Efmody (also called Chronocort), an oral long-acting formulation of hydrocortisone, has been approved in the EU and UK to treat congenital adrenal hyperplasia (CAH) in individuals aged 12 years and older. Diurnal Group (LON:DNL) has started the commercial launch of the product with a rollout in Germany, Austria and the UK at the beginning of September. CAH is an orphan disease caused by deficiency of adrenal enzymes, most commonly 21-hydroxylase. The total addressable EU market is worth $268m based on the price of Plenadren, a long-acting hydrocortisone.
Share price performance
Diurnal marketing Efmody directly in Europe
Diurnal launched Efmody in the EU (specifically in Germany and Austria) and the UK for CAH. There are an estimated 41,000 patients in the EU/UK. The company is launching the product with its own salesforce and distributors.
SPA to de-risk the US Chronocort pivotal trial
In July, Diurnal reached a Special Protocol Assessment (SPA) agreement with the US FDA, which includes the trial design, endpoints and statistical analyses in the planned pivotal trial CONnECT (which can also be used for registration purposes in Japan). This randomised, double-blind, active-controlled Phase III trial will enrol 150 CAH patients 16 years and over. The treatment period is 12 months. There are an estimated 16,000 patients in the United States. The trial is expected to commence in Q4 CY21.
Alkindi up 18% in core commercial markets
Diurnal’s total revenue for FY21 was £4.4m, with Alkindi sales of £2.3m, down slightly from FY20 due to a negative impact from Diurnal’s Nordic partner. Proforma sales in the core markets of the UK, Germany, Italy and Austria were up 18% despite the negative impact of the COVID-19 pandemic.
Valuation: £251m or 149p per basic share
We have increased our total valuation to £251m from £230m mainly due to higher net cash and rolling forward our NPV. However, the valuation per share fell from 166p to 149p mainly due to a higher number of shares outstanding, primarily resulting from the £20.7m (gross) capital raise completed in May 2021. Net cash as of 30 June 2021 was £34.0m. Diurnal now has a clear cash runway to complete Efmody development in the United States and commercialise Efmody in the EU/UK.
Two approved products and a promising pipeline
Diurnal is an emerging endocrine company that has improved formulations of hydrocortisone in both Alkindi and Efmody with unique characteristics that can provide the patient with convenient dosing and improved efficacy. Its second product Efmody (an extended-release formulation of hydrocortisone) was recently approved in patients with CAH in the EU and UK, and subsequently launched in the UK and certain EU countries (namely Germany and Austria) in the first half of September. CAH is an orphan condition that is caused by enzyme deficiencies, most commonly 21-hydroxylase, which is an enzyme needed to produce the adrenal steroid hormone cortisol. Without cortisol, an over production of male hormones (androgens) occurs. This condition is inherited at birth and affects both males and females. Diurnal plans to begin a Phase III trial in the United States in Q4 CY21. Efmody has orphan disease designation for CAH in the United States, which provides seven years of market exclusivity.
The company’s first launched product is Alkindi, a formulation of hydrocortisone intended to treat adrenal insufficiency (AI) in paediatric patients. Before its approval in the EU in 2018 and the United States in 2020, there were no hydrocortisone products provided in paediatric doses. Additional formulation improvements in the product include it being provided in a sprinkle format, which eases administration in children and has a taste masking layer. Eton Pharmaceuticals is the partner in the United States. Alkindi was approved by the FDA in September 2020 and marketing began in November 2020. Eton has not reported actual sales numbers yet.
The company’s third product candidate is DITEST, a novel oral formulation of testosterone for the treatment of hypogonadism. It is thought that two-thirds of patients have poor control on current treatments. Testosterone products are usually topically applied since oral formulations have been difficult to develop. DITEST has completed Phase I trials in the UK. The company intends to file an IND in H221 and initiate a multiple ascending dose (MAD) study shortly thereafter in the United States. Diurnal has secured an abbreviated 505(b)(2) route to a new drug application (NDA). This pathway is for products where the active pharmaceutical ingredient (in this case testosterone) has already been approved and allows the sponsor to use data from these previous applications in its clinical data package.
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