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EHA data released

Sunesis Pharmaceuticals 24 June 2019 Update
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Sunesis Pharmaceuticals

EHA data released

Clinical update

Pharma & biotech

24 June 2019

Price

US$0.62

Market cap

US$45m

Net cash ($m) at 31 March 2019

18.8

Shares in issue

72.5m

Free float

97.5%

Code

SNSS

Primary exchange

NASDAQ

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(45.4)

(35.7)

(71.4)

Rel (local)

(47.0)

(37.8)

(73.4)

52-week high/low

US$2.45

US$0.24

Business description

Sunesis Pharmaceuticals is a pharmaceutical company focused on oncology. Its lead asset is vecabrutinib, a Bruton’s tyrosine kinase inhibitor for chronic lymphocytic leukemia for Imbruvica-refractory patients. The program is entering a dose-escalation Phase Ib/II. It has also developed TAK-580 with partner Takeda, and the preclinical PDK1 inhibitor SNS-510.

Next events

Vecabrutinib dosing complete

H219

Analyst

Nathaniel Calloway

+1 646 653 7036

Sunesis Pharmaceuticals is a research client of Edison Investment Research Limited

Sunesis provided an update at the European Hematology Association (EHA) meeting on its ongoing Phase Ib/II study of vecabrutinib in patients with B-cell malignancies, providing detailed data on the first three cohorts (25mg, 50mg and 100mg). The data were consistent with previous reports: no safety red flags were observed, and there were indications of activity. The data did not show partial responses or better at the current dose, but four patients (of 20) demonstrated stable disease, including three out of five evaluable CLL patients with C481S mutations.

Year end

Revenue ($m)

PBT*
($m)

EPS*
($)

DPS
($)

P/E
(x)

Yield
(%)

12/17

0.7

(35.5)

(1.45)

0.00

N/A

N/A

12/18

0.2

(26.6)

(0.75)

0.00

N/A

N/A

12/19e

0.0

(28.6)

(0.39)

0.00

N/A

N/A

12/20e

0.0

(33.2)

(0.43)

0.00

N/A

N/A

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

Dosing to continue

The data from the latest release continue to be consistent with an active drug dosed below its efficacy threshold. Vecabrutinib effectively binds its target BTK and reduces the formation of phosphorylated BTK (pBTK), and this translates into an inhibition of serum cytokines. Moreover, the activity of the drug appears to correlate in patients with higher C481S mutation frequency, suggesting that it is effective in evading this resistance mechanism. However, we expect more robust clinical responses to be found in higher doses.

No surprises in safety

The safety data from the latest release are roughly similar to those we have seen previously for the drug: the majority of adverse events (AEs) were hematologic in nature, as expected with this patient population. The GI profile continues to look attractive compared to Imbruvica. Although we expect the rate of AEs to increase with higher doses, we are not seeing any red flags at this time.

The drug class advances

ArQule also released data from the dosing study of its non-covalent BTK inhibitor ARQ-531 at the EHA meeting. Multiple patients had partial responses including four of six evaluable C481S CLL patients. Although ArQule and Sunesis may be future competitors, at this stage we view the positive ArQule data as a validation of this drug class and the strategy of using non-covalent BTK inhibitors for this resistant population. We expect increasing interest in this class as a whole going forward.

Valuation: $244m or $2.94 per diluted share

Our valuation has increased by a small amount to $244m or $2.94 per diluted share from $241m or $2.92 previously, due to advancing our NPVs and offset by lower net cash. We have not adjusted our probability of success for vecabrutinib at this time, but the new data increase confidence in our assumptions.

Dosing keeps marching along

Sunesis provided an interim update on the data from its ongoing Phase Ib/II study of vecabrutinib for the treatment of B-cell malignancies at the EHA annual meeting in June 2019. Vecabrutinib is a non-covalent inhibitor of Bruton’s tyrosine kinase (BTK), similar to the standard-of-care drug Imbruvica (ibrutinib), but with potential activity in resistant patients. The non-covalent nature of vecabrutinib allows it to bind to BTK harbouring cysteine-481 (C481) mutations, which are presumed to be a major Imbruvica resistance mechanism. The drug is being tested for a range of B-cell cancers but, given the prevalence and treatment patterns, we expect chronic lymphocytic leukemia (CLL) to be the most important indication clinically and commercially, and a majority of patients on this study had this disease (19/23). All patients enrolled in the study had prior BTK therapy, as well as multiple other treatments.

The clinical study is in the dose-escalation period, and patients have been enrolled in the first four dosing cohorts (25mg, 50mg, 100mg and 200mg), but only enrolment data were provided for the highest dose cohort. The data provided an activity assessment of the first three cohorts, the most detailed look to date into the potential efficacy of this drug. Cohorts 1–3 enrolled 20 patients total, four of whom achieved a stable disease – all CLL patients, three of whom had C481S mutation. The C481S patient with the strongest response (47% decrease in lesion size) was also one of two evaluable patients who was previously treated with Venclexta (venetoclax, AbbVie/Roche). This observation is important because Venclexta is becoming established as a treatment following Imbruvica progression, and recently received approval for first-line CLL in May 2019. Additionally, one patient with Waldenstrom macroglobulinemia (WM) showed a clinical benefit. All of these data are important because they are the first signs of efficacy we would expect with an active drug, suggesting that vecabrutinib is clinically active in these populations.

