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Hardman & Co

Incanthera preparing Sol for commercialisation

Incanthera plc (NEX:INC) is a spin-out from the Institute of Cancer Therapeutics (ICT) at the University of Bradford to exploit development opportunities generated by ICT. This has provided the company with its core pro-drug delivery platform technology, to which additional technologies/products have been acquired, all focused on producing better clinical outcomes for cancer patients. INC listed on the Aquis Exchange in February 2020, raising £1.2m new capital for the development of an advanced topical skin product, Sol, that prevents sun damage developing into skin cancers, which should be ready for commercialisation with a partner in the near term.

  • Strategy: INC is a specialist oncology company using a novel pro-drug approach to deliver cytotoxic warheads directly to tumour cells. It intends to develop drugs to a suitable valuation inflection point and then out-license them for late-stage trials, in return for development milestones and royalties.
  • Focus: INC is developing lead candidate, Sol, a topical cream containing an active ingredient known to prevent skin cancer, for the skincare market. An optimised programme of work is aimed at preparing the product to be ready for commercialisation – a significant value inflection point.
  • Financials: INC has just released its inaugural set of results, following a successful listing on the Aquis Exchange (AQSE) in February 2020. Tight control of costs meant that the company reported modestly better-than-expected numbers. At 31 March, it had net cash of £392k and a call option for a further £350k.
  • Risks: Investments in small, early-stage pharmaceutical companies carry a significant risk, and additional capital will be required for future expansion of clinical programmes. This additional capital may come from commercialisation of Sol, and/or INC may need to raise more capital in the future.
  • Investment summary: Incanthera offers distinct technology with the potential to attract the attention of the majors, especially given management’s strategy to out-license products early. The focus, initially, will be on a patent-protected, value-added, sun cream, which represents a relatively quick and low-risk cosmetics project. The current EV suggests that there is good upside potential when comparing INC with a group of UK-listed peers working in the same field.

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