 or so months following release of Phase II data, while STEM could be developed further as foundation drug to be used in combination therapy for an indication valued at a multiple of this. Both have high unmet need while also offering strategic entry portals to further therapeutic opportunities in oncology and neurology. For a company presently valued at just £17.9m, investors appear not to have fully recognised the value Evgen might deliver over the coming 18 months or so. Beaufort reiterates its Speculative Buy rating on the shares

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Disclaimer: Statements in this article should not be considered investment advice, which is best sought directly from a qualified professional.