First commercial revenues

Diurnal (DNL) is a commercial-stage specialty pharmaceutical company focused on diseases of the endocrine system. Its two lead products target rare conditions where medical needs are currently unmet, with the aim of building a long-term ‘Adrenal Franchise’. Following approval from the European Commission, Alkindi is being launched in key EU markets through DNL’s own commercial infrastructure, starting with Germany and now launched in the UK. Additional territories will follow during 2018 and 2019. Meanwhile, the company is pushing forward with Alkindi and Chronocort clinical trials in the US. Cash at the end of the period was £17.3m.

• Strategy: Diurnal’s strategic goal is to create a valuable ‘Adrenal Franchise’ that can treat patients with chronic cortisol deficiency diseases from birth through to old age. Once Alkindi and Chronocort are established in the EU and the US, the long-term vision is to expand the product offering to other related conditions.
• Results: Reported operating losses of £16.98m (-£12.08m) largely reflect the increased investment in R&D. This fell through the cashflow statement, leaving the company with net cash at the end of June of £17.3m, including the completion of a Placing for £10.5m gross in March.
• First sales: The results provide the first 46 days’ sales figure for Alkindi in Germany, at £73k. For the main European countries, there will be a staged roll-out, influenced by conclusion of pricing negotiations on a country-by-country basis. Since 3 September, Alkindi has also become available in the UK.
• Near-term milestones: Important value inflection points are due before the end of calendar 2018: headline data for Phase III Chronocort in the EU; start of Chronocort Phase III in the US; and readout of the US Phase III for Alkindi, which will be followed by an end-of-Phase III review meeting with the FDA.
• Investment summary: Alkindi, a cortisol replacement therapy designed for babies and children, is DNL’s first product on the market. It will be followed shortly by Chronocort for adults. The cortisol replacement market is for conditions that need life-long treatments, and it has a potential value of $3.5bn. DNL will be reporting on a number of potential valuation inflection points during the remainder of 2018.