PharmaMar recently announced that Zepsyre® failed to show a progression-free survival (PFS) benefit over Topotecan and pegylated liposomal doxorubicin (PLD) in the 443-patient CORAIL study in platinum-resistant ovarian cancer. Zepsyre is currently in a Phase III trial in small cell lung cancer (SCLC) patients with protocols for pivotal studies in endometrial and breast cancer being finalised.
Edison Investment Research is terminating coverage on PharmaMar (PHM). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant.
PharmaMar recently reported financial results for 2017. Sales for the year were down 0.9% to EUR 162.6m compared to 2016. Yondelis sales fell 4.1% to EUR 84.6m, mainly due to pricing erosion in Europe. However, the consumer chemicals division continues to grow and was up 3.4% for the year to EUR 72.0m. Importantly, the company’s Phase III trial testing Zepsyre® in small cell lung cancer (SCLC) patients is around 75% enrolled and expected to be fully enrolled in the middle of this year with data in H119.
PharmaMar investors await two key events that are expected in the next few months. The European Committee for Medicinal Products for Human Use (CHMP) should announce a recommendation regarding Aplidin’s marketing application in the EU for refractory multiple myeloma in combination with dexamethasone by the end of the year. Also, Phase III results from the 443-patient CORAIL study studying Zepsyre® in platinum-resistant ovarian cancer patients is expected early next year.
Data from the 443-patient Phase III CORAIL study of Zepsyre® (lurbinectedin, PM01183) in platinum-resistant ovarian cancer is expected in H217 (most likely Q4). Patients are receiving either Zepsyre® or pegylated liposomal doxorubicin (PLD) or topotecan, and progression free survival (PFS) is the primary endpoint. In a previous Phase II, Zepsyre® was able to demonstrate a statistically significant PFS benefit over topotecan (5.7 months vs 1.7 months, p=0.005) in 33 platinum-resistant ovarian cancer patients.
At its recent R&D day in New York, PharmaMar flagged endometrial cancer as a likely fourth indication for lurbinectedin (data to be presented at ASCO). It confirmed that it is on track to achieve the key milestones of an approval decision for Aplidin for multiple myeloma in Europe, and Phase III results for lurbinectedin in ovarian cancer this year, with the most likely timing in Q4. The company emphasised its goal of commercialising lurbinectedin itself in the US market, prompting us to adopt self-commercialisation as our base case valuation scenario, which lifts our valuation by 16% to €1.50bn (vs €1.29bn), or €6.75/share (vs €5.79/share).
PharmaMar is approaching two key milestones in H217: an approval decision for Aplidin for multiple myeloma in Europe; and Phase III results for lurbinectedin in ovarian cancer. The Chugai licence deal for lurbinectedin in Japan has strengthened the company's financial position (pro forma net debt €32m) and seen it put increased emphasis on its preferred strategy to either self-commercialise or co-promote lurbinectedin in the US. Separately, a US manufacturing patent granted last year has extended IP protection for lurbinectedin until at least December 2032. These developments have prompted us to adopt co-promotion in the US in our base case valuation scenario and to extend our rNPV model to 2035 vs 2030 previously. Our base case valuation has increased by 29% to €1.29bn (vs €1.01bn), or €5.79/share (vs €4.55/share).
PharmaMar has capped off a strong performance in 2016 by signing a licence deal with Chugai for lurbinectedin (PM1183) in Japan, including EUR 30m upfront and over EUR 70m in potential milestones. The outlook for 2017 is similarly promising, including a potential EMA approval decision for Aplidin in multiple myeloma, Phase III data for lurbinectedin in ovarian cancer, and potential initiation of a pivotal trial of lurbinectedin in a third indication (BRCA-associated breast cancer). We have substantially revised our valuation assumptions, but the end result is that our valuation is little changed at EUR 1.01bn (EUR 4.55/share).
PharmaMar has delivered impressive progress in 2016, including filing for Aplidin approval for myeloma in Europe, and the launch of small cell lung cancer (PM1183) and lymphoma (Aplidin) pivotal trials. News likely before year-end includes breast cancer Phase II results and full recruitment in the PM1183 ovarian Phase III. H116 accounts released in July showed Yondelis royalties ahead of our forecasts after approvals in US and Japan in Q415; however we were too optimistic about the boost FDA approval would give to European sales, so we have trimmed sales forecasts for Europe. This cuts our valuation to €1.02bn (€4.58/share) from €1.09bn (€4.91/share).
Positive results from PharmaMar's ADMYRE Phase III trial of Aplidin in multiple myeloma clear the path for a potential approval in Europe in H217. Separately, PharmaMar continues to accelerate clinical development of PM1183, a follow-on to its marketed anticancer drug Yondelis: a Phase III trial of PM1183 in small cell lung cancer planned for mid-year will add to the ongoing CORAIL Phase III in ovarian cancer (an interim futility analysis after 210 ovarian patients is expected to report in H216). Our valuation increases to €1.09bn (was €1.07bn previously) or €4.91 per share (€4.82), but a successful self-commercialisation of PM1183 in the US (if approved) could lift valuation by 14% compared to our base case.
PharmaMar's increasing investment in its promising oncology pipeline is supported by growing Yondelis revenue that will be further buoyed by recent approvals in the US, Japan and elsewhere, as well as by refinancing of its short-term debt. Phase III data for Aplidin in multiple myeloma, expected later this month, could be a significant catalyst for the stock. Our valuation is unchanged at €1.07bn or €4.82 per share ahead of this.
PharmaMar, the restructured Zeltia, has commenced trading amid positive newsflow, following the recent approvals of anti-cancer drug Yondelis in the US and Japan for the treatment of soft tissue sarcoma. Phase III data for Aplidin in multiple myeloma, expected early in the New Year could be another significant catalyst for the stock. We lift our valuation slightly to €1.07bn or €4.82 per share (from €4.65 per share) ahead of this catalyst.