Oryzon Genomics — Phase IIa trial in Alzheimer’s disease initiated

Oryzon Genomics (BME: ORY)

Last close As at 27/03/2024

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Research: Healthcare

Oryzon Genomics — Phase IIa trial in Alzheimer’s disease initiated

According to the latest news from Oryzon, the first Alzheimer’s disease (AD) patients (3/90) were recruited into the Phase IIa ETHERAL clinical trial testing ORY-2001, a dual LSD1/MAOB inhibitor for CNS indications. The trial is expected to be finalised in Q419, but Oryzon plans to report preliminary data in early 2019, which is one of the main catalysts in the near term. The second Phase IIa trial with ORY-2001 SATEEN in multiple sclerosis (MS) continues to enrol patients, with the preliminary readout planned in early 2019, another key catalyst for the share price. Our valuation is marginally higher at €322m or €9.4/share (vs €315m or €9.2/share previously).

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Written by

Healthcare

Oryzon Genomics

Phase IIa trial in Alzheimer’s disease initiated

Q118 update

Pharma & biotech

22 May 2018

Price

€2.73

Market cap

€91m

Net cash (€m) at end Q118
(including term deposits)

9.2

Shares in issue

33.5m

Free float

52.8%

Code

ORY

Primary exchange

Madrid Stock Exchange

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

13.3

7.3

(11.5)

Rel (local)

11.3

4.7

(4.8)

52-week high/low

€3.3

€1.8

Business description

Oryzon Genomics is a Spanish biotech focused on epigenetics. ORY-1001 (Phase I/IIa) is being explored for acute leukaemias and SCLC; ORY-2001, its CNS product, is in Phase IIa trials in MS and AD. Newer asset ORY-3001 is being developed for certain orphan indications.

Next events

Initiation of POC trials with ORY-1001 in selected indications

H218

Results of Phase IIa with ORY-2001 in MS

H119

Results of Phase IIa with ORY-2001 in AD

H119

Analysts

Jonas Peciulis

+44 (0)20 3077 5728

Alice Nettleton

+44 (0)20 3681 2527

Oryzon Genomics is a research client of Edison Investment Research Limited

According to the latest news from Oryzon, the first Alzheimer’s disease (AD) patients (3/90) were recruited into the Phase IIa ETHERAL clinical trial testing ORY-2001, a dual LSD1/MAOB inhibitor for CNS indications. The trial is expected to be finalised in Q419, but Oryzon plans to report preliminary data in early 2019, which is one of the main catalysts in the near term. The second Phase IIa trial with ORY-2001 SATEEN in multiple sclerosis (MS) continues to enrol patients, with the preliminary readout planned in early 2019, another key catalyst for the share price. Our valuation is marginally higher at €322m or €9.4/share (vs €315m or €9.2/share previously).

Year end

Revenue (€m)

PBT*
(€m)

EPS*
(€)

DPS
(€)

P/E
(x)

Yield
(%)

12/16

5.0

(4.7)

(0.2)

0.0

N/A

N/A

12/17

4.3

(4.6)

(0.1)

0.0

N/A

N/A

12/18e

7.0

(5.6)

(0.2)

0.0

N/A

N/A

12/19e

6.3

(7.3)

(0.2)

0.0

N/A

N/A

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

First patients enrolled into ORY-2001 AD trial

The first three patients out of 90 have been recruited at two sites in Barcelona into the randomised, double-blind, placebo-controlled, 26-week study (n=90) Phase IIa ETHERAL trial with ORY-2001 in AD after the trial was approved by the Spanish Medicines Agency (AEMPS) in April 2018. Oryzon has also recently received approval to start the trial in France and is awaiting approval for the UK, both of which should help with enrolment. In addition, it is planning to start a similar study in the US. The ETHERAL trial is expected to end in Q419, but a preliminary readout is planned in early 2019, which is one of the main catalysts in the near term.

