Acrux Limited (ASX: ACR) is in the business of pharmaceutical having a keen interest in developing and commercialising topical pharmaceuticals. It is developing a range of topical and dermatological generic products for the US markets by leveraging its GMP manufacturing suite, on-site laboratories, clinical and commercial experience to bring affordable products to market.
On 3rd April 2019, the company announced that that it has settled its Hatch-Waxman patent litigation relating to its first-to-file Abbreviated New Drug Application (ANDA) for the generic equivalent to Jublia® (efinaconazole) Topical Solution 10% brought by Kaken Pharmaceuticals Co. Ltd, Valeant Pharmaceuticals Ireland Ltd., Dow Pharmaceuticals Sciences, Inc. (subsidiaries of Bausch Health Companies Inc.), and Valeant Pharmaceuticals North America LLC. Terms of the settlement are confidential. Acrux’s generic equivalent to Jublia® is currently under review by the FDA.
The CEO and Managing Director of Acrux stated: “This is a positive development for the company and will help the growing pipeline of the products. The Research and Development and product development team are continuing to achieve the operational targets. This product is one of 14 generic topical products in the company’s pipeline which are progressing to commercialisation.”
On 25th February 2019, the company released its investors’ presentation with updates on current operations. It stated the size of the topical generic market in the US alone worth ~US$18bn which provides attractive returns with fast, low-risk development for drug developers. Currently, the company has 14 products in the portfolio, owing to its strong execution in building the topical generic pipeline since 2015. With this, it is targeting to capture a niche market of US$18 billion within a >US$400 billion market with an already present addressable market of US$1.7 billion for the company’s portfolio.
Acrux has deliberately targeted an attractive, accessible and valuable market and has built a scalable engine focused on drug selection and development. The process of the engine is:
- Identify - which requires market evaluation to screen high potential prescription topical goods.
- Develop - which involves R&D team with highly specific topical proficiency. A drug usually takes 3-4 years in development time including engaging CMOs1 to scale up manufacturing.
- Approve - Before launching the product, some approvals are needed from the regulators. The FDA has made a commitment to review 90% of first round applications within 10 months.
- Launch - After all the approvals the product can be launched.
It also distinguishes itself from the traditional drug development market. A new drug may have a significant market opportunity; however, it takes 10 years to develop a new drug, involving multiple expensive trials. Acrux, on the other hand, has an attractive market and licensee terms with fast development and low cost.
The stock shot up by 4.4% on ASX and closed at A$0.190 as of 3rd April 2019 compared to the previous closing of A$0.182. In the last six months, the stock has fallen by 20.65%, and the YTD return stands at 4.3%.
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