Optimised hunting for the hidden killer

Immunovia 3 May 2019 Update
Download PDF

Immunovia

Optimised hunting for the hidden killer

Q1 update

Healthcare equipment & services

3 May 2019

Price

SEK160.8

Market cap

SEK3136m

Cash (SEKm) at 31 March 2019

360

Shares in issue

19.5m

Free float

70.94%

Code

IMMUNOV

Primary exchange

NASDAQ Stockholm

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(11.3)

7.5

13.2

Rel (local)

(13.8)

(1.3)

6.9

52-week high/low

SEK265.0

SEK132.0

Business description

Immunovia is a Swedish company specialising in diagnostics for oncology and autoimmune diseases. Its main product is IMMray PanCan-d, an antibody microarray based on its proprietary IMMray platform. A prospective trial in 2,000 people at high risk of familial pancreatic cancer is ongoing. The company expects to make self-pay service-test sales from 2020.

Next events

Optimisation study end

Q219

Primary PanFam-1 outcome

December 2019

First IMMray PanCan-d sales

Q120

Analyst

Dr John Savin MBA

+44 (0)20 3077 5735

Immunovia is a research client of Edison Investment Research Limited

During 2019, Immunovia will focus on optimising the IMMray PanCan-d test in preparation for the start of a commercial private testing service for pancreatic cancer (PDAC). The sample optimisation study should end in Q2. In H219, accreditation of the Swedish and US laboratories is required to enable a private PDAC test service by Q120. The 2,000 patient PanFAM-1 prospective clinical trial is still recruiting patients and might report primary data on early-stage PDAC detection in December 2019. Earlier-stage opportunities are: Type II diabetes, early symptoms of PDAC, lung cancer and rheumatoid arthritis. Our valuation remains at SEK3.5bn.

Year end

Revenue
(SEKm)

PBT*
(SEKm)

EPS*
(SEK)

DPS
(SEK)

P/E
(x)

Yield
(%)

12/17

13.31

(45.23)

(2.67)

0.0

N/A

N/A

12/18

26.13

(86.53)

(4.67)

0.0

N/A

N/A

12/19e

23.13

(88.75)

(4.53)

0.0

N/A

N/A

12/20e

13.62

(99.25)

(5.07)

0.0

N/A

N/A

Note: *Normalised, excluding amortisation of acquired intangibles and exceptionals.

IMMray PanCan-d self-pay sales from Q120

The sample optimisation study might complete in Q219 after successfully sourcing enough fresh samples. The IMMray test itself is unaffected, but the algorithm may be adjusted. It seems unlikely to us that private sales can start before Q120; Immunovia will announce a schedule in Q2 including the three to five months needed for lab accreditation. Tests will be run in-house in Sweden and the US. Management guidance is for 2022 sales of SEK250–300m; c 50,000 privately paid tests at c US$600 per test. By 2024, guidance is for sales of SEK800–1,000m if insurance coverage is gained, based on PanFAM-1 data; c 164,000 tests.

Prospective study: PanFAM-1 might be late

The prospective PanFAM-1 clinical trial is essential for reimbursement. It is stated to complete its primary endpoint in December 2019 and end in March 2020 (21 January 2019, NCT03693378). The primary, 18-month endpoint is: “Demonstrate that the IMMray PanCan-d test is equal or better than standard imaging for early detection of PDAC in asymptomatic high-risk individuals.” As two new centres were added in Q1, making 17, recruitment is ongoing. Accordingly, we question if published dates can be met as the trial cannot end until 18 months after the final individual enrols unless PDAC incidence rates are much higher than the literature suggests. If recruitment ends by June 2019, the endpoint might be in H220-Q121. The published (Mellby et al 2018) sensitivity is 93%, specificity 95%, accuracy 96%.

Valuation: DCF SEK3.5bn or SEK177 per share

Our valuation remains at SEK3.5bn pending the schedule update promised in Q2. We assume the first sales of PanCan-d are in Q120. Edison’s 2028 peak sales forecast is unchanged at SEK2.5bn. There are earlier-stage opportunities in patients with potential PDAC symptoms, in screening Type 2 diabetics for pancreatic cancer (about 0.5% incidence on diagnosis), detecting lung cancer and rheumatoid arthritis. Of these, the potential PDAC study has been extended in a London-based study and the test could be useful if it rapidly rules out PDAC.

