Arecor shares soar on US-rooted $11m financing and key drug alliance

The Chesterford Research Park business unveiled an $11 million funding deal with Florida based Ligand Pharmaceuticals which extends its cash runway into the first half of 2017.

It also revealed a co-development agreement with Sequel Med Tech LLC, which is anchored in New Hampshire. Arecor's share price soared more than 14p on the news.

Sequel Med Tech is developing state-of-the-art insulin delivery technologies and the deal with Arecor is to combine its AT278 (500U/mL) with Sequel’s twiist™ Automated Insulin Delivery (AID) system powered by Tidepool.

AIM-quoted Arecor is focused on drug development and delivery in diabetes and other cardiometabolic diseases.

CEO Sarah Howell said: “The co-development agreement for AT278 and the non-dilutive fund raising via the monetisation agreement are both major strategic achievements for Arecor. The Sequel agreement marks a key milestone, furthering our ambitions to realise AT278’s significant benefits for people living with diabetes as well as building substantial value for our shareholders.

“The funding realised through the monetisation of specific royalty rights enables us to accelerate AT278’s clinical development and extends our cash runway to 1H 2027 without diluting our shareholders.”

Insulin pump innovator. Sequel’s advanced AID technology aligns with Arecor’s commitment to transformative drug delivery solutions, according to Dr Howell.

Its technology leverages acoustic sensing to precisely measure each insulin dose, delivering superior dosing accuracy and detecting occlusions up to nine times faster than other automated insulin delivery systems. This high level of precision makes it an ideal complement to AT278’s ultra-concentrated, ultra-rapid insulin product, the CEO added.

Under the terms of the agreement, Arecor and Sequel will co-fund all trial-enabling development activities for the AT278-AID System development programme to achieve Phase 2 trial-ready status. Each company will commit up to $1.3 million to accelerate and fund all Phase 2 clinical trial-enabling development work.

This will include regulatory interactions and filings with the US Food and Drug Administration (FDA), clinical trial batch manufacturing and AID System compatibility work. Work will commence immediately and is expected to be completed during 1H 2026, culminating in the filing of an IND (Investigational New Drug). If approved, the programme would be ready to enter a pivotal Phase 2 clinical study during 2H 2026.

Longer term, both companies have confirmed their strategic intent to enter a broader, co-development and commercialisation partnership. This would enable the further development and future commercialisation of AT278 in a next generation AID system, serving a key unmet patient need in a high value market.

Howell added: “Sequel has expertise in the development and commercialisation of AID Systems, exemplified by the recent launch of the innovative twiist™ AID System. The pairing of AT278 - the only ultra-concentrated (500U/mL), ultra-rapid insulin in development - with the twiist™ AID system, enables longer wear, even for those people with diabetes (PwD) who require high daily doses of insulin, as well as future miniaturisation opportunities.

“This combination will unlock powerful benefits for more PwD and provide more choice in how they manage their diabetes.

“We are proud to be bringing devices and therapeutics together in a collaboration which addresses a real unmet need in a high value market, helping people with diabetes better manage their blood glucose whilst significantly lowering the daily burden of disease management.”

This partnership, including commercialisation outside the US, presents significant growth potential for Arecor. The company estimates the total addressable US insulin revenue market opportunity for AT278 is very attractive at c.$2.9 billion with additional upside through commercialisation in Europe and other territories.

This is driven by two high unmet-need market segments: 1) People with diabetes who require high daily insulin doses and prefer pumps yet currently lack a suitable pump option and 2) People with diabetes seeking the convenience of an extended-wear device with insulin capacity for 7+ days.

In the Arecor management’s opinion, AT278 has the potential to be the only insulin that can enable and catalyse the next generation of longer wear and miniaturised AID systems, simplifying care, reducing care burden and broadening access to people living with Type 1 or Type 2 diabetes.

Arecor’s strategic priority has been to pursue high-value R & D opportunities that have the potential to generate significant value for shareholders. Near term, the management anticipates that AT278, the ultra-concentrated, ultra-rapid acting insulin candidate, and the development of a novel oral delivery of peptides platform technology, offer the best opportunities to fulfil this aim.

Arecor reveals that it has sold the global royalty rights related to AT220, an Arestat®-enhanced biosimilar product marketed by a global pharmaceutical company, and all potential milestone and technology access fees related to AT292 (licensed to Inhibrx, now Sanofi’s Efdoralprin alfa) as per the Royalty Financing Agreement, to Ligand.

Ligand will pay Arecor up to $11m which includes a $7m upfront cash payment and an additional $4m, which will be payable on the achievement of certain commercial milestones related to AT220 and AT292, of which $1m is expected to be received during 2026.

Todd Davis, CEO of Ligand said: "We are excited to partner with Arecor on this compelling opportunity to invest in two partnered assets with significant commercial potential. This unique investment exemplifies the types of deals our team aims to pursue, focusing on highly differentiated, de-risked assets that are marketed by strong partners.”