Ergomed Share Discussion Threads

[douglas fir] 01/11/2017 10:11

EQUITY DEVELOPMENT EQUITY DEVELOPMENT
CHAMPIONING GROWTH COMPANIES

Ergomed :
Positive PeproStat Data
Symbol
ERGO
Listing
AIM
Share Price
210p
Market Cap
£89.6m
Sector
Healthcare
Published
01/11/17
Analyst
Elizabeth Klein




Recently announced results from the phase II clinical trial of PeproStat were positive. As a result, the probability of PeproStat reaching the market increased from around a third to around two-thirds. This adds £12.7m to the valuation of this programme. As expected the shares saw strong performance on the back of the positive data. There remains significant upside to the bottom end of our 276p-401p valuation.

Ergomed acquired Haemostatix in May 2016 for £28m (an initial £8.0m upfront, with the remainder in success-based milestone payments). Haemostatix had developed a new approach to controlling bleeding using a peptide that binds to fibrinogen, targeting a surgical market valued at c. US$2.5bn, growing at c. 6.2% pa.

The phase II trial consisted of 169 patients treated (162 evaluable) at 16 sites in five European countries. PeproStat was shown to be clinically and significantly superior to standard of care across three surgery types.

The mean time to Haemostasis was reduced by 1.55 minutes for PeproStat vs. standard of care, and favourable by investigator opinion (80.9% surgeons rated PeproStat (blinded) as good to excellent in controlling bleeding vs 59.6% for standard of care).

The first commercial deal for a Haemsotatix product was signed late September with a South Korean company, Boryung Pharmaceutical Co. Ergomed will receive an upfront payment and a series of milestone payments as well as a double-digit share of all future product sales in this territory.

Further PeproStat deals, along with the start of the next trial in H2 2018 and initial ReadyFlow data, should feature in the news flow over the next 12-18 months, along with further acquisitions to boost the profitability of the Services business.

The bottom of the 276p - 401p per share valuation is based on the more conservative “Services-only” sales forecast, discounting completely the potential upside from Development projects. The top of the range adds in these projects with the Haeomstatix programme now making up 60% of the Development valuation.

[mfhmfh] 24/10/2017 20:17

hxxps://youtu.be/FFCT_F8zDpQ

[bermudashorts] 23/10/2017 21:05

Interview with Andrew Mackie here:-

hxxps://www.goinpharma.com/en/new-antibiotic-therapies-what-future/

Link to more detailed presentation of Peprostat clinical trial results here:-

hxxp://www.ergomedplc.com/investor-relations/reports-presentations

[buffetteer] 23/10/2017 18:17

Good to see Singers sum of the parts valuation raised to 367p -a long way to go yet. When further licensing deals are announced the shares are likely to strengthen further as the scale of the opportunity becomes more apparent

[bermudashorts] 23/10/2017 11:07

Nice write up here from Labiotech

hxxps://labiotech.eu/ergomed-peprostat-surgery/

[jamtomorrow2] 23/10/2017 09:40

Sounds like they will licence out the product prior to Phase 3 so will lose control of the timing.

[timbo003] 23/10/2017 09:35

Piedro

Yes, maybe, but I'm now wondering if there may some sort of sliding scale as suggested by BB. But if not, then it may be in their interest to commence the study prior to conducting a placing of that size.

[timbo003] 23/10/2017 09:32

BB, well spotted, I don't know the answer to that one, but I now intend to make enquiries if I get an opportune moment.

[bermudashorts] 23/10/2017 09:19

Timbo,

Possibly, although it states 'up to £4m. Why use the words 'up to' - suggests there are some variables in the agreement. Any ideas what they could be?

[piedro] 23/10/2017 09:19

timbo003,

If so, they will be looking for £14m {placing?}, reckoning that the extra cash will bring MC close to the £100m

[piedro] 23/10/2017 09:14

mfhmfh,

"anyone know when Phase III will be starting/finishing?"

- read the presentation

[timbo003] 23/10/2017 09:11

Re: post #208

The current market cap is £84, so if the phase III study were to start with the share price where is is now, presumably the milestone (equivalent to around 16p/share) would not be payable, if the share price were to rise to around 245p/share, then it would be payable. That suggests to me that for now, the maximum upside for the share is around 245p in the absence of any further substantial news.

[timbo003] 23/10/2017 08:43

I suspect there may be another £4m to add to the costs, see below from the ED initiation report:

[mfhmfh] 23/10/2017 08:41

Positive Phase II results should hopefully bring more investors on board.

anyone know when Phase III will be starting/finishing?

[piedro] 23/10/2017 08:28

NEXT STEPS
Phase III
• 600 patients, £10m
• Complete recruitment 2019

- How's the bank account?

[bermudashorts] 23/10/2017 08:24

Yes - good news. Liked this part of the RNS:-

"Currently, we have a number of active licensing and partnering discussions to fund further development.""

[money maker1] 23/10/2017 08:17

Have a nice position here and think we will gain steadily. What's the price target 500p?

[timbo003] 23/10/2017 08:13

That was a nice decisive result

ED previously valued Haemostatix at £12.1M with a 36% PTS and they stated that if Haemostatix succeeds in this latest phase II it should increase to a 63% PTS i.e. to around £20m which is an increase of approximately £8m in valuation (or around 20p/share).

[piedro] 20/10/2017 15:30

Ergomed plc
Well-positioned ahead of PeproStat data

[douglas fir] 20/10/2017 11:26

Ergomed offers clinical trial and pharmacovigilance services to pharmaceutical companies, while also co-developing a product portfolio of therapies.

Ahead of the PeproStat data expected toward the end of this month, Ergomed recently improved its competitive position for its Services businesses with its acquisition of PSR in the Orphan Drug/Rare Disease. At the same time, it signed its first deal for PeproStat (and ReadyFlow), suggesting attractive commercialisation opportunities awaiting the data at the end of the month.

Excitingly, the first commercial deal for a Haemsotatix product, PeproStat for the treatment of surgical bleeding was signed late September, having completed the recruitment of its 169 patient Phase IIb trial in July, six months ahead of schedule. A positive result from this clinical trial could increase the probability of success from 36% to 63% (as estimated by BIO for this therapeutic area) in the valuation analysis, nearly doubling the valuation for this programme.

hxxps://www.equitydevelopment.co.uk/

The expected news flow for the rest of 2017 and into 2018 is focused on the outcome of the PeproStat Haemostatix trial data, further acquisitions to boost the profitability of the Clinical Research Services businesses may occur and more contract wins are likely.

The bottom of the range of our increased 281p-397p per share valuation is based on the more conservative “Services-only” sales forecast, discounting completely the potential upside from the attractive Products and Co-Development projects. The top of the range adds in these Product and Co-development projects. With significant upside to the bottom end of our valuation, the shares could see strong performance on the back of positive clinical data.

[mfhmfh] 19/10/2017 12:03

nice rise...peprostat results due this month?