Exhibit 1: Financial summary

SEK '000s

2017

2018

2019e

2020e

Year end 31 December

GAAP

GAAP

GAAP

GAAP

PROFIT & LOSS

Revenue, incl. capitalised work

13,306

26,129

23,128

13,623

Cost of Sales

0

0

105

1,228

Gross Profit

208

1,077

755

3,616

External costs

(39,113)

(65,275)

(65,275)

(40,000)

Personnel + other

(29,392)

(45,785)

(55,078)

(67,078)

EBITDA

 

 

(44,256)

(84,931)

(85,783)

(95,182)

Operating Profit (before amort. and except.)

 

 

(45,520)

(87,708)

(89,761)

(99,948)

Intangible Amortisation

0

0

0

0

Exceptionals/Other

0

0

0

0

Operating Profit

(45,520)

(87,708)

(89,761)

(99,948)

Net Interest

288

1,177

1,011

696

Exceptionals/Other

0

0

0

0

Profit Before Tax (norm)

 

 

(45,232)

(86,531)

(88,750)

(99,252)

Profit Before Tax (IFRS)

 

 

(45,232)

(86,531)

(88,750)

(99,252)

Tax

0

(7)

0

0

Discontinued operations

0

0

0

0

Profit After Tax (norm)

(45,232)

(86,538)

(88,750)

(99,252)

Profit After Tax (IFRS)

(45,232)

(86,538)

(88,750)

(99,252)

Average Number of Shares Outstanding (m)

16.93

18.55

19.53

19.53

EPS - normalised (ore)

 

 

(267)

(467)

(453)

(507)

EPS - FRS (ore)

 

 

(267)

(467)

(453)

(507)

Dividend per share (ore)

0.00

0.00

0.00

0.00

Gross Margin (%)

N/A

N/A

N/A

N/A

EBITDA Margin (%)

N/A

N/A

N/A

N/A

Operating Margin (before GW and except.) (%)

N/A

N/A

N/A

N/A

BALANCE SHEET

Fixed Assets

 

 

46,761

78,813

98,313

105,782

Intangible Assets

36,791

61,786

80,286

86,755

Tangible Assets

7,211

14,019

15,019

16,019

Other

2,759

3,008

3,008

3,008

Current Assets

 

 

204,009

398,569

290,787

184,066

Stocks

0

0

0

123

Debtors

11,584

12,433

12,433

12,433

Cash

192,425

386,136

278,354

171,510

Other

0

0

0

0

Current Liabilities

 

 

(13,975)

(15,429)

(15,429)

(15,429)

Creditors

0

0

0

0

Short term borrowings

0

0

0

0

Deferred revenues

0

0

0

0

Other short term liabilities

(13,975)

(15,429)

(15,429)

(15,429)

Long Term Liabilities

 

 

0

0

(30,154)

(30,154)

Long term borrowings

0

0

0

0

Deferred revenues

0

0

0

0

Other long term liabilities

0

0

(30,154)

(30,154)

Net Assets

 

 

236,795

461,953

343,517

244,265

CASH FLOW

Operating Cash Flow

 

 

(46,525)

(84,111)

(84,304)

(94,609)

Net Interest

0

0

0

0

Tax

0

0

0

0

Capex

(31,187)

(37,288)

(23,478)

(12,234)

Acquisitions/disposals

0

0

0

0

Financing

4,923

315,079

0

0

Dividends

0

0

0

0

Other

8,880

0

0

0

Net Cash Flow

(63,909)

193,680

(107,782)

(106,844)

Opening net debt/(cash)

 

 

(259,095)

(192,425)

(386,136)

(278,354)

HP finance leases initiated

0

0

0

0

Exchange rate movements

0

0

0

0

Other

(2,761)

31

0

0

Closing net debt/(cash)

 

 

(192,425)

(386,136)

(278,354)

(171,510)

Source: Company accounts FY18, Edison Investment Research

General disclaimer and copyright

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

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

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