MEDRX CO., LTD ANALYST NET Company Report
MEDRx Co., Ltd. | |||||||||||||||||||||||||||||||||
（4586 | Growth） | Issued: April 10, 2023 | |||||||||||||||||||||||||||||||
Now at Last Emerging from the Doldrums | |||||||||||||||||||||||||||||||||
Using proprietary technology in a niche market | Basic Report (revised) | ||||||||||||||||||||||||||||||||
MEDRx's business model involves the development of transdermal formulations | |||||||||||||||||||||||||||||||||
of the active components of existing oral and injection drugs, which development | |||||||||||||||||||||||||||||||||
Fair Research Inc. | |||||||||||||||||||||||||||||||||
it then licenses out to pharmaceutical companies, from whom it collects milestone | |||||||||||||||||||||||||||||||||
income and, after launch, royalties on sales. Compared to other drug discovery | Tsuyoshi Suzuki | ||||||||||||||||||||||||||||||||
businesses MEDRx's activities have a greater probability of success because of its | |||||||||||||||||||||||||||||||||
emphasis on existing active pharmaceutical agents, and, because of the niche | |||||||||||||||||||||||||||||||||
nature of its activities there are limited competitors, from whom it is in any case | Company Outline | ||||||||||||||||||||||||||||||||
distinguished by two proprietary technologies, ILTS® and NCTS®. It has also | |||||||||||||||||||||||||||||||||
developed a microneedle technology on which feasibility studies are now being | Location | Kagawa Pref. | |||||||||||||||||||||||||||||||
performed to provide 'vaccine patches' | |||||||||||||||||||||||||||||||||
President | Yonehiro | ||||||||||||||||||||||||||||||||
Now finally emerging from the doldrums | |||||||||||||||||||||||||||||||||
ma | Matsumura | ||||||||||||||||||||||||||||||||
2022 was another lacklustre year for MEDRx, following that of 2021. In 2023, | Established | January 2002 | |||||||||||||||||||||||||||||||
however, it finally began its emergence from the doldrums. In the first place, in | |||||||||||||||||||||||||||||||||
March 2023 an application for authorisation of Lydolyte, a lidocaine tape | Capital | JPY227 mil. | |||||||||||||||||||||||||||||||
preparation which the company hopes will be its first product to market, was re- | |||||||||||||||||||||||||||||||||
Listed | Feb. 2013 | ||||||||||||||||||||||||||||||||
submitted after supplementary testing, Secondly, in March 2023, the company | |||||||||||||||||||||||||||||||||
finally retrieved from the Indian company, Cipla, all the rights to the tizanidine | |||||||||||||||||||||||||||||||||
URL | www.medrx.co.jp | ||||||||||||||||||||||||||||||||
preparation (CPN-101,MRX-4TZT) it had licensed out, after protracted | |||||||||||||||||||||||||||||||||
negotiations on proceeding to Phase-2, with MEDRx going it alone on Phase-2. | Industry | Pharma | |||||||||||||||||||||||||||||||
MEDRx is strengthening its policy of "selective concentration" in the context of | |||||||||||||||||||||||||||||||||
limited resources. More specifically, it has made tizanidine tape (MRX-4TZT) the | Employees | 22 (consol) | |||||||||||||||||||||||||||||||
main focus of its development efforts in 2023, with BE tests for fentanyl tape | |||||||||||||||||||||||||||||||||
(MRX-9FLT) running in parallel. The company will additionally work on | Key Indicators (April 7 2023) | ||||||||||||||||||||||||||||||||
formulation improvements to its memantine patches (MRX-7MLL), putting back | |||||||||||||||||||||||||||||||||
Share price | 170 | ||||||||||||||||||||||||||||||||
PK tests until 2024 or beyond. Meanwhile, the status of diclofenac-lidocaine tape | |||||||||||||||||||||||||||||||||
(MRX-6LDT) for which the company expects blockbuster sales, is now on pause. | |||||||||||||||||||||||||||||||||
52-week low | 91 | ||||||||||||||||||||||||||||||||
Looking ahead, development will be promoted sequentially while narrowing down | |||||||||||||||||||||||||||||||||
the products to be developed. | 52-week high | 230 | |||||||||||||||||||||||||||||||
Value of four main product pipelines: JPY26.2billion (before tax) | |||||||||||||||||||||||||||||||||
Shares | 30,695,100 | ||||||||||||||||||||||||||||||||
On the basis of a number of assumptions we have calculated the total pipeline value | outstanding | ||||||||||||||||||||||||||||||||
of MEDRx's four main products (lidocaine tape, tizanidine tape, fentanyl tape, | |||||||||||||||||||||||||||||||||
Trading unit | 100 shares | ||||||||||||||||||||||||||||||||
