Evgen Pharma Plc (LON:EVG) is a virtual pharmaceutical company focused on the development of a synthetic version of a natural product, sulforaphane, which is known to modulate key signalling pathways involved in cellular protection and inflammation. Evgen’s proprietary technology, Sulforadex, creates new and stable variants of sulforaphane, enabling it to be used as a therapeutic for the first time. The results presentation is a good opportunity for Evgen to present the progress of its clinical pipeline. SFX-01 is progressing in two Phase II clinical trials for both subarachnoid haemorrhage (SAH) and ER+ metastatic breast cancer.
Strategy: Evgen is focused on the clinical development of synthetic and stable variants derived from sulforaphane using its proprietary technology, Sulforadex. Lead candidate SFX-01 is being assessed in Phase II trials for both SAH and breast cancer, both strategic entry portals for other uses in neurology and oncology.
Results: Consistent with its strategy, most of the operating expenditure is being invested in R&D to support the clinical programme for SFX-01. The two ongoing trials are expected to cost ca.£5.7m split over a two-year period, with £3.2m earmarked for fiscal 2018. Net cash at the end of the period was £3.9m.
Clinical update: Both Phase II clinical trials, in subarachnoid haemorrhage and metastatic breast cancer, are progressing well with no safety and tolerability concerns observed with SFX-01. Further sites are being opened to accelerate recruitment. Additional in-house/external opportunities are being reviewed.
Risks: As with all drug development companies, there is a risk that products will fail in clinical trials. However, sulforaphane has been through a number of encouraging clinical trials despite its stability and dosing limitations. Therefore, coupled with two potential targets, Evgen’s risk profile is arguably reduced.
Investment summary: SFX-01 would be entering multi-billion dollar global markets that are currently unsatisfied. There is also potential to use sulforaphane in other indications. Evgen intends to out-license its drugs to the pharmaceutical majors for global commercialisation. The enterprise value afforded to Evgen Pharma Plc by the market does not reflect properly the development stage of SFX-01 and lower than usual risk profile.
