Destiny Pharma (DEST) 

Destiny’s AGM included clinical and business development updates which we summarise below. In addition, there has been an increasing tempo in broader market news that helps augment Destiny’s investment proposition. These include the UK government and GSK’s pledge on antimicrobial resistance, plus the acquisition of rights to a competitor product to NTCD-M3 which we have always regarded as inferior to Destiny’s NTCD-M3. 

Encouragingly, there has also been the recent award of the Innovation Passport Designation (IPD) for Destiny’s XF-73 Nasal. 

AGM results and XF-73 Nasal titbits 

All resolutions were passed in Destiny’s 2024 AGM. In addition, there were important updates on Destiny’s XF-73 Nasal product which we explore further in the body of the note. Destiny’s CMO detailed the revised clinical program for XF-73 Nasal and what struck us most was the expected £25m cost. This was the average estimate from six or seven contract clinical research organisations. To most potential licensors of XF-73 Nasal, this level of cost (and any upfront payments) would be a ‘steal’ for a license that gets them to the other side of Phase 3, the rights to XF-73 Nasal in some jurisdictions, and a pathway to a regulatory submission. 

During the Q&A, Destiny’s CEO helpfully clarified that the ongoing review of strategic options – where an update will be provided to the market in a matter of weeks – is specifically in respect of XF-73 Nasal, rather than for Destiny Pharma itself. 

XF-73 Nasal IPD 

In a recent, well-received announcement, Destiny disclosed that its product XF-73 for the prevention of post-surgical staphylococcal infections had been awarded an IPD that provides entry into the UK’s Innovative Licensing and Access pathway (ILAP). Like the similar award to Destiny by the US FDA of Qualifying Infectious Disease Product (QIDP) status, apart from the endorsement now by two transatlantic regulators, access to the ILAP provides a number of tangible benefits which we cover in more detail later in this note. 

Valuation unchanged 

Our fair value for Destiny Pharma plc remains at £212.0m (or 234p / share) since our recent changes that reflected the longer times until Phase 3 studies start and revenues flow back to Destiny. Ironically the recent IPD award may shorten some of these timelines, while QIDP status extends exclusivity, but we have not yet incorporated these positives into our valuation.

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