Allergy Therapeutics Plc (LON:AGY) is a long-established specialist in the prevention, diagnosis and treatment of allergies. The Pollinex Quattro (PQ) platform, the ultra-short course subcutaneous allergy immunotherapy (AIT), continues to gain market share, despite its availability in the EU only on a ‘named-patient’ basis. 2019 is expected to deliver progress in several areas, notably PQ Birch, for which top-line Phase III data are due in 1Q’19. Later this year, AGY will commence the pivotal Phase III trial for PQ Grass which will support both an EU and US registration package. Meanwhile, the ‘in-market’ performance of AGY’s products is exceptional, with further market share gains.
Strategy: AGY is a fully-integrated pharmaceutical company focused on the treatment of allergies. There are three parts to its strategy: continued development of its European business via investment or opportunistic acquisitions; the US PQ opportunity; and further development of its pipeline.
Interim results: Operating performance in 1H’19 was particularly strong with underling sales rising 10.6% and underlying EBIT up 70.8%, benefiting from the second-half weighting of certain marketing and R&D investment. From a competitive standpoint, AGY saw further market share gains in Europe.
Trial updates: Calendar 2019 will be characterised by a strong clinical trial programme. Pivotal will be results from the Phase III PQ Birch trial due by the end of March. Later in the year, AGY expects to commence the important EU and US registration trials for PQ Grass.
Risks: AGY’s primary risk lies in the timings of the regulatory approval process, mostly outside of its control, related to the PQ Birch immunotherapy and the European TAV process for full approval. Ongoing trials do represent a risk, but this is limited by the products’ use on a named-patient basis.
Investment summary: AGY is approaching an exciting period. It has a clear vision, is gaining market share from competitors, and is leading the race to have its subcutaneous-administered products fully approved and regulated as biologicals – first in Europe and then in the US, where the regulators are demanding change. Read-out from the EU Phase III PQ Birch trial is imminent and will provide the next major value inflection point.