vital sign monitoring concept. 3d rendering. abstract mixed media.

FDA clears expansion of POSEIDON enrolment

Sequana Medical 7 October 2021 Update
Download PDF

Sequana Medical

FDA clears expansion of POSEIDON enrolment

Pipeline update

Pharma & biotech

7 October 2021

Price

€6.88

Market cap

€128m

$1.16/€

Net cash (€m) at 30 June 2021
(excluding €0.3m lease liabilities)

14.7

Shares in issue

18.58m

Free float

50%

Code

SEQUA

Primary exchange

Euronext

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

1.8

(20.6)

15.1

Rel (local)

7.1

(19.4)

(6.2)

52-week high/low

€11.8

€6.0

Business description

Based in Belgium, Sequana Medical develops devices based on its alfapump platform for the treatment of diuretic-resistant fluid overload in liver disease, malignant ascites and heart failure. Alfapump is CE marked for refractory ascites and is in a pivotal North American study for this indication.

Next events

Interim data for SAHARA DESERT alfapump DSR study

Q421

Complete recruitment for POSEIDON study

Q421

Analysts

Pooya Hemami, CFA

+1 646 653 7026

Maxim Jacobs, CFA

+1 646 653 7027

Sequana Medical is a research client of Edison Investment Research Limited

Sequana Medical announced on 4 October that it had received approval from the US FDA to expand patient recruitment in the pivotal cohort of its POSEIDON pivotal study to 70 (an increase of 10 patients). This decision should allow Sequana to meet its pre-defined target of having 40 evaluable patients for the primary efficacy analysis, and thus provide it with the desired statistical power to potentially meet the primary endpoint. In our view, the positive FDA decision reduces a degree of uncertainty with regards to the North American clinical programme, hence we raise our probability of success for alfapump in refractory and recurrent ascites in this market to 60% (from 55% previously). We now obtain a new pipeline rNPV of €246.4m (versus €219.8m, previously).

Year end

Revenue (€m)

PBT*
(€m)

EPS*
(€)

DPS
(€)

P/E
(x)

Yield
(%)

12/19

1.0

(14.9)

(1.22)

0.0

N/A

N/A

12/20

1.0

(19.0)

(1.25)

0.0

N/A

N/A

12/21e

0.5

(22.7)

(1.25)

0.0

N/A

N/A

12/22e

1.2

(22.8)

(1.22)

0.0

N/A

N/A

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

POSEIDON timelines re-established

Sequana announced in July that it is seeking to expand POSEIDON study enrolment by c 10 patients to address higher attrition rates and meet its target of having 40 evaluable implantations for the primary efficacy analysis. It now expects to complete POSEIDON recruitment in Q421 and report primary efficacy data in Q422. To date, 59 patients have been enrolled in the pivotal cohort. We remain confident in alfapump’s efficacy profile to date as trends shown in recent interim analyses appear to exceed the primary endpoints significantly, as defined for the pivotal cohort. The company expects to submit a US premarket approval (PMA) application in mid-2023, which we believe could lead to US launch in mid-2024.

Cash on hand until Q222

Sequana had a net cash position of €14.7m at 30 June 2021 (€21.8m in cash offset by €7.1m in long-term debt) excluding €0.3m in lease liabilities. We continue to expect that Sequana’s funds on hand should be sufficient for it to maintain operations into Q222, and model that it will need to raise a total of €125m until it starts to generate sustained positive operating cash flows in H127. We assume the company will raise €20m in 2022, €25m in 2023 and an additional €80m before FY27. As per our usual policy, we model these financing requirements as illustrative debt.

Valuation: Increasing rNPV to €246.4m

We have increased our probability of success for alfapump in the North American market to 60%. After rolling forward our estimates and adjusting forex expectations, we now obtain a pipeline rNPV valuation of €246.4m versus €219.8m, previously. After adding H121 net cash of €14.7m (excluding lease liabilities), we obtain an equity valuation of €261.1m or €14.06 per share (€12.85 fully diluted).