memantine patches) at JPY26.2billion (pre-tax). The market is currently valuing | |||||||||||||||||||||||||||||||||
MEDRx at around JPY5.5 billion in market value terms, meaning that using even | |||||||||||||||||||||||||||||||||
Market value | JPY5,218 mil. | ||||||||||||||||||||||||||||||||
the most conservative of assumptions there is a big gap between 4-product pipeline | |||||||||||||||||||||||||||||||||
present value (pre-tax) and market value. Despite signs of delay in pipeline | Dividend | 0 | |||||||||||||||||||||||||||||||
development it seems the market is only discounting the value of the lidocaine tape | |||||||||||||||||||||||||||||||||
pipeline. The expectation is that through a process of "selective concentration" | Forecast EPS | -27.8 | |||||||||||||||||||||||||||||||
valuations will rise as development proceeds one step at a time. Additionally, | |||||||||||||||||||||||||||||||||
Forecast PER | na | ||||||||||||||||||||||||||||||||
Scilex, which sells lidocaine tape in the U.S., has a market capitalization of $1.2 | |||||||||||||||||||||||||||||||||
billion, but direct comparisons are difficult since, in addition to a different pipeline | |||||||||||||||||||||||||||||||||
Actual BPS | 40.71 | ||||||||||||||||||||||||||||||||
portfolio, the company is listed via a SPAC, which tends to lead to excess | |||||||||||||||||||||||||||||||||
valuation, and there is speculation that it may expand its business by taking over | Actual PBR | 4.18X | |||||||||||||||||||||||||||||||
the good assets of its parent company, which is in financial difficulty. | |||||||||||||||||||||||||||||||||
On the basis of shares outstanding (excl | |||||||||||||||||||||||||||||||||
treasury | shares) | ||||||||||||||||||||||||||||||||
Revenue | YoY | Op. Profit | YoY | Rec, | YoY | Net | YoY | EPS | Share Price | ||||||||||||||||||||||||
Results | Profit | Earnings | |||||||||||||||||||||||||||||||
JPY mil | ％ | JPY mil | ％ | ％ | ％ | JPY | High | Low | |||||||||||||||||||||||||
JPY mil | JPY mil | ||||||||||||||||||||||||||||||||
18/12 Actual | 8 | -95.8 | -1,273 | na | -1,267 | na | -1,267 | na | -126.7 | 2,060 | 425 | ||||||||||||||||||||||
19/12 Actual | 169 | 1922.9 | -1,627 | na | -1,618 | na | -1,616 | na | -134.3 | 698 | 301 | ||||||||||||||||||||||
20/12 Actual | 115 | -32.2 | -1,130 | na | -1,149 | na | -1,114 | na | -68.6 | 426 | 160 | ||||||||||||||||||||||
21/12 | Actual | 8 | -92.7 | -1,061 | na | -1,066 | na | -1,059 | na | -49.6 | 327 | 126 | |||||||||||||||||||||
22/12 | Actual | 59 | 612.4 | -1,098 | na | -1,112 | na | -1,111 | na | -43.8 | 133 | 92 | |||||||||||||||||||||
23/12 | Forecast | 127 | 214.9 | -830 | na | -783 | na | -786 | na | -27.8 | |||||||||||||||||||||||
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This report is prepared by Fair Research Inc. (FRI) for the purpose of providing information to investors, and not for solicitation of securities trading. Although this is based on information and materials that FRI judges reliable, there is no guarantee of accuracy, credibility, completeness, suitability or timeliness. FRI shall not take any responsibility whatsoever for any results including direct or indirect damage arising from the use of, or reliance on, this report. Investors should take their own responsibility for securities and other transactions. The intellectual property rights of this report belong to FRI, and any copy, transmission or quote of any contents without permission is legally prohibited
MEDRx Co., Ltd （4586 Growth）
Issued: April 10, 2023
Company Outline & Management Philosophy
A venture company engaged | In broad terms, the company is engaged in developing transdermal absorption | |
in developing | transdermal | formulations using the active ingredients of existing oral and injectable drugs. It licenses |
absorption | medical | out these formulations to pharmaceutical companies, collecting milestone payments and, |
formulations | after launching in the market, royalties on sales. | |
Transdermal absorption formulations make up a growing medium to long-term segment | ||
of the pharmaceutical market. Among their attributes are maximisation of | ||
pharmaceutical effect, reduced side-effects and better quality of life for the patient. These | ||
attributes are achieved by the following: |
- Providing a consistent and sustained release of active ingredients: enabling the maintenance of a constant volume of the drug in the bloodstream.
