Destiny has transformed its position, both in fundamental terms and in share price strength. A year ago, the group was navigating the conduct of its Phase 2b clinical trial through the challenges of the pandemic. 12 months on, positive results from that study, the acquisition of another Phase 3-ready program, plus a successful fundraising have all transformed Destiny’s investment proposition.
The costs and news flow of Destiny’s US Phase 2b study rightly dominated its FY 2020 financial results. Operating expenses increased to £6.4m (£5.7m in FY 2019), including R&D costs of £4.5m, and £1.9m in other administrative costs (£3.8m and £1.9m in FY 2019, respectively). With positive results announced recently, this higher expense should be seen as money well spent.
As well as the acquisition of NTCD-M3 for the prevention of Clostridioides difficile infection recurrence, (making two wholly-owned Phase 3-ready assets), the portfolio has grown in the last 12 months to include the pre-clinical, but very contemporary, SporCov COVID-19 collaboration, and XF-73 in dermal infections.
Financial forecasts have been updated for Destiny’s FY 2020 results, while our valuation has only adjusted slightly for the YE cash balance. Our fair value of Destiny Pharma has modestly increased to £214.0m, or 358p per share.
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