Destiny Pharma is dedicated to the discovery, development and commercialisation of new antimicrobials that have unique properties to improve outcomes for patients and the delivery of medical care into the future.


Well-funded and on track for Phase IIb
Published: Apr 27 2018

Destiny Pharma plc (Destiny) is a UK based clinical stage developer of medicines for the prevention and treatment of infections caused by drug-resistant bacteria.

Destiny is delivering the clinical plan for its novel antimicrobial candidate XF-73 (exeporfinium chloride) on target. The initial focus for DEST is in the US where XF-73 has been granted Fast Track Designation by the FDA in the new indication of ‘Prevention of post-surgical Staphylococcal infection’. The Fast Track supports speedy development of drugs to prevent life-threatening disease.

 Early studies encouragingly showed that Staphylococcus aureus (S aureus) did not generate resistance to XF-73 after multiple exposures. There are currently no approved drugs for Prevention of post-surgical staphylococcal infection and few late stage candidates: so XF-73 could be first to a primary addressable market worth up to $1.2bn.

Following the recent Investigational New Drug (IND) opening, XF-73 is due to enter Phase IIb studies which should lead to data readout in H219. Destiny recently clarified the development plan for XF-73, which has already been trialled in 166 subjects over the course of five Phase I/II studies, detailing the standard safety studies required by FDA. In our view the three Phase I dermal safety studies detailed represent a relatively low risk hurdle towards completing the Phase III ready package.

The terms of Destiny’s December commercialisation and development agreement with China Medical Systems (CMS) included exchange of Asian rights (ex-Japan) in return for a £6m equity stake and data sharing. This validates the XF platform clinical and commercial potential and could help Destiny to accelerate the development of XF-73 and the earlier stage products. China is the world’s second largest consumer of antibiotics so it has a crucial role in managing the threat of AMR.

Our sum-of-parts DCF valuation of Destiny Pharma, using a 12.5% drug development discount rate, rises slightly to give a current worth of £117m (269p/share) after rolling our forecasts forwards and updating for end December 2017 cash. The current market cap implies a low probability of success in the lead program, despite the up to twofold likelihood of success in anti-infection indications vs the average rate.

XF-73 green light for the fast track
Published: Mar 19 2018

Destiny Pharma is a UK-based clinical stage developer of medicines for the prevention and treatment of infections caused by drug-resistant bacteria.
Destiny has confirmed that its lead candidate, topical antimicrobial XF-73, has been granted FDA Fast Track Designation in the new FDA-backed indication - prevention of post-surgical staphylococcal infection. Following the recent Investigational New Drug (IND) opening, XF-73 is due to enter Phase IIb studies this year, positioning it as a potential first-to-market product in the indication. 
Fast track designation is one of a range of incentives granted under Qualified Infectious Disease Product (QIDP) status granted to XF-73.  QIDP supports the development of drugs against priority pathogens, such as S aureus, including methicillin-resistant Staphylococcus aureus - MRSA.  
XF-73 is the lead product from DEST’s XF series and is a topical gel for nasal administration and the first candidate from the XF group, which collectively have demonstrated activity against a wide spectrum of bacteria tested. These include eight of the twelve pathogens that appear on the priority list classified by the Centers for Disease Control and Prevention (CDC) and the World Health Organisation (WHO).
The value of the primary market for XF-73 alone is an estimated $1.2bn - counting the six million patients classed as high risk who are also carriers of S aureus (based on data from US National Center for Health Statistics). In our view the low potential for resistance means that XF-73 should also be widely adopted for the c12 million high-risk non-carriers of S aureus.
We reiterate our DCF valuation of Destiny Pharma at £115m, or 263p / share, including estimated end December 2017 net cash of £16.8m. On our forecasts the group is well funded to cover the Phase IIb program with XF-73, as well as to cover its initial work on the follow-on pipeline, taking our estimated cash reach to the end of 2020. Our valuation includes only XF-73 in the lead indication, so that the entry of pre-clinical candidates into human studies provides pure upside.
In a class of its own
Published: Jan 09 2018

You only have to walk into your doctor's surgery to see signs reminding you to use antibiotics with care; meanwhile the news continues to carry stories which highlight the increasing resistance against antibiotics.  Destiny Pharma’s novel XF platform offers a solution to the global need for new antibiotics with low risk of resistance generation.  With a focus on tackling the most virulent and difficult to target hospital infections like MRSA (methicillin-resistant Staphylococcus aureus), as a group XF drugs have shown activity against eight pathogens tested that appear on the World Health Organisation and US Centers for Disease Control and Prevention (CDC)’s priority list.
Destiny is prioritising XF-73 which has potential to be first to a $1.2bn core market, in a new FDA-backed indication for prevention of post-surgical S aureus infection. CDC estimates that people with MRSA are 64% more likely to die than those with a non-resistant form of infection. 
— The XF platform is based on a novel chemical class which offers the potential to rapidly kill bacteria via mechanisms that differentiate the XF candidates from standard antimicrobial treatments. The commercial potential of such drugs is enhanced, not only to treat or prevent infection, but with low propensity for bacteria such as S aureus to develop resistance as seen in standard microbiology models even after 50-plus exposures to XF-73. Anti-Microbial Resistance (AMR) is a major limiting factor with standard antibiotic treatments. The low potential for resistance to XF-73 could support wider adoption, tripling the core patient pool.
— If the data are borne out in the Phase IIb study, then XF-73 has potential to be first to market in a new FDA-backed indication, setting a new standard and gaining a strong foothold in the market. There appears to be limited competition in later stage pipelines in the preventative space and with no approved drugs in the US. Furthermore, it seems that Destiny’s XF-73 is likely to be a more convenient presentation compared to currently used off-label antibiotic, mupirocin. 
— The company is focused on the fastest route to a Phase III ready data package, first for XF-73 and the next three products in the pipeline, rather than eyeing up a slot as a specialty pharma company. Destiny is already well-funded because of its recent £15.3m fund raise together with a further £3m investment from China Medical Systems, this is sufficient to complete the Phase II program for XF-73 in our forecasts. This route could be accelerated by a range of drivers and policy-led incentives, plus potential to benefit from alternative, non-dilutive sources of funding.
— Looking forward, we consider the probability of securing a deal post-Phase II is high, if efficacy already seen in 166 subjects is confirmed, given the apparent scarcity of novel treatments and recent high-profile vaccines failures.
— China Medical Systems is an ideal partner / investor with access to huge markets.
Our DCF valuation using a 12.5% discount rate is £115m or 263p/share.             
NB at this stage this only reflects the current clinical candidate XF-73 in the US market, and includes our estimated net cash of £16.8m at end of 2017. Consequently, we see the current market value as a fair entry point into a novel pipeline with further upside potential if additional candidates enter clinical development.
Investor Forum November 2017
Published: Nov 30 2017

Neil Clark, CEO, discusses the Group's activity post-IPO and addresses  the firm's plans going forward.