Allergy Therapeutics plc (LON:AGY), the fully integrated commercial biotechnology company specialising in allergen immunotherapy, has announced its trading update for the year ended 30 June 2022 ahead of its Full Year Results to be announced on Thursday 29 September 2022.
– Phase I VLP Peanut PROTECT trial incorporating ground-breaking VLP technology proceeding as planned with site initiation visits imminent
– Pivotal Phase III Grass MATA MPL trial on track to start in 2022 with US and EU sites being contracted ahead of site initiation visits with results expected in Q4 2023
– Robust 2022 trading with revenue expected to be £72.8m (2021: £84.3m) on streamlined portfolio
– Expenses for 2022 significantly lower than planned due to effective cost controls
– Strong cash position of £20.5m (2021: £40.3m) to support the Group’s two key clinical trials
Financials
The Group expects revenue for the year ended 30 June 2022 to be £72.8m (2021: £84.3m) representing a 14% reduction on a reported basis (down 9% on a constant currency* basis). This short-term revenue decrease is primarily due to the previously disclosed and planned strategic streamlining of older products to maintain focus on high value and highly differentiated short course subcutaneous immunotherapy (SCIT) and innovative allergy treatments. The underlying business continues to perform.
Effective cost controls implemented alongside the Group’s significant clinical progress have offset the revenue reduction. The operating profit pre-R&D for the 2022 year is however expected to be below consensus due to last minute delays of goods in supply chain of £1.4m but this will be offset by lower R&D expenses created by phasing of work on the two key clinical trials resulting in a net profit expected to be in line with consensus.
In 2023, sales are expected to return to their previous near double-digit growth levels although costs are likely to increase further due to inflation and the end of Covid-19 restrictions relating to travel, allowing a return to scientific conference attendance. There will also be additional investment in the supply chain to maintain regulatory compliance and future expansion.
The cash balance at the end of June 2022 was £20.5m (30 June 2021: £40.3m) as a consequence of executing the Group’s R&D pipeline delivery.
Based on current assumptions and as previously stated, the Group expects to be able to fully fund, with existing cash resources and some additional debt, the upcoming pivotal Phase III trial for Grass MATA MPL and the Phase I PROTECT trial for VLP Peanut, which are both on track to commence later in 2022.
Commercial
Rapid spread of the Covid-19 Omicron variant impacted Group performance, with physicians in Germany being redeployed to support the Covid-19 vaccination efforts. The challenges to the supply chain caused by the continued spread of Covid-19 and manufacturing upgrades, which led to delays in shipping, are expected to be resolved in 2023. Further to this, the regulatory environment continues to be a challenge. The Group is managing this by continuing to invest in market access expertise. The Group sees the transition from a named-patient product market to a registered market to be an important mid-term opportunity. This is being capitalised on through investments in clinical trials such as the upcoming Grass MATA MPL G306 and VLP Peanut PROTECT studies.
Given the circumstances, the business has performed robustly and continued to grow in most markets.
Pipeline
Preparations are well underway to ensure the Group’s two priority clinical development programmes, Grass MATA MPL and VLP Peanut, remain on track in 2022.
Following a successful submission of the Investigational New Drug (IND) application to the US Food and Drug Administration (FDA), sites for the first in human Phase I PROTECT trial investigating VLP Peanut, the Group’s peanut allergy vaccine candidate, have been established and the trial sites are being contracted. As previously communicated, the Group expects top line data from that trial in H1 2023.
The pivotal Phase III clinical trial (G306) investigating the Group’s short-course grass pollen immunotherapy candidate, Grass MATA MPL, is also on track with US and EU sites being contracted ahead of site initiation visits, which are expected to start later this quarter.
Manuel Llobet, CEO at Allergy Therapeutics, stated: “The Group has performed robustly despite tough conditions this year. We are now ready to start two key clinical trials of innovative products that will provide significant future market opportunities.
“At this year’s European Academy of Allergy & Clinical Immunology (EAACI) congress, one of the Group’s presentations on VLP Peanut was selected as one of the three most outstanding abstracts for the 2022 EAACI meeting for innovative clinical science. We are proud to be developing this ground-breaking product and look forward to seeing the results of the first in human trial next year. We believe that both Grass MATA MPL and VLP Peanut are market leading products with the ability to give patients outstanding treatment.”
*Constant currency uses prior year weighted average exchange rates to translate current year foreign currency denominated revenue to give a year-on-year comparison excluding the effects of foreign exchange movements.
