While the costs and preparations for the Phase 3 studies on NTCD-M3 and XF-73 will continue over the next year, we expect a transition to a lower cash burn after the first Phase 3 starts in 2024. Before then, we forecast another licensing deal (and modest cash in-flows) for Destiny’s second Phase 3-ready product, XF-73.
Destiny’s cash at the end of FY 2022 was £4.9m and it estimates that its cash reach extends to H2 2024. Our own forecasts include another $1m upfront payment for the licensing of XF-73 in YE 2023, after which milestones and royalties from both transactions could mean that Destiny avoids returning to the equity markets.
Having successfully executed on the business development front with the licensing of its lead Phase 3-ready product – the non-toxigenic Clostridioides difficile strain M3 (NTCD-M3) for the prevention of C.difficile infections – expectations remain high for its second Phase 3-ready product, XF-73 for the prevention of staphylococcal post-operative infections.
Our fair value for Destiny Pharma has risen modestly to £254.7m (or 279p / share) as a result of the revised cash balance.
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