Great equity story underpins large share issue

Cantargia 6 May 2020 Update
Download PDF

Cantargia

Great equity story underpins large share issue

Company update

Pharma & biotech

6 May 2020

Price

SEK16.54

Market cap

SEK1.51bn

Net cash (SEKm) at end-Q419 plus share issue in Q120

539.5

Shares in issue

91.0m

Free float

90%

Code

CANT

Primary exchange

Nasdaq Stockholm

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

6.7

(25.0)

(4.3)

Rel (local)

(3.3)

(9.1)

1.2

52-week high/low

SEK25.0

SEK12.8

Business description

Cantargia is a clinical-stage biotechnology company based in Sweden, established in 2009 and listed on the Nasdaq Stockholm main market. It is developing two assets against IL1RAP, CAN04 and CAN10. CAN04 is being studied in a Phase IIa clinical trial, CANFOUR, in solid tumours focusing on NSCLC and pancreatic cancer. Cantargia is preparing to file an IND and initiate a trial in the US next year.

Next events

Initiate new US study with CAN04 in combination with CPIs

Mid-2020

Phase IIa CANFOUR updates

2020

CAN10 preclinical development updates

2020

Analyst

Jonas Peciulis

+44 (0)20 3077 5728

Cantargia is a research client of Edison Investment Research Limited

In February 2020, Cantargia raised SEK410m gross. This is an impressive amount of capital for a pure-play European biotech with assets in early- to mid-stage development, and is underpinned by the successful progression of its R&D pipeline. In recent months, the company reported positive interim data from the ongoing Phase IIa trial with lead asset CAN04, an anti-IL1RAP antibody, announced the first clinical trial in the US (IND accepted) and introduced CAN10, a preclinical project in inflammation (Phase I study start likely in 2022). Tailwinds in the industry include Novartis initiating multiple Phase I–III trials with its canakinumab (anti-IL-1beta) in oncology after a surprising discovery in a large cardiovascular outcomes study and deals involving assets targeting the IL-1 pathway (in cancer and inflammation). Our valuation post the share issue is SEK3.48bn or SEK38.2 per share.

Year end

Revenue (SEKm)

PBT*
(SEKm)

EPS*
(SEK)

DPS
(SEK)

P/E
(x)

Yield
(%)

12/18

0.0

(91.2)

(1.38)

0.0

N/A

N/A

12/19

0.0

(110.8)

(1.56)

0.0

N/A

N/A

12/20e

0.0

(138.0)

(1.69)

0.0

N/A

N/A

12/21e

0.0

(138.5)

(1.52)

0.0

N/A

N/A

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

Update on COVID-19 impact

In April 2020, Cantargia provided an update on the potential impact of the COVID-19 pandemic. The key Phase I/IIa CANFOUR clinical trial with CAN04 in non-small cell lung cancer (NSCLC) and pancreatic ductal adenocarcinoma (PDAC) has been progressing as expected as of the update (7 April 2020). The dose escalation part has been completed in both indications. Recruitment of the remaining patients is ongoing. Due to COVID-19, future timelines are difficult to estimate, but assuming the situation will normalise by the end of Q220, Cantargia expects that the last patient in each arm will be recruited in Q320 (PDAC) and Q420 (NSCLC), later by one quarter – not a major delay given the circumstances.

IND approved for the US study with CAN04 plus CPI

In 2019, Cantargia announced a major expansion of its clinical programme, with plans to initiate a Phase Ib study in the US. The company filed an investigational new drug (IND) application in April 2020, which was approved in May and the trial could start in Q320 (depending on progression of the COVID-19 outbreak). The goal is to explore the potential of CAN04 in combination with checkpoint inhibitors (CPIs) in four indications (NSCLC, head and neck cancer and urothelial cancer or malignant melanoma).

