Insight into the future of SNS-510

Sunesis Pharmaceuticals 14 November 2019 Update
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Sunesis Pharmaceuticals

Insight into the future of SNS-510

Scientific update

Pharma & biotech

14 November 2019

Price

US$0.42

Market cap

US$47m

Net cash ($m) at Q319

32.8

Shares in issue

111.3m

Free float

98%

Code

SNSS

Primary exchange

NASDAQ

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(34.3)

(45.4)

(67.7)

Rel (local)

(36.9)

(48.3)

(71.6)

52-week high/low

US$1.74

US$0.24

Business description

Sunesis Pharmaceuticals is a pharmaceutical company focused on oncology. Its lead asset is vecabrutinib, a Bruton’s tyrosine kinase inhibitor for chronic lymphocytic leukemia for Imbruvica-refractory patients. The program is in a dose-escalation Phase Ib/II. It has also developed TAK-580 with partner Takeda, and the preclinical PDK1 inhibitor SNS-510.

Next events

ASH meeting

7–10 December 2019

Analyst

Nathaniel Calloway

+1 646 653 7036

Sunesis Pharmaceutical is a research client of Edison Investment Research Limited

Sunesis recently presented a poster on the preclinical findings of its PDK1 inhibitor SNS-510. Surprisingly, researchers found that the drug was most active in cancer cell lines with mutations in the cyclin-dependent kinase inhibitor 2A (CDKN2A) gene, with the strongest activity in melanoma, leukemia and brain cancers. Additionally, the company announced that this finding pointed to potential synergies with CDK4/6 inhibitors (such as Ibrance), which are now under investigation.

Year end

Revenue ($m)

PBT*
($m)

EPS*
($)

DPS
($)

P/E
(x)

Yield
(%)

12/17

0.7

(35.5)

(1.45)

0.00

N/A

N/A

12/18

0.2

(26.6)

(0.75)

0.00

N/A

N/A

12/19e

0.0

(24.0)

(0.21)

0.00

N/A

N/A

12/20e

0.0

(26.5)

(0.22)

0.00

N/A

N/A

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

CDKN2A biomarker a surprise

The poster was presented at the AACR-NCI-EORTC International Conference on Molecular Targets and Cancer Therapeutics. The researchers tested SNS-510 in 320 cell lines in 20 tumor types, the so called OncoPanel, which was subsequently data mined to identify the increased activity in CDKN2A: 44% of sensitive cell lines harbored this mutation. The finding is somewhat surprising because the protein is not part of the canonical pathway to which PDK1 belongs.

Dramatic activity in mouse xenografts

The most susceptible cell identified in the panel was the acute myeloid leukemia (AML) cell line MV4-11. To further investigate this activity, the company performed a series of xenograft studies using this (and another AML cell line), which showed that SNS-510 dramatically inhibited cancer growth in this environment. Although very early stage, the activity is encouraging. This also highlights the unique activity of SNS-510 in both hematologic malignancies as well as solid tumors.

Looking forward to ASH

Vecabrutinib remains the primary focus of the company, and it will be presenting data on it at the American Society of Hematology (ASH) annual meeting. However, the advancement to the 300mg cohort in July was too close to the abstract submission deadline for useful information to be available in the abstract. The company also announced in its Q319 earnings release that it has advanced to 400mg, and that it is seeing a dose response with chemokine reduction. We are eagerly awaiting the presentation, which will give us our best look at activity to date.

Valuation: Increased to $257m from $244m

We have increased our valuation to $257m from $244m, although it is lower on a per-share basis ($2.08 per diluted share, from $2.94). This is driven by the recent financing ($28m gross). We have reduced our expected financing requirement to $100m (from $115m) before profitability in 2024.

