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ImmuPharma voted Best Drug Development Company in Europe

ImmuPharma was the winner of the New Economy Pharmaceutical & Healthcare Awards for 2010.  This adds to two recent awards, “Breakthrough of the Year 2009” European Mediscience Award and “Best Technology Award” at the AIM Awards 2009, organized by the London Stock Exchange.

Drug development company Immupharma plc (LSE:IMM) is focused on the creation of medicines aimed at treating serious medical conditions. The firm, that has been public for 4 years now, is principally concerned with developing pioneering drugs in specialist therapeutic areas where there is not much competition.  ImmuPharma has exclusive collaboration with the Centre National de la Recherche Scientifique (CNRS), the largest fundamental research organization in Europe with a budget of €3.3bn (2008).

The CNRS provides ImmuPharma with access to many scientists and physicians. allowing ImmuPharma to outsource early-stage research and keep costs low.

Currently, ImmuPharma is involved in the development of five drug candidates, which it claims have significant sales potential, for the treatment of: lupus; cancer; moderate to severe cancer pain or post-operative pain; highly resistant, hospital-acquired infections such as MRSA; and inflammatory and allergic disorders.

ImmuPharma’s treatment for Lupus, Lupuzor, was licensed to US specialty pharmaceutical company Cephalon (NASDAQ:CEPH) in February 2009, after ImmuPharma had completed a successful Phase IIa trial of the drug and began a Phase IIb trial.

Lupus is a chronic, potentially life-threatening autoimmune disease that attacks multiple organs such as the skin, joints, kidneys, blood cells, heart and lungs. There are an estimated 1.4 million people diagnosed with the disease in the seven major countries, according to ImmuPharma and analysys estimates, and there is no known cure.

ImmuPharma’s phase IIb trial that was double-blind and placebo-controlled in 150 Lupus patients who received Lupuzor once-a-month for three months, demonstrated a significant clinical improvement to their condition.

After paying ImmuPharma $15m before the study was complete, plus $30m last year for the worldwide rights for Lupuzor, Cephalon is now responsible for the development and commercialisation of the drug worldwide. This is part of one of the largest deals in Europe, with ImmuPharma potentially receiving further cash payments from Cephalon of an additional $450m, depending on the achievement of certain regulatory and sales milestones and even more importantly, high royalties on commercial sales of Lupuzor.

Since early 2008, ImmuPharma has been involved in the field of cancer therapy following its licensing of a novel cancer compound from its research partner CNRS (Centre National de la Recherche Scientifique). According to the company, its lead compound, IPP-204106, has displayed outstanding preclinical data that confirms the ability for a series of compounds to effectively control and stop the growth of a wide range of cancer cell lines. Collectively, the firm’s studies comprised breast cancer, prostate cancer, melanoma, gioblastomas, leukaemia, colon cancer and pancreatic cancer cell lines.  ImmuPharma expects soon to start testing the drug in cancer patients in France.  This will represent a major milestone for ImmuPharma, having two drugs in human trials.

ImmuPharma has received two grants amounting to €1.2m from French institutions to expedite the development of its cancer programme.

ImmuPharma’s third compound aimed at tackling pain, IPP-102199, is being designed as a non-addictive replacement for morphine, with potential major advantages such as longer duration and fewer side effects. The compound is based on met-enkephalin, a small peptide that naturally occurs within the body and is secreted by the brain and adrenal glands but is usually quickly broken down by the body.

ImmuPharma is using its proprietary peptide-to-drug converting technology in order to enable IPP-102199 to be delivered orally just once a day.

ImmuPharma’s fourth compound aimed at tackling MRSA and other hospital-acquired infections, IPP-203101, is an antibiotic that uses the fact that bacterial organisms have an electrical charge on their cell membranes while human cells do not. IPP-203101 is a peptide-based antibiotic that carries an electrical charge to disrupt the membranes of the bacteria.

This is a clever approach, since bacteria, and MRSA in particular, are very efficient at mutating and creating a resistance but they are not expected to be able to modify their basic physical characteristics.

Every year in the US, around two million people become ill from hospital-acquired infections, including MRSA, of whom approximately 90,000 die (source: US Centres for Disease Control and Prevention).

IPP-203101 is expected to be delivered intravenously, once a day, and ImmuPharma is hopeful that the US Food and Drug Administration (FDA) will permit a fast-track development and approval process.

In the field of inflammatory and allergic disorders, ImmuPharma is examining ways of inhibiting phospholipases A2s (PLA2s) – enzymes that can cause allergic reactions as well as inflammatory disorders such as rheumatoid arthritis, septic shock and acute pancreatitis.

ImmuPharma’s most recent set of results were released last September and covered the six months to 30 June 2009. During this period, the company generated revenues of £21.6m, which included a payment of $30m from Cephalon in February that related to its licensing of Lupuzor.

The firm increased its first half pre-tax profit to £13.7m, compared with a loss of  £1.5m in H1 2008, which translated to diluted earnings per share of 13.7 pence (H1 2008: 2 pence loss). At the end of June last year, the company had cash on its balance sheet of more than £27m (31 December 2008: £12.5m).

ImmuPharma’s internal focus (the most advanced drug, Lupuzor, is now the responsibility of Cephalon Inc.) remains on the progression of its lead drug candidates, particularly its cancer compound, IPP-204106.

ImmuPharma has attracted some interest from institutional investors, and in January of this year ING Belgium took a 4% stake in the business after exercising warrants that had been issued to it in December 2006. The warrants were issued in connection with a deal that saw ING advance €3m to ImmuPharma’s subsidiary ImmuPharma France SA.  ING is a an addition to an already impressive of funds, including M&G, Gartmore, Jupiter, SV Life Sciences, Legal & General, Close, Standard Life,

Having traded as high as 136 pence each in November last year, ImmuPharma’s shares are currently not far off their 52-week low at 89 pence each. Results for 2009 as a whole are not due for a couple of months, but analysts currently forecast that the company will produce revenues of £21.8m (2008: £0.1m) with a pre-tax profit of £13.7m (2008: £4.9m), which translates to 13.3 pence earnings per share (2008: 6.2 pence).

Revenue streams are uncommon in the biotech sector and funding is typically done through new equity issues.  However, ImmuPharma is a good position and has alleviated the need for funding and reduced internal costs as its partner Cephalon has assumed all further costs.  Analysts’ forecasts range from £1.54 (Singers) to over £3.00 (Panmure and Matrix).

Certainly a share to watch.

Disclosure: The author holds no positions in the company