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Phase II data from 500+ patients over 2022/23

Ultimovacs 20 January 2021 QuickView
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Ultimovacs

Phase II data from 500+ patients over 2022/23

Pharma & biotech

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20 January 2021

Price

NOK79

Market cap

NOK2.5bn

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Share details

Code

ULTIMO

Listing

Oslo Stock Exchange

Shares in issue

32.0m

Business description

Ultimovacs is a biotechnology company focused on developing a near-universal cancer peptide vaccine, UV1, which targets human telomerase reverse transcriptase (known to be expressed in c 85% of cancer types). After successful completion of the Phase I programme, Ultimovacs has initiated a Phase II programme with four clinical trials.

Bull

UV1 could potentially target multiple cancer types, as telomerase is expressed in 85% of cancers types.

Comfortable cash position ensures operations into 2023.

UV1 epitopes were selected based on insights from large clinical trials that investigated another, unrelated telomerase vaccine (ie, based on real-world evidence).

Bear

COVID-19 pandemic development in Western markets can affect clinical trials, which is true for all drug developers.

R&D risk is unavoidable in the development of novel cancer therapies.

Solid immune response data obtained, but clinical proof of concept is yet to be seen (ie, Phase II trials are ongoing).

Analyst

Dr Jonas Peciulis

+44 (0)20 3077 5728

Ultimovacs’ R&D pipeline has been transformed over the past few weeks. Although delayed by the pandemic, the company has delivered on its promise to initiate a third Phase II trial (UV1 durvalumab and olaparib in ovarian cancer) led by investigators, with combination drugs supplied by AstraZeneca. The recent surprise was, however, the fourth Phase II trial (UV1 plus pembrolizumab in head and neck cancer). Ultimovacs is sponsoring its flagship INITIUM trial (UV1 plus ipilimumab and nivolumab in melanoma), while the other three are led by investigators that are top European oncology organisations. So, in our view, it is the ability to forge relationships with different stakeholders that allowed such an expansion of the pipeline and will ensure eventful years in 2022 and 2023.

Intensive newsflow ahead

These trials will enrol a total of more than 500 patients (Exhibit 1). In our view, this amount of a proof-of-concept data will be more than enough to inform the late-stage R&D strategy, but also will be invaluable in partnering discussions. The INITIUM and NIPU trials are already up and running, while the DOVACC and FOCUS trials should start recruiting patients in H121. The result readouts are expected in 2022 and 2023. Proof-of-concept trials carry significant R&D risk (historical pass-through success probabilities are with the 33–54% range). But the pipeline is well diversified now across indications and different combinations and the result readouts are within cash reach, which the investors will find reassuring.

Cost-efficient way of conducting trials

Ultimovacs is sponsoring its flagship INITIUM trial, while the other three are led by investigators, which are top European oncology organisations. Most of the expensive combination immunoncology drugs are either supplied by large pharma companies or standard of care. Even though technically the data will be owned by the investigators, Ultimovacs has been closely involved in clinical trial design with the idea that the company will be able to carry on late-stage development if the data are supportive.

Valuation: EV of NOK2.04bn

At end-Q320, Ultimovacs had a comfortable cash position of NOK453m and no debt. The implied EV is NOK2.04bn. The share price appreciated recently after the announcements of the two new clinical trials. The readouts from all four trials will further provide significant inflection points.

Consensus estimates

Year end

Revenue
(NOKm)

PBT
(NOKm)

EPS
(NOK)

DPS
(NOK)

P/E
(x)

Yield
(%)

12/18

0.0

(55.3)

(3.5)

0.0

N/A

N/A

12/19

0.0

(61.2)

(2.7)

0.0

N/A

N/A

12/20e

0.0

(135.0)

(4.2)

0.0

N/A

N/A

12/21e

0.0

(160.0)

(5.0)

0.0

N/A

N/A

Source: Refinitiv

Ultimovacs is a research client of Edison Investment Research Limited

R&D pipeline with more than 500 patients in Phase II

In our last report, we provided general background about the company and its lead asset UV1, which is potentially a near-universal peptide cancer vaccine. The lead asset UV1 activates the immune system to recognise cancer cells that express human telomerase reverse transcriptase (hTERT, or telomerase), which is expressed in over 85% of cancer types. In these malignancies, cell reproduction relies exclusively on hTERT maintaining the length of telomers. For this reason, UV1 has a broad potential in a variety of cancers, in different stages, and in combination with other treatments (combination with checkpoint inhibitor is the key element of the R&D strategy). UV1 has an interesting discovery history. The selection of the peptides of which UV1 is comprised is based on insights from large clinical trials that investigated another, unrelated telomerase vaccine. The patients who lived longest in those trials had specific T cells against three epitopes, of which UV1 consists. So UV1 was constructed using real-world evidence.

The Phase II programme now includes:

The INITIUM trial (n=154) with UV1 plus ipilimumab and nivolumab in first-line metastatic melanoma. The trial is fully sponsored by the company and the results should be in 2022.

The NIPU trial (n=118) with same combination as above in second-line mesothelioma. The trial is led by Oslo University Hospital network with the combination drugs supplied by Bristol Myers Squibb. Results are expected in 2022.

The DOVACC trial (n=184) with UV1 plus durvalumab and olaparib in second-line maintenance in ovarian cancer. The trial is led by the Nordic Society of Gynaecological Oncology supported by the European Network of Gynaecological Oncological Trial Groups with drugs supplied by AstraZeneca. Results are expected in 2023. Recent detailed company webcast with a KOL presentation about the trial can be found here.

The FOCUS trial (n=75) with UV1 plus standard of care pembrolizumab in first-line head and neck cancer. The trial is led by University of Medicine Halle part of Martin Luther University. Results are expected in 2023.

Exhibit 1: Ultimovacs’ R&D pipeline with more than 500 patients in Phase II

Source: Ultimovacs


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.

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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).

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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.

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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.

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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.

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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

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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

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