The coming 12 months will be an important period for Xspray. Results from the planned registration study with lead project HyNap-Dasa will be available towards the end of 2019, and with good results where HyNap-Dasa meets the formal bioequivalence of dasatinib (Sprycel; BMS), a registration filling could follow in Q1 2020.
In October, detailed data from the HyNap-Dasa bioequivalence (BE) study was presented, which confirmed that BE was in line with what was seen in the preliminary data. The results were a milestone for the project and shows that Xspray’s new production tools has the ability to make amorphous drugs hit the BE of crystalline drugs, a significant step forward which gives a solid grounding for the business plan going forward, and sets the company up for showing positive results in the registration trial.
Xspray was also granted an additional patent for HyNap-Dasa was approved in the US under the quarter. The patent (US 10.143.683) covers the pharmaceutical composition for HyNap-Dasa and will expire on January 11 2033, limiting the ability of competitors to launch a dasatinib candidate based on amorphous formulation in the US.
HyNap-Sora is moving ahead according to plan and the first clinical study started in December. The project is an improved generic, a stable amorphous version of sorafenib (Nexavar; Bayer), which could be launch under the 505(b)(2) pathway in the US in 2021. The trial will be conducted in the UK and results are expected in February 2019.
Due to the upcoming listing on the Nasdaq Stockholm main market, Xspray has switched their accounting to IFRS and changed the corporate structure by acquiring a newly formed subsidiary. The report presents the result for the parent company. The net result for the fourth quarter was SEK -10.6 (-5.0) million, with operating expenses of 10.5 (5.0) million. For the full year, the net result was -23.1 (-13.8) million, with operating expenses of 23.2 (13.9) million. Cash flow from operation activates and fixed capital investments (tangible+intagibles) was SEK -24.3 (12.6) million and for the full year was -64.7 (-35.7) million. Xspray raised new capital two times during the year, SEK 88 million in Q1 and SEK 92 million in Q4, and the cash balance at the end of the year was SEK 221 (116) million. Production and development will require more capital as the projects move forward, but we expect the cash to last well into 2020.
The capital raise in Q4 brought in SEK 92 million to the company. The takers were, among others, Unionen, the Third Swedish National Pension Fund, and the Forth Swedish National Pension Fund. The cash will be used to further the development of the pipeline as well as accelerate the development of HyNap-Nilo, with the aim to launch the product earlier, if the chance arise. In connection with the directed share issue, CEO Per Andersson talked about an ongoing patent litigation regarding nilotinib (Tasigna; Novartis), which could result in a possible earlier launch date of HyNap-Nilo in some parts of the world outside the US, which is why Xspray aims to have HyNap-Nilo ready for launch about six months earlier than first expected.
A critical part of the business plan will be getting the manufacturing process in order. Xspray is working with their Italian partner NerPharMa to install new machines and tools that will have commercial scale capabilities. The process will likely be finished by mid-2019, which will be important for keeping the timelines in the development.
We see a good case in Xspray going forward with a potential to close the gap to our base case during 2019 as HyNap-Dasa gets closer to market. Our Base Case is SEK 135 per share, with a Bull and Bear Case of SEK 220 and SEK 35 per share, respectively. The report does not warrant any changes.
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