Realising near-term value in oncology

Incanthera is a spin-out from the Institute of Cancer Therapeutics at the University of Bradford to exploit development opportunities generated from this prestigious organisation. This has provided the company with its core pro-drug delivery platform technology, to which additional technologies/products have been acquired from esteemed establishments, all focused on producing better clinical outcomes for cancer patients. At IPO, Incanthera will seek £2m-£3m to complete development of an advanced topical skin product, Sol, containing an active ingredient that prevents sun damage developing into skin cancers, ready for licensing within 18 months’ time.

• Strategy: Incanthera is a specialist oncology company progressing technologies that aim to deliver improved patient outcomes. Its strategy is to develop products and drugs to the earliest point at which they can be out-licensed, in return for revenue-generating development milestones and royalties.
•  Focus: Initially, Incanthera will complete the development of Sol, a topical cream containing an active ingredient known to prevent skin cancer, for the skincare market. An optimised programme of work has been prepared to have Sol ready for licensing in ca.18 months’ time, after a successful listing on the NEX Exchange.
• Opportunity: Global awareness of the damaging effects of the sun’s rays has led to a sun care market worth ca.$12.0bn in 2018, and projected have 5% CAGR to 2025. Graduation of the market from simple sun protection to a quality cosmetic is also driving the demand for innovative value-added products.
• Risks: Investments in small, early-stage pharmaceutical companies carry a significant risk, and additional capital will be required in the future for further expansion of its clinical programmes. Management intends to undertake an IPO on NEX, but there is no guarantee on timing, nor on the quantum of cash raised.
• Investment summary: Incanthera offers distinct programmes with the potential to attract the attention of the majors, especially given management’s strategy to out-license products early. The focus, initially, will be on a patent-protected, value-added, sun cream, which represents a relatively quick and low-risk cosmetics project. Our cashflow analysis, based on a raise of £2m-£3m at IPO and approved by HMRC for VCT/EIS tax relief, gives a cash runway of 24 months.