cover-image

Bemcentinib preliminary data in COVID-19

BerGenBio 20 April 2021 Update
Download PDF

BerGenBio

Bemcentinib preliminary data in COVID-19

COVID-19 clinical update

Pharma & biotech

20 April 2021

Price

NOK30.1

Market cap

NOK2,640m

NOK8.50/US$

Net cash (NOKm) at 31 December 2020

720.3

Shares in issue

87.8m

Free float

61%

Code

BGBIO

Primary exchange

Oslo

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(9.2)

(18.7)

79.1

Rel (local)

(10.7)

(22.7)

33.9

52-week high/low

NOK46.1

NOK16.79

Business description

BerGenBio is a clinical-stage biopharmaceutical company developing innovative drugs for aggressive diseases, including immune-evasive, drug-resistant and metastatic cancers. It focuses on AXL inhibitors bemcentinib (small molecule) and tilvestamab (mAb).

Next events

Bemcentinib top-line data from ACCORD-2 and BGBC020 in COVID-19

May 2021

Potential start of global Phase III pivotal study in COVID-19

H221

Start of bemcentinib plus LDAC Phase III registrational study in relapsed AML

2021

Analysts

Dr Susie Jana

+44 (0)20 3077 5700

Dr John Priestner

+44 (0)20 3077 5700

BerGenBio is a research client of Edison Investment Research Limited

BerGenBio (BGBIO) has announced preliminary data for lead asset bemcentinib, an oral once daily highly selective AXL inhibitor for the treatment of severe COVID-19 infections requiring hospitalisation. In the Phase II ACCORD-2 and BGBC020 trials, treatment with bemcentinib led to numerically fewer deaths versus standard of care up to day 29. Preliminary analysis of the primary endpoint, time to clinical improvement of at least two points on the WHO nine-point ordinal scale, or live discharge from the hospital, was numerically in bemcentinib’s favour but not statistically significant in this small study with a diverse patient population and demographic. Detailed top-line data are expected in May. If favourable, we expect an additional global Phase III study will be required before emergency use authorisation. We value BGBIO at NOK4.72bn.

Year end

Revenue (NOKm)

PBT*
(NOKm)

EPS*
(NOK)

DPS
(NOK)

P/E
(x)

Yield
(%)

12/19

8.9

(199.3)

(3.43)

0.0

N/A

N/A

12/20

0.6

(257.0)

(3.43)

0.0

N/A

N/A

12/21e

0.0

(300.3)

(3.43)

0.0

N/A

N/A

12/22e

0.0

(317.6)

(3.62)

0.0

N/A

N/A

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

Early data, more details expected in May

Bemcentinib has a unique dual mechanism of action that could prevent viral intracellular entry and augment the type 1 interferon response (a key antiviral defence mechanism). Additionally, as it does not directly target the SARS-CoV-2 spike protein-ACE2 pathway, it is expected to be variant (spike protein) agnostic. Bemcentinib was given as an add-on therapy to current standard of care (remdesivir and dexamethasone) for hospitalised patients who were not intubated or ventilated. Both studies used the same trial design and clinical endpoints. Preliminary data reported that in ACCORD-2 there was one death in 28 patients in the bemcentinib arm versus five in 32 patients receiving only standard of care, and two versus three in BGBC020 (115 patients enrolled, 58 received bemcentinib).

COVID-19 could expediate route to market

While bemcentinib is primarily being developed for oncology indications (see ‘Bemcentinib leading the AXL charge‘), COVID-19 could expediate its route to market in 2022. Its potential dual mechanism of action and convenient once-a-day oral dosing is initially being assessed in a hospitalised setting. Clinical development work to assess its potential use in a community setting or as a post-exposure prophylactic may be appropriate depending on the future status of the pandemic. We maintain our peak sales of $300m and adopt a ‘wait-and-see’ approach in light of global vaccination programmes and the progress of other potential treatments.

Valuation: NOK4.72bn or NOK53.8 per share

We continue to value BerGenBio at NOK4.72bn or NOK 53.8/share. Our forecasts remain unchanged. The key value drivers are bemcentinib in second-line NSCLC (peak sales $1.2bn, NOK37.2/share) and AML (peak sales $598m, NOK12.2/share) plus the COVID-19 opportunity (peak sales $300m, NOK5.4/share).