Valuation: SEK3.48bn or SEK38.2 per share

Our updated valuation of Cantargia is higher at SEK3.48bn vs SEK2.94bn previously due to a higher cash position after the private placement and rolling the model forward. On a per share basis, the valuation is lower at SEK38.2 per share vs SEK40.4 per share due to dilution. We keep our R&D assumptions unchanged.

Successful large share issue will help weather the storm of COVID-19

In February 2020, Cantargia completed a private placement, raising SEK410m gross (the cash position was SEK150m as of end-FY19). This was one of the largest share issues we have seen in the Nordic healthcare sector over the last few years. The ongoing positive equity story, steady R&D progress and upcoming catalysts (listed in the Valuation section) were the key factors in attracting such a significant amount of new capital, in our view. Existing and new institutional investors participated in the share issue, with Swedbank Robur and HBM being the key new investors. The uses of the proceeds include:

preparation of the lead asset for Phase III development (currently Phase IIa);

development of the CANxx/CAN10 preclinical programme into early clinical development; and

validation of the production process and general corporate purposes.

In total, Cantargia issued 18.2m new shares, which represents 25% of the previous number of outstanding shares. The subscription price was SEK22.5 per share, which equalled the volume weighted average price of the last 20 trading days and only a 6% discount to the closing price on the day before the issue. Cantargia’s cash burn (defined as cash flow from operating activities) was SEK105m and SEK112m in 2018 and 2019, respectively.

R&D progress update and COVID-19 impact

Lead asset CAN10: Dose escalation part complete

As of the latest update from Cantargia (7 April 2020), the Phase IIa CANFOUR trial is progressing according to plan (Exhibit 1). So far, in the combination therapy arms, 17 patients with PDAC and seven patients with NSCLC have started therapy. The dose escalation part was completed and the 5mg/kg dose was selected in both indications where CAN10 is administered in combination with standard-of-care (SoC) chemotherapies. The interim data reported in December 2019 (described in detail in our previous report) were derived using the same dose. This dose level was deemed sufficient for IL1RAP targeting and no new safety/tolerability issues were reported.

With regards to the impact of COVID-19 on the CANFOUR trial, Cantargia highlighted that despite restrictive measures in place, all recruited patients are continuing the treatment. Recruitment of new patients is also ongoing, although the number of active sites has decreased, causing temporary restrictions on new patient recruitment. Timelines are difficult to estimate, but assuming that the situation normalises in Q220, Cantargia expects that the last patient in each arm will be recruited in Q320 (PDAC) and Q420 (NSCLC). Previously, guidance was for Q220 and Q320, so this is certainly not a major delay given the circumstances, in our view. Cantargia also planned to release biomarker data from this trial, which will likely be delayed by several months. The supply of CAN10 has not been interrupted so far, and planning and preparations for subsequent studies remains on track.

As a reminder, the CANFOUR study is an open-label, three-arm Phase I/IIa trial with CAN04 in NSCLC and PDAC as monotherapy and in combination with first-line chemotherapy regimens. The trial consists of two parts – Phase I and Phase IIa. Full Phase I data were presented at ASCO on 2 June 2019, which showed that CAN04 was generally safe and well tolerated, and inflammatory biomarkers were reduced, in line with the proposed mechanism of action. The ongoing Phase IIa study includes initial efficacy endpoints, among others. The first results from the combination with chemotherapy arm were reported in December 2019 (see our last published report for a detailed review). These results support the hypothesis that CAN04 is synergistic with the SoC chemotherapy.

The key readouts (progression-free survival and overall survival) from the combination arms are likely to be available in 2021 (depending on the impact of the COVID-19 outbreak).

Exhibit 1: Phase IIa CANFOUR trial design

Source: Cantargia

Next step with CAN04: Combination with CPI study

Cantargia filed an IND application in April 2020, which was approved in May 2020, and plans to initiate a Phase Ib clinical trial in the US. This is a major R&D expansion as the combination will involve CPIs. The rationale is based on several observations:

Myeloid suppressive cells, such as tumour-associated macrophages or myeloid-derived suppressor cells, express IL1RAP and play a substantial role in PD-1 resistance.

