AstraZeneca licensing deal validates Synairgen's approach, say analysts

Anglo-Swedish drug major AstraZeneca’s (LSE: AZN) recent $230 million deal with British respiratory drug development specialist Synairgen (AIM: SNG) for the development of SNG001, an inhaled interferon beta in development for treating respiratory tract viral infections in patients with severe asthma, validates Synergen’s business approach, say analysts at Edison Equity Research.

The analysts say that the licensing agreement for SNG001 gives credence to the use of the inhaled interferon beta as immunotherapy to reduce asthma attacks triggered by viral infections. Edison estimates an enterprise value of £39 million ($66 million) for Synairgen, but also acknowledges that aside from SNG001 there is limited visibility of a follow-on pipeline, and that Synairgen is reliant on in-licensing drug candidates or immunotherapies.

The Edison analysts said: “The recent exclusive global deal with AstraZeneca, potentially worth $230 million, to in-license SNG001 for the treatment of asthma is a strong validation of Synairgen’s in-vitro cell-based approach using its biobank database. The current EV [enterprise value]of about £39 million is more than justified in our view by the deal value and the potential of SNG001 in asthma, which is a significant opportunity, although Synairgen’s ability to acquire and screen further drug candidates will be a key driver.”