Realm Therapeutics (RLM), based in Malvern PA, is an emerging specialty bio-pharmaceutical company developing therapeutic products to treat immune related disorders in adults and children, using its proprietary Hypochlorous acid-based technology. RLM’s lead candidates include the topical gel, PR022 for Atopic Dermatitis (AD), and PR013, a topical solution to treat Allergic Conjunctivitis (AC).
RLM has today reported that it is making excellent progress advancing its proprietary therapeutic pipeline for inflammatory disease, with a cash reach to cover its Phase II programs in the first three indications. RLM’s Phase II study of PR013 in Allergic Conjunctivitis is progressing ahead of schedule with the expected top line readout shifting into Q118 (from Q2).
If the trial data achieves a certain high level of clinical efficacy, this could mean that just one additional pivotal study will be needed to support an NDA filing of PR013. The commercial potential of PR013, provided data support efficacy and safety profile, is as an alternative to topical steroids which have serious side effects, for non-responders to standard dual-acting antihistamines, a pool of c 3.7m people in the US according to ORA Clinical.
The Phase IIa study of topical gel PR022 in mild to moderate Atopic Dermatitis is also progressing to plan, with data due in Q318. The primary endpoint of the double-blind, randomised, multi-centre, placebo controlled study is the evaluation of the efficacy and safety of PR022 using percentage change from baseline assessing Eczema Area and Severity Index. Given that there are few non-steroid topical treatment alternatives, we think that PR022 stands to gain a significant share in a growing market segment which has an estimated Rx value of $4bn.
A December 2017 year-end cash position of $33.9m is in line with our estimate and enough to cover the ongoing Phase II trials in AC and AD, and a Phase II Proof of Concept study for RLM023, taking the cash reach on our forecasts into Q319.
We retain our Sum of Parts DCF valuation of RLM at £128m, or 110p/share. The current market capitalisation at £59m still seems to us an attractive entry point into a well-funded, clinical stage biotech pipeline with little value ascribed to the active pipeline.