ASIT biotech research image

All go on Phase III

ASIT biotech 16 July 2018 Update
Download PDF

ASIT biotech

All go on Phase III

Over-subscribed fund-raising

Pharma & biotech

16 July 2018

Price

€3.55

Market cap

€59m

£/€1.13

Net cash (€m) at end Q417, plus €13.9m share issue

15.6

Shares in issue

16.5m

Free float

53%

Code

ASIT

Primary exchange

Euronext Brussels

Secondary exchange

Euronext Paris

Share price performance

%

1m

3m

12m

Abs

(10.1)

(3.5)

(27.6)

Rel (local)

(9.9)

(1.4)

(25.8)

52-week high/low

€5.7

€3.2

Business description

ASIT biotech is a clinical-stage company focused on the development of short-course therapies for allergies. ASIT’s products are based on the proprietary ASIT+ technology platform allowing the development of products containing highly purified allergen fragments in an adjuvant-free formulation, selected to be safe while maintaining the capacityto stimulate the immune system.

Next events

Start of confirmatory Phase III of gp-ASIT+

Q418

hdm-ASIT+ and peanut-ASIT+ updates

2018

H118 results

19 September 18

Analyst

Andy Smith

+44 (0)20 3077 5700

ASIT biotech is a research client of Edison Investment Research Limited

On July 11 ASIT biotech raised €12m in commitments in a heavily oversubscribed convertible bond placement. In raising this additional capital, ASIT outlined the primary use of the proceeds which is to fund the Phase III study of its short-course grass pollen allergy immunotherapy (AIT) product gp-ASIT+. An update was provided on its earlier-stage products – house dust mite and peanut allergy AITs. We speculated on the latter in our initiation note and it is now confirmed.

Year end

Revenue (€m)

PBT*
(€m)

EPS*
(€)

DPS
(€)

P/E
(x)

Yield
(%)

12/17

0

(12.0)

(0.9)

0.0

N/A

N/A

12/18e

0

(11.8)

(0.8)

0.0

N/A

N/A

12/19e

0

(12.2)

(0.7)

0.0

N/A

N/A

12/20e

10.4

(4.9)

(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.

Good news fund-raising

ASIT biotech’s €12m convertible bond (CB) fund-raising was heavily over-subscribed and the committed capital will be paid in equal tranches over the next 20 months. Proceeds from the placement will fund the second confirmatory Phase III study for the company’s grass pollen AIT, which is expected to start recruiting patients in Q418 and report in Q419. In addition, the funding allows the continued development of ASIT’s second product – hdm-ASIT+ – the house dust mite AIT and the third product, which we had previously termed a food allergy AIT, and has now been announced as a peanut allergy AIT (pnt-AIST+).

A funded pipeline results in optionality

ASIT now has the financial resources to complete the second Phase III for gp-ASIT+ which we have assumed will be commercialised by ASIT in Europe. The fund-raising puts ASIT in a much stronger position in partnering negotiations on gp-ASIT+ and other products that the company is developing outside Europe. This includes the recently disclosed pnt-ASIT+ – a short-course AIT for peanut allergy. Peanut allergies are anaphylactic reactions that potentially fatal and often require emergency hospitalisation. A GlobalData study estimated the 2017 disease prevalence in the eight major markets of 6.9m patients, with 44% of patients in the US and EU5 markets.

Valuation updated for cash and pipeline progression

We have included the cash flows from the €12m CB offering in our model which will result in 20 equal cash tranches over the next 20 months. We have assumed that the initial cash inflows will be modest (€3m in H218) and that the dilution starts 19 months from the date of CB issue and ends in H120. The only other change we have made to our model is to update spot foreign exchange rates. Our risk-adjusted rNPV valuation has increased to €121.8m, or €7.4 per share from €119.6m or €7.3 per share.

Exhibit 1: Financial summary

 

 

 

EUR ('000)

2015

2016

2017

2018e

2019e

2020e

2021e

Year end 31 December

 

 

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

4

0

0

0

0

10,351

14,916

Cost of Sales

 

 

 

(3)

0

0

0

0

0

0

Gross Profit

 

 

 

1

0

0

0

0

10,351

14,916

General and Administrative Expenses

 

(947)

(1,822)

(1,676)

(1,659)

(1,643)

(1,626)

(1,610)

Research and Development Expenses

 

(6,691)

(12,123)

(10,903)

(10,903)

(11,365)

(14,322)

(15,570)

Other Operating Income

 

 

(3)

1,667

604

634

666

699

734

Reported operating profit

 

 

(7,640)

(12,278)

(11,975)

(11,928)

(12,341)

(4,898)

(1,529)

Net Interest

 

 

 

(75)

(60)

(9)

104

107

37

7

Profit before tax (reported)

 

 

(7,715)

(12,338)

(11,984)

(11,824)

(12,235)

(4,861)

(1,523)

Reported tax

 

 

 

0

(1)

(2)

(2)

2

1,458

457

Profit after tax (reported)

 

 

(7,715)

(12,339)

(11,986)

(11,826)

(12,232)