Phase IIa SATEEN trial in MS ongoing

The second Phase IIa SATEEN trial with ORY-2001 in MS continues to enrol patients, with the first recruited in January this year. SATEEN is a randomised, double-blind, placebo-controlled, 36-week study (n=24) that will evaluate ORY-2001 in patients with relapsing-remitting MS and secondary progressive MS. The preliminary readout is planned in early 2019. Also, Oryzon reiterated its plans to submit clinical trial applications for a further two Phase IIa trials testing ORY-1001 in acute myeloid leukaemia and small cell lung cancer soon. ORY-3001 is still in preclinical stages, but has now completed regulatory toxicology studies and may move into Phase I.

Valuation: Marginally higher at €322m or €9.4/share

Our valuation is slightly up at €322m or €9.4/share from €315m or €9.2/share due to rolling our model forward, which is partially offset by lower net cash. The two near-term catalysts are the results from both Phase IIa trials with ORY-2001. We note that since the Oryzon’s shares were listed on Madrid Stock Exchange in December 2015, the trading volumes have been steadily increasing (Exhibit 2).

Financials and valuation

Oryzon’s Q118 financial results came in largely in line with our expectations. Q118 R&D expenses were €1.9m ($2.3m) compared with €1.3m ($1.6m) in Q117. The increase is related to more intensive clinical R&D activities, mainly the initiation of the two new trials. Q118 G&A costs were €0.7m ($0.9m) compared with €0.8 ($1.0m) a year ago. We leave our R&D cost estimates of €8.5m for FY18 and €9.5m for FY19 unchanged; these are the main cost drivers. €1.8m was booked as income and represents capitalised R&D costs (Oryzon follows local GAAP). The reported Q118 cash position was €30.9m (cash and short-term investments; net cash €9.2m). Our model suggests this should be sufficient to reach 2020.

As Oryzon is on track to develop its assets in all the indications we currently include in our valuation, we leave our assumptions unchanged. Our new valuation is €322m or €9.4/share, marginally up from €315m or €9.2/share due to rolling our model forward, which was partially offset by a lower net cash position.

Exhibit 1: Oryzon rNPV valuation

Product

Indication

Launch

Peak sales*
(US$m)

Value
(€m)

Probability
(%)

rNPV
(€m)

rNPV/share
(€/share)

ORY-1001

AML

2023

927

257.1

15%

47.0

1.4

ORY-1001

SCLC

2026

571

125.7

8%

21.8

0.6

ORY-2001

AD

2026

4,510

938.1

15%

145.2

4.3

ORY-2001

MS

2027

1,940

415.1

20%

98.4

2.9

Net cash (end-Q118)

9.2

100%

9.2

0.3

Valuation

 

 

1,745.1

321.7

9.4

Source: Edison Investment Research. Note: *Peak sales are rounded to the nearest US$10m, shown in US dollars. SCLC = small cell lung cancer; AML = acute myeloid leukaemia; AD = Alzheimer’s disease; MS = multiple sclerosis. Net cash includes term deposits.

Exhibit 2: Monthly trading volumes in Oryzon’s share

Source: Edison Investment Research

Exhibit 3: Financial summary

€000s

2014

2015

2016

2017

2018e

2019e

December

Local GAAP

Local GAAP

Local GAAP

Local GAAP

Local GAAP

Local GAAP

PROFIT & LOSS

Revenue

 

 

15,536

7,185

5,009

4,317

7,034

6,301

Cost of Sales

0

0

0

0

0

0

Gross Profit

15,536

7,185

5,009

4,317

7,034

6,301

Research and development

(1,108)

(3,191)

(5,210)

(5,306)

(8,502)

(9,454)

EBITDA

 

 

11,659

688

(3,721)

(3,498)

(4,678)

(6,350)

Operating Profit (before amort. and except.)