Interestingly, the activity of the drug appears to scale with the allelic frequency of the C481 mutation. The company provided a brief analysis of the patients with a C481S mutation on the study, showing that those with more copies of the mutation (the variant allelic frequency VAF) had more pronounced responses to the drug (Exhibit 1). All the patients on the study previously progressed on another BTK inhibitor, and these data suggest that those whose progression is driven by a C481 mutation can potentially be treated with vecabrutinib (and likewise if it is not the driving factor, these patients may be harder to treat). The company’s own enrolment data continue to support this as a major resistance mechanism, with the mutation present in 61% of patients examined.

Exhibit 1: Change in lesion size vs C481S allelic frequency

Source: Sunesis. Note: SPD = sum of the product of the (lesion) diameters. VAF = variant allelic frequency.

We would expect these responses to become more pronounced as the dosing of the drug continues. The company provided pharmacokinetic data on the first three cohorts, together with some data showing that plasma exposure is linear over the range investigated (Exhibit 2). The company provided data that showed that the plasma Cmin (the lowest concentration before readministering the drug) in the 100mg cohort was 873ng/mL (from the four evaluable patients), which is short of the 1,000ng/mL threshold the company expects to be necessary for sufficient clinical activity. However, the linearity of these observations suggests that higher doses will likely yield higher exposures. We therefore expect more robust demonstrations of efficacy in the forthcoming higher doses.

Exhibit 2: Vecabrutinib Cmin plasma concentrations

Source: Sunesis. Note: Cmin plasma concentrations for 25mg (n=3), 50mg (n=10) and 100mg (n=4), respectively.

Although the clinical study has not yet reached dosing levels with pronounced clinical remissions, the data are supportive of clinical activity. In addition to the response data provided, the company provided supportive pharmacodynamic data showing that the formation of pBTK was inhibited (average 81% after the first dose and 80% at the end of the first cycle) and that chemokine production was widely inhibited, as would be expected with an active BTK inhibitor. We expect this to continue to develop into clinical responses as the clinical program progresses.

Safety update

The data presented at EHA provided the most up-to-date glimpse of the safety profile of the drug. The profile was largely consistent with previous reports, the most common treatment emergent adverse events (TEAEs) being hematologic in nature (anaemia 40%, neutropenia 30%, etc), which is to be expected in this patient population. GI adverse events continue to be uncommon (nausea 15%, diarrhea 10%, constipation 10%), compared to what is seen for Imbruvica (51% diarrhea, 31% nausea, 25% constipation, etc). Additionally, there were no serious adverse events that were deemed study related (out of a total of eight). This safety profile may continue to progress with higher doses, but currently there are no red flags.

Where do we stand now?

Unfortunately absent from the EHA poster are any definitive efficacy data that signal the viability of this drug in the clinic, such as partial or complete responses. However, it is worth noting that everything that has been observed to date is consistent with an active drug, and the absence of this evidence is in no way evidence of absence. It is encouraging to see early signs of efficacy such as an impact on cytokines at these doses, as well as pharmacokinetic data suggesting that the drug can continue to be dosed at higher concentrations.

These data arrive in the backdrop of increasing prominence for non-covalent BTK inhibitors as a class. There were also presentations at EHA for both Aptose’s and ArQule’s non-covalent BTK inhibitors. The Aptose presentation was on preclinical data, but quickly follows the recent initiation of the company’s own Phase I CLL study in May 2019. The ArQule drug, also in a Phase I dosing study, showed multiple patients with partial responses, including four out of six CLL patients in the current dosing arm. Although ArQule is ostensibly in competition with Sunesis, we view these data as validation of this class of molecule, and supportive of potential efficacy for vecabrutinib, given their shared mechanisms. Moreover, these results serve to promote the class as a whole, which may improve downstream valuations as awareness of their utility increases.

Valuation

Our valuation has increased by a small amount to $244m or $2.94 per diluted share, from $241m or $2.92 previously. The valuation was lifted by rolling forward our NPVs and offset almost completely by lower net cash ($17.6m at the end of Q119 vs $24.7m estimated previously).

We have not adjusted our vecabrutinib model at this time, although we find the data release encouraging and it confirms our current assessment. We expect to update our valuation for the molecule with the release of efficacy data at higher doses, which the company expects to share later in 2019.

Exhibit 3: Valuation of Sunesis

Development program

Clinical stage

Expected commercialization

Prob. of success

Launch year

Launch pricing ($)

Peak
sales ($m)

Patent/exclusivity protection

Royalty/
margin

rNPV
($m)

TAK-580

Phase I/II

Licensed to Takeda

10%

2025

500,000

603

2032

15%

$20

Vecabrutinib

Phase Ib/II

Proprietary

20%

2023

152,000

666

2034

56%

$196

SNS-510

IND ready

Proprietary

10%

2025

130,000

344

2031

51%

$24

Unallocated costs (discovery programs, administrative costs, etc.)

