A growth year

Pacific Edge 1 June 2017 Update
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Pacific Edge

A growth year

Financial update

Pharma & biotech

1 June 2017

Price

NZ$0.49

Market cap

NZ$196m

NZ$1.42/US$

Net cash (NZ$m) at 31 March 2017

14.6

Shares in issue

399.5m

Free float

92%

Code

PEB

Primary exchange

NZX

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(17.0)

(7.6)

(15.5)

Rel (local)

(17.2)

(9.4)

(16.6)

52-week high/low

NZ$0.63

NZ$0.43

Business description

Pacific Edge develops and sells a portfolio of molecular diagnostic tests based on biomarkers for the early detection and management of cancer. Tests utilising its Cxbladder technology for detecting and monitoring bladder cancer are sold in the US, New Zealand, Australia and Singapore.

Next events

Updates on product launches

2017

Analysts

Maxim Jacobs

+1 646 653 7027

Nathaniel Calloway

+1 646 653 7036

Pacific Edge is a research client of Edison Investment Research Limited

Pacific Edge continues to make progress in the commercialisation of its bladder cancer diagnostics tests, reporting 35% growth in the number of tests analysed and a 62% increase in operating revenue. The potential for a significant sales ramp exists as TRICARE and the Veterans Administration (VA) are now under contract and expected to come online commercially in FY18. Also, discussions with Kaiser Permanente are nearing conclusion and progress has been made with the Centers for Medicare and Medicaid Services (CMS) on the reimbursement front.

Year end

Revenue (NZ$m)

PBT*
(NZ$m)

EPS*
(c)

DPS
(c)

P/E
(x)

Yield
(%)

03/16

6.4

(15.5)

(4.1)

0.0

N/A

N/A

03/17

9.3

(20.8)

(5.4)

0.0

N/A

N/A

03/18e

18.5

(9.2)

(2.3)

0.0

N/A

N/A

03/19e

41.8

11.2

1.9

0.0

25.8

N/A

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

TRICARE and VA are significant opportunities

Pacific Edge has agreements in place with TRICARE, which handles the healthcare for a total of 9.4 million beneficiaries (uniformed service members and their families as well as some veterans) with a total of 70.5 million outpatient visits in 2015, and with the Veterans Administration (VA), with approximately 20 million people under coverage. Sales are expected to come online for both in FY18, although the exact timing and magnitude are unknown.

Kaiser Permanente in final discussions

Kaiser Permanente, a managed care provider that serves 11.8 million members, had been evaluating the Cxbladder Triage and Detect tests in a large, blinded User Programme. According to Pacific Edge, the findings were positive, compelling and equivalent to the previously published data. The company is now in final discussions with Kaiser regarding a commercial relationship.

Monitor and Resolve launches underway

Back in December, the company launched the Cxbladder Monitor test in the US and the Cxbladder Resolve test in New Zealand. Monitor is meant for use in the ongoing monitoring of bladder cancer in order to check for recurrence and Resolve classifies tumours as low or high grade. Pacific Edge is becoming a one-stop shop to detect and manage bladder cancer through non-invasive urine tests.

Valuation: NZ$449m or NZ$1.12 per share

Our valuation for Pacific Edge has increased from NZ$422m (NZ$1.10/share) to NZ$449m (NZ$1.12/share). This is mainly due to rolling forward our NPV and was mitigated by adjustments to sales and expense expectations as well as a higher share count. We continue to expect profitability in FY19. Net cash of NZ$14.6m should fund operations into forecast profitability. We believe evidence of commercial success will serve as a driver of the valuation.

A broad suite of products

Pacific Edge develops and commercialises molecular tests, three of which are being commercialised in the US, for the detection and better management of urothelial cancers (UC) and is the only company worldwide to offer multiple molecular diagnostic tests for bladder cancer. The company has created a franchise of products that can be commercialised through the same channels under the Cxbladder brand to meet a series of unmet needs along the same clinical pathway. The underlying aims are to meet the clinical needs of urologists, notably a reduction in the length of current, repetitive and invasive diagnostic testing for UC, and an improvement in accuracy over those tests currently in the market. The first test in the range, Cxbladder Detect, has been shown in clinical studies to be more accurate than benchmark tests at all stages and grades. Cxbladder Monitor targets patients who are currently undergoing follow-up surveillance for UC and was recently (December 2016) launched in the US. Cxbladder Triage is designed for undiagnosed patients that present with haematuria, and launched in New Zealand in 2015 and in the US in 2016.

