New asset to target tumor lymphangiogenesis

Kazia Therapeutics 20 April 2021 ADR Update
Download PDF

Kazia Therapeutics

New asset to target tumor lymphangiogenesis

Business update

Pharma & biotech

20 April 2021

Price

$10.98

Market cap

$142m

ADR/Ord conversion ratio 1:10

Net cash ($m) at 31 December 2020

13.9

ADRs in issue

12.9

ADR code

KZIA

ADR exchange

NASDAQ

Underlying exchange

ASX

Depository

BNY

ADR share price performance

52-week high/low

$14.71

$2.56

Business description

Kazia Therapeutics is a pharmaceutical company with lead asset paxalisib, a PI3K inhibitor licensed from Genentech that can cross the blood-brain barrier, which is entering a pivotal study for GBM. It also recently in-licensed the Phase I drug EVT801, an inhibitor of lymphangiogenesis in tumors.

Next events

Dana-Farber BCBM Phase II

CY21

Sloan-Kettering BM Phase II

CY21

NIH BM Phase II

CY21

Analysts

Nathaniel Calloway

+1 646 653 7036

Kazia Therapeutics is a research client of Edison Investment Research Limited

Kazia announced that it is expanding its pipeline to include EVT801, a novel small molecule inhibitor of VEGFR3. The drug is being licensed from Evotec for €1m upfront, €308m in milestones and tiered single-digit royalties. EVT801 was developed as part of a collaboration between Evotec and Sanofi. Kazia will be responsible for development, but will collaborate with and have access to Evotec resources to support development. The product is currently in preclinical development, but Kazia believes it can launch a Phase I study before the end of CY21.

Year end

Revenue ($m)

PTP*
($m)

EPADR
($)

DPADR
($)

P/E
(x)

Gross yield
(%)

6/19

1.1

(5.3)

(0.91)

0.00

N/A

N/A

6/20

0.8

(7.7)

(1.01)

0.00

N/A

N/A

6/21e

12.0

1.1

0.09

0.00

N/A

N/A

6/22e

0.9

(13.8)

(0.97)

0.00

N/A

N/A

Source: <Insert>. Note: Converted at A$1.4/US$. Dividend yield excludes withholding tax. Investors should consult their tax advisor regarding the application of any domestic and foreign tax laws.

A specific inhibitor of VEGFR3

EVT801 is an oral small molecule that targets VEGFR3. The VEGFR family of proteins are receptor tyrosine kinases involved in the formation of the circulatory system, and in cancer they are implicated in angiogenesis. These proteins and their ligand (VEGF) have been a common target for therapeutics, including both targeted angiogenesis inhibitors (eg Avastin) and multi-tyrosine kinase inhibitors (eg Nexavar). However, there have been fewer efforts to specifically target the VEGFR3 isoform, which is important for the formation of lymphatic vessel networks.

Lymphangiogenesis has multiple roles in cancer

Lymphangiogenesis is an important component of tumor biology. An initial metastasis for many tumor types is via the lymphatic system to nearby lymph nodes. The lymphatic system acts as a highway of sorts for immune cells, and EVT801 has also shown capacity in vitro to shift the balance of immune cell subtypes in a tumor. This shift in immune cell populations can potentially sensitize tumors to immunotherapy. We expect this to be the focus of some of the research into this molecule in the coming years.

A good strategic fit while paxalisib is in the clinic

Strategically, this is an important deal for Kazia, because it enables it to expand the pipeline to multiple drugs. Paxalisib will remain the lead asset, but most of the operational burden of that development is borne by the investigators running GBM AGILE. This leaves capacity for the company to expand its offering.

Valuation: Increased on new drug to A$346m

We have increased our valuation to US$247m or US$19.14 per basic ADR from US$215m or US$16.60 per basic ADR due to the new drug (initial valuation of US$33.7m). This has also increased expected R&D spending significantly and our financing requirement for the company to US$36m (including US$21m in FY23) from US$7m, previously.