(3,403)

(1,066)

Minority interests

 

 

0

0

0

0

0

0

0

Net income (reported)

 

 

(7,715)

(12,339)

(11,986)

(11,826)

(12,232)

(3,403)

(1,066)

 

 

 

 

 

 

 

 

 

 

 

Basic average number of shares outstanding

 

8,504

11,219

12,806

15,526

16,432

16,432

16,432

EPS - basic reported (EUR)

 

 

-0.91

-1.10

-0.94

-0.76

-0.74

-0.21

-0.06

Stock price

 

 

 

3.46

4.46

5.46

3.66

3.66

3.66

3.66

 

 

 

 

 

 

 

 

 

 

 

BALANCE SHEET

 

 

 

 

 

 

 

 

 

Non Current Assets

 

 

506

1,770

1,837

1,886

1,931

1,825

1,684

Property Plant and equipment, net

 

494

736

691

740

785

679

538

Other intangible assets

 

 

0

0

0

0

0

0

0

Other Non Current Assets

 

 

12

1,034

1,146

1,146

1,146

1,146

1,146

Current Assets

 

 

4,968

13,785

2,448

8,037

3,024

1,951

1,205

Cash and cash equivalents

 

 

4,621

13,387

2,126

7,715

2,702

1,629

883

Accounts receivable

 

 

2

3

0

0

0

0

0

Inventories

 

 

 

11

0

0

0

0

0

0

Other current assets

 

 

334

395

322

322

322

322

322

Current Liabilities

 

 

6,332

2,004

2,654

3,218

3,282

3,707

3,884

Accounts payable

 

 

1,611

1,707

1,264

1,828

1,892

2,317

2,494

Short term debt and borrowings

 

4,232

12

34

34

34

34

34

Other current liabilities

 

 

489

285

1,356

1,356

1,356

1,356

1,356

Non Current Liabilities

 

 

0

419

432

432

432

432

432

Loans and borrowings

 

 

0

419

432

432

432

432

432

Other non-current liabilities

 

 

0

0

0

0

0

0

0

Equity

 

 

 

(858)

13,132

1,199

6,273

1,241

(362)

(1,428)

Common stock / Capital

 

 

11,625

17,506

9,989

13,615

13,615

13,615

13,615

Additional paid-in capital / Share premium

 

0

21,957

21,957

23,405

18,372

16,770

15,704

Other reserves and surplus

 

 

(12,483)

(24,229)

(28,645)

(28,645)

(28,645)

(28,645)

(28,645)

Other Equity

 

 

 

0

(2,102)

(2,102)

(2,102)

(2,102)

(2,102)

(2,102)

 

 

 

 

 

 

 

 

 

 

 

CASH FLOW

 

 

 

 

 

 

 

 

 

 

Cash Flow from Operations

 

 

 

 

 

 

 

 

 

Net income (loss)

 

 

(7,715)

(12,339)

(11,986)

(11,826)

(12,232)

(3,403)

(1,066)

Depreciation and Amortization

 

 

80

141

205

189

202

203

172

Interest income/expense

 

 

75

60

9

(104)

(107)

(37)

(7)

Stock-based compensation

 

 

18

0

54

0

0

0

0

Non Cash Adjustments

 

 

0

11

(492)

0

0

0

0

(Increase) decrease in inventories

 

3

0

0

0

0

0

0

(Increase) decrease in trade receivables

 

(819)

(62)

74

0

0

0

0

(Increase) decrease in other current assets

 

0

(1,016)

(112)

0

0

0

0

Increase (decrease) in trade payables

 

751

(492)

(586)

564

64

424

178

Net cash used in Operating activities

 

(7,606)

(13,697)

(12,834)

(11,177)

(12,073)

(2,812)

(722)

Cash Flow from Investing

 

 

 

 

 

 

 

 

 

Purchases of fixed assets

 

 

(372)

(383)

(161)

(239)

(247)

(98)

(31)

Other Investing Activities

 

 

1

(6)

0

0

0

0

0

Net cash used in Investing activities

 

(371)

(389)

(161)

(239)

(247)

(98)

(31)

Cash Flow from Financing

 

 

 

 

 

 

 

 

 

Change in Debt

 

 

4,130

0

0

0

0

0

0

Change in Capital Stock

 

 

0

22,199

0

16,900

7,200

1,800

0

Interest paid

 

 

 

(6)

(204)

(10)

(23)

(23)

(23)

(23)

Other Financing Activities

 

 

33

857

1,743

128

130

60

30

Net cash used in Financing activities

 

4,157

22,852

1,733

17,004

7,307

1,837

7

Net Changes in Cash and Cash Equivalent

 

(3,820)

8,766

(11,262)

5,589

(5,013)

(1,073)

(746)

Net cash (debt) at the beginning of the period

 

8,441

4,621

12,968

1,694

7,283

2,270

1,197

Net cash (debt) at the end of the period

 

4,621

12,968

1,694

7,283

2,270

1,197

451

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 ASIT biotech 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

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 ASIT biotech 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

Share this with friends and colleagues