11,398

448

(3,879)

(3,660)

(4,789)

(6,461)

Intangible Amortisation

(657)

(657)

(695)

(664)

(767)

(887)

Exceptionals

(4,617)

(24)

(4)

0

0

0

Other

0

0

0

0

0

0

Operating Profit

6,124

(233)

(4,578)

(4,324)

(5,556)

(7,348)

Exceptionals

667

(169)

(58)

0

0

0

Net Interest

(52)

(553)

(844)

(928)

(793)

(802)

Profit Before Tax (norm)

 

 

11,346

(105)

(4,724)

(4,588)

(5,582)

(7,263)

Profit Before Tax (reported)

 

 

6,739

(955)

(5,480)

(5,252)

(6,349)

(8,150)

Tax

(88)

(37)

32

55

0

0

Profit After Tax (norm)

11,258

(142)

(4,692)

(4,533)

(5,582)

(7,263)

Profit After Tax (reported)

6,651

(992)

(5,448)

(5,197)

(6,349)

(8,150)

Average Number of Shares Outstanding (m)

23.3

24.7

27.6

31.7

34.2

34.2

EPS - normalised (€)

 

 

0.48

(0.01)

(0.17)

(0.14)

(0.16)

(0.21)

EPS - reported (€)

 

 

0.29

(0.04)

(0.20)

(0.16)

(0.19)

(0.24)

Dividend per share (€)

0.0

0.0

0.0

0.0

0.0

0.0

Gross Margin (%)

100.0

100.0

100.0

100.0

100.0

100.0

EBITDA Margin (%)

75.0

9.6

N/A

N/A

N/A

N/A

Operating Margin (before GW and except.) (%)

73.4

6.2

N/A

N/A

N/A

N/A

BALANCE SHEET

Fixed Assets

 

 

16,059

18,050

21,269

24,914

31,070

36,373

Intangible Assets

12,928

15,188

18,810

22,458

28,725

34,139

Tangible Assets

981

854

696

638

527

417

Investments

2,150

2,008

1,763

1,818

1,818

1,818

Current Assets

 

 

9,999

22,681

28,475

36,130

24,013

10,366

Stocks

9

4

8

7

8

8

Debtors

704

940

978

857

517

687

Cash

3,633

19,467

22,028

34,950

23,488

9,671

Other*

5,654

2,270

5,461

316

0

0

Current Liabilities

 

 

(3,969)

(5,296)

(7,597)

(8,696)

(9,084)

(8,890)

Creditors

(1,299)

(2,401)

(2,119)

(1,343)

(1,731)

(1,537)

Short term borrowings

(2,670)

(2,895)

(5,477)

(7,354)

(7,354)

(7,354)

Long Term Liabilities

 

 

(8,196)

(7,841)

(19,419)

(17,915)

(17,915)

(17,915)

Long term borrowings

(6,420)

(6,177)

(17,723)

(16,041)

(16,041)

(16,041)

Other long term liabilities

(1,776)

(1,664)

(1,696)

(1,874)

(1,874)

(1,874)

Net Assets

 

 

13,893

27,594

22,729

34,432

28,083

19,933

CASH FLOW

Operating Cash Flow

 

 

12,178

1,076

(4,536)

(4,281)

(4,621)

(7,393)

Net Interest

(52)

(553)

(471)

(426)

(793)

(802)

Tax

0

0

0

0

0

0

Capex

0

0

(28)

(105)

0

0

Acquisitions/disposals

798

0

0

0

0

0

Financing

0

14,725

287

16,887

0

0

Other*

(9,579)

605

(6,819)

653

(6,048)

(5,622)

Dividends

0

0

0

0

0

0

Net Cash Flow

3,345

15,853

(11,567)

12,728

(11,462)

(13,817)

Opening net debt/(cash)

 

 

8,803

5,458

(10,395)

1,172

(11,555)

(93)

HP finance leases initiated

0

0

0

0

0

0

Other

0

0

0

0

0

0

Closing net debt/(cash)

 

 

5,458

(10,395)

1,172

(11,555)

(93)

13,724

Source: Oryzon accounts, Edison Investment Research. Note: Oryzon reports in Spanish GAAP. *Includes cash outflows related to development costs that were capitalised.

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Pty Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2018 Edison Investment Research Limited. All rights reserved. This report has been commissioned by Oryzon Genomics and prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Investment Research Pty Ltd (Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd (AFSL: 427484)) and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.
Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (ie without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2018. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

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US

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Pty Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2018 Edison Investment Research Limited. All rights reserved. This report has been commissioned by Oryzon Genomics and prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Investment Research Pty Ltd (Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd (AFSL: 427484)) and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.
Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (ie without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2018. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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