All the bases loaded for ASIT011

ASIT biotech 3 April 2019 Update
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ASIT biotech

All the bases loaded for ASIT011

FY18 results

Pharma & biotech

3 April 2019

Price

€1.58

Market cap

€31m

US$/€0.88

Cash (€m) at end-March 2019

5.9

Shares in issue

19.4m

Free float

57%

Code

ASIT

Primary exchange

Euronext Brussels

Secondary exchange

Euronext Paris

Share price performance

%

1m

3m

12m

Abs

37.1

(1.2)

(57.4)

Rel (local)

33.7

(14.8)

(56.0)

52-week high/low

€4.0

€1.1

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 capacity to stimulate immune tolerance.

Next events

hdm- and pnt-ASIT+ licensing news

Ongoing

H119 results

August 2019

gp-ASIT+ Phase III results

December 2019

Analyst

Andy Smith

+44 (0)20 3077 5700

ASIT biotech is a research client of Edison Investment Research Limited

ASIT’s FY18 preliminary results were dominated by the initiation of the second Phase III study of gp-ASIT+ where randomisation is now complete. The company’s FY18 operating loss increased slightly to €12.8m compared to FY17. R&D comprised the bulk of operating expense at €10.9m and included €9.9m on the Phase III study. Cash at the end of FY18 and March 19 was €8.5m and €5.9m, respectively, while the previously announced convertible note offering should extend the cash runway from Q319 until Q320.

Year end

Revenue (€m)

PBT*
(€m)

EPS*
(€)

DPS
(€)

P/E
(x)

Yield
(%)

12/17

0.0

(12.0)

(0.94)

0.0

N/A

N/A

12/18

0.0

(14.3)

(0.86)

0.0

N/A

N/A

12/19e

0.0

(9.7)

(0.52)

0.0

N/A

N/A

12/20e

0.0

(5.4)

(0.21)

0.0

N/A

N/A

Note: *PBT and EPS are both as reported.

FY18 results include the pivotal Phase III study

The improvements that ASIT and its CRO have implemented to improve the likelihood of success in the larger ASIT011 Phase III study in grass allergy patients have come at a lower R&D spend than we had estimated. The first of 624 patients was dosed at the end of January for the 2019 allergy season and enrolment is now complete. ASIT’s FY18 operating loss increased slightly to €12.8m from €12.0m. R&D was the largest operating expense but was flat at €10.9m compared to FY17. Our estimates of FY18 operating loss and R&D spend were higher at €13.8m and €12.0m, respectively. Net loss increased to €14.3m (from €12m in FY17) after €1.6m in expenses associated with the 2018 offerings. Cash at end-FY18 was €8.5m (vs €2.1m at end-FY17). Including its existing equity line, ASIT estimates that its cash runway will last until Q319 before the convertible note issue announced in February, which is required to complete the ASIT011 study. This should extend the cash needs until the end of Q320. By that time, we expect gp-ASIT+ to have been filed and partnerships to have been signed.

Busy time in business development

ASIT has provided more detail on the out-licensing of its pipeline, which includes hdm-ASIT+ and pnt-ASIT+ for house dust mite and peanut allergies, respectively. These earlier two products will enter Phase I in partnership or with co-financing. This means that business development (BD) moves to centre stage, adding to the ongoing BD effort to secure a marketing partner for gp-ASIT+ in the US. While the optimal partnering strategy for shareholders may result in different partners for each product, clinical success in the ASIT011 Phase III study that reports at the end of 2019 will validate the platform and likely assist all ASIT’s BD.

Valuation: Virtually unchanged

Our valuation of ASIT is unchanged at €119m, or €6.4 per share. We have made minor changes to our financial model but will update the valuation after the €9–12m convertible note offering has completed and the full FY18 financials published.

Exhibit 1: Financial summary

 

 

 

€'000s

2017

2018

2019e

2020e

2021e

Year end 31 December

 

 

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

 

 

 

 

 

 

 

Revenue

 

 

 

0

0

0

0

0

Cost of Sales

 

 

 

0

0

0

0

0

Gross Profit

 

 

 

0

0

0

0

0

General and Administrative Expenses

 

(1,676)

(2,481)

(2,456)

(2,432)

(2,407)

Research and Development Expenses

 

(10,903)

(10,856)

(8,000)

(3,480)

(2,000)

Other Operating Income

 

 

604

570

599

628

660

Reported operating profit

 

 

(11,975)

(12,767)

(9,858)

(5,283)

(3,747)

Net Interest

 

 

 

(9)

(1,557)

180

(144)

(274)

Profit before tax (as reported)

 

 

(11,984)

(14,324)

(9,678)

(5,427)

(4,021)

Reported tax

 

 

 

(2)

3

2

1,628

1,206

Profit after tax (reported)

 

 

(11,986)

(14,321)

(9,676)

(3,779)

(2,815)

Minority interests

 

 

0

0

0

0

0

Net income (reported)

 

 

(11,986)

(14,321)

(9,676)

(3,779)

(2,815)

Basic average number of shares outstanding ('m)

 

12,806

16,704

18,434

18,434

18,434

EPS - basic, as reported (€)

 

(0.94)

(0.86)

(0.52)

(0.21)

(0.15)

BALANCE SHEET

 

 

 

 

 

 

 

Non-Current Assets

 

