Ryvu Therapeutics — Introducing Ryvu Therapeutics

Ryvu Therapeutics (WSE: RVU)

Last close As at 25/04/2024

53.90

0.00 (0.00%)

Market capitalisation

990m

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Research: Healthcare

Ryvu Therapeutics — Introducing Ryvu Therapeutics

The corporate split is now complete and Selvita is continuing as Ryvu Therapeutics, which will focus on innovative drug development. The contract research organisation (CRO) business, which was spun out, has retained the Selvita brand and is also trading on the Warsaw Stock Exchange. Pawel Przewiezlikowski, co-founder and CEO of the former Selvita, continues to lead Ryvu Therapeutics, while Boguslaw Sieczkowski, co-founder and COO is now the CEO of the newly listed Selvita (CRO). We performed a detailed analysis of Ryvu Therapeutics assets in previous notes. Our last published SOTP valuation of the former Selvita implies a valuation for Ryvu of PLN935m or PLN58.6/share, which we will update with the Q3 results on 6 November 2019.

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Healthcare

Ryvu Therapeutics

Introducing Ryvu Therapeutics

Company news

Pharma & biotech

31 October 2019

Price

PLN48.00

Market cap

PLN768m

Net cash (PLNm) at end-Q219

107.4

Shares in issue

16.0m

Free float

40%

Code

RVU

Primary exchange

WSE

Secondary exchange

N/A

Share price performance

Business description

Ryvu Therapeutics (previously known as Selvita) is a clinical-stage drug development company focusing on novel small molecule therapies in oncology. The lead asset is wholly owned SEL120, a selective CDK8 kinase inhibitor, which is being studied in a Phase Ib clinical trial for AML and myelodysplastic syndrome, but also has potential in solid tumours. SEL24/MEN1703 is a dual PIM/FLT3 kinase inhibitor licensed to the Menarini Group in Phase I/II trial for AML. The preclinical stage pipeline includes assets in cancer metabolism, synthetic lethality and immunooncology.

Analyst

Jonas Peciulis

+44 (0)20 3077 5728

Ryvu Therapeutics is a research client of Edison Investment Research Limited

The corporate split is now complete and Selvita is continuing as Ryvu Therapeutics, which will focus on innovative drug development. The contract research organisation (CRO) business, which was spun out, has retained the Selvita brand and is also trading on the Warsaw Stock Exchange. Pawel Przewiezlikowski, co-founder and CEO of the former Selvita, continues to lead Ryvu Therapeutics, while Boguslaw Sieczkowski, co-founder and COO is now the CEO of the newly listed Selvita (CRO). We performed a detailed analysis of Ryvu Therapeutics assets in previous notes. Our last published SOTP valuation of the former Selvita implies a valuation for Ryvu of PLN935m or PLN58.6/share, which we will update with the Q3 results on 6 November 2019.

Year end

Revenue
(PLNm)

PBT
(PLNm)

EPS
(PLN)

DPS
(PLN)

P/E
(x)

Yield
(%)

12/17

N/M

N/M

N/M

N/M

N/M

N/M

12/18

N/M

N/M

N/M

N/M

N/M

N/M

Note: Ryvu Therapeutics (formerly Selvita) spun out its CRO business in October 2019, therefore our previously published estimates should be considered outdated.

Key value drivers

Following the split, Ryvu will be a classical drug developer, with the benefits of a biotech business model: flexible capital allocation to R&D and direct access to capital markets. We believe this will allow it to progress its R&D programmes faster. The pipeline is diversified from various stages in preclinical development to two assets in Phase I/II trials, which will allow for well-paced news flow.

Upcoming news flow

The lead asset, wholly owned SEL120, is a selective CDK8 kinase inhibitor that is being tested in a Phase Ib clinical trial for acute myeloid leukaemia (AML) and myelodysplastic syndrome (it also has potential in multiple solid tumours). Ryvu should present SEL120 interim data from the Phase Ib study in 2020. SEL24/MEN1703, a dual PIM/FLT3 kinase inhibitor licensed to the Menarini Group, is in a Phase I/II trial for AML. We expect SEL24 data from Phase I part (dose escalation) of the ongoing Phase I/II study in 2020, but the timing depends on Menarini.

Ryvu asset valuation of PLN935m or PLN58.6/share

Our last published pre-split valuation of Selvita was PLN1.46bn or PLN91.5/share, of which the oncology drug development corresponded to 57% (rNPV), CRO to 36% (DCF) and net cash to 7%. Our SOTP valuation of the former Selvita included a DCF model for the revenue-generating CRO business and risk-adjusted NPV projects for six different programmes in R&D. Removing CRO from our model, the rNPVs of Ryvu’s R&D assets imply a valuation of PLN935m or PLN58.6/share. This will be updated with the Q3 results (6 November 2019) when we expect more details on the respective cash positions, capex and expected grant financing.

General disclaimer and copyright

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

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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.

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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 Ryvu Therapeutics and prepared and issued by Edison, in consideration of a fee payable by Ryvu Therapeutics. 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

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