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Extension trial to produce data in Q122

ReNeuron Group 8 October 2021 Update
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ReNeuron Group

Extension trial to produce data in Q122

Trial timing update

Pharma & biotech

8 October 2021

Price

92p

Market cap

£52m

$1.32/£

Gross cash (£m) at 31 March 2021

22.2

Shares in issue (30 June)

56.94m

Free float

99.7%

Code

RENE

Primary exchange

LSE

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(14.0)

(15.1)

(3.1)

Rel (local)

(12.)

(14.2)

(19.9)

52-week high/low

148.5p

72.5p

Business description

ReNeuron Group is a UK biotech company developing allogeneic cell therapies. Human retinal progenitor cells are the lead Phase I/IIa project for retinitis pigmentosa. There is a strong preclinical technology base in exosomes and cell therapies.

Next events

Continuation Phase II data

Q122

hRPC pivotal study start

Late 2022

Analyst

Dr John Savin

+44 (0)20 3077 2500

ReNeuron Group is a research client of Edison Investment Research Limited

ReNeuron has announced that the nine-patient Phase IIa (2m cell dose) extension study (halted in June after a presumed eye infection case) has fully restarted with five patients left to treat. Two patients are scheduled for treatment in October. The company expects to report some data by March 2022, which could potentially open the way to a crucial partnering deal. Full efficacy data at six months post-treatment should be available around the middle of 2022. Our valuation remains £190m.

Year end

Revenue (£m)

PBT*
(£m)

EPS*
(p)

DPS
(p)

P/E
(x)

Yield
(%)

03/20

6.2

(13.9)

(35.85)

0.0

N/A

N/A

03/21

0.3

(13.4)

(29.00)

0.0

N/A

N/A

03/22e

0.3

(13.1)

(19.12)

0.0

N/A

N/A

03/23e

0.4

(13.2)

(19.12)

0.0

N/A

N/A

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

hRPC trial: Partial data by Q122

ReNeuron’s clinical portfolio is focused on the human retinal progenitor cell (hRPC) therapy for retinitis pigmentosa, an inherited, degenerative genetic eye disease. The trial is now in a Phase IIa extension study using 2m cells (given as two injections, or blebs, under the retina). The extended trial aims to recruit nine patients across four centres: two in the US, one in the UK and one in Spain. ReNeuron had a setback in early June 2021 as the fourth patient had a presumed infection (endophthalmitis) after a successful hRPC implantation. It is routine to halt trials to investigate if a possible safety signal emerges, and the subsequent review showed no fundamental issues. ReNeuron announced in October that all trial centres had restarted. Two patients are due to receive treatment in October, leaving three more to recruit and treat before the end of 2021.

Data outputs and pivotal study progression

By the end of March 2022, we expect that ReNeuron should be able to present six-month data on three patients and three-month data on up to five patients. The formal endpoint is at six months but patients have an interim three-month assessment. There is no update on the patient who suffered post-surgical complications - although they will have to be included in formal analysis - so it is possible that an additional patient might be recruited to give nine uncomplicated treatments. Six-month data for all patients is expected to be available by mid-year 2022. This could allow a pivotal study to start from Q422; this is expected to need 100 patients.

Valuation: Maintained at £190m till Q122 data

Management has stated that cash of £22.2m at March 2021 will cover costs for at least 12 months; we estimate that to Q4 FY23 is possible. An eye therapy deal from Q3FY23 might occur and could cover the pivotal trial costs. Exosome deals are possible. Our indicative value is unchanged at £190m and will be updated once the Q1CY22 initial data is presented and when pivotal trial timelines are confirmed.

Exhibit 1: Financial summary

£'000s

2020

2021

2022e

2023e

Year end 31 March

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

6,165

335

300

350

Cost of Sales

0

0

0

0

Gross Profit

6,165

335

300

350

R&D expenses

(16,335)

(9,503)

(10,500)

(10,600)

SG&A expenses

(4,239)

(3,746)

(2,933)

(2,900)

EBITDA

 

 

(13,997)

(12,534)

(12,773)

(12,810)

Operating Profit (before amort. and except.)

 

(14,409)

(12,914)

(13,133)

(13,150)

Intangible Amortisation

0

0

0

0

Exceptionals

0

0

0

0

Operating Profit

(14,409)

(12,914)

(13,133)

(13,150)

Other

0

0

0

0

Net Interest

551

(496)

(13)

(18)

Profit Before Tax (norm)

 

 

(13,858)

(13,410)

(13,146)

(13,168)

Profit Before Tax (FRS 3)

 

 

(13,858)

(13,410)

(13,146)

(13,168)

Tax

2,446

2,063

2,276

2,298

Profit After Tax (norm)

(11,412)

(11,347)

(10,870)

(10,870)

Profit After Tax (FRS 3)

(11,412)

(11,347)

(10,870)

(10,870)

Average Number of Shares Outstanding (m)

31.8

39.1

56.8

56.9

EPS - normalised (p)

 

 

(35.85)

(29.00)

(19.12)

(19.12)

EPS - FRS 3 (p)

 

 

(35.85)

(29.00)

(19.12)

(19.12)

Dividend per share (p)

0.0

0.0

0.0

0.0

BALANCE SHEET

Fixed Assets

 

 

1,229

872

629

436

Intangible Assets

186

186

186

186

Tangible Assets

452

213

88

13

Other

591

473

355

237

Current Assets

 

 

19,147

24,479

13,695

2,861

Stocks

0

0

0

0

Debtors

696

444

444

444

Cash and deposits

12,625

22,203

11,206

350

Other

5,826

1,832

2,045

2,067

Current Liabilities

 

 

(6,446)

(5,884)

(5,884)

(5,884)

Creditors

(6,280)

(5,727)

(5,727)

(5,727)

Short term borrowings

0

0

0

0

Short term leases

(166)

(157)

(157)

(157)

Other

0

0

0

0

Long Term Liabilities

 

 

(707)

(562)

(405)

(248)

Long term borrowings

0

0

0

0

Long term leases

0

0

0

0

Other long term liabilities

(707)

(562)

(405)

(248)

Net Assets

 

 

13,223

18,905

8,035

(2,835)

CASH FLOW

Operating Cash Flow

 

 

(13,651)

(12,075)

(12,865)

(12,932)

Net Interest

258

(6)

(13)

(18)

Tax

(611)

6,056

2,063

2,276

Capex

(119)

(25)

(25)

(25)

Acquisitions/disposals

0

0

0

0

Financing

188

17,502

0

0

Dividends

0

0

0

0

Other

6,242

(1,865)

(157)

(157)

Net Cash Flow

(7,693)

9,587

(10,997)

(10,856)

Opening net debt/(cash)

 

 

(20,152)

(12,459)

(22,046)

(11,049)

HP finance leases initiated

0

0

0

0

Other

0

0

0

0

Closing net debt/(cash)

 

 

(12,459)

(22,046)

(11,049)

(193)

Source: ReNeuron accounts, Edison Investment Research

General disclaimer and copyright

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

General disclaimer and copyright

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

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