FDA – more data needed for paediatric AKI

BioPorto Diagnostics 2 December 2019 Update
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BioPorto Diagnostics

FDA – more data needed for paediatric AKI

Clinical update

Healthcare equipment & services

2 December 2019

Price

DKK3.02

Market cap

DKK528m

DKK6.75/US$

Net cash (DKKm) at end Q319

34.1

Shares in issue

174.9m

Free float

79.5%

Code

BIOPOR

Primary exchange

NASDAQ Copenhagen

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(2.3)

6.3

(21.7)

Rel (local)

(7.4)

(1.9)

(33.8)

52-week high/low

DKK4.14

DKK2.56

Business description

BioPorto Diagnostics is a diagnostic company focused on the development and commercialisation of biomarker-based assays. The company’s portfolio includes The NGAL Test, for prediction of acute kidney injury, and an extensive antibody library.

Next events

Paediatric NGAL application

Q220

Adult NGAL application

After paediatric appointment

Analysts

Nathaniel Calloway

+1 646 653 7036

Wiktoria O’Hare

+1 646 653 7028

BioPorto Diagnostics is a research client of Edison Investment Research Limited

Following an interaction with the FDA, BioPorto announced on 18 November 2019 that it will need to gather more data to complete the 510(k) application for the paediatric NGAL Test. The company expects this process to take several months and to resubmit its application in Q220. The feedback from the FDA has implications relating to the ongoing adult NGAL study, which is now expected to be submitted after the paediatric application (pushed back from Q419).

Year end

Revenue (DKKm)

PBT*
(DKKm
)

EPS*
(DKK)

DPS
(DKK)

P/E
(x)

Yield
(%)

12/17

25.2

(34.2)

(0.21)

0.0

N/A

N/A

12/18

26.0

(42.5)

(0.24)

0.0

N/A

N/A

12/19e

28.5

(66.4)

(0.36)

0.0

N/A

N/A

12/20e

42.1

(73.2)

(0.38)

0.0

N/A

N/A

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

FDA worried that enrolment method introduced bias

The data on paediatric AKI that were submitted to the FDA were from samples collected during the AWARE study, the largest study examining paediatric AKI (and renal angina) performed to date. The major issue raised by the FDA in the recent feedback was that only patients who expected to stay in the ICU for at least 48 hours were included in the study, and this assessment was made by individual investigators. The worry is that this assessment lacked rigour and introduced too much investigator bias into the dataset.

New study to be completed after several months

The company will have to perform a clinical study to gather sufficient data to support its 510(k) application. Based on our communication with the company, it expects to include approximately 300 paediatric intensive care unit (PICU) admissions in the new dataset, which it anticipates will take several months to complete. The company expects a full revised data package will be submitted to the FDA in Q220.

Completion of adult study also pushed back

BioPorto has also revised its outlook on the ongoing adult AKI clinical study following the FDA’s feedback on the paediatric application. The company previously guided to the study being complete and the application submitted in Q419, but it is now expected after the submission for paediatric AKI. The company told us that this was in part to ensure equal enrolment between sites in an effort to shore up statistical rigour in the submitted data.

Valuation: Lowered to DKK942m or DKK5.39

We have lowered our valuation to DKK942m or DKK5.39 per share from DKK993m or DKK5.67 previously. This is driven by the delay in approval timelines and lower expected growth in research products. We have increased our financing requirement to DKK50m from DKK35m based on the revised timelines.

Back and forth on paediatric AKI

The most recent announcement regarding the paediatric AKI programme is one of many such announcements BioPorto has made throughout 2019 since it submitted the initial 510(k) application in May. The initial submission used data solely derived from previously gathered patient samples. The company then changed its plans following the FDA’s request for additional information in July 2019, and stated that it would need to withdraw and resubmit its application after collecting additional samples. However, in October 2019, it again revised its outlook, stating that it believed the old dataset should be sufficient to satisfy the agency’s requests. This appears not to have been the case, as the most recent FDA feedback suggests the only way forward is the initiation of a new clinical study and the collection of additional data. This type of back-and-forth dealing with the FDA is not unusual, but most companies are not as transparent regarding their dealings with the agency and the current thinking regarding the process. However, it is unfortunate that the process has delayed the collection of these data and the submission of the application.

