Paion |
On track for two filings by mid-2018 |
Q117 results update |
Pharma & biotech |
12 May 2017 |
Share price performance
Business description
Next events
Analysts
Paion is a research client of Edison Investment Research Limited |
Paion has completed patient recruitment in its pivotal bronchoscopy study of its ultra-fast-acting sedative remimazolam. Results are likely by mid-2017 and, if positive, would put it on track to file for US approval for procedural sedation in mid-2018. Paion is also preparing a dossier for a filing for general anaesthesia (GA) in Japan in a similar time frame. It has also outlined a programme that could see it restart Phase III studies in GA in Europe (estimated cost €20-25m). Paion has sufficient cash to fund operations beyond end 2018, but would need additional funds to complete the Europe development programme. We leave our valuation unchanged at €214m ahead of the key bronchoscopy trial results.
Year |
Revenue (€m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/15 |
0.1 |
(34.0) |
(55.7) |
0.0 |
N/A |
N/A |
12/16 |
4.3 |
(24.3) |
(36.4) |
0.0 |
N/A |
N/A |
12/17e |
5.9 |
(16.4) |
(23.2) |
0.0 |
N/A |
N/A |
12/18e |
3.1 |
(13.3) |
(19.2) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding exceptionals and share-based payments.
Bronchoscopy data likely in June
On 27 March Paion announced full recruitment in the confirmatory Phase III trial of remimazolam for procedural sedation in bronchoscopy patients, with headline data expected in mid-2017. Based on consultation with the FDA, Paion will initiate additional Phase I studies to further assess abuse potential. A pre-NDA meeting is planned for the end of 2017, with a US filing by partner Cosmo expected in mid-2018 (pending positive trial results).
Getting serious about Europe
Paion will shortly commence a Phase I trial using EEGs to measure the depth of anaesthesia, to help determine the number of patients that would be required for an EU Phase III study for GA in general surgery patients. The Phase III could start in 2018, but would require €20-25m in additional funding up to filing.
Japan filing potentially mid-2018
Paion has begun to prepare a dossier for a potential mid-2018 filing for remimazolam for general anaesthesia in Japan. Paion will validate commercial-scale production of remimazolam for the Japanese market and will use an experienced contract research organisation to prepare the dossier. Paion is in ongoing discussions as it seeks to partner in the Japanese market.
Valuation: Unchanged at €214m
Our forecasts and valuation are unchanged at €214m (€3.68/share). Paion has sufficient cash to fund operations beyond end 2018, which would allow it to complete filings in the US (via partner Cosmo) and Japan. However, it would need ~€20-25m of additional funds to complete development of remimazolam in Europe (funds could potentially come from Cosmo milestones and a licence deal in Japan).
Exhibit 1: Financial summary
€'000s |
2014 |
2015 |
2016 |
2017e |
2018e |
||
Year end 31 December |
|||||||
PROFIT & LOSS |
|||||||
Revenue |
|
|
3,456 |
61 |
4,262 |
5,874 |
3,100 |
Cost of sales |
(4) |
0 |
0 |
0 |
0 |
||
Gross profit |
3,452 |
61 |
4,262 |
5,874 |
3,100 |
||
R&D expenditure |
(11,799) |
(29,385) |
(23,408) |
(19,000) |
(13,000) |
||
General, administrative & selling |
(3,702) |
(5,729) |
(5,129) |
(3,800) |
(3,914) |
||
Other |
411 |
965 |
(807) |
51 |
51 |
||
Operating profit |
(11,639) |
(34,088) |
