Diurnal enjoying transformational year as it generates first commercial revenues
Diurnal Group (DNL:AIM) has ambitions to become a world-leading specialty pharmaceutical company in endocrinology. The company is targeting treatments in certain underserved chronic hormonal diseases that, combined, represent a $10bn market opportunity.
Diurnal’s near-term focus is on the development of its pipeline of products for the treatment of diseases of cortisol deficiency in Europe and the US, focusing on the treatment of the rare genetic condition congenital adrenal hyperplasia (CAH), a market opportunity of approximately $0.5bn, and the treatment of adrenal insufficiency (AI), a market opportunity of approximately $2.8bn. Longer-term, Diurnal’s earlier stage pipeline potentially addresses endocrinological disorders with a combined market size of over $6.6 billion.
Executing on this strategy, in just over two years after Diurnal’s initial public offering, the Company received its first regulatory approval in February 2018: Alkindi (hydrocortisone granules in capsules for opening) was subsequently launched in Germany on 15 May 2018.
Diurnal is one of the few UK biotechnology companies that have successfully taken a product from concept through to commercialisation. Diurnal expects to generate its first commercial revenues during 2018.
CREATING A STRONG EUROPEAN COMMERCIALISATION CAPABILITY
The endocrine disorders Diurnal is targeting are typically managed by specialist physicians based in major hospitals. Given this concentrated prescribing base, and in an effort to maximise the economic value it extracts from its products, Diurnal intends to directly commercialise in the European market.
Diurnal has established the commercial infrastructure required to support a successful launch of its first product, Alkindi, and intends to use the same commercial organisation and supply chain for the planned future European launch of its second drug candidate, currently in late stage development, Chronocort (modified release hydrocortisone), which is anticipated to receive market authorisation in 2020. Diurnal believes the work done to support the launch of Alkindi substantially derisks the planned launch of Chronocort.
Diurnal also believes that its European commercial infrastructure is a valuable asset that can ensure it not only retains the full economic value of its in-house products in major European territories, but also makes the company an attractive partner for companies seeking to commercialise endocrinology focused products in Europe.
In the US, Diurnal’s current strategy is to capitalise on the interest in its programmes and seek a US partner for commercialisation of its late-stage pipeline products at an appropriate time to ensure that market access is optimised for a successful product launch.
BUILDING VALUE IN LATESTAGE CORTISOL DEFICIENCY PIPELINE
Deficiency of the essential hormone cortisol results in fatigue, depression and may cause death through adrenal crisis. Through Alkindi and Chronocort, Diurnal is building a life-long ‘adrenal franchise’. Alkindi is the first product specifically designed for children suffering from AI, and the related condition CAH, and aims to address the need for a product that is licensed, effective, safe and
easy to administer.
Chronocort provides a drug release profile that the company believes mimics the body’s natural cortisol circadian rhythm, which current therapy is unable to replicate, and is designed to improve disease control for adults with CAH. Diurnal is also assessing the utility of Chronocort in adults in the AI market.
For Alkindi in the US, following discussion with the US Food and Drug Administration (FDA), the company has assembled a package of studies alongside the existing European Phase III study data that it believes will support a regulatory submission for approval in paediatric AI. The company does not believe that further clinical studies will be required for US registration and intends to submit its regulatory package for Alkindi to the FDA in 2018.
For Chronocort, the Company expects a significant value inflection point following the report of headline data from its European Phase III study of Chronocort in CAH patients, which is expected in Q4 2018. In the US, following discussion with the FDA, Diurnal has designed a Phase III registration package for Chronocort and intends to commence this programme during Q3 2018. Diurnal also plans to enter the AI market with Chronocort, commencing a Phase II study in US centres around the end of 2018.
Diurnal’s pipeline of product candidates for cortisol deficiency are protected by an extensive patent portfolio, benefitting from several granted or pending patents in key jurisdictions, along with strong protection through orphan drug designations, extending commercial exclusivity until 2034.
MAXIMISING PIPELINE POTENTIAL OUTSIDE OF CORE MARKETS
Outside Diurnal’s core territories in Europe and the US, the company will seek to maximise income from Alkindi and Chronocort by entering into local distribution agreements with experienced partners, which they have already done in Israel, Australia and New Zealand. Typically, the Company will seek to access territories where there is the potential for a price which reflects the innovation for its products and which can use the European regulatory dossier as the basis for local regulatory submissions.
BUILDING AN EARLIER-STAGE PIPELINE
Whilst Diurnal’s current primary focus is on bringing its late-stage cortisol deficiency pipeline to the market in Europe and the US, the company’s longerterm plan is to expand into endocrine disease areas, such as those associated with the thyroid, gonads and pituitary. Earlier-stage candidates currently include a native oral testosterone for the treatment of male hypogonadism, which is currently being assessed in a Phase I/II clinical study expected to complete during 2018.
The company also has earlier-stage development activities assessing a modified-release T3 replacement therapy for hypothyroidism and an siRNA therapy for Cushing’s disease, a condition characterised by an excess of cortisol. In addition, Diurnal regularly assesses third party products for chronic endocrine disorders that fit within its strategic vision.