Share price fails to reflect Arecor potential as revenues almost double

Cambridge biopharma group Arecor Therapeutics virtually doubled revenue in the year to December 31 – from £2.4 million in 2022 to £4.6m.

Total income, including grant awards, increased to £5.6m from £3.5m and Arecor had cash and equivalents of £6.8 million, ahead of market expectations.

The news was delivered in a trading update which did not give a profit or loss figure. Business Weekly asked for that information after the share price only rose 1p or so on what appeared to be an exceptional update.

CEO Sarah Howell paints a buoyant picture for the immediate and longer-term prospects for the business, which is seen as a particularly strong player in the market to fight diabetes and related issues.

Dr Howell says: “With a first commercial product incorporating Arestat™ launched in late 2023 and now generating royalties, licence milestones triggered on partnered products, a stream of new pharma technology partnerships and continued momentum with our diabetes portfolio clinical development, we continue to realise the potential of our Arestat™ platform and, in doing so, are building a significant biopharmaceutical company.

“We are encouraged by the continued success of the Tetris Pharma roll-out of Ogluo® across the UK and Europe, which is reflected in strong sales performance as awareness and access to this key diabetes product increases.

“With further partnerships anticipated from our in-house proprietary specialty hospital portfolio, in addition to key Phase I clinical data for AT278 expected in 1H 2024, we look forward to continued growth and value creation for 2024.”

Last month, Inhibrx and Sanofi announced that the companies have entered into a definitive agreement under which Sanofi will acquire all the assets and liabilities associated with INBRX-101.

That announcement is a further endorsement of Arecor's Arestat™ platform and highlights both the value of this novel therapy for patients and its future commercial potential.

Arecor believes that Sanofi is well placed to complete the late-stage development of this novel medicine and, ultimately, bring it to patients in need.

In December, Arecor announced a co-development and exclusive licence option agreement with a leading global medical products company for a high-value, ready-to-dilute oncology product from Arecor's proprietary Specialty Hospital pipeline.

The agreement involves further co-development and regulatory work which is now underway. The accord includes an option for the partner to exercise a licence to further develop and commercialise the product, with Arecor eligible to receive potential developmental milestones.

Arecor’s portfolio of technology partnerships with leading pharmaceutical and biotechnology companies, to enhance their proprietary products across a range of indications and stages of development, continues with five new agreements signed in 2023 and earlier this year.

Dr Howell says these continue to validate the strength and the need for the Arestat™ technology platform, provide near term revenue generation and also significant upside recurring revenue potential from future licensing.

In November, the group signed a further collaboration with an existing partner, Lilly, to develop a novel liquid formulation of one of Lilly's key products with enhanced properties.

That was followed last month with the expansion of an ongoing, exclusive formulation study collaboration with the pharmaceutical division of one of the world's largest chemicals marketing and pharmaceuticals companies, to develop a differentiated, ready-to-use liquid formulation of the company's product, AT351.

In both collaborations, Arecor’s partners are funding the development work with options to acquire the rights to the new proprietary formulations and associated intellectual property under Arecor's technology licensing model.

Further technology partnerships, the out-licensing of programmes from those partnerships, together with new licenses from the group's proprietary pipeline, are anticipated to continue driving revenue growth in 2024.