Exhibit 1: Financial summary

Accounts: IFRS, Year end 31 December, NOK000s

 

2018

2019

2020

2021e

2022e

Profit & Loss

 

 

 

 

 

 

Operating revenues

 

2,335

8,900

601

0

0

Licensing revenues

 

2,335

8,900

601

0

0

Other revenues

 

0

0

0

0

0

Total operating expenses

 

(196,874)

(213,274)

(261,692)

(305,499)

(319,862)

Other operating expenses (R&D)

 

(133,699)

(141,630)

(163,442)

(205,937)

(216,234)

EBITDA (reported)

 

(194,335)

(203,589)

(260,365)

(305,120)

(319,562)

Depreciation and amortisation

 

(204)

(785)

(726)

(379)

(299)

Reported operating income

 

(194,539)

(204,374)

(261,091)

(305,499)

(319,862)

Operating margin %

 

N/A

N/A

N/A

N/A

N/A

Finance income/(expense)

 

2,793

5,096

4,062

5,166

2,277

Exceptionals and adjustments

 

 

0

0

0

0

Profit before tax (reported)

 

(191,746)

(199,278)

(257,029)

(300,333)

(317,585)

Income tax expense

 

0

0

0

0

0

Net income (reported)

 

(191,746)

(199,278)

(257,029)

(300,333)

(317,585)

Basic average number of shares (m)

 

53.3

58.0

74.9

87.7

87.8

Year-end number of shares (m)

 

54.7

61.1

87.3

87.8

87.8

Basic EPS (NOK)

 

(3.60)

(3.43)

(3.43)

(3.43)

(3.62)

Adjusted EPS (NOK)

 

(3.60)

(3.43)

(3.43)

(3.43)

(3.62)

Dividend per share (NOK)

 

0.0

0.0

0.0

0.0

0.0

 

 

 

 

 

 

 

Balance sheet

 

 

 

 

 

 

Property, plant and equipment

 

581

974

2,332

2,020

1,787

Intangible assets

 

0

0

0

0

0

Total non-current assets

 

581

974

2,332

2,020

1,787

Cash and equivalents

 

360,414

253,586

721,641

432,656

118,128

Other current assets

 

17,831

15,818

14,228

15,023

14,626

Total current assets

 

378,245

269,404

735,869

447,679

132,753

Total non-current liabilities

 

0

0

1,367

1,367

1,367

Trade and other payables

 

23,939

26,746

22,550

33,841

35,668

Other current liabilities

 

12,875

21,803

38,046

38,585

39,185

Provisions

 

4,732

2,074

6,008

6,008

6,008

Total current liabilities

 

41,546

50,623

66,604

78,434

80,861

Equity attributable to company

 

337,280

219,754

670,229

369,896

52,311

 

 

 

 

 

 

 

Cashflow statement

 

 

 

 

 

 

Profit before taxes

 

(191,746)

(199,278)

(257,029)

(300,333)

(317,585)

Depreciation and amortisation

 

204

785

726

379

299

Share based payments

 

1,678

3,842

7,412

0

0

Other adjustments

 

1,712

(2,990)

4,644

0

0

Movements in working capital

 

1,446

13,164

13,572

11,620

3,410

Interest paid/received

 

0

(2,206)

(3,614)

0

0

Income taxes paid

 

0

0

0

0

0

Cash from operations (CFO)

 

(186,706)

(186,683)

(234,290)

(288,333)

(313,876)

Capex

 

(228)

0

(67)

(67)

(67)

Acquisitions & disposals net

 

0

0

0

0

0

Other investing activities

 

0

2,206

3,614

0

0

Cash used in investing activities (CFIA)

 

(228)

2,206

3,548

(67)

(67)

Net proceeds from issue of shares

 

176,998

77,910

700,092

0

0

Movements in debt

 

0

0

0

0

0

Other financing activities

 

0

(593)

(585)

(585)

(585)

Cash from financing activities (CFF)

 

176,998

77,317

699,507

(585)

(585)

Cash and equivalents at beginning of period

 

370,350

360,414

253,586

721,641

432,656

Increase/(decrease) in cash and equivalents

 

(9,936)

(107,160)

468,765

(288,985)

(314,528)

Effect of FX on cash and equivalents

 

0

332

(710)

0

0

Cash and equivalents at end of period

 

360,414

253,586

721,641

432,656

118,128

Net (debt)/cash

 

360,414

253,586

720,274

431,289

116,761

Source: Company accounts, Edison Investment Research


General disclaimer and copyright

This report has been commissioned by BerGenBio and prepared and issued by Edison, in consideration of a fee payable by BerGenBio. 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 research department of Edison 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 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). 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

This document is prepared and provided by Edison 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.

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.

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

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

1185 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

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

1185 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 BerGenBio and prepared and issued by Edison, in consideration of a fee payable by BerGenBio. 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 research department of Edison 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 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). 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

This document is prepared and provided by Edison 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.

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.

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

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

1185 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

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

1185 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

Share this with friends and colleagues