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New year, renewed focus

ASIT biotech 17 January 2019 Update
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ASIT biotech

New year, renewed focus

Pipeline refocusing

Pharma & biotech

17 January 2019

Price

€1.44

Market cap

€27m

US$/€0.88

Cash (€m) estimated at end-Dec 2018 taking into account bond conversion

10.2

Shares in issue (including dilution from bond conversion)

18.7m

Free float

74.2%

Code

ASIT

Primary exchange

Euronext Brussels

Secondary exchange

Euronext Paris

Share price performance

%

1m

3m

12m

Abs

(26.2)

(45.2)

(69.1)

Rel (local)

(27.5)

(43.4)

(62.7)

52-week high/low

€5.7

€1.4

Business description

ASIT biotech is a clinical-stage company focused on the development of short-course therapies for allergies. ASIT’s products are based on the proprietary ASIT+ technology platform, allowing the development of products containing highly purified allergen fragments in an adjuvant-free formulation, selected to be safe while maintaining the capacity to stimulate immune tolerance.

Next events

Additional detail on pipeline refocussing

February 2019

FY18 results

April 2019

gp-ASIT+ Phase III results

December 2019

Analyst

Andy Smith

+44 (0)20 3077 5700

ASIT has announced renewed focus on its most advanced product, gp-ASIT+ for grass pollen allergies, which coincides with some changes in senior management. The increased focus has been well received by shareholders and, while our model changes to reflect the reduced future spend on the early-stage products, the products’ potential for cash flow generation remains as ASIT has also announced an emphasis on out-licensing and co-development for its earlier-stage products.

Year end

Revenue (€m)

PBT*
(€m)

EPS*
(€)

DPS
(c)

P/E
(x)

Yield
(%)

12/17

0.0

(12.0)

(0.94)

0.0

N/A

N/A

12/18e

0.0

(13.3)

(0.82)

0.0

N/A

N/A

12/19e

0.0

(15.5)

(0.88)

0.0

N/A

N/A

12/20e

0.0

(5.6)

(0.22)

0.0

N/A

N/A

Note: *PBT and EPS are both as reported.

Logical pipeline refocusing on gp-ASIT+

ASIT has reviewed the clinical plan, manufacturing and resource allocation for its core and most advanced product, gp-ASIT+ for grass pollen allergies in Phase III, and concluded that clinical development is better resourced and supported to conduct the pivotal study. This was also our conclusion, having reviewed the changes ASIT had made to maximise the chances of clinical success in this second Phase III study. There will be increased allocation of regulatory and business development resources, which means that ASIT’s earlier-stage programmes, in particular pnt-ASIT+ for peanut allergy, have been scheduled for partnering rather than continued internal development. There are a number of financial moving parts to this refocusing, some of which will net others off.

Senior management reorganisation

After discussions with shareholders, ASIT’s board has appointed Michel Baijot as CEO and Yves Désiront as interim CFO, and appointed Philippe Degeer to the board representing the Meusinvest group, a local investor supporting companies in Liège, Belgium. The refocusing of ASIT’s resources to support the conduct of the Phase III study of gp-ASIT+, its future registration and commercialisation, and the emphasis on partnering ASIT’s earlier products after the preclinical phase has been a result of these management changes.

Valuation: Removing pnt-ASIT+ clinical costs

With the focus on the gp-ASIT+ Phase III programme, partnering the earlier-stage assets – hdm-ASIT+ for house dust mite allergies and pnt-ASIT+ – will eventually remove the future clinical development costs of those earlier-stage products from our model, although we continue to expect royalties once those products are marketed by ASIT’s partners. While we expect more detail on these changes after the February board meeting and FY18 results, removing the pnt-ASIT+ clinical costs, updating for the higher share count and exchange rates leaves our risk-adjusted valuation unchanged at €118m or €6.3 per share.

ASIT biotech is a research client of Edison Investment Research Limited

Exhibit 1: Financial summary

 

 

 

EUR ('000)

2015

2016

2017

2018e

2019e

2020e

Year end 31 December

 

 

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

 

 

 

 

 

 

 

 

Revenue

 

 

 

4

0

0

0

0

0

Cost of Sales

 

 

 

(3)

0

0

0

0

0

Gross Profit

 

 

 

1

0

0

0

0

0

General and Administrative Expenses

 

(947)

(1,822)

(1,676)

(2,547)

(2,522)

(2,497)

Research and Development Expenses

 

(6,691)

(12,123)

(10,903)

(11,500)

(13,940)

(3,980)

Other Operating Income

 

 

(3)

1,667

604

789

829

870

Reported operating profit

 

 

(7,640)

(12,278)

(11,975)

(13,258)

(15,633)

(5,606)

Net Interest

 

 

 

(75)

(60)

(9)

(40)

148

6

Profit before tax (as reported)

 

 

(7,715)

(12,338)

(11,984)

(13,298)

(15,485)

(5,600)

Reported tax

 

 

 

0

(1)

(2)

(1)

3

1,680

Profit after tax (reported)

 

 

(7,715)

(12,339)

(11,986)

(13,298)

(15,482)

(3,920)

Minority interests

 

 

0

0

0

0

0

0

Net income (reported)

 

 

(7,715)

(12,339)

(11,986)

(13,298)

(15,482)

(3,920)

 

 

 

 

 

 

 

 

 

 

Basic average number of shares outstanding ('m)

 

