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Diurnal Group - A new dawn

Updated: Mar 19

Diurnal faces an imminent regulatory decision on Chronocort, it’s most important product to date. Our note published today revisits the investment case, highlighting Chronocort’s benefits to patients and also the opportunities for Diurnal beyond Chronocort and Congenital Adrenal Hyperplasia (CAH).

Diurnal faces an imminent regulatory decision on Chronocort, it’s most important product to date. Our note published today revisits the investment case, highlighting Chronocort’s benefits to patients and also the opportunities for Diurnal beyond Chronocort and Congenital Adrenal Hyperplasia (CAH).


Approval for Chronocort in Europe for CAH should facilitate access to the much larger Adrenal Insufficiency market, worth nearly $2bn in Europe. It will also bring the US CAH market into play, assuming a successful US Phase 3 study is conducted.


The Journal of Clinical Endocrinology and Metabolism recently published further details on the Chronocort’s European Phase 3 and extension study. The Phase 3 study is the largest interventional study ever conducted in the CAH patient population. The data suggests that, unlike existing treatments, most patients can be controlled with a normal adrenal replacement dose of Chronocort, thereby avoiding glucocorticoid doses exceeding those found in healthy individuals. This minimises the side effects associated with the administration of excessive steroids.


Diurnal has enough cash to take the European adrenal franchise through to profitability and also further develop DITEST. DITEST could be a best-in-class testosterone replacement therapy, targeting a global market estimated to be worth $4.8bn. Diurnal is well prepared for the launch of Chronocort with an existing salesforce already in place for Alkindi, and pre-launch activities have already begun. With Alkindi for children and Chronocort for adults both approved in Europe, Diurnal will be able to offer patients a lifelong treatment.


Should Diurnal receive a positive recommendation for Chronocort in the last week of March, we would expect management to agree a regulatory pathway with US regulators and look to commence a US Phase 3 study. Consequently, we have incorporated this investment in our forecasts.


We have DCF derived fair value of 99p per share. (See full note here)


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IMPORTANT:

Diurnal Group is a client of Calvine Partners and as such, this publication is not independent and should be considered a marketing communication under FCA Rules. None of the information contained in this publication should be considered as any form of advice.

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