Allergy Therapeutics is writing a story of resilience and transformation. Putting behind it manufacturing setbacks, the company has redefined its trajectory with a bold strategy centred on innovation.
Its pioneering short-course therapies, designed to tackle conditions such as hay fever and peanut allergy, promise not only to disrupt traditional treatments but to drive significant growth and value in the process.
Its August results hinted at a turning point. In the second half of the financial year, the company posted its first revenue growth since 2021, a milestone that signals progress but also serves as a prelude to something potentially transformative.
That journey has already begun with the Grass MATA MPL treatment – for grass pollen allergies – which late last month was submitted for regulatory approval in Germany. If greenlit by the Paul-Ehrlich-Institut (PEI), the treatment could be on the market by this time next year.
‘We have worked around the clock to get the trading business back to growth,’ says CEO Manuel Llobet.
‘The Peanut project is very exciting, but maybe in the short term, more interestingly, is the regulatory submission we have made [for Grass MATA MPL], where the primary endpoint was met.’
Allergy Therapeutics boss Manuel Llobet is targeting a return to growth
A change of emphasis
Historically, Allergy Therapeutics has operated in a niche market, relying on the ‘named patient’ model – a system in which bespoke treatments are prescribed under regulatory exemptions. While this approach offered a reliable revenue stream, it limited scale and broader market penetration.
Now, the company is pursuing fully licensed therapies, aiming for a more standardised and globally accessible business model. Crucially, it also has its eye on the US, the world’s most lucrative drug market.
This transition isn’t merely about process; it’s about ambition. Licensed medicines unlock larger markets and open doors to pharmaceutical partnerships. It should also be noted they meet rigorous regulatory benchmarks, bolstering credibility with both clinicians and healthcare systems.
The company’s flagship PQ platform, which targets allergies to grass and tree pollens, exemplifies this shift. Currently, in clinical trials, it stands to challenge established players in allergy immunotherapy upon securing regulatory approval.
For Allergy Therapeutics, this move isn’t just about scalability – it’s about reshaping how allergy treatments are perceived and deployed. Unlike traditional therapies that focus on symptom management, the company’s approach centres on modifying immune responses, and addressing allergies at their root.
As we move into 2025, the near-term value catalyst is Grass MATA MPL, which, as mentioned above, is now undergoing scrutiny by the PEI following the successful conclusion of a comprehensive phase III trial.
It’s what’s called a subcutaneous immunotherapy (SCIT) designed to address the root cause of allergic rhino-conjunctivitis caused by grass pollen.
The jab combines MicroCrystalline Tyrosine-adsorbed allergoids with the adjuvant Monophosphoryl-lipid A (MPL), which enhances the immune response.
The treatment has been developed to modify the allergic response with a regimen of just six injections ahead of the grass allergy season.
With the dossier validation process underway with the PEI, the company hopes to secure marketing authorisation in the third or fourth quarter of next year. It is also evaluating a paediatric indication.
Potentially, a bigger commercial leg up would come from US approval for the immunotherapy. However, further regulatory work would likely have to take place, including (but perhaps not limited to) a safety trial before the all-powerful Food & Drug Administration gives the green light.
As Grass MATA MPL undergoes regulatory scrutiny in Germany, the news flow from Allergy Therapeutics has been augmented by an encouraging update on the progress of VLP Peanut from its phase I/IIa PROTECT trial.
The study’s early data showed the putative treatment appeared to reduce sensitivity to peanuts and lower allergic reactions.
Reducing the treatment burden
The analysis focused on 12 patients divided into three groups. A key finding was a dose-dependent reduction in skin sensitivity to peanut allergens.
It can’t be understated what success might spell for the company, given that 4.6 million adults in the US alone (and a further 1.5 million children) are allergic to this foodstuff.
VLP Peanut is envisaged to be administered as a series of three injections, followed by a booster dose after several years (although the exact regimen will be finalised in phase II and confirmed in phase III).
This approach significantly reduces the treatment burden compared to existing oral therapies, which require continuous daily dosing.
Outside the two core assets, the company has a bulging pipeline with birch and ragweed formulations of the MATA MPL format. In pre-clinical research, it is assessing possible treatments for melanoma and asthma.
Allergy Therapeutics is pursuing a focused growth strategy centred on expanding in Europe, advancing its pipeline, and preparing for entry into the United States.
To fund its commercial, regulatory, and clinical aspirations, the business has amassed significant financial firepower, including just under £41 million from an equity financing last October.
Strong balance sheet
More recently, Allergy Therapeutics has strengthened its financial position with a new £40 million debt line from Hayfin Healthcare Opportunities, comprising a £20 million committed five-year term loan and a £20 million uncommitted incremental facility. Additionally, it has increased an existing loan facility by £10 million to £50 million.
This sort of backing suggests Allergy Therapeutics may be onto something big, an assertion supported by analysts at the research house Cavendish.
Using a discounted cash flow model, they have set a price target of 13p for stock in Allergy Therapeutics – a 124 per cent premium to the current share price.
Specifically, the Cavendish number crunchers believe VLP Peanut could achieve blockbuster status in the US with annual sales in excess of $1 billion, while it expects a not-insubstantial $300–400 million peak sales from Grass MATA MPL.
Cavendish is also predicting strong top-line growth to the previously sedentary existing commercial operation and believes the company’s technology provides a strong moat (Warren Buffett’s term for competitive protection) to the business.
Summarising the 37-page research ‘opus’, Cavendish said it believes Allergy Therapeutics has the ability, based on its two key assets, to generate ‘significant potential future value for shareholders’.
As always, we caution readers to do their due diligence and to remember this is a risk-reward scenario, not a risk-free bet. Albeit, the Allergy Therapeutics team, led by CEO Manuel Llobet and CFO Shaun Furlong, has done a great deal to minimise the potential downside.
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