The Group has announced the acquisition for €1.75 million and royalties of the exclusive rights for Episil, an oncology supportive care product developed by Camurus AB (‘Camurus’), a privately owned Swedish life science company. Episil is a patented oral spray indicated for local treatment of pain associated with oral mucositis, a serious side effect of chemotherapy and radiotherapy during cancer treatment. Episil creates a strongly bioadhesive FluidCrystal® film that protects sensitive and sore areas of the mouth providing prolonged pain reduction for at least eight hours.
ISPH plans to launch Episil across Europe (excluding the Nordic countries) through 2010 and 2011. The market for such products in Europe is estimated at £200 million. The consideration of €1.75 million will be funded through a combination of existing cash resources and a draw down from IS Pharma’s debt facilities. As at 30 September 2009 the Group had a cash balance of £4.2 million and an undrawn debt facility of £4.5 million.
Shares in ISPH have wilted of late. Hopefully this news will encourage greater interest in a business that hasn’t really put a foot wrong since new management took charge in September 2005Episil represents a new concept therefore no historic numbers to reflect on. It has been registered as a medical device across Europe, has been granted the CE mark and is protected by patent until 2025.
Following this deal. research house Execution Noble does not estimate a material change to Financial Year Mar 2011 estimates as it will take time to roll out the product in EU. However, they point out that IS Pharma’s shares currently trade at c.5x 2010 EV/EBITDA, being a 50% discount to UK peers and reiterate their BUY recommendation.
