rbs rating update, page-4

Oncology Phase III program ready to go?
ACL is ready to commence a randomised, double-blind Phase III clinical trial of either
FOLFIRI (a combination of cancer drugs 5-FU, leucovorin and irinotecan) or FOLF(HA)-
Irinotecan in 390 second line metastatic colorectal cancer patients (mCRC). HA-Irinotecan is
ACL?s proprietary formulation. The primary end-point is progression free survival. The trial
will commence following the approval of fondaparinux and is anticipated to cost about A$25m
over three years. Irinotecan (Camptosar, Pfizer) had peak sales of US$970m and has been
in generic use in the US since 2008.
?and we have adjusted our forecasts to reflect the potential of this program
With the Phase III program set to commence imminently, we have taken the opportunity to
incorporate the upside potential of an approved HA-Irinotecan into our forecasts. This adds
47cps to our DCF valuation and positively impacts EPS from FY14 onwards.
Generic fondaparinux: still waiting for key catalyst to be delivered
ACL?s lead compound is fondaparinux, a generic version of Arixtra, a synthetic heparin
marketed by GlaxoSmithKline (NYSE: GSK). ACL?s manufacturing and marketing partner is
Dr Reddy's Laboratories (NYSE: RDY). Dr Reddy?s Abbreviated New Drug Application
(ANDA) filed with the FDA was accepted for review in May
RBS REPORT for those interested,They see the HA Program as the next growth phase, remember RBS have always been ultra conservative

The next leg of growth
ACL's HyACT program is ready to progress down the development pathway. As a
result, we believe it is timely to consider how this will impact ACL's growth
profile, anticipated post the FDA approval of generic fondaparinux. Buy retained.


2009. Approval is pending and we
anticipate it will be delivered between July and October 2011, based on a 27-30 month
average ANDA review time. Arixtra had CY10 US sales of US$274m, up 15% on the pcp.
Focus on upcoming catalysts. New price target of A$1.30, Buy retained.
Underlying cash burn is A$0.65m per month, excluding the Phase III HyAct trial costs, which
are likely to be funded by fondaparinux revenues. Upcoming catalysts include the approval of
fondaparinux, which, when received, will allow ACL to progress its Phase III clinical program
for HA-Irinotecan. Following forecast revisions, our DCF-based valuation and target price
have increased to A$1.30 (from A$0.83). Risks surround commercialisation of pipeline.
have a good day