Original-Research: Vidac Pharma Holding Plc (von Sphene Capital GmbH): Buy

Classification of Sphene Capital GmbH to Vidac Pharma Holding Plc

Important patent protection granted by the USPTO

The positive news flow of Vidac Pharma continues. Vidac Pharma has been granted a patent by the USPTO that—in our view—fully protects the company’s efforts to bring its entirely new class of cancer products to market. As of our knowledge, Vidac Pharma is the only company in the world whose products are aimed at reversing the altered metabolism of cancer cells (known as Warburg effect), and now holds an exclusive patent for this promising mode of action in the US market. After the strong share price performance since our initiation of coverage (+194.4% vs. DAX 2.4%), we confirm our Buy rating and our three-stage discounted cash flow entity model based share price target of EUR 4.90 (base case scenario). Our price target is based on the assumption that Vidac Pharma receives approval for its current core product VDA-1102-AK. Monte Carlo scenario values range between EUR 4.04 (10% quantile) and EUR 5.40 (90% quantile) per share.

Vidac Pharma has been granted a broad and exclusive patent by the United States Patent and Trademark Office (USPTO) that provides comprehensive protection for the mode of action of its two oncology and onco-dermatology therapeutic candidates VDA-1275 and VDA-1102 (phase 2b clinical trial for AK and phase 2 trial for cutaneous T-cell lymphoma). The patent protects the use of Vidac Pharma's novel chemical entities that prevent the enzyme hexokinase-2 (HK2) from attaching to the mitochondrial VDAC channels, in order to reverse the malignant metabolism of cancer cells and to restore normal cell functioning—as of Vidac's clinical studies the drug candidates have the potential to stop cancer cell proliferation, re-instate programmed cell death (apoptosis), and suppress the immunosuppressive properties of the tumour microenvironment. Vidac Pharma is thus (1) to our knowledge the only company in the world with products designed to reverse the altered metabolism of cancer cells and (2) now holds an exclusive patent for this mode of action in the US market.

Vidac Pharma also received additional capital of more than EUR 0.6mn from existing investors and management to accelerate the development of its products. Vidac Pharma will use the funds to advance a number of clinical trials, including a second phase 2b clinical trial for its lead candidate VDA-1102 in patients with advanced actinic keratosis (AK), a potentially premalignant disease of the skin with high estimated global prevalence. According to the company, VDA-1102 has also been shown to be safe and effective in the treatment of cutaneous T-cell lymphoma; Vidac Pharma has completed a phase 2a proof-of-concept study, the results of which are expected to be published shortly. VDA-1275, meanwhile, is also in advanced preclinical studies.