Nanexa announced yesterday afternoon details for its next in-house project “NEX 20”, this time focusing on developing a long-acting formulation of Lenalidomide. Lenalidomide (brand name Revlimid), developed by Celgene (later acquired by Bristol Myers Squibb), was FDA approved in 2006 for the treatment of relapsed/refractory Myeloma. It is today approved for the treatment of multiple myeloma from first line in the US, EU and Japan and is a commercial success: Sales exceeded USD 9 billion in 2020 as estimated by Datamonitor. Sales are estimated to peak in 2021 before the entry of generic-drug competition from 2022 and onward. While uncertain, Revlimid sales are expected to remain substantial and are believed to amount to USD 1.7 billion in 2026.
While Revlimid’s oral administration has been one of its advantages compared to drugs like Velcade, it also has the drawback of non-compliance. Revlimid is taken daily (often combined with additional drugs) for three to four weeks during a 28 day cycle. Several studies have shown that non-compliance is relatively common and is estimated to be between 25-40%, both affecting the patient’s health and societal costs. This subgroup will be the focus of NEX- 20: Using Nanexa’s Pharmashell technology, the dosing could be reduced to one injection per 28 days. We see the rationale for Nanexa’s value compared to generics and aim to investigate further the demand of such a solution, including how potential non-compliance groups could be identified.
We also want to see sound project financing in place before we value the full potential of the project. For NEX 20, progress will depend on the warrant program’s outcome, potential additional financing from Applied Ventures (and others), and licensing agreements (our model today includes one formal deal). Our fair value range is under review.
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