Pacific Edge is working towards fully commercialising its bladder cancer testing, reporting a steady increase in volumes from existing customers in recent quarters, albeit off a low base and including healthcare organisations’ testing through User Programmes.

Exhibit 1: Summary of the Cxbladder pipeline

Product name

Function

Status

Notes

Cxbladder Detect

Detects bladder cancer in patients with haematuria.

Commercially available in NZ, Australia and the US since 2013.

Non-invasive laboratory test for the detection of bladder cancer. Adjunct to cystoscopy.

Cxbladder Triage

Segregates patients without bladder cancer.

Commercially available in NZ (2014), Australia and the US (2015).

High sensitivity and high negative predictive value.

Cxbladder Monitor

Ongoing monitoring to check for recurrence of bladder cancer.

Commercially available in NZ (2015) and the US (2016).

High sensitivity and high negative predictive value to determine patients who should receive follow-up tests.

Cxbladder Resolve (formerly Predict)

Classifies tumours as low or high grade.

Launched in New Zealand (2016) with US roll-out in 2018.

Prognostic test with high sensitivity and high specificity to patients with high-grade and late-stage disease.

Source: Pacific Edge

Continued progress in the US

Pacific Edge has successfully made inroads with large US public healthcare groups, most notably including TRICARE, which provides healthcare to members of the armed services and their families, the Veterans Administration (VA), which provides healthcare to veterans, and the Centers for Medicare and Medicaid Services (CMS), which covers 35% of Americans.

In March 2016, its dossier for Cxbladder Detect was approved for addition to the Federal Supply Schedule (VA FSS)1 enabling commercial access to the VA urologists and expedited payment following a lengthy review process. The government-funded VA, one of the largest healthcare programmes in the US, is an organisation that represents a considerable market providing care to approximately 20 million veterans and their families in a network of clinics, hospitals and healthcare centres across the US. The company is currently targeting five large VA clinics and expects the incorporation of the Cxbladder test into their clinical practice to begin in the near future. It also expects to set up User Programmes at larger sites so that healthcare providers can trial the tests.

  Enables provision of goods and services to government entities and enterprises.

In October 2016, Pacific Edge was approved as a provider and negotiated a contract price for tests with TRICARE. TRICARE covers 9.4 million beneficiaries who accounted for 70.5 million outpatient visits in 2015 in 55 military hospitals and 373 military medical centres. The company is currently leveraging existing relationships with high-volume sites in key areas. As in other areas, it anticipates User Programmes at the larger sites so that healthcare providers can trial the tests.

CMS provides healthcare services to the elderly and those on a lower income in the US. Progress has also been made in the negotiation process with the CMS and management expects the conclusion of discussion on approval and reimbursement to provide a significant lift in revenue/lab throughput for Cxbladder tests, though exact timing is uncertain as the process is long and iterative.

Pacific Edge is also targeting integrated healthcare providers such as Kaiser Permanente (KP), which serves over 11.8 million members. In the large User Programme with KP, patients presenting with haematuria for the evaluation of the Cxbladder Triage were enrolled in the large, blinded study. With the successful conclusion of the programme, the previously published Cxbladder Triage data (sensitivity of 95.1% and a negative predictive value of 98.5% according to the BioMed Central Urology journal) has been validated in a real-world clinical setting, based on the company’s analysis. The company is now in final discussions with Kaiser regarding a commercial relationship. Commercial adoption by KP could provide a significant ramp in sales.

The markets in Australia and New Zealand

In New Zealand, Pacific Edge is seeing steadily increasing adoption of Cxbladder products by publicly and privately funded health organisations. Launched in 2011 in New Zealand, the sales effort there has focused primarily on the district health boards (DHBs). More recently the company signed an agreement with Canterbury District Health Board to provide Cxbladder testing for primary referral in the evaluation of haematuria through Canterbury DHB’s HealthPathways2 plan. Among private health insurance providers, nib Health Insurance and Sovereign Health have approved reimbursement for Cxbladder diagnostic tests. Also, the Waitemata District Health Board in Auckland has approved a programme in which selected low-risk patients previously diagnosed and treated for bladder cancer will receive a Cxbladder Monitor test. The company’s newest test, Cxbladder Resolve, was launched in the region in December 2016.