Kazia expands its pipeline

Kazia announced on 19 April 2021 that it has licensed the compound EVT801 from Evotec. The deal included €1m upfront for Evotec, €308m in milestones, and tiered single-digit royalties. Kazia will assume all development, regulatory and marketing responsibilities. However, Kazia noted that it would be collaborating with Evotec and will have access to Evotec resources such as clinical trial management and manufacturing as part of a services agreement. The company noted that the initial focus of development will be for renal cell carcinoma (RCC), hepatocellular carcinoma (HCC), and soft tissue sarcoma (STS).

Evotec is a company that is operationally focused on drug discovery, and out-licenses these assets and discovery programs to a range of (typically big pharma) partners. EVT801 in particular was previously discovered in a collaboration agreement between Evotec and Sanofi, but Sanofi decided not to option the program, leaving it open for licensing to Kazia. Sanofi’s decision not to exercise the option could have been for any number of strategic reasons, so we do not assume it would have any bearing on the clinical viability of the program.

EVT801 is an inhibitor of vascular endothelial growth factor receptor 3 (VEGFR3). Many readers are likely to be familiar with this family of proteins (VEGFR) and their ligand (VEGF) because they have been successfully targeted by a number of anti-cancer therapeutics. Avastin (bevacizumab, Genentech) was the first drug approved to specifically target this signalling pathway. It is a ligand trap for VEGF-A that depletes this growth factor from the blood and prevents activation of the VEGFR family of receptors. Additionally, proteins of the VEGFR family are frequent targets for so-called multi-tyrosine kinase inhibitors. VEGFR proteins are members of the receptor tyrosine kinase class along with other growth factor receptors such as EGFR and FLT3. These other growth factors are also important for tumorigenesis and multi-tyrosine kinase inhibitors like Nexavar (sorafenib, Bayer) inhibit a wide number of these receptors to varying degrees, and achieve their efficacy by this combined effect.

Historically, the VEGFR family has been targeted to prevent the formation of new blood vessel (angiogenesis) in a tumor. By preventing the generation of new blood vessels, the tumors can be starved of nutrients and oxygen. Avastin is a so-called angiogenesis inhibitor. However, the specific isoform VEGFR3 is associated with the formation of lymphatic vessels (as opposed to blood vessels). Therefore the specific inhibition of this protein may have a different activity profile from other drugs that target this VEGFR class. The lymphatic system is the primary route of metastasis for many tumor types.

One featured highlighted by Evotec is that EVT801 can shift the balance of immune cells in a tumor including the proliferation of CD4+ (helper) T-cells among others (Exhibit 1). This may be an advantage if EVT801 is combined with immunotherapy such as checkpoint inhibitors. Most of the research into tumor-infiltrating lymphocytes has been into the role of CD8+ (killer) T-cells, but CD4+ cells are important for driving a sustained immune response.1

  Tay RE, et al. (2021) Revisiting the role of CD4+ T cells in cancer immunotherapy—new insights into old paradigms. Cancer Gene Ther. 28, 5-17.

Exhibit 1: EVT801 induces CD4+ T-cells

Source: Evotec

Relatively few programs in which VEGFR3 was specifically targeted have reached the clinic. IMC-3C5, originally developed by ImClone (now owned by Eli Lilly), was an anti-VEGFR3 monoclonal antibody that was abandoned after it failed to show activity in Phase I. VGX-100 (Ceres Oncology) is a VEGF-C ligand trap (and this is a ligand primarily associated with VEGFR3 activation) that was tested in Phase I, but never further developed. Most other drugs that have had activity against VEGFR3 have been multi-tyrosine kinase inhibitors, with a range of other activities, so it is difficult to draw conclusions from these programs. However, the aim is that by using a more targeted approach this can improve the tolerability of EVT801 compared to tyrosine kinase inhibitors.

Much of Kazia’s operational capacity has opened up with the inclusion of paxalisib in the GBM AGILE study, and the company believes that it can dedicate significant resources to the EVT801 program. It has the drug on an accelerated track to the clinic and is targeting initiation of Phase I in CY21.

