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The biotech company believes its lead candidate XF-73 could kill bacteria within 15 minutes
Thursday 31 Aug 2017 Author: Lisa-Marie Janes

Destiny Pharma plans to raise approximately £10m when it floats on AIM on 4 September. The money will help it complete the study for its drug product XF-73 which aims to tackle the global challenge of antibiotic resistance.

XF-73 is designed to rapidly bind to bacterial membrane and make it porous, forcing the bacteria to leak out, which kills it within 15 minutes.

Chief executive officer Neil Clark believes XF-73’s mechanism and speed of action means the bacteria does not have enough time to reproduce or mutate, but further data is needed to confirm the findings.

The clinical stage biotech firm has an indicative launch date between 2020 and 2021. Investors should be aware this is subject to the outcome of the clinical studies and regulations.

The financial injection at IPO (initial public offering) will also be used to develop other programmes in the pipeline and to potentially license out the technology for future income.

Blockbuster potential

Sales expectations for XF-73 are very high. Clark estimates the treatment could hit $1bn in the US alone. Destiny Pharma also plans to launch the product in Europe and Asia.

Clark is keen to stress the company’s strong intellectual property with ‘global coverage’ in major territories and 94 patents that are potentially valid until the mid-2030s.

Why is antibiotic resistance dangerous?

Antibiotic resistance is a growing threat because it reduces the effectiveness of drugs and cannot prevent the bacteria from surviving and multiplying.

According to the US Centers for Disease Control and Prevention, at least 2m people in the US every year become infected with bacteria that are resistant to antibiotics.

Approximately 23,000 people die every year in the country as a direct result of these infections. By tackling this issue, lives can be saved and hospitals can cut costs treating those affected.

Rapid action and low resistance

XF-73 is believed to be significantly de-risked as five successful Phase I/II clinical trials have been completed already, which shows rapid antibacterial action and a low resistance profile.

The most important upcoming event for Destiny Pharma is the Phase IIb study that is anticipated to start next year with results expected in 2019.

While the company is floating with no debt and a drug with less risk compared to untested drugs, there is still a chance the clinical development of XF-73 could fail despite the success of earlier trials.

As with all IPOs, we urge investors to read the admission document (for AIM stocks) or prospectus (for Main Market stocks) before buying the shares.

 

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