MIDAS TIPS: Amryt Pharma's remedies can save lives

Amryt is a drugs firm with a difference. It focuses on treatments for rare and ‘orphan’ diseases, that is, conditions that affect fewer than one in 2,000 people. The shares are 17¾p and deserve to be far higher.

High cholesterol normally afflicts people in their 50s and above, often because they eat the wrong food and take too little exercise. In some cases, however, children are born with exceptionally high cholesterol, so much so that they are at risk from heart attacks and strokes before they even start school.

The condition, known as HoFH, is rare, affecting about one in a million people, but those who are affected are not expected to survive into adulthood if they are left untreated. Even with treatment their life expectancy is about 45.

The standard treatment for HoFH involves being strapped to a machine for hours every fortnight, much like dialysis. But there is an alternative – a simple capsule, called Lojuxta sold by Aim-listed Amryt Pharma. Lojuxta is licensed for adults and may be licensed for children.

Helping hand: Amryt Pharma is developing a treatment for a rare condition that it hopes will be licensed for children

Helping hand: Amryt Pharma is developing a treatment for a rare condition that it hopes will be licensed for children

Amryt is a drugs firm with a difference. It focuses on treatments for rare and ‘orphan’ diseases, that is, conditions that affect fewer than one in 2,000 people. The shares are 17¾p and deserve to be far higher.

Amryt is chaired by Harry Stratford, who set up Shire in 1986, a drugs firm now valued at £33billion. Stratford also set up ProStrakan, a pharmaceutical firm sold to the Japanese for nearly £300million back in 2011.

Amryt was founded four years later, in August 2015. Though a fairly new firm, it has crossed some important milestones.

Many young biotech firms struggle as they focus on a single drug and take years to bring it to market. From the start Amryt spread its net wider.

It does not spend time and money discovering new drugs. Instead, it acquires products that are either in trials or approved by regulators. The group then develops these products into fully-fledged medicines and sells them to those in need.

Focus: Amryt boss Harry Stratford

Focus: Amryt boss Harry Stratford

Today, there is a growing need for effective drugs to treat orphan diseases. The number of people affected may be small but there are about 7,000 such conditions and large pharmaceutical firms have historically paid scant attention to them.

Thousands of conditions go untreated, sufferers are desperate for help and global orphan drug sales are expected to reach more than £150billion over the next five years. It is easier to gain regulatory approval for orphan drugs too, so treatments move from development to commercial sales much faster than conventional medicines.

Amryt’s team is impressive. Not only is it chaired by a veteran of the industry, but chief executive Joe Wiley has spent 20 years in the healthcare and private equity sectors, having trained as a neurologist.

The finance director, commercial officer, chief medical officer, head of medical affairs and head of licensing have worked for an average of 20 years each in healthcare, both here and in the US, the largest drugs market by far. They are bringing this experience to bear, using their networks to find suitable acquisitions and take drugs from clever ideas to commercial sale. 

In the case of Lojuxta, Amryt acquired the licence to sell it in Europe and the Middle East from a US firm, Aegerion Pharmaceuticals. Amryt’s chief medical officer knew Lojuxta well as he held the same position at Aegerion years ago.

The deal was signed in December 2016, Lojuxta is on track to deliver sales this year of €11.5million (£10.3million – most sales are in euros) and the market is valued at up to €100million a year. Only last week, Amryt signed a deal to sell Lojuxta in Saudi Arabia, the Middle East’s largest drugs market. The group is talking to the NHS about supplying Lojuxta here too.

Amryt is also in late-stage trials with a treatment for Epidermolysis Bullosa, a rare, distressing and painful genetic condition, where the skin is so fragile that those affected suffer constantly from blisters and burns, caused by acts as mundane as pulling on socks or shaking hands. There are about 35,000 sufferers in Europe and 30,000 in the US. Amryt is developing a gel to treat it.

Trial results are expected next year but early signs are encouraging and, if the treatment is approved, the market is valued at over £1billion.

Amryt is also working on treatments for Acromegaly and Cushing’s disease, which affect growth and stress hormones. Treatments are at an early stage but the combined market opportunity is estimated at £800million. In the meantime, Stratford, Wiley and the team are pursuing other deals, so new additions to the portfolio should be forthcoming soon.

In September, the company raised £13million via a share placement at 20p. That fundraising means the group now has plenty of money to increase Lojuxta sales, bring drugs to the market and look for new opportunities.

Midas verdict: Amryt listed in April 2016. So far, the group has done everything it said it would and more. Yet the shares have underperformed. At 17¾p, they are a buy.