AKTX - thinly traded, low float bio - Long Idea

5 мая 2018 г.

A lot of folks have been asking me regarding the idea around AKTX setup. So instead of repeating myself over twitter and other places, I am going to post some DD behind my thesis in case you find it useful.

Currently, stock trades around $2 mark so w/ ~15M shares in the OS, the market cap is ~30M. As a point of reference, co has their lead asset Coversin complete a successful PII trial back in Dec 2017 in PnH. Some excellent information to read up on from Dec analyst event

Co has repeatedly mentioned that they plan to start the P III trial in Q1 2018. First in the Dec analyst event and more recently in the ER conf call (ER webcast linked) in late March. Some nice discussion on the pipeline on the ER conf call in case you're interested in reading the conf call transcript.

Co has cash into Q2 2019. Last raise was at $5 BEFORE they announced the P II data so they clearly didn't pump the data release to do a raise into it. As part of the raise, insiders loaded up big. RPC_Pharma purchased 600K shares worth 3M. Check who the MD is on RPC_Pharma - Ray Prudo. Next, you should know that Prudo is the Chairman of Akari.
Here's the text from filing: On October 20, 2017, pursuant to an underwritten public offering (the “Offering”) of 3,480,000 of the Issuer’s American Depositary Shares (“ADSs”), each representing 100 Ordinary Shares, RPC purchased 600,000 ADSs at a price of $5.00 per ADS. The funds used by RPC to acquire the ADSs were from its working capital.

C E O stated in March ER that they had everything ready to go (his words, not mine) to kick off Capstone and will provide additional details around trial (locations, design, population, etc.) soon. Here we are in May, and we still have nothing on the trial. So the question becomes, why has the co not yet started the Capstone PIII trial in Naive patients for PnH? This is where my thesis is that co is working on some sort of licensing or partnership deal where they will likely receive some upfront payment and/or royalties from partner in return of Coversin licensing rights. C E O has a history of licensing PII assets for upfront payments and royalties from his past life e.g. Zealand_Pharma and Boehringer Ingelheim Enter Into a Licence and Collaboration Agreement

Additional fuel to this fire is the new board member co added recently in Jan - one of which is a long time licensing veteran from JNJ. You should wonder, why would the top guy from JNJ join Akari board unless he was brought on specifically to flex his licensing muscle and make deals for the company. CEO also called him out specifically as part of his comment on the ER conf call. So obviously co is excited to have him on board and I suspect for a good reason.

As another data point, main competition of Coversin in PnH patients is Soliris from NASDAQ:ALXN which enjoys block-buster sales Y-o-Y. Now I am not your science guy but I do know that Akari has a better mechanism for drug delivery and room to undercut Soliris when it comes to pricing.