- Little or no first-pass effect: while the efficacy of orally administered drugs can be reduced to 10-20% on passage through the liver, this is not an issue in the case of transdermal absorption formulations.
- Better medication compliance: suitable for patients who find it difficult to take drugs orally due to problems swallowing, and also reduces the problem of forgetting to medicate.
The company has proprietary
technologies, giving its products a higher probability of success than is possible for other new drug discovery businesses
- Unlike drug delivery by injection, transdermal delivery is painless.
- Transdermal delivery lends itself to a wide range of conditions.
The MEDRx business model is distinctive in two ways:
- It is low risk (i.e. high probability of success) because it does not involve the discovery or development of new active ingredients.
- The company has its own transdermal absorption technology using ionic liquids (ILTS®: Ionic Liquid Transdermal System), which distinguishes it from other companies.
Note: Ionic liquids are salts in liquid form at room temperature composed of ions which are resistant to crystalization. They are non-volatile, non- flammable and electricity conductive. In recent years these properties have led to applications in lithium battery electrolysis and elsewhere. With ILTS®, MEDRx was the first to develop the technology for the transdermal absorption of ionic liquids, thus facilitating the administration of drugs which are normally difficult to administer transdermally. With existing technology, transdermal absorption was difficult in the case of nucleic acid or macromolecular formulations, but ILTS® has made it much easier.
Source: MEDRx company briefing
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This report is prepared by Fair Research Inc. (FRI) for the purpose of providing information to investors, and not for solicitation of securities trading. Although this is based on information and materials that FRI judges reliable, there is no guarantee of accuracy, credibility, completeness, suitability or timeliness. FRI shall not take any responsibility whatsoever for any results including direct or indirect damage arising from the use of, or reliance on, this report. Investors should take their own responsibility for securities and other transactions. The intellectual property rights of this report belong to FRI, and any copy, transmission or quote of any contents without permission is legally prohibited
MEDRx Co., Ltd （4586 Growth）
Issued: April 10, 2023
The human skin is composed of the highly hydrophobic stratum corneum and the highly hydrophilic epidermal/ dermal layer. Highly hydrophilic active ingredients of drugs cannot permeate and diffuse in the stratum corneum. In ionic liquids, the anion or negative part (blue circle in the figure) is bonded to the hydrophilic group, and the cation or positive part (red △ in the figure) is bonded to the hydrophobic group. Such liquids thus have amphipathic properties (both hydrophilic and hydrophobic). Further, molecules do not move randomly as in ordinary liquids, but the structure is formed at the nano level when viewed from moment to moment. That is to say, the molecules that are ionic liquefied congregate (light blue elliptical and orange elliptical parts in the figure: alkyl congregation and clone congregation). According to the nanostructured fluid hypothesis, the active ingredients of a drug dissolve in an ionic liquid to a state analogous to enclosure in nanoparticles. The technique involved means that transdermal absorption of nucleic acids and high molecular weight drugs, which was difficult to achieve in the past, is now much easier.
Solids | Ionic Liquids | Liquids |
Source: MEDRx company briefing
The company has a well- A notable feature of MEDRx's ILTS® is that it has built high barriers to entry. The endowed library of ionic company has a library of several hundred ionic liquids formed from combinations of liquids and this know-how compounds with a track record of use on human subjects as pharmaceuticals and presents a formidable barrier additives. The company also has extensive know-how on selecting ionic liquids for
to entryparticular drug properties, and formulation expertise on maintaining and improving the transdermal properties of ionic liquids.
The company's main target is The company's primary target is the US market for transdermal absorption formulations,
the US marketmainly because of the size of the potential market. The US makes up in excess of 40% of the global pharmaceuticals market and a high growth rate has been maintained in recent
years. MEDRx believes that the added value of new formulations, such as patch formulations (which provide increased efficacy, reduced side effects, improved quality of life and convenience, etc.) are likely to be reflected in drug prices.
Note: In Japan and Europe public insurance and public funds cover most medical costs and pharmaceutical prices are set by the state and thereby involve fiscal constraints. This means that, compared to the US market the added value of new formulations is not reflected in prices.