(25,082) |
(16,875) |
(13,763) |
||
Depreciation and amortisation |
(93) |
0 |
(759) |
(500) |
(400) |
||
Share-based payments |
0 |
0 |
0 |
0 |
0 |
||
Exceptionals |
0 |
0 |
0 |
0 |
0 |
||
EBITDA |
|
|
(11,546) |
(34,088) |
(24,323) |
(16,375) |
(13,363) |
Operating profit (before GW and except) |
|
(11,546) |
(34,088) |
(24,323) |
(16,375) |
(13,363) |
|
Net interest |
(66) |
42 |
21 |
20 |
20 |
||
Profit before tax (norm) |
|
|
(11,612) |
(34,046) |
(24,302) |
(16,355) |
(13,343) |
Profit before tax (reported) |
|
|
(11,704) |
(34,046) |
(25,061) |
(16,855) |
(13,743) |
Tax |
2,468 |
5,834 |
4,944 |
3,135 |
2,145 |
||
Profit after tax (norm) |
(9,143) |
(28,212) |
(19,359) |
(13,220) |
(11,198) |
||
Profit after tax (reported) |
(9,236) |
(28,212) |
(20,118) |
(13,720) |
(11,598) |
||
Average number of shares outstanding (m) |
39.9 |
50.7 |
53.2 |
57.0 |
58.2 |
||
EPS - normalised (c) |
|
|
(22.9) |
(55.7) |
(36.4) |
(23.2) |
(19.2) |
EPS - reported (c) |
|
|
(23.2) |
(55.7) |
(37.8) |
(24.1) |
(19.9) |
Dividend per share (c) |
|
|
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
Gross margin (%) |
NA |
NA |
NA |
NA |
NA |
||
EBITDA margin (%) |
NA |
NA |
NA |
NA |
NA |
||
Operating margin (before GW and except.) (%) |
NA |
NA |
NA |
NA |
NA |
||
BALANCE SHEET |
|||||||
Fixed assets |
|
|
3,516 |
3,417 |
2,855 |
2,355 |
1,955 |
Intangible assets |
3,440 |
3,362 |
2,688 |
2,313 |
2,013 |
||
Tangible assets |
76 |
56 |
167 |
42 |
-58 |
||
Refund from assumption of dev costs |
0 |
0 |
0 |
0 |
0 |
||
Other |
0 |
0 |
0 |
0 |
0 |
||
Current assets |
|
|
63,032 |
40,051 |
35,128 |
20,925 |
9,727 |
Stocks |
0 |
0 |
0 |
0 |
0 |
||
Debtors |
467 |
0 |
0 |
25 |
25 |
||
Cash |
58,912 |
32,680 |
30,111 |
15,883 |
4,685 |
||
Other |
3,653 |
7,371 |
5,017 |
5,017 |
5,017 |
||
Current liabilities |
|
|
(3,924) |
(7,901) |
(13,040) |
(7,266) |
(7,266) |
Trade payables |
(3,338) |
(7,332) |
(6,353) |
(6,353) |
(6,353) |
||
Short-term borrowings |
0 |
0 |
0 |
0 |
0 |
||
Provisions |
(306) |
(224) |
(555) |
(555) |
(555) |
||
Finance lease liabilities |
0 |
0 |
0 |
0 |
0 |
||
Other current liabilities |
(254) |
(305) |
(359) |
(359) |
(359) |
||
Current deferred income |
(26) |
(39) |
(5,774) |
0 |
0 |
||
Long-term liabilities |
|
|
(17) |
(6) |
0 |
0 |
0 |
Long-term borrowings |
0 |
0 |
0 |
0 |
0 |
||
Provisions |
0 |
0 |
0 |
0 |
0 |
||
Long-term deferred income |
(17) |
(6) |
0 |
0 |
0 |
||
Deferred taxes |
0 |
0 |
0 |
0 |
0 |
||
Other long-term liabilities |
0 |
0 |
0 |
0 |
0 |
||
Net assets |
|
|
62,607 |
35,562 |
24,943 |
16,014 |
4,416 |
CASH FLOW |
|||||||
Operating cash flow |
|
|
(12,044) |
(28,212) |
(17,135) |
(22,174) |
(13,363) |
Net interest |
(66) |
43 |
19 |
20 |
20 |
||
Tax |
0 |
2,575 |
5,529 |
3,135 |
2,145 |
||
Capex |
0 |
0 |
7 |
0 |
0 |
||
Purchase of intangibles |
(26) |
(33) |
0 |
0 |
0 |
||
Acquisitions/disposals |
0 |
0 |
(199) |
0 |
0 |
||
Equity Financing |
57,618 |
22 |
9,212 |
4,790 |
0 |
||
Dividends |
0 |
0 |
0 |
0 |
0 |
||
Other |
0 |
0 |
0 |
0 |
0 |
||
Net cash flow |
45,482 |
(25,605) |
(2,567) |
(14,229) |
(11,198) |
||
Opening net debt/(cash) |
|
|
(13,292) |
(58,912) |
(32,680) |
(30,111) |
(15,883) |
Effect of exchange rate changes |
(72) |
(66) |
(2) |
0 |
0 |
||
Other |
210 |
-560 |
0 |
0 |
0 |
||
Closing net debt/(cash) |
|
|
(58,912) |
(32,680) |
(30,111) |
(15,883) |
(4,685) |
Source: Edison Investment Research, Paion accounts
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