8,504

11,219

12,806

16,240

17,507

17,507

EPS - basic, as reported (EUR)

 

(0.91)

(1.10)

(0.94)

(0.82)

(0.88)

(0.22)

 

 

 

 

 

 

 

 

 

 

BALANCE SHEET

 

 

 

 

 

 

 

 

Non Current Assets

 

 

506

1,770

1,837

2,008

2,126

2,027

Property Plant and equipment, net

 

494

736

691

693

811

712

Other intangible assets

 

 

0

0

0

0

0

0

Other Non Current Assets

 

 

12

1,034

1,146

1,315

1,315

1,315

Current Assets

 

 

4,968

13,785

2,448

10,941

2,561

13,099

Cash and cash equivalents

 

 

4,621

13,387

2,126

10,688

2,308

12,846

Accounts receivable

 

 

2

3

0

0

0

0

Inventories

 

 

 

11

0

0

0

0

0

Other current assets

 

 

334

395

322

253

253

253

Current Liabilities

 

 

6,332

2,004

2,654

4,196

4,216

2,775

Accounts payable

 

 

1,611

1,707

1,264

2,354

2,374

933

Short term debt and borrowings

 

4,232

12

34

38

38

38

Other current liabilities

 

 

489

285

1,356

1,804

1,804

1,804

Non Current Liabilities

 

 

0

419

432

446

446

7,446

Loans and borrowings

 

 

0

419

432

446

446

7,446

Other non-current liabilities

 

 

0

0

0

0

0

0

Equity

 

 

 

(858)

13,132

1,199

6,126

(2,157)

(4,277)

Common stock / Capital

 

 

11,625

17,506

9,989

13,125

13,125

13,125

Additional paid-in capital / Share premium

 

0

21,957

21,957

26,958

18,675

16,555

Other reserves and surplus

 

 

(12,483)

(24,229)

(28,645)

(33,957)

(33,957)

(33,957)

Other Equity

 

 

 

0

(2,102)

(2,102)

0

0

0

CASH FLOW

 

 

 

 

 

 

 

 

 

Cash Flow from Operations

 

 

 

 

 

 

 

 

Net income (loss)

 

 

(7,715)

(12,339)

(11,986)

(13,298)

(15,482)

(3,920)

Depreciation and Amortization

 

 

80

141

205

176

195

211

Interest income/expense

 

 

75

60

9

40

(148)

(6)

Stock-based compensation

 

 

18

0

54

0

0

0

Non Cash Adjustments

 

 

0

11

(492)

0

0

0

(Increase) decrease in inventories

 

3

0

0

0

0

0

(Increase) decrease in trade receivables

 

(819)

(62)

74

0

0

0

(Increase) decrease in other current assets

 

0

(1,016)

(112)

69

0

0

Increase (decrease) in trade payables

 

751

(492)

(586)

2,180

20

(1,441)

Net cash used in Operating activities

 

(7,606)

(13,697)

(12,834)

(10,833)

(15,415)

(5,157)

Cash Flow from Investing

 

 

 

 

 

 

 

 

Purchases of fixed assets

 

 

(372)

(383)

(161)

(265)

(313)

(112)

Other Investing Activities

 

 

1

(6)

0

0

0

0

Net cash used in Investing activities

 

(371)

(389)

(161)

(265)

(313)

(112)

Cash Flow from Financing

 

 

 

 

 

 

 

 

Change in Debt

 

 

4,130

0

0

0

0

7,000

Change in Capital Stock

 

 

0

22,199

0

16,900

7,200

1,800

Interest paid

 

 

 

(6)

(204)

(10)

(42)

(24)

(24)

Other Financing Activities

 

 

33

857

1,743

2

172

31

Net cash used in Financing activities

 

4,157

22,852

1,733

16,860

7,348

8,806

Net Changes in Cash and Cash Equivalent

 

(3,820)

8,766

(11,262)

5,761

(8,380)

3,538

Net cash (debt) at the beginning of the period

 

8,441

4,621

12,968

1,694

10,242

1,862

Net cash (debt) at the end of the period

 

4,621

12,968

1,694

10,242

1,862

5,400

Source: Company accounts, Edison Investment Research

General disclaimer and copyright

This report has been commissioned by ASIT biotech and prepared and issued by Edison, in consideration of a fee payable by ASIT biotech. 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 Edison analyst 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 Myonlineadvisers Pty Ltd who holds an Australian Financial Services Licence (Number: 427484). 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

Neither this document and associated email (together, the "Communication") constitutes or form part of any offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any securities, nor shall it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. Any decision to purchase shares in the Company in the proposed placing should be made solely on the basis of the information to be contained in the admission document to be published in connection therewith.

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 (nor will such persons be able to purchase shares in the placing).

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

295 Madison Avenue, 18th Floor

10017, New York

US

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

295 Madison Avenue, 18th Floor

10017, New York

US

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 ASIT biotech and prepared and issued by Edison, in consideration of a fee payable by ASIT biotech. 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 Edison analyst 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 Myonlineadvisers Pty Ltd who holds an Australian Financial Services Licence (Number: 427484). 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

Neither this document and associated email (together, the "Communication") constitutes or form part of any offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any securities, nor shall it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. Any decision to purchase shares in the Company in the proposed placing should be made solely on the basis of the information to be contained in the admission document to be published in connection therewith.

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 (nor will such persons be able to purchase shares in the placing).

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

295 Madison Avenue, 18th Floor

10017, New York

US

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

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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