TPI provides its latest research note on Midatech Pharma plc (MTPH.L).

Midatech has announced an extension of the Q-Sphera R&D Collaboration (‘the Collaboration’) that was originally detailed on 21 July 2020, while also disclosing that the previously unnamed party is, in fact, Janssen Pharmaceutica NV (‘Janssen’), the Belgium-based pharmaceutical arm of the world’s largest and most broadly-based healthcare company, Johnson & Johnson (NYSE: JNJ).

Today’s news follows Midatech’s 17 June 2021 announcement that it had successfully encapsulated a proprietary Janssen experimental large molecule medicine while preserving its functional integrity. Considering no other commercial or academic organisation has been able to deliver any such experimental medicine over extended periods using methods capable of commercial scaling, Janssen’s decision to extend the Collaboration clearly reflects very positively on the potential of Q-Sphera’s technology in the delivery of active pharmaceutical ingredients (‘API’) via long-acting injectables. Midatech will now focus on maximising drug loading and optimising in vitro duration of release while utilising the technology.

While this is the next of what is likely to become many more development steps requiring successful completion before a commercial opportunity presents itself, it is worth reflecting on the fact that the global monoclonal antibody (‘mAb’) market was valued at a giant US$154bn in 2020. Recognising that beyond Janssen there are large number of candidates, both on market and under development, that could benefit from this advance in technology, satisfying not only the need for sustained release but also local/targeted delivery, translation of biologics as long-acting formulations offer the potential for blockbuster opportunities. From these, Midatech could generate not only substantial fees/extended royalties but also build significantly on its reputation for innovation.

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We would draw your attention to the various disclaimers in the document both at the beginning and at the end of the note. Retail clients (as defined by the rules of the FCA) must not rely on the research document. In particular you should note that the research document is a non-independent marketing communication. The analyst who has prepared the research is aware that TPI provides research to Midatech Pharma plc. Accordingly the research has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibitions on dealing ahead of its dissemination.

The information in the document is published solely for information purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. The material contained in the document is general information intended for recipients who understand the risks associated with equity investment in smaller companies. It does not constitute a personal recommendation as defined by the FCA or take into account the particular investment objectives, financial situation or needs of individual investors nor provide any indication as to whether an investment, a course of action or the associated risks are suitable for the recipient.

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