 

1,837

1,998

2,011

1,935

1,849

Property Plant and equipment, net

 

691

683

686

620

534

Other intangible assets

 

 

0

0

0

0

0

Other Non-Current Assets

 

 

1,146

1,315

1,315

1,315

1,315

Current Assets

 

 

2,448

8,753

17,097

28,512

25,571

Cash and cash equivalents

 

 

2,126

8,500

16,844

28,265

25,318

Accounts receivable

 

 

0

0

0

0

0

Inventories

 

 

 

0

0

0

0

0

Other current assets

 

 

322

253

253

253

253

Current Liabilities

 

 

2,654

4,196

3,340

2,684

2,467

Accounts payable

 

 

1,264

2,354

1,498

842

625

Short term debt and borrowings

 

34

38

38

38

38

Other current liabilities

 

 

1,356

1,804

1,804

1,804

1,804

Non-Current Liabilities

 

 

432

446

9,446

16,446

16,446

Loans and borrowings

 

 

432

446

9,446

16,446

16,446

Other non-current liabilities

 

 

0

0

0

0

0

Equity

 

 

 

1,199

6,617

4,140

2,141

(673)

Common stock / Capital

 

 

9,989

13,125

13,125

13,125

13,125

Additional paid-in capital / Share premium

 

21,957

27,449

24,972

22,973

20,159

Other reserves and surplus

 

 

(28,645)

(33,957)

(33,957)

(33,957)

(33,957)

Other Equity

 

 

 

(2,102)

0

0

0

0

CASH FLOW

 

 

 

 

 

 

 

 

Cash Flow from Operations

 

 

 

 

 

 

 

Net income (loss)

 

 

(11,986)

(12,807)

(9,676)

(3,779)

(2,815)

Depreciation and Amortization

 

 

205

176

184

181

160

Interest income/expense

 

 

9

40

(180)

144

274

Stock-based compensation

 

 

54

0

0

0

0

Non-Cash Adjustments

 

 

(492)

0

0

0

0

(Increase) decrease in inventories

 

0

0

0

0

0

(Increase) decrease in trade receivables

 

74

0

0

0

0

(Increase) decrease in other current assets

 

(112)

69

0

0

0

Increase (decrease) in trade payables

 

(586)

2,180

(856)

(656)

(217)

Net cash used in Operating activities

 

(12,834)

(10,342)

(10,527)

(4,129)

(2,598)

Cash Flow from Investing

 

 

 

 

 

 

 

Purchases of fixed assets

 

 

(161)

(255)

(197)

(106)

(75)

Other Investing Activities

 

 

0

0

0

0

0

Net cash used in Investing activities

 

(161)

(255)

(197)

(106)

(75)

Cash Flow from Financing

 

 

 

 

 

 

 

Change in Debt

 

 

0

0

9,000

7,000

0

Change in Capital Stock

 

 

0

16,900

7,200

1,800

0

Interest paid

 

 

 

(10)

(42)

(24)

(474)

(824)

Other Financing Activities

 

 

1,743

2

204

330

550

Net cash used in Financing activities

 

1,733

16,860

16,380

8,656

(274)

Net Changes in Cash and Cash Equivalent

 

(11,262)

6,262

5,655

4,421

(2,947)

Net cash (debt) at the beginning of the period

 

12,968

1,694

8,054

7,398

11,819

Net cash (debt) at the end of the period

 

1,694

8,054

7,398

11,819

8,872

Source: ASIT Biotech SA, Edison Investment Management

General disclaimer and copyright

This report has been commissioned by ASIT biotech and prepared and issued by Edison, in consideration of a fee payable by ASIT biotech. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: 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 and have not sought for this information to be independently verified. Opinions contained in this report represent those of the Edison analyst at the time of publication. 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.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, 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 securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. 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, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2019 Edison Investment Research Limited (Edison). All rights reserved FTSE International Limited (“FTSE”) © FTSE 2019. “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.

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd who holds an Australian Financial Services Licence (Number: 427484). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

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. 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 (i.e. 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.

United Kingdom

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This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document (nor will such persons be able to purchase shares in the placing).

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

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The Investment Research is a publication distributed in the United States by Edison Investment Research, Inc. Edison Investment Research, Inc. is registered as an investment adviser with the Securities and Exchange Commission. Edison 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. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

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

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by ASIT biotech and prepared and issued by Edison, in consideration of a fee payable by ASIT biotech. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: 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 and have not sought for this information to be independently verified. Opinions contained in this report represent those of the Edison analyst at the time of publication. 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.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, 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 securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. 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, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2019 Edison Investment Research Limited (Edison). All rights reserved FTSE International Limited (“FTSE”) © FTSE 2019. “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.

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd who holds an Australian Financial Services Licence (Number: 427484). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

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. 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 (i.e. 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.

United Kingdom

Neither this document and associated email (together, the "Communication") constitutes or form part of any offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any securities, nor shall it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. Any decision to purchase shares in the Company in the proposed placing should be made solely on the basis of the information to be contained in the admission document to be published in connection therewith.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document (nor will such persons be able to purchase shares in the placing).

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

The Investment Research is a publication distributed in the United States by Edison Investment Research, Inc. Edison Investment Research, Inc. is registered as an investment adviser with the Securities and Exchange Commission. Edison 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. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

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

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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