($15)

Total

 

 

 

 

 

 

 

 

$225

Net cash and equivalents (Q119) ($m)

$18.8

Total firm value ($m)

$243.7

Total basic shares (m)

72.5

Value per basic share ($)

$3.36

Convertible pref stock (m)

11.4

Warrants and options (m)

4.3

Total diluted shares (m)

88.2

Value per diluted share ($)

$2.94

Source: Sunesis reports, Edison Investment Research.

Financials

The company reported Q119 financials largely within expectations. The operational loss for the period was $5.7m. We expect operating losses to increase in the coming quarters once the vecabrutinib study advances to the Phase II portion, and we currently forecast an operating loss of $28.1m for 2019. Our financing forecasts remain unchanged at this time, and we expect the company to require an additional $115m ($40m in 2020, $40m in 2021 and $35m in 2022) to complete its clinical program and reach profitability.

Exhibit 4: Financial summary

$000s

2017

2018

2019e

2020e

Year end 31 December

US GAAP

US GAAP

US GAAP

US GAAP

PROFIT & LOSS

Revenue

 

 

669

237

0

0

Cost of Sales

0

0

0

0

Gross Profit

669

237

0

0

Research and development

(21,540)

(14,615)

(16,427)

(17,230)

Selling, general & administrative

(13,548)

(11,332)

(11,672)

(12,022)

EBITDA

 

 

(34,428)

(25,719)

(28,107)

(29,261)

Operating Profit (before GW and except.)

(34,419)

(25,710)

(28,098)

(29,252)

Intangible Amortisation

0

0

0

0

Exceptionals/Other

0

0

0

0

Operating Profit

(34,419)

(25,710)

(28,098)

(29,252)

Net Interest

(1,039)

(905)

(512)

(3,928)

Other (change in fair value of warrants)

0

0

0

0

Profit Before Tax (norm)

 

 

(35,458)

(26,615)

(28,610)

(33,180)

Profit Before Tax (IFRS)

 

 

(35,458)

(26,615)

(28,610)

(33,180)

Tax

0

0

0

0

Deferred tax

0

0

0

0

Profit After Tax (norm)

(35,458)

(26,615)

(28,610)

(33,180)

Profit After Tax (IFRS)

(35,458)

(26,615)

(28,610)

(33,180)

Average Number of Shares Outstanding (m)

24.5

35.6

74.0

77.3

EPS - normalised ($)

 

 

(1.45)

(0.75)

(0.39)

(0.43)

EPS - IFRS ($)

 

 

(1.45)

(0.75)

(0.39)

(0.43)

Dividend per share ($)

0.0

0.0

0.0

0.0

BALANCE SHEET

Fixed Assets

 

 

1,401

124

2

0

Intangible Assets

0

0

0

0

Tangible Assets

20

11

2

0

Other

1,381

113

0

0

Current Assets

 

 

32,933

15,200

7,814

17,750

Stocks

0

0

0

0

Debtors

0

0

0

0

Cash

31,750

13,696

6,215

16,151

Other

1,183

1,504

1,599

1,599

Current Liabilities

 

 

(8,901)

(8,789)

(1,435)

(1,494)

Creditors

(1,697)

(1,393)

(1,435)

(1,494)

Short term borrowings

(7,204)

(7,396)

0

0

Long Term Liabilities

 

 

(112)

(8)

(5,998)

(45,998)

Long term borrowings

0

0

(5,990)

(45,990)

Other long term liabilities

(112)

(8)

(8)

(8)

Net Assets

 

 

25,321

6,527

383

(29,742)

CASH FLOW

Operating Cash Flow

 

 

(36,142)

(24,404)

(24,709)

(30,057)

Net Interest

0

0

0

0

Tax

0

0

0

0

Capex

(26)

0

0

(7)

Acquisitions/disposals

0

0

0

0

Financing

32,930

6,343

18,634

0

Dividends

0

0

0

0

Other

0

0

0

0

Net Cash Flow

(3,238)

(18,061)

(6,075)

(30,064)

Opening net debt/(cash)

 

 

(28,153)

(24,546)

(6,300)

(225)

HP finance leases initiated

0

0

0

0

Exchange rate movements

0

0

0

0

Other

(369)

(185)

0

0

Closing net debt/(cash)

 

 

(24,546)

(6,300)

(225)

29,839

Source: Sunesis reports, Edison Investment Research


General disclaimer and copyright

This report has been commissioned by Sunesis Pharmaceuticals and prepared and issued by Edison, in consideration of a fee payable by Sunesis Pharmaceuticals. 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 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

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

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

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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

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 Sunesis Pharmaceuticals and prepared and issued by Edison, in consideration of a fee payable by Sunesis Pharmaceuticals. 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 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

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

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

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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