Immunicum — Collaboration and supply agreement signed

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Research: Healthcare

Immunicum — Collaboration and supply agreement signed

Immunicum has announced that it has signed a collaboration and supply agreement with Pfizer and Merck KGaA, Darmstadt, Germany for the checkpoint inhibitor (CPI) Bavencio to be used in combination with ilixadencel in the Phase Ib/II ILIAD study. Bavencio (avelumab) is marketed by Pfizer and Merck KGaA, and approved in the US and EU. The availability of Bavencio at no cost to Immunicum in the ILIAD study potentially opens up European study sites, which will be aided by the recent share issues.

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Healthcare

Immunicum

Collaboration and supply agreement signed

Agreement signed

Pharma & biotech

19 November 2018

Price

SEK8.55

Market cap

SEK436m

$/SEK 9.04; €/SEK 10.34

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

132.4

Shares in issue November 2018

51.0m

Shares in issue post-stock issues

92.3m

Free float

86.1%

Code

IMMU

Primary exchange

NASDAQ Stockholm

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(5.0)

12.7

11.8

Rel (local)

(1.5)

21.0

17.8

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

19 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 has announced that it has signed a collaboration and supply agreement with Pfizer and Merck KGaA, Darmstadt, Germany for the checkpoint inhibitor (CPI) Bavencio to be used in combination with ilixadencel in the Phase Ib/II ILIAD study. Bavencio (avelumab) is marketed by Pfizer and Merck KGaA, and approved in the US and EU. The availability of Bavencio at no cost to Immunicum in the ILIAD study potentially opens up European study sites, which will be aided by the recent share issues.

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.

Icing on the cake

Building on a very busy summer, which included stock issues and agreement on the ILIAD study protocol with the FDA, Immunicum has now announced a collaboration and supply agreement with Pfizer and Merck KGaA for the CPI Bavencio (avelumab) to be used in combination with ilixadencel. We had already removed the cost of CPI supply from our model, but the endorsement by Pfizer and Merck KGaA makes expansion of the ILIAD study to European centres (where CPIs are not readily available) possible, and thus recruitment of the Phase II portion could be faster than we had estimated. Bavencio was approved by the FDA in March 2017 for metastatic Merkel cell carcinoma (MCC), and for urothelial carcinoma in May 2017. Bavencio was approved for metastatic MCC in the EU in September 2017. Before Immunicum’s announcement, the PD-L1 monoclonal antibody was in 18 combination studies in 2017, four of which were immunoncology (I/O) combination studies.

Funding secured

Immunicum has secured funding for its clinical programmes until the end of 2021. The EGM on 8 November resolved to approve both resolutions on the directed and rights issues, and we had already included the number of shares issued, the subsequent SEK351m cash inflow and an estimated 10% share issue costs in our FY18 numbers. The rights and share issues are expected to complete on or around 13 December.

Valuation: Unchanged, but confidence higher

The signing of a collaboration agreement with Pfizer and Merck KGaA should give investors confidence that big pharma lends ilixadencel a significant endorsement as a combination I/O agent, otherwise the partners would sell a valuable CPI commercially. Our valuation remains unchanged at SEK1.4bn or SEK15.1 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

93,284

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

 

 

 

189,556

409,577

142,734

85,816

(30,666)

Retained earnings start of period

 

(151,447)

(231,785)

(327,664)

(594,507)

(708,344)

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

(115)

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

General disclaimer and copyright

This report has been commissioned by Immunicum and prepared and issued by Edison, in consideration of a fee payable by Immunicum. 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 2018 Edison Investment Research Limited (Edison). All rights reserved 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.

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.

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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).

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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

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

General disclaimer and copyright

This report has been commissioned by Immunicum and prepared and issued by Edison, in consideration of a fee payable by Immunicum. 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 2018 Edison Investment Research Limited (Edison). All rights reserved 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.

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

Neither this Communication nor any copy (physical or electronic) of it may be (i) taken or transmitted into the United States of America, (ii) distributed, directly or indirectly, in the United States of America or to any US person (within the meaning of regulations Regulation S made under the US Securities Act 1933, as amended), (iii) taken or transmitted into or distributed in Canada, Australia, the Republic of Ireland or the Republic of South Africa or to any resident thereof, except in compliance with applicable securities laws, (iv) taken or transmitted into or distributed in Japan or to any resident thereof for the purpose of solicitation or subscription or offer for sale of any securities or in the context where the distribution thereof may be construed as such solicitation or offer, or (v) or taken or transmitted into any EEA state other than the United Kingdom. Any failure to comply with these restrictions may constitute a violation of the securities laws or the laws of any such jurisdiction. The distribution of this Communication in or into other jurisdictions may be restricted by law and the persons into whose possession this document comes should inform themselves about, and observe, any such restrictions.

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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