Valuation

We have increased our valuation to US$247m or US$19.14 per basic ADR from US$215m or US$16.60 per basic ADR. This increase is due to the Evotec transaction, and we have added EVT801 to our models with an initial valuation of US$33.7m. We model initial commercialization of the drug for RCC, and assume it will be used in the second line after progression on checkpoint inhibitors. We estimate a total addressable market of approximately 70,000 in the US and Europe. We assume an initial launch price of US$120,000 per course. This is a discount from the pricing of checkpoint inhibitors (~$150,000 per course in current day pricing) because we model it being used primarily as an adjunct to these treatments. Our peak penetration is 15%, and we expect initial commercialization in 2028. The company noted in the press release that patents on the compound extend to 2031/32 in most jurisdictions and we assume a five-year patent term extension to this. We model royalties of 4–8% payable to Evotec as well as €158m in milestones (out of €308m in total), of which €18m are clinical and regulatory and €140m are commercial. Our probability of success is 10%, which we view as average for a drug at this stage. Many of these details are subject to change based on the performance of the drug and its particular qualities in the clinic, which are not clearly understood at this point. For instance, RCC is one of several potential target indications for this treatment, and this may change in the future. We have adjusted our net cash line to reflect the €1m upfront payment for the program.

Exhibit 2: Valuation of Kazia

Development Program

Indication

Clinical stage

Prob. of success

Launch year

Patent/Exclusivity Protection

Launch Pricing ($/course)

Peak sales (US$m)

rNPV (US$m)

Paxalisib

GBM

Phase II

35%

2025

2037

169,000

450

173.66

BCBMs

Phase II

5%

2029

2037

183,000

249

6.15

Cantrixil

OC

Phsae I complete

15%

2027

2040

124,000

174

6.05

EVT801

RCC

Phase I ready

10%

2028

2037

120,000

807

33.74

Total

219.60

Net cash and equivalents (FQ221 + Oasmia + Simcere - Evotec) (A$m)

27.72

Total firm value (US$m)

247.32

Total basic ADRs (m)

12.9

Value per basic ADR (US$)

19.14

Dilutive options (as ADRs, m)

0.45

Total diluted ADRs

13.4

Value per diluted ADR

18.69

Source: Kazia reports, Edison Investment Research.

Financials

With the new development program, we expect an increased R&D expenditure going forward. We have increased our expected R&D spending for FY21 to US$7.6m (from US$5.8m) and to US$10.0m (from US$4.7m) in FY22. We may adjust this spending schedule in the future once we have a more concrete timeline for development. This has also increased our expected financing requirement for the company to US$36mm (A$21m in FY23, A$15m in FY25) from US$7m previously (which had been modelled in FY24). Otherwise, our forecasts remain unchanged.

Exhibit 3: Financial summary

$'k

2019

2020

2021e

2022e

30-June

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

1,117.9

757.8

12,003.4

1,124.0

Cost of Sales

0.0

0.0

0.0

0.0

Gross Profit

1,117.9

757.8

12,003.4

1,124.0

R&D

4,625.4

6,781.7

7,596.4

9,996.4

SG&A

2,704.0

2,635.6

4,285.6

5,871.3

EBITDA

 

 

(5,260.9)

(7,697.7)

1,083.1

(13,782.0)

Normalised operating profit

 

 

(5,261.0)

(7,697.7)

1,083.1

(13,782.0)

Amortisation of acquired intangibles

(774.5)

(774.5)

(774.5)

(774.5)

Exceptionals

(1,337.4)

(458.8)

0.0

0.0

Share-based payments

(176.0)

(187.2)

(187.2)

(187.2)

Reported operating profit

(7,548.9)

(9,118.3)

121.4

(14,743.8)

Net Interest

0.0

0.0

0.0

0.0

Joint ventures & associates (post tax)

0.0

0.0

0.0

0.0

Exceptionals

0.0

0.0

0.0

0.0

Profit Before Tax (norm)

 

 

(5,261.0)

(7,697.7)

1,083.1

(13,782.0)

