Shares in Eco Animal Health (LON:EAH) rallied after the veterinary products specialist in-licensed a late-stage sheep toxoplasmosis vaccine from French biotech Vaxinano.
Toxoplasmosis is a major cause of reproductive losses in sheep and other species. The vaccine candidate targets reproductive failure caused by Toxoplasma gondii. This is a major cause of abortions, stillbirths and weak lambs that can inflict significant losses on farmers.
Investors are clearly excited by this licence, which strengthens AIM-listed Eco’s growing preventative medicines pipeline. The licence covers all important sheep rearing markets worldwide and the technology has patent protection too.
Flocking to Eco Animal Health
Eco is a fast-growing global animal health firm headquartered in London. The David Hallas-led outfit develops and markets veterinary pharmaceuticals globally.
Lead product Aivlosin is an antibiotic that treats enteric and respiratory diseases in pigs and poultry.
Whilst specific terms relating to the sheep toxoplasmosis vaccine were not disclosed, Eco will pay Vaxinano a ‘modest upfront licence fee’. It is also on the hook for a future development milestone payment and future royalty payments based on commercial product sales.
Eco believes the product has estimated peak annual sales of approximately £10 million in the UK and Europe alone. As such, it is expected to make a ‘meaningful contribution to the incremental earnings from the company’s growing vaccine portfolio’.
Exciting step forward
Hallas said: ‘This agreement with Vaxinano is an exciting step forward for Eco, strengthening our position in livestock vaccines, complementing our new and growing vaccines franchise and aligning with the focus of our internal R&D portfolio in preventative animal health, in line with our investment plans.’
This sounds like a compelling deal for Eco Animal Health, adding another vaccine candidate to its burgeoning pipeline. Crucially, the vaccine candidate has already demonstrated safety and efficacy. Furthermore, it is at an advanced stage of development, which reduces technical and regulatory risk.
Admittedly, there is an existing marketed vaccine for sheep toxoplasmosis. However, Cavendish analysts believe this has ‘significant handling and shelf-life constraints which significantly limit wider market adoption’.
Assuming Eco’s product overcomes those drawbacks, there is ‘scope both to take share and to expand the overall market opportunity within existing markets and also beyond Europe’, insists the broker.
