Event – Circassia’s crucial Catalyst approaches

After Circassia bought two companies specialising in asthma last year its cat allergy vaccine Cat-Spire is perhaps no longer as decisive as once it was. But, having sold its record-breaking £200m ($283m) IPO two years ago on the project’s potential, a miss in its phase III trial could shake investor confidence.

Data from the Catalyst study of the ToleroMune cat allergy vaccine should emerge in the coming weeks. Compared with the exhilaration when the company listed excitement is muted, partly owing to the miss in phase IIb of the group’s ragweed vaccine, which also uses the ToleroMune technology. A trial failure would no longer be fatal to Circassia, but the company will need Catalyst to hit if it is to prevent its shareholders feeling disappointed.

The pivotal Catalyst trial, also called CP007, enrolled 1,409 people with a cat at home and moderate or severe allergy symptoms, defined as mean total rhinoconjunctivitis symptom score (TRSS) of 10 or less. They have received either a single course of the vaccine, meaning four 6nmol doses administered over 12 weeks, or two sequential courses.

The primary efficacy endpoint is change in combined TRSS and rescue medication use scores one year after the start of treatment versus placebo.

Some experts dismissed concerns that the ragweed vaccine’s failure might read across to Cat-Spire (Circassia falls victim to placebo effect, December 8, 2014). A second failure of a ToleroMune asset would not be so easily brushed aside.

Fine and dander?

If the study’s endpoints are met the vaccine is forecast by Stifel analysts to take over from the Niox asthma diagnosis franchise, which Circassia obtained thanks to its £139m takeout of Aerocrine, as the group’s most valuable product. Cat-Spire sales will hit £114m in 2019, according to Stifel, pushing the company into profitability. In 2022, they add, sales of the vaccine will reach £527m.

As even a cursory glance at social media will show, a great many people are fond of cats, and doubtless this includes some of those who are allergic. But whether they are popular enough that Circassia’s vaccine – reimbursement of which is vanishingly unlikely – can really make sales of more than half a billion pounds is as yet unclear.

Circassia’s full-year 2015 net loss clocked in at £50m, significantly below analysts’ estimates of around £60m in losses, and the group has cash of around £200m. Having at least some sales thanks to its acquisitions means that the company has a bulwark against the share price sliding should Catalyst fail, though it will probably fall to some degree.

It cannot, however, have passed Circassia by that two other UK-based respiratory specialists merged last week. The Vectura-SkyePharma deal was largely to do with asthma and COPD, and since Circassia now owns the UK inhaled technology specialist Prosonix the arguments for consolidation stand (Circassia buy shifts focus to asthma, May 15, 2015).

With that in mind, it seems plausible that a takeout of Circassia could become more appealing if Catalyst causes a fall in the company’s valuation by failing.

To contact the writer of this story email Elizabeth Cairns in London at [email protected] or follow @LizEPVantage on Twitter

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