IL-1 upregulates PD-L1 on macrophages and induces downstream factors, such as IL-6, which add to immunosuppression in the tumour microenvironment.

IL-1beta blockade has been shown to reverse tolerance to anti-PD-1 in an in vivo setting.

The indications (NSCLC, head and neck cancer and urothelial cancer or malignant melanoma) were selected because the tumours express IL1RAP and are relatively immunogenic, therefore suitable for treatment with CPIs. In addition, the checkpoint inhibitor, Keytruda, is a standard therapy in these indications. The patients in the trial will be eligible if they have progressed on prior PD1/PDL-1 antibody therapy (second-line positioning). The trial plans to include up to 18 patients. Endpoints will include typical safety evaluation, as well as exploratory biomarkers and initial efficacy. The trial could start in Q320 (depending on the progression of the COVID-19 outbreak).

CAN10: Parts of preclinical programme on hold, but in vivo efficacy studies ongoing

Cantargia disclosed its second drug candidate last year. This antibody is in preclinical development for systemic sclerosis and myocarditis. Animal studies in inflammatory disease are ongoing. Other parts of the programme (biochemistry, production) are affected since they are performed with suppliers in the US that have been forced to temporarily close their facilities. The start of the clinical trial is now expected in 2022 (we previously expected it in 2021). Since this asset is still in preclinical development, we believe most of Cantargia’s value is in CAN04. We therefore do not include it in our valuation.

Financials and valuation

With its Q419 results, Cantargia reported an operating loss of SEK36.4m versus SEK28.1m in Q418. R&D costs in Q419 were SEK32.8m versus SEK24.7m in Q418, an increase due to the Phase IIa CANFOUR study advancing, higher spending on CAN04 production development (CMC) and the maturing preclinical pipeline (CAN10 and CANxx).

FY19 R&D costs were SEK97.5m compared to SEK77.0m the year before, while FY19 operating loss was SEK111.6m vs SEK93.3m in FY18 (with the same reasons for the increase as above). Cantargia will continue its Phase IIa study in 2020, but also plans to initiate the combination with CPIs study (Phase Ib) in the US later this year (depending on the progression of the COVID-19 outbreak) and preclinical development is also accelerating. We have therefore increased our R&D cost estimates for 2020 and 2021 by a similar amount as in 2019 vs 2018, ie up 27% to SEK123.5m from SEK99.6m. This led to operating loss increase to SEK139m from SEK114m in 2020 and 2021. We note that until the outcome of the COVID-19 pandemic is known, spending visibility is decreased due to multiple possible effects. For example, if the combination study in the US is delayed, associated costs could also be delayed. The reported cash position at end Q419 was SEK150m (including short-term investments) plus the share issue of SEk410m gross in Q120.

Our updated valuation of Cantargia is higher at SEK3.48bn vs SEK2.94bn previously due to a higher cash position after the private placement and rolling the model forward. On a per share basis, the valuation is lower at SEK38.2 per share vs SEK40.4 per share due to dilution. We keep our R&D assumptions uncaged. Potential catalysts for Cantargia’s share price in the near term include:

initiation of the US trial with CAN04 in combination with checkpoint inhibitors (2020, depending on the progression of the COVID-19 outbreak);

Phase IIa CANFOUR trial combination results in PDAC and NSCLC:

further response, biomarker and safety data in 2020;

progression-free survival and overall survival in 2021;

Phase IIa CANFOUR trial monotherapy biomarker/biopsy results (2020); and

CAN10 preclinical development update.