  The Canterbury HealthPathways are the main source of assessment, management and referral information about Canterbury health services for community healthcare providers, and used by 80% of general practitioners more than six times per week.

In Australia, Pacific Edge partnered with Tolmar Australia earlier this year; Tolmar is a specialist uro-oncology company that provides healthcare to men with advanced prostate cancer. It has a specialist salesforce of nine people with strong relationships with urologists throughout Australia who will encourage the use of Cxbladder tests through User Programmes, replicating the marketing approach in the US and New Zealand.

Singapore as a beachhead to South-East Asia

Pacific Edge is evaluating the South-East Asian market opportunity and has set up Singapore as a base to do so. In early June 2015, the company announced its first entry into South-East Asia with the commencement of a User Programme agreement with Tan Tock Seng Hospital (TTSH) in Singapore. TTSH is one of Singapore’s largest hospitals with 40 clinical and allied health departments and a more than 7,000 strong staff, which tends to over 2,000 patients per day. In November 2016 a User Programme agreement with Singapore General Hospital (SGH), the country’s largest hospital, was signed. SGH has a team of 10,000 staff and serves over one million patients a year. We note that approximately one million medical tourists visit Singapore each year, which according to Pacific Edge is projected to exceed 1.3 million by 2018. This tourist patient population regularly pays out of pocket, thereby lowering any reimbursement hurdles.

The User Programmes with TTSH and SGH represent an initial move into a potentially significant market. In this targeted growth region, the company anticipates work with additional hospitals and clinics in South-East Asia. The company is also employing sales and marketing staff in the region to pursue commercial rollouts in Bangkok and Taipei. Financial support for the programme will be provided by a grant from New Zealand Trade and Enterprise (NZTE). The three-year NZ$600,000 grant to aid the evaluation of the South-East Asian market opportunity will be dispersed on the basis of milestones and Pacific Edge will match NZTE funding.

While we believe that signing TTSH and SGH represents significant milestones, we do not yet include potential sales in the South-East Asian region. We await the completion of Pacific Edge’s evaluation and clarity on sales potential, particularly that stemming from the potentially large medical tourist community.

Valuation

Our valuation for Pacific Edge has increased from NZ$422m (NZ$1.10/share) to NZ$449m (NZ$1.12/share). This is mainly due to rolling forward our NPV and was mitigated by adjustments to sales and expense expectations as well as a higher share count. We continue to expect profitability in FY19. Net cash of NZ$14.6m should fund operations into forecast profitability. We believe evidence of commercial success will serve as a driver of the valuation.

Exhibit 2: Valuation based on DCF

Discounted cash flow (NZ$000)

434,626

Net cash (NZ$000) 31 March 2017

14,564

Valuation (NZ$000)

449,190

Number of shares (m)

399.53

Value per share (NZ$)

1.12

Source: Edison Investment Research

Financials

For FY17 (ended 31 March 2017) Pacific Edge reported operating revenue of NZ$8.1m, up 62% compared to FY16. Laboratory throughput (which includes both user programmes and commercial tests) rose 35% compared to last year. R&D expenses were NZ$4.9m, up 10.5% compared to the prior year. SG&A expenses were NZ$18.3m, up 71% compared to the prior year though NZ$2.9m of the increase was due to a non-cash charge in relation to the conversion of the Employee Incentive Scheme into ordinary shares and NZ$3.2m was due to a conservative approach to bad debt provisioning. Without these charges, SG&A expenses would have been NZ$12.2m, up 13% compared to the prior year.

We have adjusted our FY18 revenue estimates downward by NZ$5.6m (and by a similar amount in FY19) due to a lack of visibility into the commercial uptake of the VA and TRICARE and increased SG&A by NZ$2.4m due to a higher than expected run rate. Pacific Edge ended the year with NZ$14.6m in cash thanks to an NZ$8.75m private placement in February 2017. This level of cash should be sufficient for the company to attain profitability, which we continue to estimate for FY19.

Exhibit 3: Financial summary

NZ$'000s

2015

2016

2017

2018e

2019e

Year end 31 March

NZ GAAP

NZ GAAP

NZ GAAP

NZ GAAP

NZ GAAP

PROFIT & LOSS

Revenue

 

 

3,622

6,431

9,286

18,504

41,832

Cost of Sales

(588)

(1,047)

(996)

(1,850)

(3,600)

Gross Profit

3,034

5,384

8,290

16,654

38,232

EBITDA

 

 

(10,530)

(14,899)

(19,620)

(8,192)

12,323

Operating Profit (before GW and except.)

