pexels-edward-jenner-4033018

ORR impressive in Phase I UV1 plus Keytruda

Ultimovacs 21 May 2021 Update
Download PDF

Ultimovacs

ORR impressive in Phase I UV1 plus Keytruda

Clinical data

Pharma & biotech

21 May 2021

Price

NOK76.60

Market cap

NOK2,451m

Net cash (NOKm) at end Q121

409.3

Shares in issue

32.0m

Free float

90%

Code

ULTI

Primary exchange

Oslo Stock Exchange

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

20.6

7.9

97.9

Rel (local)

19.5

1.0

53.9

52-week high/low

NOK87.80

NOK38.4

Business description

Ultimovacs is a biotechnology company developing novel immunotherapies against cancer. The lead product candidate, UV1, is a peptide-based vaccine against the universal cancer antigen telomerase (hTERT). Around 85% of all cancer types express high levels of hTERT. Therefore, UV1 has a broad potential in a variety of different settings and combinations with other cancer treatments.

Next events

Cohort 1 first data from Phase I trial of UV1 plus CPI in melanoma

Q421

Cohort 2 update from Phase I trial of UV1 plus CPI in melanoma

Q421

Q21 results

20 August 2021

Analysts

Jonas Peciulis

+44 (0)20 3077 5728

Sean Conroy

+44 (0)20 3077 5700

Yesterday, Ultimovacs reported the first results from a Phase I trial of UV1 in advanced melanoma in combination with Keytruda. After the minimum 18-month follow-up period (median of 21 months), complete responses (CRs) were achieved in 30% (n=6 out of 20) of patients and partial responses were seen in another 30% of patients resulting in 60% of overall response rate (ORR; 12 out of 20). In Phase III trials of Keytruda in advanced melanoma and post-hoc analyses after the approval the ORR was 33–37% and CR 5–12%. Although this is a comparison against historical data, we find the large difference reassuring. So, although early, these new data give confidence in the existing R&D strategy (UV1 in combination with checkpoint inhibitor (CPIs) in four different Phase II trials). Our valuation is increased to NOK3.65bn or NOK114 per share (vs NOK99.4 per share previously).

Year end

Revenue (NOKm)

PBT*
(NOKm)

EPS*
(NOK)

DPS
(NOK)

P/E
(x)

Yield
(%)

12/19

0.0

(61.2)

(2.67)

0.0

N/A

N/A

12/20

0.0

(120.6)

(3.98)

0.0

N/A

N/A

12/21e

0.0

(152.5)

(4.77)

0.0

N/A

N/A

12/22e

0.0

(159.0)

(4.97)

0.0

N/A

N/A

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Additional data

There were no new safety and tolerability issues. The median progression-free survival (mPFS) was 18.9 months compared with 5.5–11.6 months in the Keytruda studies. The median overall survival is yet to be reached. We note the scientific rationale for cancer vaccines is to increase the durability of response, so there is potential for overall survival data to surprise again. More details will be presented as an online poster at the American Society of Clinical Oncology 2021 Annual Meeting on 4–8 June.

Next steps

In next step, the trial is expected to enrol 30 patients in total. There are two arms with different levels of adjuvant 37.5µg (cohort 1, 20 patients, reported yesterday) and 75µg (cohort 2, 10 patients). The 24-month follow-up from the cohort 1 should be provided in Q421, while the first 12-month follow-up data from the cohort 2 should also be released in Q421.

Valuation: NOK3.65bn or NOK114 per share

This was the first time Ultimovacs’ vaccine was combined with PD-1/PD-L1 CPI and various CPI combinations with UV1 are being evaluated in all four Ultimovacs’ Phase II trials. The results provide comfort that the company has chosen the right combinations. One of the four Phase II trials is INITIUM, evaluating UV1 in combination with nivolumab and ipilimumab in melanoma as well. We increase the probability of success in our model to 25% from 20% in all indications, as we believe there is read across as long as tumours express telomerase and are known to respond to CPI treatment. Our updated valuation is NOK3.65bn or NOK114 per share (vs NOK3.18bn or NOK99.4 per share).

Ultimovacs is a research client of Edison Investment Research Limited

Valuation

Our valuation is based on risk-adjusted NPV analysis using a 12.5% discount rate, including net cash of NOK409m at end-Q121. Our model includes four rNPV projects, with UV1 being evaluated in the Phase II trials in all four indications. We use a bottom-up approach to calculate the market sizes and industry average data for the basis of our other assumptions. More details can be found in our recent initiation report.