Exhibit 2: Sum-of-the-parts Cantargia valuation

Product

Launch

Peak sales
($m)

Unrisked NPV (SEKm)

Unrisked NPV/
share (SEK)

Technology probability (%)

rNPV
(SEKm)

rNPV/share (SEK)

CAN04 – NSCLC

2026

3,100

6,830.2

75.1

18.0%

1,260.7

13.9

CAN04 – pancreatic cancer

2024

2,100

6,930.7

76.2

18.0%

1,679.9

18.5

Net cash (FY19) plus share issue (Q120)

539.5

5.9

100%

539.5

5.9

Valuation

14,300.4

157.1

3,480.0

38.2

Source: Edison Investment Research. Note: WACC = 12.5% for product valuations.

Exhibit 3: Financial summary

SEK'000s

2018

2019

2020e

2021e

December

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

0

0

0

0

Cost of Sales

0

0

0

0

Gross Profit

0

0

0

0

Research and development

(76,951)

(97,477)

(123,478)

(123,478)

EBITDA

 

 

(93,306)

(111,590)

(138,015)

(138,451)

Operating Profit (before amort. and except.)

 

 

(93,306)

(111,590)

(138,015)

(138,451)

Intangible Amortisation

0

0

0

0

Exceptionals

0

0

0

0

Other

0

0

0

0

Operating Profit

(93,306)

(111,590)

(138,015)

(138,451)

Net Interest

2,145

780

0

0

Profit Before Tax (norm)

 

 

(91,161)

(110,810)

(138,015)

(138,451)

Profit Before Tax (reported)

 

 

(91,161)

(110,810)

(138,015)

(138,451)

Tax

0

0

0

0

Profit After Tax (norm)

(91,161)

(110,810)

(138,015)

(138,451)

Profit After Tax (reported)

(91,161)

(110,810)

(138,015)

(138,451)

Average Number of Shares Outstanding (m)

66.2

71.1

81.9

91.0

EPS - normalised (ore)

 

 

(137.73)

(155.74)

(168.51)

(152.13)

Dividend per share (ore)

0.0

0.0

0.0

0.0

Gross Margin (%)

N/A

N/A

N/A

N/A

EBITDA Margin (%)

N/A

N/A

N/A

N/A

Operating Margin (before GW and except.) (%)

N/A

N/A

N/A

N/A

BALANCE SHEET

Fixed Assets

 

 

2,957

6,868

6,868

6,868

Intangible Assets

0

6,868

6,868

6,868

Tangible Assets

0

0

0

0

Investments

2,957

0

0

0

Current Assets

 

 

168,486

159,189

411,686

274,698

Stocks

0

0

0

0

Debtors

0

0

0

0

Cash

76,528

39,870

292,367

155,379

Other*

91,958

119,319

119,319

119,319

Current Liabilities

 

 

(16,398)

(23,785)

(23,785)

(23,785)

Creditors

(16,398)

(23,785)

(23,785)

(23,785)

Short term borrowings

0

0

0

0

Long Term Liabilities

 

 

0

0

0

0

Long term borrowings

0

0

0

0

Other long term liabilities

0

0

0

0

Net Assets

 

 

155,045

142,272

394,769

257,781

CASH FLOW

Operating Cash Flow

 

 

(105,165)

(111,853)

(138,015)

(138,451)

Net Interest

478

597

1,463

1,463

Tax

0

0

0

0

Capex

0

(6,880)

0

0

Acquisitions/disposals

0

0

0

0

Financing

0

98,037

389,048

0

Other

31,434

(16,559)

0

0

Dividends

0

0

0

0

Net Cash Flow

(73,253)

(36,658)

252,497

(136,988)

Opening net debt/(cash)

 

 

(149,781)

(76,528)

(39,870)

(292,367)

HP finance leases initiated

0

0

0

0

Other

0

0

0

0

Closing net debt/(cash)

 

 

(76,528)

(39,870)

(292,367)

(155,379)

Source: Cantargia accounts, Edison Investment Research


General disclaimer and copyright

This report has been commissioned by Cantargia and prepared and issued by Edison, in consideration of a fee payable by Cantargia. 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 2020 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

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 Cantargia and prepared and issued by Edison, in consideration of a fee payable by Cantargia. 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 2020 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

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

Share this with friends and colleagues