(10,838)

(15,246)

(19,973)

(8,527)

12,035

Intangible Amortisation

(151)

(159)

(189)

(82)

(131)

Exceptionals

154

223

(67)

0

0

Operating Profit

(10,835)

(15,182)

(20,229)

(8,609)

11,904

Other

(750)

(1,034)

(1,067)

(1,067)

(1,067)

Net Interest

510

762

249

437

262

Profit Before Tax (norm)

 

 

(11,078)

(15,518)

(20,792)

(9,158)

11,229

Profit Before Tax (FRS 3)

 

 

(11,075)

(15,453)

(21,048)

(9,240)

11,098

Tax

0

0

0

0

(3,107)

Profit After Tax (norm)

(11,078)

(15,518)

(20,792)

(9,158)

8,122

Profit After Tax (FRS 3)

(11,075)

(15,453)

(21,048)

(9,240)

7,990

Average Number of Shares Outstanding (m)

318.6

376.5

382.5

401.6

417.7

EPS - normalised (c)

 

 

(3.5)

(4.1)

(5.4)

(2.3)

1.9

EPS - FRS 3 (c)

 

 

(3.5)

(4.1)

(5.5)

(2.3)

1.9

Dividend per share (c)

0.0

0.0

0.0

0.0

0.0

Gross Margin (%)

N/A

N/A

N/A

N/A

N/A

EBITDA Margin (%)

N/A

N/A

N/A

N/A

N/A

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

N/A

N/A

N/A

N/A

N/A

BALANCE SHEET

Fixed Assets

 

 

1,362

1,237

1,166

1,246

1,343

Intangible Assets

244

248

329

525

681

Tangible Assets

1,118

990

837

721

663

Other

0

0

0

0

0

Current Assets

 

 

11,271

31,093

22,397

16,555

29,550

Stocks

623

707

824

824

824

Debtors

2,584

5,730

6,519

6,519

6,519

Cash

7,819

24,160

14,564

8,722

21,716

Other

245

496

490

490

490

Current Liabilities

 

 

(1,930)

(2,523)

(2,734)

(2,734)

(4,288)

Creditors

(1,930)

(2,523)

(2,734)

(2,734)

(4,288)

Short term borrowings

0

0

0

0

0

Short term leases

0

0

0

0

0

Other

0

0

0

0

0

Long Term Liabilities

 

 

0

0

0

0

0

Long term borrowings

0

0

0

0

0

Long term leases

0

0

0

0

0

Other long term liabilities

0

0

0

0

0

Net Assets

 

 

10,703

29,807

20,829

15,067

26,605

CASH FLOW

Operating Cash Flow

 

 

(13,048)

(17,715)

(18,086)

(5,782)

14,804

Net Interest

510

762

249

437

262

Tax

0

0

0

0

(1,554)

Capex

(427)

(325)

(479)

(498)

(517)

Acquisitions/disposals

0

0

0

0

0

Financing

0

35,336

8,750

0

0

Dividends

0

0

0

0

0

Other

1

(1,936)

(91)

0

0

Net Cash Flow

(12,964)

16,123

(9,657)

(5,842)

12,995

Opening net debt/(cash)

 

 

(20,444)

(7,819)

(24,160)

(14,564)

(8,722)

HP finance leases initiated

0

0

0

0

0

Other

340

218

61

0

0

Closing net debt/(cash)

 

 

(7,819)

(24,160)

(14,564)

(8,722)

(21,716)

Source: Company accounts, Edison Investment Research

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 Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison and is not regulated by the Australian Securities and Investment Commission. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2017 Edison Investment Research Limited. All rights reserved. This report has been commissioned by Pacific Edge 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 Aus and any access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act. 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 2017. “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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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

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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

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Sydney +61 (0)2 8249 8342

Level 12, Office 1205

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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 Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison and is not regulated by the Australian Securities and Investment Commission. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2017 Edison Investment Research Limited. All rights reserved. This report has been commissioned by Pacific Edge 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 Aus and any access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act. 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 2017. “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 12, 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 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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