Exploring the direction of SNS-510

On 29 October, the company presented the first new data on the SNS-510 program in over a year. SNS-510 is an inhibitor of PDK1, an effector of the receptor tyrosine kinase (RTK) pathway. This pathway is responsible for translating a range of signals including growth signals to the cell, but is co-opted in cancer to drive oncogenesis. Many of the proteins in the pathway have been the subject of drug development (such as PI3K, AKT and mTOR), but little effort has been made to target PDK1.

Exhibit 1: PDK1’s RTK effector role

Source: Edison investment Research

One of the unique aspects of this pathway is that these proteins are implicated in a very wide range of cancers, including both solid tumors and hematologic cancers. The goal of the current research that was presented by the company is to identify which cancers and genetic markers are most closely associated with activity. The company tested the drug against 320 cell lines in 20 tumor types, the so-called OncoPanel.

Exhibit 2: OncoPanel results – activity across different cancer cell lines

Source: Sunesis Pharmaceuticals

The study identified 59 cell lines that were sensitive to the drug, with activity across a range of cancer types (Exhibit 2). One detail that is evident from these data is that no single cancer subtype showed dramatically higher efficacy, with most subtypes having a range of responses, with some responders and some non-responders. This suggests that there may be an underlying biomarker accounting for disease response that is not specific to a particular cancer subtype. The company was able to correlate response to SNS-510 with mutational data from the OncoPanel, which pointed to the protein cyclin-dependent kinase inhibitor 2A (CDKN2A). 44% of cell lines where the drug was active harbored mutations or deletions in this protein. This is an interesting new result, because it is unclear at this time exactly why this particular protein would underpin activity of a PDK1 inhibitor as it is not part of the canonical pathway (shown above). CDKN2A is a protein important for regulating the cell cycle and division, a class of protein that is heavily implicated in cancer and cancer treatment. It has previously been identified as an oncogene, with a focus on familial melanoma. Indeed, of the cell lines that harbored CDKN2A mutations or deletions, melanoma was one of the strongest responders, along with leukemia and brain cancer. This roughly correlates with which cancers these mutations have the highest prevalence in (Exhibit 3). For instance, glioma and melanoma have mutations or deletions in over 30% of those included in the MSK-IMPACT Clinical Sequencing Cohort database.

The company stated in the poster that it is currently examining SNS-510 in combination with CDK4/6 inhibitors in mouse xenografts. CDK4/6 inhibitors are a new class of drug for breast cancer that also target the cyclin system and have recently had their first approvals. Ibrance (palbociclib, Pfizer), the first drug in this class to be approved (in 2015), reported $4.1bn in sales in 2018. Novartis also launched its own CDK4/6 inhibitor Kisqali (ribociclib), and Eli Lilly launched Verzenio (abemaciclib), both in 2017. PDK1 is implicated in the process by which cancers acquire resistance to CDK4/6 inhibitors, and its inhibition may enhance the effect of these drugs. A combination therapy that enhances the effect of one of these drugs could be very attractive to a big pharma company looking to differentiate its product.

Exhibit 3: CDKN2A alterations by cancer type

Source: cBioPortal. Note: blue = deletion, green = mutation, red = amplification, purple = fusion.

The single cell line that responded the most strongly to treatment was an acute myeloid leukemia cell line, MV4-11. To further examine activity in this cancer type, the company tested it in a pair of mouse xenografts, one using MV4-11 and the other using another AML cell line, MOLM-16, which responded less strongly. These data showed a pronounced response in the MV4-11 mice and a more modest response, but clear activity in the MOLM-16 mice (Exhibits 4 and 5). It is encouraging to see confirmation of the in vitro results, and we hope to see more data on the molecule in more advanced systems in the future.