Primary issue stems from enrolment bias

To add some clarity to this process, we took the opportunity to speak with management regarding the data, its discussions with the FDA and the path forward. The FDA’s major objection was in regard to the enrolment of patients in the study, which it believes introduced excess investigator bias. The data submitted to the FDA were derived from patient samples and histories in the AWARE clinical study, a major survey of AKI in paediatric and young adults, which was published in the New England Journal of Medicine in 2017.1 The study was not designed to examine NGAL specifically, but instead to provide insight into the epidemiology, treatment and outcomes in this population. The study evaluated 4,683 patients across 32 PICUs over the course of three months and identified 1,261 patients who developed AKI. Patients were eligible for the study if their PICU stays were estimated to be greater than 48 hours at the time of admission. We believe the 48-hour rule requirement was included to limit the study to patients who could meet the required follow-up examinations to confirm the presence of AKI and provide data on outcomes. However, the 48-hour requirement was the sticking point identified by the FDA, as it required a patient assessment that was wholly determined at the discretion of the doctor examining them. It appears there could be a high degree of variation in how doctors made this assessment, which could introduce bias into the dataset. Interestingly, this protocol is slightly different from what was initially proposed for the AWARE study,2 which suggested culling patients that were not in the ICU for 48 hours after the fact, instead of pre-emptively. We believe this protocol was adjusted to save resources. The situation highlights some of the risks and limitations of depending on third-party data for approval.

Kaddourah A, et al. (2017) Epidemiology of Acute Kidney Injury in Critically Ill Children and Young Adults. N Eng J Med 376, 11-20.

Basu RK et al. (2015) Assessment of Worldwide Acute Kidney Injury, Renal Angina and Epidemiology in Critically Ill Children (AWARE): study protocol for a prospective observational study. BMC Nephrol 16, 24.

BioPorto’s path forward is to perform an additional clinical study. According to feedback provided by the company, it will need to identify a minimum of 20 AKI-positive individuals. To do this, it expects it will need to screen 300 paediatric patients presenting at the PICU, after accounting for expected exclusions and a margin of safety. Although it is unfortunate that the company needs to perform an additional study, it should progress very quickly given the nature of the condition and the screening population. Patients only need to be observed for a short time, and most PICU patients should be eligible.

Doubling down on rigour for adult AKI

Concurrent with the announcement of the delay in the paediatric AKI programme, BioPorto also announced that it would be delaying the submission of the adult AKI programme until after the submission of the paediatric application. It had previously guided towards submission of the 510(k) application in Q419. Based on our conversation with BioPorto, the primary cause for this delay was to ensure balanced enrolment between participating clinical sites. Although some sites are enrolling quickly, the company wants to ensure that the study population is balanced across different centres, which should provide less biased data in the eventual readout. We suspect this was a reaction to the feedback on the paediatric application as the company is now better acquainted with the degree of rigour it can expect from the agency in this process. In this way, the paediatric programme is being used to anticipate which issues might arise with the much higher-stakes adult application.

Valuation

We have lowered our valuation to DKK942m or DKK5.39 per share from DKK993m or DKK5.67 previously. This is driven by pushing back the timelines for the paediatric and adult 510(k) applications to submission in mid-2020. In addition, we have adjusted for slower than expected growth in non-NGAL research products, which has lowered that valuation to DKK7.7m from DKK19.2m. Finally, we have adjusted for lower net cash (DKK34.1m at end Q319 from DKK51.4m at end Q219). This was offset by exchange rate effects and rolling forward our NPVs.

Exhibit 1: Valuation of BioPorto

Programme

Market

Prob. of success

Peak revenue ($m)

Valuation (DKKm)

The NGAL Test

ICU

50%

185.1

691.5

ED

30%

172.9

320.3

Post-surgery

30%

55.4

96.3

Research

100%

2.1

6.0

Paediatrics

50%

16.8

17.2

Other products

Research

100%

2.6

7.7

Unallocated costs

(230.9)

Total

908.1

Net cash and equivalents (Q319) (DKKm)

34.1

Total firm value (DKKm)

942.3

Total shares (m)

174.9

Value per share (DKK)

5.39

Dilutive warrants (m)

16.5

Total diluted shares

191.5

Value per diluted share (DKK)

5.24

Source: BioPorto reports, Edison Investment Research

Financials

Although BioPorto’s operational focus remains firmly on the approval of The NGAL Test in the US, it continues to generate revenue from its suite of research products. Revenue for Q319 was DKK6.6m, up 29% year-on-year. US sales of The NGAL Test for research use continue to expand and are up 29% year-on-year (DKK1.9m), which is more important as an indicator of interest in the technology than as a revenue source and we continue to be encouraged by its trajectory. Following the recent developments with the 510(k) process in the US, BioPorto has revised its guidance for 2019 to DKK29m in revenue and an EBIT loss of DKK70m. We have increased our expected R&D spend for 2020 by approximately DKK10m to DKK47.5m to account for the adult and paediatric AKI studies. These adjustments have increased our expected financing requirement to DKK50m from DKK35m, which we include as illustrative debt in 2020.