POSEIDON study enrolment expansion adds clarity

Sequana Medical announced on 4 October that it had received approval from the US FDA to expand patient recruitment in the pivotal cohort of its POSEIDON study to 70 (an increase of 10 patients). POSEIDON is Sequana’s North American pivotal study of the alfapump for the treatment of recurrent or refractory ascites (RRA) due to liver cirrhosis.

As a reminder, Sequana reported positive data in July from the second interim analysis in patients in the roll-in cohort.1 At the time, Sequana announced that, based on an analysis of attrition rates between study enrolment and alfapump implantation, it anticipated that c 10 additional patients would need to be enrolled in the pivotal cohort (above the pre-specified study size of 60 for the pivotal cohort initially approved by the FDA) to meet its target of 40 evaluable implantations for the primary efficacy analysis. As explained in our July note, the higher attrition rate was largely due to delays caused by COVID-19 restrictions on elective surgery, leading to disease progression in some of the patients in the pre-implantation observation period, whereby they no longer met inclusion criteria by the expected time of implantation.

The POSEIDON study allows for up to 30 patients to be enrolled in a training (or ‘roll in’) cohort (which will be excluded from primary efficacy analysis), to ensure centres are experienced in the use of the alfapump before the actual study (pivotal) cohort is enrolled.

Initially, the company planned to enrol 60 patients in the pivotal cohort, to implant at least 50 of these patients with the alfapump (following the three-month pre-implant observation period and eligibility reassessment) and have at least 40 of the implanted patients evaluable for the primary endpoint analysis at six months after implantation. Due to the higher attrition rate between initial enrolment and implantation, Sequana was seeking to enrol 10 additional patients to ensure that at least 50 patients would undergo alfapump implantation, with at least 40 of these included for the primary endpoint analysis (as originally planned).

With the recently provided FDA clearance for additional study enrolment, Sequana can now meet these POSEIDON study objectives (ie have at least 50 patients undergo alfapump implantation and at least 40 included for the primary endpoint analysis) and it also resumed providing POSEIDON study guidance. Sequana now expects completion of POSEIDON study recruitment in Q421 and for primary endpoint data to be available in Q422. To date, it reports that 59 patients have been enrolled in the pivotal cohort.

Overall, this development is positive in our view, and adds clarity and reassurance to POSEIDON’s likelihood of meeting the primary endpoint, as had the FDA not agreed to expand enrolment, we estimate that the POSEIDON trial’s evaluable pivotal cohort would then consist of only c 35 patients, thereby dampening the statistical power compared to the planned target of c 40 in that cohort. As a reminder, the primary effectiveness outcomes of POSEIDON include:

the proportion of patients with a 50% reduction in overall average frequency of therapeutic paracentesis (TP) per month in the post-implant observation period (reflecting month four to month six after implantation) compared to the pre-implant observation period; and

whether at least 50% of patients receive a 50% reduction in their monthly frequency of required TP post-implantation compared to the average monthly number of TP required pre-implantation.

As outlined in our recent note, the second interim analysis of the study roll-in cohort showed that subjects had a greater than 90% reduction in mean frequency of TP versus baseline, and all patients experienced at least a 50% reduction in mean TP frequency per month versus baseline. As these trends substantially exceed the primary endpoints as defined for the pivotal cohort, we are confident that the POSEIDON study will likely meet the primary endpoint if trends shown in the roll-in cohort are maintained.

Another favourable development, in our view, is that, in allowing POSEIDON recruitment size to increase, the FDA did not impose any new restrictions or conditions on the trial, which we perceive as a vote of confidence in the data reported to date and in the study’s overall progression.

Financials and valuation

We have not modified our forecasts in local currency terms (for instance, in US dollars for the US market) and continue to forecast net operating cash burn rates of €22.6m and €23.9m for 2021 and 2022 respectively. We continue to expect that Sequana’s funds on hand should be sufficient for it to maintain operations into Q222, and our forecasts for fund-raising needs are unchanged. We model that Sequana will need to raise a total of €125m until it starts to generate sustained positive operating cash flows in H127.

