Aiming to be ready to use in solid tumour combos

Immunicum 9 November 2018 Update
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Immunicum

Aiming to be ready to use in solid tumour combos

Q318 results

Pharma & biotech

 

9 November 2018

Price

SEK8.38

Market cap

SEK427m

$/SEK 9.04; €/SEK 10.34

Net cash (SEKm) at end-Q3 (before proposed c SEK351m rights issues)

132.4

Shares in issue

51m

Free float

86.1%

Code

IMMU

Primary exchange

NASDAQ Stockholm

Secondary exchange

NA

Share price performance

%

1m

3m

12m

Abs

(29.9)

24.0

12.3

Rel (local)

(26.3)

31.1

17.3

52-week high/low

SEK12.3

SEK6.0

Business description

Immunicum is a clinical-stage immunoncology company based in Gothenburg, Sweden. The company is developing an allogeneic off-the-shelf dendritic cell immune activator or immune primer for use in combination with tyrosine kinase inhibitors and checkpoint inhibitors in potentially any solid tumour indications.

Next events

Multi-indication (ILIAD) Phase Ib/II study start

H218

FY18 results

February 2019

RCC Phase II (MERECA) study top-line results

Q319

Multi-indication (ILIAD) interim data

2019

Analyst

Andy Smith

+44 (0)20 3077 5700

Immunicum is a research client of Edison Investment Research Limited

Immunicum’s Q318 results detailed progress on a number of levels including regulatory, scientific and financing. The clinical progress resulted in increased administrative and R&D spend in the last year, which was higher than our estimates, and reflected the number and earlier stage of Immunicum’s clinical trials outlined in Q3 results relative to Q2. Gross cash at end Q3 was SEK133.2m, which will be bolstered by the recently announced c SEK351m (before expenses) rights issue inflows expected before year-end FY18.

Year end

Revenue (SEKm)

PBT* (SEKm)

EPS* (SEK)

DPS (SEK)

P/E (x)

Yield (%)

12/17

0.0

(80.3)

(3.1)

0.0

N/A

N/A

12/18e

0.0

(95.9)

(1.9)

0.0

N/A

N/A

12/19e

0.0

(266.8)

(2.9)

0.0

N/A

N/A

12/20e

0.0

(56.9)

(0.6)

0.0

N/A

N/A

Note: *PBT and EPS are as reported.

Q3 outflows increase ahead of studies and trials

Q318 results reflect Immunicum’s accelerating development stage, to be funded by the proposed c SEK351m (before costs) capital raises expected to be completed in December. Overall operating cash outflows for the nine months to September were SEK100.8m (SEK16.7m in Q3), up from SEK59m a year ago. Q3 R&D and administrative costs of SEK17.2m and SEK6.1m respectively were higher than our estimates due to advanced preparations for the US Phase Ib/II (ILIAD), as well as the ongoing Phase II renal cell carcinoma (MERECA) studies. Net cash at end September 2018 was SEK132.4m (SEK43.6m in Q317 and SEK149.1m at end Q218). We estimate further operating cash outflow increases as both the ILIAD study and investment in manufacturing to commercial scale start. We note these are now phased in from Q3, earlier than we had previously anticipated.

Recent preclinical data add to confidence

Preclinical results presented at the European Society for Medical Oncology 2018 Congress demonstrated the synergistic anti-tumour activity of the combination of systemically administered checkpoint inhibitors (CPIs) or immune enhancers, and Immunicum’s lead product – ilixadencel – administered intratumourally. These are important data as ilixadencel is about to start the Phase Ib/II ILIAD study in combination with systemic CPIs and demonstrating that immune priming with ilixadencel can overcome resistance to CPI monotherapy should ensure better responses with the combination in the three tumour types to be studied. Prolonged survival with the anti-CD137/4-1BB immune enhancers also potentially expands ilixadencel’s options in combination therapies and partnerships.

Valuation: Updated for accelerated trial spend

Q3 results and updates on development prompt us to further update our valuation. We had already included the upcoming stock issues. We now allow for higher and earlier operating expenses than we had previously, which fine-tunes our valuation to SEK1.4bn or SEK15.1 per share, from SEK1.5bn or SEK16.4 per share.