Exhibit 4: SNS-510 activity in MV4-11 xenografts

Exhibit 5: SNS-510 activity in MOLM-16 xenografts

Source: Sunesis Pharmaceuticals

Source: Sunesis Pharmaceuticals

Exhibit 4: SNS-510 activity in MV4-11 xenografts

Source: Sunesis Pharmaceuticals

Exhibit 5: SNS-510 activity in MOLM-16 xenografts

Source: Sunesis Pharmaceuticals

Vecabrutinib: Looking forward to ASH data

Sunesis continues to progress the dose escalation portion of its ongoing Phase Ib/II study of vecabrutinib. It reported on 8 July 2019 that it was progressing to the 300mg dosing cohort, and subsequently announced on 12 November that it had advanced to the 400mg cohort. The company previously guided that it expected to see signs of efficacy in the 100mg, 200mg or 300mg cohorts, based on the extrapolation of pharmacokinetic data from previous studies. We therefore expect the next data release on these cohorts to be highly illuminating, and we expect the company to present some of these data at the upcoming ASH meeting on 7–10 December. ASH abstracts became available on 6 November, although it is worth noting that these abstracts were submitted in early August, too early to evaluate the 300mg cohort. We would expect the final presentation in December to have up-to-date safety and efficacy data on the 300mg cohort and potentially early data on the 400mg cohort as well, so will reserve our interpretation until then. Additionally, the company announced on the Q319 earnings call that it was seeing a dose response in chemokine reduction, which suggests that the drug is actively inhibiting the proliferation of malignant cells. This is highly encouraging and the ASH abstract may provide more insight.

We should note that a dose escalation does not necessarily mean that the previous dosing cohort failed to show efficacy. The limiting factor here is safety and, if higher doses remain safe, increasing the dose may prove more efficacious. Conversely, the highest dose reached in the dose escalation protocol may not be the dose that is advanced into the Phase II portion of the trial. Both these factors should be taken into account if the company continues its dose escalation.

Valuation

We have increased our valuation to $257m from $244m, although it is lower on a per-share basis ($2.08 per diluted share, from $2.94). This increase is largely driven by the increase in cash from the July offering (46.67m common shares or equivalent in convertible preferred shares at $0.60, $28m gross). We have pushed back the timing of vecabrutinib approval in our model to 2024 from late 2023 to align with the progress to date on the project, but this is largely offset by rolling forward our NPVs ($193m from $196m). In the future, we may update our model for SNS-510 when it is more clear which initial indication the company will pursue. We currently use the breast cancer market as a placeholder in the model and this may still be a pathway the company chooses, considering the potential synergies with CDK4/6 inhibitors.

Exhibit 6: Valuation of Sunesis

Development program

Clinical stage

Expected commercialization

Probability. of success

Launch year

Launch pricing ($)

Peak sales ($m)

Patent/ exclusivity protection

Royalty/ margin

rNPV ($m)

TAK-580

Phase I/II

Licensed to Takeda

10%

2025

500,000

603

2032

15%

$21

Vecabrutinib

Phase Ib/II

Proprietary

20%

2024

152,000

666

2034

55%

$193

SNS-510

IND ready

Proprietary

10%

2025

130,000

344

2031

51%

$26

Unallocated costs (discovery programs, administrative costs, etc.)

($16)

Total

 

 

 

 

 

 

 

 

$224

Net cash and equivalents (Q319) ($m)

$32.8

Total firm value ($m)

$256.7

Total basic shares (m)

111.3

Value per basic share ($)

$2.31

Convertible Pref stock (m)

19.7

Total diluted shares (m)

131.0

Value per diluted share ($)

$2.08

Source: Sunesis reports, Edison Investment Research

Financials

Sunesis reported operating expenses of $6.0m for Q319, which is roughly in line with previous quarters. We have reduced our expected operational costs for 2019 to align with these trends ($23.9m from $28.1m). We find it unlikely that the company will incur the expenses associated with expanding the ongoing vecabrutinib study to the Phase II portion this late in the year. We expect the company to require $100m in additional capital (down from $115m previously) to reach profitability in 2024, which we include as illustrative debt ($20m in 2021, $40m in 2022 and $40m in 2023).