We continue to value Sequana using a risk-adjusted NPV model with a 12.5% cost of capital for alfapump in North America and alfapump DSR, and a 10% rate for alfapump in ex-North American markets (where it is commercialised). Given the improved clarity relating to the FDA’s acceptance of the company’s POSEIDON pivotal cohort expansion request and the increased confidence that the primary endpoint analysis should include at least 40 patients as originally planned, we have reinstated our probability of success for alfapump in the North American market to 60% (versus our earlier reduction to 55% when there was a lack of certainty as to whether the request would have been accepted).

Exhibit 1: Sequana Medical rNPV assumptions

Product contribution

Indication

Stage

NPV
(€m)

Probability of success

rNPV
(€m)

rNPV/
basic share (€)

Launch year

Sales (€m) in 2032

alfapump in North America (net of R&D and SG&A costs)

Refractory and recurrent ascites and malignant ascites

Pivotal studying ongoing

213.1

60%

122.3

6.59

Mid-2024

180.2

alfapump in Europe and ex-NA regions (net of SG&A costs)

Refractory and recurrent ascites and malignant ascites

Commercial/Marketed

2.2

100%

2.2

0.12

2013

3.4

alfapump DSR and short-term DSR

Fluid overload in heart failure

Human feasibility studies

779.5

25%

179.5

9.66

H226 in US

445.2*

Corporate costs

(57.6)

100%

(57.6)

(3.10)

Total

937.2

246.4

13.27

Net cash (H121) excluding lease liabilities

14.7

14.7

0.79

Total equity value

951.8

261.1

14.06

Basic shares outstanding (000) (27 July 2021)

18,577

Outstanding warrants and share options

1,747

FD shares outstanding (000) (27 July 2021)

20,324

Source: Edison Investment Research. *Reflects estimate of projected transfer pricing revenue to Sequana Medical rather than end-market commercial sales.

We have also rolled forward our forecasts and made a slight revision in our forex assumptions ($1.16/€ versus $1.19/€ previously). Following these adjustments, we now obtain a pipeline rNPV valuation of €246.4m versus €219.8m, previously. After adding H121 net cash of €14.7m (excluding lease liabilities), we obtain an equity valuation of €261.1m or €14.06 per share (€12.85 fully diluted).

Exhibit 2: Financial summary

€’000s

2018

2019

2020

2021e

2022e

2023e

2024e

31-December

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

1,029

971

963

525

1,214

1,396

3,661

Cost of Sales

(158)

(198)

(202)

(105)

(243)

(279)

(732)

Gross Profit

871

773

761

420

971

1,117

2,929

General & Administrative

(8,206)

(7,102)

(6,738)

(7,103)

(7,038)

(8,529)

(13,597)

Net Research & Development

(5,816)

(7,652)

(11,835)

(15,606)

(15,500)

(12,000)

(12,500)

Operating profit before exceptionals

(13,150)

(13,981)

(17,813)

(22,289)

(21,567)

(19,412)

(23,168)

EBITDA

 

 

(13,070)

(13,737)

(17,506)

(22,117)

(21,380)

(19,275)

(23,064)

Depreciation & other

(81)

(244)

(307)

(172)

(187)

(137)

(104)

Operating Profit (before amort. and except.)

 

(13,150)

(13,981)

(17,813)

(22,289)

(21,567)

(19,412)

(23,168)

Exceptionals including asset impairment

74

18

41

17

0

0

0

Operating Profit

(13,077)

(13,964)

(17,771)

(22,272)

(21,567)

(19,412)

(23,168)

Net Interest

(883)

(878)

(1,178)

(416)

(1,229)

(3,157)

(5,254)

Profit Before Tax (norm)

 

 

(14,033)

(14,859)

(18,991)

(22,705)

(22,795)

(22,569)

(28,422)

Profit Before Tax (FRS 3)

 

 

(13,960)

