Medigene |
Expansion of platform technology |
US patent grant |
Pharma & biotech |
26 July 2016 |
Share price performance
Business description
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Analysts
Medigene is a research client of Edison Investment Research Limited |
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Medigene has announced that it has expanded its TCR platform technology with the grant of a US patent focused on a method for identifying T-cell antigens. This demonstrates Medigene’s continued advancement of its TCR technology, including providing a new source for potential TCR candidates and establishing a more efficient method for identifying tumour-specific antigens. We maintain our rNPV-based valuation at €214m, or €10.8 per share, with upside expected as it executes its clinical strategy.
Year end |
Revenue (€m) |
PBT* (€m) |
EPS* (€) |
DPS (€) |
P/E (x) |
Yield (%) |
12/14 |
13.8 |
(5.3) |
(0.42) |
0.0 |
N/A |
N/A |
12/15 |
6.8 |
(12.8) |
(0.74) |
0.0 |
N/A |
N/A |
12/16e |
7.1 |
(13.1) |
(0.66) |
0.0 |
N/A |
N/A |
12/17e |
7.3 |
(13.5) |
(0.67) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Expansion of TCR platform technology – US patent
Medigene has expanded its TCR platform technology with the grant of a US patent, which claims a method for the identification of antigens recognised by CD4+ T-cells, including tumour-infiltrating CD4+ T-cells. The patent has a significant period of time to expiry (2030) and is important to Medigene as it offers an effective additional source for potential TCR candidates. It also enables the identification of patient-specific neoantigens seen by CD4+ cells. Neoantigens are potentially good targets for cancer immunotherapy as they are specifically expressed in the tumour, which potentially enables therapies to be specifically targeted.
Building on a broad patent base
Medigene has four patent families relating to its TCR platform, which comprise 47 granted patents and 14 pending applications. These patents are granted in a number of jurisdictions including Europe, the US, Australia and Canada.
Advancing immunotherapies
Medigene is making solid progress with the development of its immunotherapy franchise. Its DC vaccine programmes include a company-initiated trial (a Phase I/II study in 20 AML patients) and investigator-initiated trials (IIT) in AML and prostate cancer. In its TCR division, we expect the start of a planned IIT by mid-2017 following the announcement of a co-operation agreement, with grant funding, to conduct a Phase I. Two company-initiated trials are due to start in 2017 and 2018.
Valuation: Maintained at €214m, or €10.8/share
We maintain our rNPV-based valuation at €214m, or €10.8/share. Medigene’s announcement continues to build on recent positive developments such as the co-operation agreement, with grant funding to conduct an IIT Phase I trial. We expect upside to our valuation as Medigene executes its clinical development strategy over the next few years.
Exhibit 1: Financial summary
€'000s |
2014 |
2015 |
2016e |
2017e |
||
Year end 31 December |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
||||||
Revenue |
|
|
13,784 |
6,808 |
7,056 |
7,330 |
of which: Veregen revenues (royalties/milestones/supply) |
5,195 |
3,101 |
3,462 |
3,737 |
||
R&D partnering (SynCore/Falk Pharma/grants) |
6,096 |
1,214 |
1,100 |
1,100 |
||
Non-cash income (Eligard) |
2,493 |
2,493 |
2,493 |
2,493 |
||