Profit Before Tax (reported)

 

 

(7,548.9)

(9,118.3)

121.4

(14,743.8)

Reported tax

213.0

213.0

(4.6)

562.7

Profit After Tax (norm)

(5,261.0)

(7,404.0)

1,041.8

(13,256.1)

Profit After Tax (reported)

(7,335.9)

(8,905.3)

116.7

(14,181.1)

Minority interests

0.0

0.0

0.0

0.0

Discontinued operations

0.0

0.0

0.0

0.0

Net income (normalised)

(5,261.0)

(7,404.0)

1,041.8

(13,256.1)

Net income (reported)

(7,335.9)

(8,905.3)

116.7

(14,181.1)

Basic average number of ADRs outstanding (m)

5.8

7.3

11.9

13.6

EPADR - basic normalised ($)

 

 

(0.91)

(1.01)

0.09

(0.97)

EPADR - diluted normalised ($)

 

 

(0.91)

(1.01)

0.09

(0.97)

EPADR - basic reported ($)

 

 

(1.28)

(1.22)

0.01

(1.04)

Dividend (A$)

0.00

0.00

0.00

0.00

BALANCE SHEET

Fixed Assets

 

 

9,758.8

8,864.4

12,497.4

10,294.3

Intangible Assets

9,638.9

8,864.4

8,089.9

7,315.3

Tangible Assets

0.0

0.0

0.0

0.0

Investments & other

119.9

0.0

4,407.5

2,979.0

Current Assets

 

 

5,367.3

7,609.7

24,411.6

13,040.9

Stocks

0.0

0.0

0.0

0.0

Debtors

1,221.9

965.9

1,093.9

739.1

Cash & cash equivalents

3,881.3

6,260.0

22,933.9

11,918.0

Other

264.0

383.8

383.8

383.8

Current Liabilities

 

 

(1,357.4)

(3,619.6)

(2,927.4)

(3,910.1)

Creditors

(1,260.0)

(2,492.1)

(2,692.7)

(3,675.5)

Tax and social security

0.0

0.0

0.0

0.0

Short term borrowings

0.0

0.0

0.0

0.0

Other

(97.4)

(1,127.5)

(234.7)

(234.7)

Long Term Liabilities

 

 

(3,629.6)

(2,764.8)

(3,838.4)

(3,275.7)

Long term borrowings

0.0

0.0

0.0

0.0

Other long term liabilities

(3,629.6)

(2,764.8)

(3,838.4)

(3,275.7)

Net Assets

 

 

10,139.1

10,089.7

30,143.2

16,149.3

Minority interests

0.0

0.0

0.0

0.0

Shareholders' equity

 

 

10,139.1

10,089.7

30,143.2

16,149.3

CASH FLOW

Op Cash Flow before WC and tax

(5,260.9)

(7,697.7)

1,083.1

(13,782.0)

Working capital

252.1

1,192.2

(4,154.2)

2,203.5

Exceptional & other

213.0

213.0

(4.6)

562.7

Tax

0.0

0.0

0.0

0.0

Net operating cash flow

 

 

(4,795.9)

(6,292.5)

(3,075.7)

(11,015.8)

Capex

0.0

0.0

0.0

0.0

Acquisitions/disposals

0.0

0.0

(1,114.3)

0.0

Net interest

0.0

0.0

0.0

0.0

Equity financing

2,725.5

8,671.2

20,863.8

0.0

Dividends

0.0

0.0

0.0

0.0

Other

1,685.1

0.0

0.0

0.0

Net Cash Flow

(385.3)

2,378.7

16,673.8

(11,015.8)

Opening net debt/(cash)

 

 

(4,254.4)

(3,881.3)

(6,260.0)

(22,933.9)

FX

12.2

0.0

0.0

0.0

Other non-cash movements

0.0

0.0

0.0

0.0

Closing net debt/(cash)

 

 

(3,881.3)

(6,260.0)

(22,933.9)

(11,918.0)

Source: Kazia reports, Edison Investment Research.

General disclaimer and copyright

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

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

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