There are four product pipelines to which MEDRx has applied its proprietary ILTS® technology
The main products to which the ILTS® technology is applied are tizanidine tape (CPN- 101, MRX-4TZT), which has been successfully licensed out to Cipla Corp., lidocaine tape (MRX-5LBT), fentanyl tape (MRX-9FLT) and diclofenac-lidocaine tape (MRX- 6LDT).
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This report is prepared by Fair Research Inc. (FRI) for the purpose of providing information to investors, and not for solicitation of securities trading. Although this is based on information and materials that FRI judges reliable, there is no guarantee of accuracy, credibility, completeness, suitability or timeliness. FRI shall not take any responsibility whatsoever for any results including direct or indirect damage arising from the use of, or reliance on, this report. Investors should take their own responsibility for securities and other transactions. The intellectual property rights of this report belong to FRI, and any copy, transmission or quote of any contents without permission is legally prohibited
MEDRx Co., Ltd （4586 Growth）
Issued: April 10, 2023
A memantine patch using NCTS® technology has been developed
The company also has a transdermal absorption technology using nanocolloids (NCTS®: Nano-Sized Colloid Transdermal System). As mentioned earlier, the ILTS® technology is used in the transdermal absorption of macromolecular agents such as peptides and nucleic acids. The NCTS® technology, however, enhances transdermal absorption of relatively low molecular-mass agents by reducing pharmacologically active components to nano-sized colloids. Among products now at the development stage for which information has already been disclosed is MRX-7MLL, a transdermal absorption formulation using memantine (for the treatment of Alzheimer's), which can suppress the skin irritation which memantine usually causes.
NCTS®： Nano-sized Colloid Transdermal System - Image
The company is working on microneedle arrays which can be used as "vaccine patches"
Source: Fair Research Inc, using company briefing materials
The company has also developed a technology using microneedle arrays as a sort of "vaccination patch". The microneedle technique works by using super-fine needles to open apertures in the surface of the skin, thereby allowing access to the drug. The skin not only acts as a physical barrier to foreign substances but also acts immunologically to expel such substances. Langerhans cells in the epidermis below the stratum corneum and dermis dendritic cells in the dermis below, are antigen-presenting cells which play an important role in biological defense. A strong immune response can be elicited by efficiently transmitting the vaccine antigen to these antigen-presenting cells.
However, the stratum corneum presents a barrier, so that vaccine applied to the skin does not penetrate. Microneedles transmit drugs into the skin by opening apertures in the epidermis with superfine needles. They are less than 1mm in length and do not reach the nerve, hence providing vaccination without pain. In other words, this method can be seen as a "vaccination patch".
Source: MEDRx company briefing, February 2021
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This report is prepared by Fair Research Inc. (FRI) for the purpose of providing information to investors, and not for solicitation of securities trading. Although this is based on information and materials that FRI judges reliable, there is no guarantee of accuracy, credibility, completeness, suitability or timeliness. FRI shall not take any responsibility whatsoever for any results including direct or indirect damage arising from the use of, or reliance on, this report. Investors should take their own responsibility for securities and other transactions. The intellectual property rights of this report belong to FRI, and any copy, transmission or quote of any contents without permission is legally prohibited
MEDRx Co., Ltd （4586 Growth）
Issued: April 10, 2023
Microneedles could be a promising means of tackling pandemics in developing countries
This business has important social ramifications. Not only does the 'vaccination patch' using minimally invasive microneedles entail less pain than an injection, but it can be patient-administered without the presence of the medical worker who would normally be involved. Additionally, microneedles to which solid vaccine antigens have been applied are very suitable for storage at room temperature and are easy to transport. This makes the technology a promising means of dealing with pandemics in developing countries that may have only a rudimentary medical environment.
Microneedle array technology - image
Source: Fair Research Inc. using various materials
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This report is prepared by Fair Research Inc. (FRI) for the purpose of providing information to investors, and not for solicitation of securities trading. Although this is based on information and materials that FRI judges reliable, there is no guarantee of accuracy, credibility, completeness, suitability or timeliness. FRI shall not take any responsibility whatsoever for any results including direct or indirect damage arising from the use of, or reliance on, this report. Investors should take their own responsibility for securities and other transactions. The intellectual property rights of this report belong to FRI, and any copy, transmission or quote of any contents without permission is legally prohibited
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Medrx Co. Ltd. published this content on 20 April 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 April 2023 07:33:07 UTC.
