4SC

DE: VSC

€87.4m market cap

€2.8 last close

4SC is a Munich-based cancer biopharmaceutical company. Resminostat (HDAC inhibitor) is the lead candidate for CTCL (pivotal study started in Q416). It has a second compound, domatinostat (formerly 4SC-202; Phase II). 4SC has several partners including Yakult Honsha for resminostat in Japan.

Investment summary

4SC has reported progress with both its clinical-stage assets – resminostat, a broad spectrum HDAC inhibitor, and domatinostat, a specific Class 1 HDAC inhibitor. In January 2019, the investigator-led Phase II EMERGE study was initiated, which is testing domatinostat in gastrointestinal cancer. 4SC has developed a broad development programme for this drug, which will include several strategic options to commercialize the asset including out-licensing based on data from multiple Phase II studies and internal pivotal development for Merkel cell carcinoma. In January 2019, the resminostat RESMAIN study received a second positive DSMB safety review and the top-line results are expected in H120. 4SC remains well funded with cash of €30.8m at end-Q318, which should fund operations into 2020. Our valuation is virtually unchanged at €328m or €10.7/share.

Y/E Dec
Revenue (€m)
EBITDA (€m)
PBT (€m)
EPS (c)
P/E (x)
P/CF (x)
2016A 2.1 (10.9) (10.9) (54.17) N/A N/A
2017A 4.2 (9.8) (10.0) (40.58) N/A N/A
2018E 5.7 (16.5) (16.6) (54.12) N/A N/A
2019E 3.1 (19.1) (19.2) (62.58) N/A N/A
Last updated on 14/02/2019
Industry outlook

Resminostat could become the first HDAC inhibitor to gain EU approval for CTCL (vs two HDACs approved in the US), but more importantly the maintenance treatment indication would be unique, potentially offering a competitive edge in Europe, the US and Japan.

Last updated on 14/02/2019
Sector
Healthcare
Share price graph
Balance sheet
Forecast net cash (€m) 23.2
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (9.4) (7.5) (61.7)
Relative* (11.3) (4.8) (57.4)
52-week high/low €8.5/€2.6
*% relative to local index
Key management
Jason Loveridge CEO
Dr. Anna Niedl Manager Corporate Communications and Investor

Content on 4SC