Exhibit 1: Financial summary

 

 

SEK'000s

2017

2018e

2019e

2020e

2021e

Year end 31 December

 

 

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

 

 

 

 

 

 

 

Revenue

 

 

 

0

0

0

0

0

EBITDA

(80,629)

(95,804)

(266,846)

(56,904)

(59,571)

Operating expenses

 

 

(80,847)

(96,017)

(267,080)

(57,162)

(59,854)

Depreciation

 

 

 

(71)

(61)

(3)

(1)

(0)

Operating income

 

 

218

213

234

258

283

Reported operating profit

 

 

(80,700)

(95,865)

(266,849)

(56,905)

(59,571)

Net Interest

 

 

 

362

(15)

6

(13)

7

Profit before tax (reported)

 

 

(80,338)

(95,880)

(266,843)

(56,918)

(59,563)

Reported tax

 

 

 

0

0

0

0

0

Profit after tax (reported)

 

 

(80,338)

(95,880)

(266,843)

(56,918)

(59,563)

Minority interests

 

 

0

0

0

0

0

Net income (reported)

 

 

(80,338)

(95,880)

(266,843)

(56,918)

(59,563)

Basic average number of shares outstanding

 

25,959

49,444

92,258

92,258

92,258

EPS - basic reported (SEK)

 

 

(3.09)

(1.94)

(2.89)

(0.62)

(0.65)

BALANCE SHEET

 

 

 

 

 

 

 

Non-current Assets

 

 

105,309

6

3

2

1

Property Plant and equipment, net

 

69

5

2

1

0

Other financial assets

 

 

1

1

1

1

1

Other non-current Assets

 

 

105,239

0

0

0

0

Current Assets

 

 

140,837

423,533

156,929

100,313

40,838

Cash and cash equivalents

 

 

128,883

416,881

150,093

93,285

33,606

Accounts receivable

 

 

0

3,675

3,859

4,052

4,254

Marketable securities and short-term investments

0

0

0

0

0

Prepaid expenses

 

 

8,454

2,977

2,977

2,977

2,977

Current Liabilities

 

 

55,740

15,214

15,449

15,750

15,838

Accounts payable

 

 

11,714

842

1,077

1,378

1,466

Accrued other liabilities

 

 

43,694

13,081

13,081

13,081

13,081

Other current liabilities

 

 

331

1,291

1,291

1,291

1,291

Non-Current Liabilities

 

 

850

850

850

850

850

Long term debt

 

 

850

850

850

850

850

Equity

 

 

Total Shareholder's Equity

 

 

189,556

409,577

142,734

85,816

(30,666)

CASH FLOW

 

 

 

 

 

 

 

 

Cash Flow from Operations

 

 

 

 

 

 

 

EBIT (Operating profit)

 

 

(80,700)

(95,865)

(266,849)

(56,905)

(59,571)

Depreciation

 

 

 

71

62

3

1

0

Income Tax paid

 

 

0

0

0

0

0

Other Working Capital changes

 

34,455

(37,316)

51

108

(155)

Cash interest paid

 

 

(274)

(15)

(26)

(26)

0

Cash interest received

 

 

0

0

32

13

7

Net cash used in Operating activities

 

(46,447)

(133,140)

(266,788)

(56,809)

(59,678)

Cash Flow from Investing

 

 

 

 

 

 

 

Purchase of fixed assets

 

 

0

0

0

0

0

Sale of Investments

 

 

10,162

0

0

0

0

Net cash used in investing activities

 

10,162

0

0

0

0

Cash Flow from Financing

 

 

 

 

 

 

 

Change in Capital Stock

 

 

62,269

421,139

0

0

0

Net cash from Financing activities

 

62,269

421,139

0

0

0

Net Changes in Cash and Cash Equivalent

 

25,984

287,999

(266,788)

(56,809)

(59,678)

Cash and Cash Equivalents - Beginning

 

102,899

128,883

416,882

150,094

93,285

Cash and Cash Equivalents - End

 

128,883

416,882

150,094

93,285

33,607

Net cash/(debt)

128,033

416,031

149,243

92,434

32,756

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 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 Immunicum 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 Immunicum 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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