Paion |
Positive data in high-risk patients |
Headline trial results |
Pharma & biotech |
27 March 2017 |
Share price performance
Business description
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Analysts
Paion is a research client of Edison Investment Research Limited |
Paion has taken an important step towards its goal of US approval for its ultra-fast-acting sedative, remimazolam with the announcement of positive top line results from a safety study in high risk colonoscopy patients. It is approaching another important milestone, with the confirmatory Phase III in bronchoscopy patients expected to complete recruitment soon; top line results are likely about two months later. Paion is on track to file for approval in both the US (in procedural sedation via partner Cosmo Pharmaceuticals) and Japan (for general anaesthesia) by mid-2018.
Year end |
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 amortisation of acquired intangibles, exceptional items and share-based payments.
Safety confirmed in high-risk colonoscopy patients
Paion reported positive headline data from a safety study in high-risk colonoscopy patients (American Society of Anesthesiologists (ASA) class III or IV patients with severe systemic disease who are mostly treated in a hospital environment). The primary objective of the trial was to assess the safely of remimazolam compared to placebo with midazolam rescue. Paion reported that remimazolam demonstrated good respiratory and cardiovascular stability compared to placebo with midazolam rescue; no adverse events of concern were observed in either group. While commercial use of remimazolam is likely to be targeted at lower-risk ASA I/II patients, this trial is an important part of the development programme agreed with the FDA because it confirms that remimazolam can be used safely in high-risk patients.
Efficiency gains similar to colonoscopy Phase III
Secondary outcome measures that compared remimazolam to placebo and to an open label arm treated with midazolam according to the US label confirmed time savings with the use of remimazolam. Induction of and recovery from sedation was faster with remimazolam than midazolam (median induction time 5.0 vs 19.0 minutes, and time to full recovery 3.0 vs 7.0 minutes for the two groups, respectively. Recovery times to full alertness were similar to the results reported last year from the comparable groups in the Phase III trial in low-risk colonoscopy patients (4.0 and 19.0 minutes, respectively); recovery to full alertness took longer in all groups in the phase III (7.2 and 15.7 minutes, respectively) – the use of lower doses may have led to faster recovery in the high-risk patients.
Valuation: Unchanged at €214m
Our valuation is 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 should it choose to restart 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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