ReNeuron’s announcement of early but exciting data on three patients in the clinical study of its human retinal progenitor cell (hRPC) product was well received. Although the patient numbers are small and the follow-up time points are short (two months and 18 days), the improvements in visual acuity are striking and may enable an earlier start to the pivotal programme.
ReNeuron has announced the long-awaited dosing of the first patient in its placebo-controlled US Phase IIb (PISCES III) study in patients six to 12 months after ischemic stroke. The news has been well-received as it is rare for a small UK biotech to start dosing US patients with a novel stem cell-derived product.
Building on last year’s business development activities, ReNeuron has announced its first collaboration based on its exosome platform which was introduced at its 2018 capital markets day. At that time, the whole exosome field was at an early research stage but ReNeuron’s collaboration with a US-based biopharmaceutical company marks the fourth and latest in a series of exosome deals announced in the sector in less than a year.
ReNeuron’s H119 results highlighted cash of GBP 30.7m, allowing it to execute on its ongoing clinical trials, although execution will bring a funding requirement in 2020. Operating expenses – expected to accelerate in H219 – resulted in total operating costs of GBP 10.1m (vs GBP 10.8m in H118) reflecting clinical study investment. Other operating income was a welcome buffer. Our revision of the clinical timelines has deferred revenues and moved our valuation to GBP 192m or 608p per share from GBP 280m or 885p per share.
ReNeuron’s capital markets day highlighted the potential for the company’s exosome nanomedicine platform to be a source of both product and licensing revenues. This morning’s announcement of a collaboration between PureTech Health and Roche on PureTech’s milk-derived exosome platform highlights the attractiveness of ReNeuron’s neuronal stem cell-derived exosome platform.
ReNeuron ended FY18 with a healthy cash balance and the 11 July announcement of an exclusivity agreement worth up to US$5m with a US specialty pharmaceutical company for the evaluation of ReNeuron’s hRPC platform now leaves it well-funded through to FY20. A key milestone is the imminent start of the US Phase IIb PISCES III placebo-controlled study in chronic stroke disability, which heralds the later stages of clinical development for ReNeuron.
ReNeuron introduced its exosome nanomedicine programme at its recent capital markets day. While being a preclinical programme, it has three significant advantages. First, it gives ReNeuron the potential to expand into new therapeutic indications. Second, it opens up the potential for collaborations in diagnostics and drug delivery. Third, it builds on its wealth of experience and IP and on its CTX cell line on which ReNeuron’s existing products and the exosome platform are built.
ReNeuron’s recent 100 for 1 share consolidation was a benign and cosmetic ‘tidy up’ of its historical capital structure. The share price of ReNeuron is trading at 52-week lows and the recent consolidation may have been an unrelated or an unintended cause for concern for some investors. ReNeuron’s valuation is now below its c GBP 40m cash position. In this update, we offer some possible thoughts on this overreaction and, in the absence of operational newsflow, our forecasts and valuation are largely unchanged.
ReNeuron’s interim results for the six months to 30 September 2017 showcased a crucial juncture in the company’s history. With the first of two US placebo-controlled, late-stage studies in chronic stroke starting in 2018 and dosing ongoing in the US Phase I/II study in retinitis pigmentosa, ReNeuron’s stem cell therapies are aimed at helping the disabled walk and the blind see. ReNeuron reported a loss of GBP 9.6m for the six months (vs GBP 7.7m in H117). In 2018 ReNeuron’s profile will increase further as it conducts two clinical studies and opens an operational base in the US.
The highlight of FY17 was positive Phase II efficacy data from ReNeuron’s PISCES II clinical trial. As this and its other clinical programmes in ophthalmology and its earlier stage exosome platform progress, ReNeuron is entering a period of potentially significant milestones over the next 12 to 18 months. We maintain our valuation of GBP 291m, adjusting for FY17 cash and rolling the model forward, which is offset by moving out the clinical timeline for the Phase III pivotal trial in stroke, now expected to start in early 2018 (vs H217).
ReNeuron continues to prepare for its Phase III chronic stroke study (due to start in H217) and has indicated that it is making progress with the US/EU regulatory authorities. It intends to submit an IND in the US in Q217 and shortly after in the EU. ReNeuron also announced that it now plans to expand its ongoing Phase I/II retinitis pigmentosa (hRP cells) study to 20 patients in Phase II and commence a Phase II study in a new indication: cone-rod dystrophy (CRD). As a result, it will not continue development of CTX in critical limb ischaemia (CLI). We maintain our rNPV at £291m.
ReNeuron reported in December 2016 positive Phase II trial data for its CTX cells in chronic stroke patients, despite not meeting the three-month time frame of a two-point improvement in its primary outcome measure, the Action Research Arm Test (ARAT). As a result, the company has confirmed that it will progress to a pivotal controlled clinical study in 2017. Beyond CTX, we expect safety and efficacy data from its retinitis pigmentosa (RP) trial in 2017 and Phase I data from its critical limb ischaemia (CLI) trial. Our rNPV has increased to £291m.