Exhibit 7: Financial summary

$000s

2017

2018

2019e

2020e

Year end 31 December

US GAAP

US GAAP

US GAAP

US GAAP

PROFIT & LOSS

Revenue

 

 

669

237

0

0

Cost of Sales

0

0

0

0

Gross Profit

669

237

0

0

Research and development

(21,540)

(14,615)

(13,709)

(15,574)

Selling, general & administrative

(13,548)

(11,332)

(10,199)

(10,505)

EBITDA

 

 

(34,428)

(25,719)

(23,917)

(26,088)

Operating Profit (before GW and except.)

(34,419)

(25,710)

(23,908)

(26,079)

Intangible Amortization

0

0

0

0

Exceptionals/Other

0

0

0

0

Operating Profit

(34,419)

(25,710)

(23,908)

(26,079)

Net Interest

(1,039)

(905)

(133)

(467)

Other (change in fair value of warrants)

0

0

0

0

Profit Before Tax (norm)

 

 

(35,458)

(26,615)

(24,041)

(26,545)

Profit Before Tax (IFRS)

 

 

(35,458)

(26,615)

(24,041)

(26,545)

Tax

0

0

0

0

Deferred tax

0

0

0

0

Profit After Tax (norm)

(35,458)

(26,615)

(24,041)

(26,545)

Profit After Tax (IFRS)

(35,458)

(26,615)

(24,041)

(26,545)

Average Number of Shares Outstanding (m)

24.5

35.6

113.5

118.7

EPS - normalised ($)

 

 

(1.45)

(0.75)

(0.21)

(0.22)

EPS - IFRS ($)

 

 

(1.45)

(0.75)

(0.21)

(0.22)

Dividend per share ($)

0.0

0.0

0.0

0.0

BALANCE SHEET

Fixed Assets

 

 

1,401

124

2

0

Intangible Assets

0

0

0

0

Tangible Assets

20

11

2

0

Other

1,381

113

0

0

Current Assets

 

 

32,933

15,200

37,217

13,619

Stocks

0

0

0

0

Debtors

0

0

0

0

Cash

31,750

13,696

34,981

11,383

Other

1,183

1,504

2,236

2,236

Current Liabilities

 

 

(8,901)

(8,789)

(1,221)

(1,332)

Creditors

(1,697)

(1,393)

(1,221)

(1,332)

Short term borrowings

(7,204)

(7,396)

0

0

Long Term Liabilities

 

 

(112)

(8)

(5,474)

(5,474)

Long term borrowings

0

0

(5,466)

(5,466)

Other long term liabilities

(112)

(8)

(8)

(8)

Net Assets

 

 

25,321

6,527

30,524

6,813

CASH FLOW

Operating Cash Flow

 

 

(36,142)

(24,404)

(21,769)

(23,591)

Net Interest

0

0

0

0

Tax

0

0

0

0

Capex

(26)

0

0

(7)

Acquisitions/disposals

0

0

0

0

Financing

32,930

6,343

45,101

0

Dividends

0

0

0

0

Other

0

0

0

0

Net Cash Flow

(3,238)

(18,061)

23,332

(23,598)

Opening net debt/(cash)

 

 

(28,153)

(24,546)

(6,300)

(29,515)

HP finance leases initiated

0

0

0

0

Exchange rate movements

0

0

0

0

Other

(369)

(185)

(117)

0

Closing net debt/(cash)

 

 

(24,546)

(6,300)

(29,515)

(5,917)

Source: Sunesis reports, Edison Investment Research


General disclaimer and copyright

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

The Investment Research is a publication distributed in the United States by Edison Investment Research, Inc. Edison Investment Research, Inc. is registered as an investment adviser with the Securities and Exchange Commission. 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

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Germany

London +44 (0)20 3077 5700

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United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

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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 Sunesis Pharmaceuticals and prepared and issued by Edison, in consideration of a fee payable by Sunesis Pharmaceuticals. 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

The Investment Research is a publication distributed in the United States by Edison Investment Research, Inc. Edison Investment Research, Inc. is registered as an investment adviser with the Securities and Exchange Commission. 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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