Destiny Pharma is dedicated to the discovery, development and commercialisation of new antimicrobials that have unique properties to improve outcomes for patients and the delivery of medical care into the future.
Destiny Pharma’s FY 2019 results featured its ongoing Phase IIb study of its lead drug XF-73 for the prevention of post-operative staphylococcal infections and its prudent cash management. Careful financial management had decreased Destiny’s operating loss to £5.6m (vs. £6.1m in FY 2018) of which, R&D costs were £3.8m (£3.5m in FY 2018).
The coronavirus pandemic has brought swings and roundabouts for Destiny – a pause to the Phase IIb study and therefore a delay in licensing the product, but a raised profile for antimicrobial resistant (AMR) hospital infections, that now make a licensing transaction more likely.
This pause in Destiny’s clinical trial came with 34% of patients so far recruited. However, the probability of success for this active antimicrobial agent in the decolonisation of nasal staphylococcal carriage remains high as demonstrated by the now published Phase I study in 60 healthy volunteers.
Destiny remains well-funded with cash of £7.5m at the end of FY 2019 which provides a runway through Q4 2021 and coronavirus provides an increasingly supportive backdrop to the importance of preventing AMR infections.
Anti-microbial agents with unique properties
Bucking the Big Pharma trend
Extending the clinical pipeline
Clinical progress with XF drug platform
Well-funded and on track for Phase IIb
Destiny Pharma plc (Destiny) is a UK based clinical stage developer of medicines for the prevention and treatment of infections caused by drug-resistant bacteria.
Destiny is delivering the clinical plan for its novel antimicrobial candidate XF-73 (exeporfinium chloride) on target. The initial focus for DEST is in the US where XF-73 has been granted Fast Track Designation by the FDA in the new indication of â€˜Prevention of post-surgical Staphylococcal infectionâ€™. The Fast Track supports speedy development of drugs to prevent life-threatening disease.
Following the recent Investigational New Drug (IND) opening, XF-73 is due to enter Phase IIb studies which should lead to data readout in H219. Destiny recently clarified the development plan for XF-73, which has already been trialled in 166 subjects over the course of five Phase I/II studies, detailing the standard safety studies required by FDA. In our view the three Phase I dermal safety studies detailed represent a relatively low risk hurdle towards completing the Phase III ready package.
The terms of Destinyâ€™s December commercialisation and development agreement with China Medical Systems (CMS) included exchange of Asian rights (ex-Japan) in return for a Â£6m equity stake and data sharing. This validates the XF platform clinical and commercial potential and could help Destiny to accelerate the development of XF-73 and the earlier stage products. China is the worldâ€™s second largest consumer of antibiotics so it has a crucial role in managing the threat of AMR.
Our sum-of-parts DCF valuation of Destiny Pharma, using a 12.5% drug development discount rate, rises slightly to give a current worth of Â£117m (269p/share) after rolling our forecasts forwards and updating for end December 2017 cash. The current market cap implies a low probability of success in the lead program, despite the up to twofold likelihood of success in anti-infection indications vs the average rate.
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