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Diurnal Group - Full year results



The 2021 full-year results for Diurnal, reported this morning, had been well flagged by the recent trading update. Diurnal has transformed itself from a development stage company to a commercial one with its two approved hydrocortisone-based products Alkindi and Efmody. While Alkindi has proven to be a useful new approved treatment for paediatric patients with adrenal insufficiency (AI), Efmody represents the greater value-added product. Efmody, for congenital adrenal hyperplasia (CAH), enables the smart physiological delivery of hydrocortisone to match patients' diurnal rhythm. As a result, scrutiny of its roll out and sales progress will be crucial in measuring the success of Diurnal's commercial capabilities.

Leading indicators are encouraging. While sales of Alkindi remain modest as expected, it would appear that the majority of newborns are receiving treatment. These trends suggest that the commercial infrastructure in Europe is delivering. For Efmody, pricing in launched countries is in line with our initial views, with important geographies such as Germany and the UK now ready to go.

The US is a significant market opportunity for Efmody, with awareness of the importance of treating CAH rising as novel and complementary treatments progress. The receipt of a Special Protocol Assessment should reduce the clinical risk. At the same time, the size of the CAH opportunity and Orphan designation are suggestive of commercial success from a highly targeted approach using a small sales/ educating salesforce. Importantly, Diurnal is well placed financially to progress this opportunity.

The icing on the cake for the adrenal franchise is the larger AI opportunity which is also a disorder of low cortisol. In Europe and the US, the market is wide open for a treatment like Efmody that best mimics the physiological release of cortisol. With European approval in CAH now secured, we look forward with keen anticipation on Diurnal realising the full potential of Efmody and retaining the full margin in Europe, the US and potentially Japan as well.

The progress of the native testosterone replacement therapy (TRT) DITEST have been largely overlooked, in our opinion. DITEST has the potential to become the first effective oral native testosterone in a $5bn global market. We believe portents are good as regulatory concerns regarding TRT ease (in the US) and the regulatory pathway for DITEST has cleared. The prospect of a truncated branded generic (505(b)(2)) regulatory pathway, and an oral treatment that overcomes the requirement for a high-fat meal required for approved oral TRTs currently, suggests that this should be a low-risk, high-reward programme for Diurnal if successfully prosecuted.


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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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