Cost of sales |
(2,086) |
(1,103) |
(1,305) |
(1,415) |
||
Gross profit |
11,698 |
5,705 |
5,751 |
5,915 |
||
Selling, general & administrative spending |
(7,081) |
(7,615) |
(7,833) |
(8,057) |
||
R&D expenditure |
(7,498) |
(8,529) |
(9,808) |
(10,789) |
||
Other operating spending |
0 |
. |
0 |
0 |
||
Operating profit |
(2,881) |
(10,439) |
(11,890) |
(12,931) |
||
Goodwill & intangible amortisation |
(527) |
(526) |
(525) |
(524) |
||
Exceptionals |
0 |
0 |
0 |
0 |
||
Share-based payment |
(66) |
(111) |
(50) |
(50) |
||
EBITDA |
|
|
(2,005) |
(9,384) |
(11,090) |
(12,132) |
Operating profit (before GW and except.) |
|
|
(2,288) |
(9,802) |
(11,315) |
(12,357) |
Net interest |
(1,774) |
(2,914) |
(2,529) |
(2,361) |
||
Other (forex gains/losses; associate profit/loss) |
(1,257) |
(46) |
719 |
1,204 |
||
Profit before tax (norm) |
|
|
(5,319) |
(12,762) |
(13,126) |
(13,514) |
Profit before tax (FRS 3) |
|
|
(5,912) |
(13,399) |
(13,701) |
(14,088) |
Tax |
155 |
400 |
0 |
0 |
||
Profit/(loss) from discontinued operations |
0 |
0 |
0 |
0 |
||
Profit after tax (norm) |
(5,164) |
(12,362) |
(13,126) |
(13,514) |
||
Profit after tax (FRS 3) |
(5,757) |
(12,999) |
(13,701) |
(14,088) |
||
Average number of shares outstanding (m) |
12.2 |
16.8 |
19.9 |
20.2 |
||
EPS - normalised (€) |
|
|
(0.42) |
(0.74) |
(0.66) |
(0.67) |
EPS - FRS 3 (€) |
|
|
(0.47) |
(0.77) |
(0.69) |
(0.70) |
Dividend per share (€) |
0.0 |
0.0 |
0.0 |
0.0 |
||
BALANCE SHEET |
||||||
Fixed assets |
|
|
46,617 |
53,631 |
45,730 |
46,309 |
Intangible assets & goodwill |
38,377 |
37,792 |
35,188 |
34,664 |
||
Tangible assets |
951 |
2,502 |
3,605 |
4,708 |
||
Other non-current assets |
7,289 |
13,337 |
6,937 |
6,937 |
||
Current assets |
|
|
24,666 |
59,900 |
54,364 |
37,836 |
Stocks |
4,406 |
6,654 |
6,654 |
6,654 |
||
Debtors |
1,733 |
763 |
763 |
763 |
||
Cash |
14,976 |
46,759 |
45,679 |
29,151 |
||
Other |
3,551 |
5,724 |
1,268 |
1,268 |
||
Current liabilities |
|
|
(7,755) |
(9,664) |
(8,376) |
(8,376) |
Trade accounts payable |
(1,785) |
(1,354) |
(1,354) |
(1,354) |
||
Short-term borrowings |
0 |
0 |
0 |
0 |
||
Deferred income |
(57) |
(226) |
(226) |
(226) |
||
Other |
(5,913) |
(8,084) |
(6,796) |
(6,796) |
||
Long-term liabilities |
|
|
(14,457) |
(13,879) |
(13,879) |
(13,879) |
Pension provisions |
(413) |
(359) |
(359) |
(359) |
||
Long-term borrowings |
0 |
0 |
0 |
0 |
||
Other liabilities (Deferred taxes; Trianta milestones) |
(3,221) |
(2,915) |
(2,915) |
(2,915) |
||
Deferred revenues (Eligard non-cash income) |
(10,823) |
(10,605) |
(10,605) |
(10,605) |
||
Net assets |
|
|
49,071 |
89,988 |
77,839 |
61,890 |
CASH FLOW |
||||||
Operating cash flow |
|
|
(8,765) |
(10,585) |
(9,495) |
(14,339) |
Net interest |
9 |
(20) |
(1,029) |
(861) |
||
Tax |
0 |
0 |
0 |
0 |
||
Capex |
(873) |
(1,328) |
(1,328) |
(1,328) |
||
Expenditure on intangibles |
0 |
0 |
0 |
0 |
||
Acquisitions/disposals |
0 |
0 |
9,953 |
0 |
||
Equity financing |
14,502 |
43,695 |
819 |
0 |
||
Other |
(62) |
21 |
0 |
0 |
||
Net cash flow |
4,811 |
31,783 |
(1,080) |
(16,528) |
||
Opening net debt/(cash) |
|
|
(10,166) |
(14,976) |
(46,759) |
(45,679) |
HP finance leases initiated |
0 |
0 |
0 |
0 |
||
Other (foreign exchanges differences) |
(1) |
0 |
(0) |
0 |
||
Closing net debt/(cash) |
|
|
(14,976) |
(46,759) |
(45,679) |
(29,151) |
Source: Company accounts, Edison Investment Research
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