Exhibit 1: Valuation of Ultimovacs

Product

Launch

Peak sales* ($m)

NPV (NOKm)

NPV/share (NOK/share)

Probability

rNPV (NOKm)

rNPV/share (NOK/share)

UV1 – malignant melanoma

2028

1,010

2,979.5

93.2

25.0%

932.2

29.2

UV1 – mesothelioma

2028

460

1,428.6

44.7

25.0%

464.9

14.5

UV1 – ovarian cancer

2028

625

1,919.2

60.0

25.0%

643.2

20.1

UV1 – H&N cancer

2028

1,090

3,492.7

109.2

25.0%

1,199.7

37.5

Net cash, last reported

 

 

409.3

12.8

100.0%

409.3

12.8

Valuation

 

 

10,229.2

319.9

3,649.4

114.1

Source: Edison Investment Research. Note: Peak sales rounded to the nearest $10m.

Exhibit 2: Financial summary

Year end 31 December

NOK'000s

2018

2019

2020

2021e

2022e

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Total revenues

0

0

0

0

0

Cost of sales

0

0

0

0

0

Gross profit

0

0

0

0

0

SG&A (expenses)

(27,078)

(20,160)

(50,989)

(58,637)

(60,103)

R&D costs

(28,844)

(43,995)

(70,438)

(95,091)

(99,846)

Other income/(expense)

0

0

0

0

0

Exceptionals and adjustments

 

0

0

0

0

0

Reported EBITDA

 

(55,922)

(64,155)

(121,427)

(153,729)

(159,949)

Depreciation and amortisation

(601)

(2,063)

(2,720)

(3,114)

(2,991)

Reported Operating Profit/(loss)

(56,523)

(66,218)

(124,147)

(156,842)

(162,940)

Finance income/(expense)

1,242

5,051

3,593

4,322

3,958

Other income/(expense)

0

0

0

0

0

Exceptionals and adjustments

0

0

0

0

0

Reported PBT

(55,281)

(61,167)

(120,554)

(152,520)

(158,983)

Income tax expense

0

0

0

0

0

Reported net income

 

(55,281)

(61,167)

(120,554)

(152,520)

(158,983)

Basic average number of shares, m

15.6

22.9

30.3

32.0

32.0

Basic EPS (NOK)

 

(3.55)

(2.67)

(3.98)

(4.77)

(4.97)

Diluted EPS, (NOK)

(3.55)

(2.67)

(3.98)

(4.77)

(4.97)

BALANCE SHEET

Property, plant and equipment

 

736

536

377

359

341

Intangible assets

56,418

55,519

64,551

61,737

59,046

Other non-current assets

0

3,523

3,630

3,630

3,630

Total non-current assets

68,135

70,429

80,353

77,521

74,812

Cash and equivalents

 

115,540

399,607

440,925

299,590

149,304

Trade and other receivables

0

0

0

0

0

Other current assets

6,184

8,004

8,438

8,438

8,438

Total current assets

121,724

407,611

449,363

308,028

157,742

Non-current loans and borrowings*

0

0

0

0

0

Total non-current liabilities

 

10,981

13,152

13,870

13,870

13,870

Trade and other payables

 

2,978

11,768

8,611

10,190

9,400

Other current liabilities

15,996

7,164

17,149

17,149

17,149

Total current liabilities

18,974

20,257

27,467

29,046

28,256

Equity attributable to company*

159,904

444,632

488,380

342,637

190,431

CASH FLOW

Operating Profit/(loss)

 

(56,523)

(66,218)

(124,147)

(156,842)

(162,940)

Depreciation and amortisation

601

2,063

2,720

3,114

2,991

Other adjustments

0

0

0

0

0

Movements in working capital

5,528

(1,862)

6,395

1,579

(789)

Interest paid / received

0

0

0

0

0

Income taxes paid

0

0

0

0

0

Cash from operations (CFO)

(50,389)

(62,989)

(108,224)

(141,051)

(150,004)

Capex

(513)

(172)

(282)

(282)

(282)

Acquisitions & disposals net

 

0

0

0

0

0

Other investing activities

1,247

4,490

(455)

0

0

Cash used in investing activities (CFIA)

(3,852)

4,318

(737)

(282)

(282)

Net proceeds from issue of shares

0

344,582

152,933

0

0

Movements in debt

0

0

0

0

0

Other financing activities

0

(1,579)

(1,916)

0

0

Cash from financing activities (CFF)

0

343,003

151,017

0

0

Increase/(decrease) in cash and equivalents

(54,269)

284,067

41,317

(141,333)

(150,286)

Cash and equivalents at beginning of period

169,808

115,539

399,606

440,923

299,590

Cash and equivalents at end of period

115,539

399,606

440,923

299,590

149,304

Net (debt) cash

115,540

399,607

440,925

299,590

149,304

Source: Ultimovacs accounts, Edison Investment Research. Note: *Long-term debt used instead of equity issue.


General disclaimer and copyright

This report has been commissioned by Ultimovacs and prepared and issued by Edison, in consideration of a fee payable by Ultimovacs. 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 2021 Edison Investment Research Limited (Edison).

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

1185 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 Ultimovacs and prepared and issued by Edison, in consideration of a fee payable by Ultimovacs. 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 2021 Edison Investment Research Limited (Edison).

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

1185 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