Exhibit 2: Financial summary

DKK'000s

2017

2018

2019e

2020e

31-December

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

25,155

26,016

28,532

42,094

Cost of Sales

(6,907)

(8,181)

(8,922)

(10,506)

Gross Profit

18,248

17,835

19,610

31,589

Sales

(18,545)

(20,935)

(36,654)

(31,050)

R&D

(21,930)

(18,676)

(23,759)

(47,473)

Administrative

(14,267)

(20,005)

(28,986)

(29,276)

EBITDA

 

 

(33,134)

(42,103)

(63,931)

(73,119)

Operating Profit (before amort. and except.)

 

 

(33,638)

(42,646)

(66,934)

(73,354)

Amortisation of acquired intangibles

0

0

0

0

Exceptionals

0

0

0

0

Share-based payments

(2,856)

865

(2,856)

(2,856)

Reported operating profit

(36,494)

(41,781)

(69,790)

(76,210)

Net Interest

(570)

164

536

116

Joint ventures & associates (post tax)

0

0

0

0

Exceptionals

0

0

0

0

Profit Before Tax (norm)

 

 

(34,208)

(42,482)

(66,398)

(73,238)

Profit Before Tax (reported)

 

 

(37,064)

(41,617)

(69,254)

(76,094)

Reported tax

4,821

3,569

3,973

4,366

Profit After Tax (norm)

(29,758)

(38,124)

(62,596)

(69,036)

Profit After Tax (reported)

(32,243)

(38,048)

(65,280)

(71,728)

Minority interests

0

0

0

0

Discontinued operations

0

0

0

0

Net income (normalised)

(29,758)

(38,124)

(62,596)

(69,036)

Net income (reported)

(32,243)

(38,048)

(65,280)

(71,728)

Average Number of Shares Outstanding (m)

145

157

174

183

EPS - normalised (DKK)

 

 

(0.21)

(0.24)

(0.36)

(0.38)

EPS - diluted normalised (DKK)

 

 

(0.21)

(0.24)

(0.36)

(0.38)

EPS - basic reported (DKK)

 

 

(0.22)

(0.24)

(0.38)

(0.39)

Dividend (DKK)

0.00

0.00

0.00

0.00

BALANCE SHEET

Fixed Assets

 

 

2,623

3,563

8,113

7,878

Intangible Assets

1,629

1,374

4,970

4,970

Tangible Assets

263

1,437

2,344

2,109

Investments & other

731

752

799

799

Current Assets

 

 

62,981

62,638

41,498

28,846

Stocks

3,434

3,631

2,933

3,454

Debtors

6,380

8,036

7,035

10,379

Cash & cash equivalents

47,080

46,709

23,130

6,614

Other

6,087

4,262

8,398

8,398

Current Liabilities

 

 

(8,653)

(9,217)

(18,989)

(74,974)

Creditors

(3,412)

(4,451)

(3,800)

(9,785)

Tax and social security

(182)

(141)

(2,796)

(2,796)

Short term borrowings

0

0

0

(50,000)

Other

(5,059)

(4,625)

(12,393)

(12,393)

Long Term Liabilities

 

 

(883)

(787)

(1,220)

(1,220)

Long term borrowings

0

0

0

0

Other long term liabilities

(883)

(787)

(1,220)

(1,220)

Net Assets

 

 

56,068

56,197

29,402

(39,470)

Minority interests

0

0

0

0

Shareholders' equity

 

 

56,068

56,197

29,402

(39,470)

CASH FLOW

Op Cash Flow before WC and tax

(33,134)

(42,103)

(63,931)

(73,119)

Working capital

2,325

(631)

7,812

2,121

Exceptional & other

(595)

(74)

719

116

Tax

2,005

4,799

(54)

4,366

Net operating cash flow

 

 

(29,399)

(38,009)

(55,453)

(66,516)

Capex

(38)

(1,483)

(2,443)

0

Acquisitions/disposals

0

0

0

0

Net interest

0

0

0

0

Equity financing

40,921

39,319

36,749

0

Dividends

0

0

0

0

Other

(45)

(198)

(2,596)

0

Net Cash Flow

11,439

(371)

(23,743)

(66,516)

Opening net debt/(cash)

 

 

(35,641)

(47,080)

(46,709)

(23,130)

FX

0

0

0

0

Other non-cash movements

0

0

165

0

Closing net debt/(cash)

 

 

(47,080)

(46,709)

(23,130)

43,386

Source: BioPorto Reports, Edison Investment Research

General disclaimer and copyright

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

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

General disclaimer and copyright

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

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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