# Diurnal Group: All set for three pivotal trials

- Link: https://www.directorstalkinterviews.com/diurnal-group-all-set-for-three-pivotal-trials/4121022938
- Published: 2021-09-17T08:22:59+01:00
- Author: Amilia Stone

**Diurnal Group plc** (LON:DNL) is a commercial-stage specialty pharmaceutical company
focused on diseases of the endocrine system. Its drugs target conditions where medical
need is currently unmet, with the aim of becoming a global endocrine leader. Alkindi
®, soon to be accompanied by Efmody®, continues to be rolled out throughout Europe.
The results presentation highlighted three important clinical trials that are due
to start in 2H’21 and aimed at delivering on the company’s strategic goal. The current
cash resource is expected to be sufficient to complete these trials and to get Diurnal’s
core commercial European cortisol deficiency franchise through to profitability.

 * **Strategy:** Diurnal Group’s near-term goal is to create a valuable “Adrenal
   Franchise” that can treat patients with chronic cortisol deficiency diseases 
   from birth and for the rest of their lives. The long-term vision, once Alkindi
   and Efmody are established, is to expand the product offering to other endocrine
   conditions.
 * **Finals:** The July trading update had already stated that 2021 proforma sales
   were in line with forecasts, at £2.46m (£2.39m), up 7%. However, this hides the
   fact that Alkindi sales were up 18% in core markets, despite COVID-19, offsetting
   the decline in distributor purchases. Diurnal had period-end net cash of £34.0m.
 * **Outlook:** The target for the next 12 months is to invest in the core commercial
   European cortisol deficiency franchise – to improve penetration of Alkindi and
   launch Efmody successfully – and Diurnal’s development pipeline. Management has
   made very clear what cash will be used for and what will, or will not, be funded.
 * **Risks:** Penetration of the market with Alkindi was hampered by the pandemic
   during the past 12-18 months. Further penetration, coupled with the launch of
   Efmody, is dependent on patients being able to attend hospitals and specialist
   clinics. Diurnal may need a partner to maximise the US Efmody opportunity.
 * **Investment summary:** Diurnal Group is in a good position, with regulatory 
   approvals in Europe (Alkindi, Efmody) and the US (Alkindi) and a strong cash 
   position. The medium-term goal is to drive its European cortisol deficiency franchise
   through to profitability, while simultaneously investing in the three important
   trials. Efmody is a very large commercial opportunity and its launch should act
   as a catalyst for the shares to move nearer to our NPV of 142p per share.

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