Street Calls of the Week
Recent newsflow includes solid interim results, which demonstrated value in Abzena's (LON:ABZA) integrated service proposition and hybrid business model, positive updates on a couple of Abzena inside products and a licensing agreement to commercialise a legacy asset to Trieza Therapeutics. We maintain our valuation at £112m, but expect upside as it progresses.
Licence agreement for legacy asset
Abzena has announced a licensing agreement with Trieza Therapeutics, a start-up biotechnology company specialising in the discovery and development of immunomodulatory oncolytic viruses. Abzena has granted an exclusive worldwide licence to an undisclosed antibody sequence, which was created using Abzena’s Composite Human Antibody technologies. Trieza intends to exploit this technology in conjunction with its viral vector technology to develop novel therapies in oncology. Abzena has indicated that it could receive up to $35m in milestone payments and a royalty on any resulting sales. We believe Abzena could achieve a higher royalty rate than other Abzena inside products (c 3% vs c 1%) as its input has been higher and therefore we expect a potentially higher return. This is positive as it underlies its rationale of focusing on its core business (service and technology provider), while retaining value from its assets, thereby lowering the risk profile.
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