(14,841)

(18,949)

(22,688)

(22,795)

(22,569)

(28,422)

Tax

(24)

(136)

(157)

(129)

0

0

0

Profit After Tax and minority interests (norm)

(14,057)

(14,995)

(19,148)

(22,834)

(22,795)

(22,569)

(28,422)

Profit After Tax and minority interests (FRS 3)

(13,983)

(14,977)

(19,106)

(22,817)

(22,795)

(22,569)

(28,422)

Average Number of Shares Outstanding (m)

10.0

12.3

15.3

18.3

18.7

18.7

18.8

EPS - normalised (€)

 

 

(1.41)

(1.22)

(1.25)

(1.25)

(1.22)

(1.20)

(1.51)

EPS - normalised and fully diluted (€)

 

 

(1.41)

(1.22)

(1.25)

(1.25)

(1.22)

(1.20)

(1.51)

EPS - (IFRS) (€)

 

 

(1.40)

(1.22)

(1.25)

(1.25)

(1.22)

(1.20)

(1.51)

Dividend per share (€)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

BALANCE SHEET

Fixed Assets

 

 

242

829

772

640

486

385

372

Tangible Assets

184

765

705

561

407

305

293

Investments in long-term financial assets

58

63

67

79

79

79

79

Current Assets

 

 

3,099

8,522

13,441

12,142

8,372

10,295

7,584

Short-term investments

0

0

0

0

0

0

0

Cash

1,318

5,586

11,016

11,035

7,099

9,705

5,852

Other

1,782

2,935

2,425

1,107

1,273

590

1,733

Current Liabilities

 

 

(18,727)

(5,315)

(5,966)

(4,950)

(3,464)

(2,490)

(2,817)

Creditors

(6,654)

(4,855)

(5,966)

(4,950)

(3,464)

(2,490)

(2,817)

Short term borrowings

(12,073)

(459)

0

0

0

0

0

Long Term Liabilities

 

 

(3,374)

(3,110)

(8,135)

(7,839)

(27,839)

(52,839)

(77,839)

Long term borrowings

(2,582)

(2,261)

(7,473)

(7,089)

(27,089)

(52,089)

(77,089)

Other long-term liabilities

(792)

(849)

(662)

(750)

(750)

(750)

(750)

Net Assets

 

 

(18,760)

926

113

(8)

(22,445)

(44,650)

(72,700)

CASH FLOW

Operating Cash Flow

 

 

(8,987)

(17,596)

(15,791)

(22,087)

(22,674)

(19,202)

(23,507)

Net interest and financing income (expense)

(883)

(878)

(1,178)

(416)

(1,229)

(3,157)

(5,254)

Tax

(5)

(9)

(36)

(85)

0

0

0

Net Operating Cash Flow

 

 

(9,875)

(18,482)

(17,005)

(22,588)

(23,902)

(22,360)

(28,762)

Capex

(39)

(106)

(138)

(71)

(34)

(35)

(92)

Acquisitions/disposals

0

0

0

0

0

0

0

Financing

2

26,165

19,000

22,768

0

0

0

Dividends

0

0

0

0

0

0

0

Other

0

0

0

0

0

0

0

Net Cash Flow

(9,912)

7,576

1,857

109

(23,936)

(22,394)

(28,853)

Opening net debt/(cash)

 

 

0

13,337

(2,866)

(3,543)

(3,946)

19,990

42,384

HP finance leases initiated

0

0

0

0

0

0

0

Other

(3,425)

8,627

(1,179)

293

(0)

(0)

(0)

Closing net debt/(cash)

 

 

13,337

(2,866)

(3,543)

(3,946)

19,990

42,384

71,238

Lease debt

N/A

504

387

343

343

343

343

Closing net debt/(cash) inclusive of IFRS 16 lease debt

13,337

(2,362)

(3,157)

(3,603)

20,333

42,727

71,580

Source: Company data, Edison Investment Research

General disclaimer and copyright

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

Share this with friends and colleagues