PISCES-I long-term data published in The Lancet

ReNeuron Group 5 August 2016 Update

ReNeuron Group

PISCES-I long-term data published in The Lancet

Stroke Phase I data

Pharma & biotech

5 August 2016

Price

3.00p

Market cap

£95m

Net cash (£m) at 31 March 2016

65.7

Shares in issue

3,164.6m

Free float

60.5%

Code

RENE

Primary exchange

AIM

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

26.3

(7.7)

(45.5)

Rel (local)

21.5

(15.3)

(45.6)

52-week high/low

5.75p

2.38p

Business description

ReNeuron is a UK biotech company developing allogeneic cell therapies. CTX neural stem cells are in development for ischaemic stroke disability (Phase II) and critical limb ischaemia (Phase I), and hRPCs (human retinal progenitor cells) are being studied for retinitis pigmentosa (Phase I/II).

Next events

CTX Phase II stroke data/start Phase II/III study

H216/H117

CTX: CLI Phase I data/Phase II study start

H216/H117

hRPC: safety and efficacy data

2017

Exosome: Phase I clinical study start

H217

Analysts

Dr Linda Pomeroy

+44 (0)20 3077 5738

Lala Gregorek

+44 (0)20 3681 2527

ReNeuron Group is a research client of Edison Investment Research Limited

ReNeuron has announced the publication of long-term Phase I stroke clinical trial (PISCES-I) data in The Lancet. The data indicate improvements in neurological status and limb function compared with pre-treatment baseline performance within three months of treatment and throughout long-term follow up. Alongside this there were no cell-related or immunological adverse events across the four ascending dose levels in the study. This is positive as the data from the first stroke study continue to demonstrate safety, tolerability and functional improvement from the CTX cell therapy treatment. Investor focus is currently on the three-month readout of ReNeuron’s Phase II stroke disability study (PISCES-II) with its CTX cells, due in Q416. We maintain our rNPV at £249m.

Year
end

Revenue (£m)

PBT*
(£m)

EPS*
(p)

DPS
(p)

P/E
(x)

Yield
(%)

03/15

0.0

(10.3)

(0.50)

0.0

N/A

N/A

03/16

0.0

(12.8)

(0.44)

0.0

N/A

N/A

03/17e

0.0

(26.7)

(0.74)

0.0

N/A

N/A

03/18e

0.0

(32.6)

(0.91)

0.0

N/A

N/A

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

Long-term Phase I data published – PISCES-I study

PISCES was a Phase I study, which treated 11 stroke-disabled patients with a range of doses of CTX cells (2m, 5m, 10m, 20m) injected into the damaged area of the brain. On safety, no cell-related or immunological adverse events were reported. In terms of treatment benefit, three out of 11 patients (~25%) had a one-point improvement after 24 months in the modified Rankin Score, regarded as clinically meaningful. Median NIHSS improved by two points, from 7 at baseline to 5 after 24 months (p=0.002). Please click here to read the Lancet publication.

Focus on Phase II (PISCES-II) first data readout Q416

Primary investor focus is on the readout of the Phase II stroke study expected in Q416, with ≥ two responders in the revised 21-patient cohort required to pass the futility hurdle. The company has indicated that positive data would enable a Phase II/III study to commence in 2017, with potential data in 2019.

Additional potential newsflow

Newsflow is expected from the critical limb ischaemia (CLI) study (Phase I data readout in Q416), retinitis pigmentosa (RP) study (Phase I/II safety and efficacy data readout 2017) and further preclinical data from the exosome nanomedicine programme and potential clinical entry in H217. Further out, there could be an RP Phase II/III start (2018) with a readout in 2019 and CLI Phase II data in 2018.

Valuation: Maintained at £249m

We maintain our valuation at £249m or 7.9p per share. ReNeuron is well-funded to execute its clinical strategy over the next 24-36 months, which could offer a number of inflection points from the potential newsflow outlined above.

Exhibit 1: Financial summary

£'000s

2013

2014

2015

2016

2017e

2018e

Year end 31 March

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

17

22

30

29

29

29

Cost of Sales

0

0

0

0

0

0

Gross Profit

17

22

30

29

29

29

R&D expenses

(4,786)

(5,829)

(7,250)

(10,272)

(23,112)

(28,428)

SG&A expenses

(2,319)

(2,824)

(3,693)

(4,015)

(4,617)

(5,079)

EBITDA

 

 

(6,966)

(7,857)

(10,269)

(13,632)

(27,094)

(32,816)

Operating Profit (before GW and except)

 

(7,088)

(7,969)

(10,394)

(13,724)

(27,166)

(32,944)

Intangible Amortisation

0

0

0

0

0

0

Exceptionals

0

0

0

0

0

0

Operating Profit

(7,088)

(7,969)

(10,394)

(13,724)

(27,166)

(32,944)

Other

0

0

0

0

0

0

Net Interest

29

149

91

878

493

317

Profit Before Tax (norm)

 

 

(7,059)

(7,820)

(10,303)

(12,846)

(26,673)

(32,627)

Profit Before Tax (FRS 3)

 

 

(7,059)

(7,820)

(10,303)

(12,846)

(26,673)

(32,627)

Tax

714

754

1,397

1,492

3,201

3,915

Profit After Tax (norm)

(6,345)

(7,066)

(8,906)

(11,354)

(23,473)

(28,712)

Profit After Tax (FRS 3)

(6,345)

(7,066)

(8,906)

(11,354)

(23,473)

(28,712)

Average Number of Shares Outstanding (m)

748.7

1,425.0

1,788.8

2,609.3

3,164.6

3,164.6

EPS - normalised (p)

 

 

(0.85)

(0.50)

(0.50)

(0.44)

(0.74)

(0.91)

EPS - FRS 3 (p)

 

 

(0.85)

(0.50)

(0.50)

(0.44)

(0.74)

(0.91)

Dividend per share (p)

0.0

0.0

0.0

0.0

0.0

0.0

BALANCE SHEET

Fixed Assets

 

 

1,620

1,772

2,033

6,963

7,242

7,536

Intangible Assets

1,272

1,272

1,591

1,591

1,591

1,591

Tangible Assets

213

225

161

361

640

934

Other

135

275

281

5,011

5,011

5,011

Current Assets

 

 

4,602

22,347

14,054

64,894

41,837

13,539

Stocks

0

0

0

0

0

0

Debtors

341

676

400

1,421

1,421

1,421

Cash

3,547

20,917

12,382

60,709

37,215

8,203

Other

714

754

1,272

2,764

3,201

3,915

Current Liabilities

 

 

(1,164)

(2,036)

(2,345)

(4,199)

(4,199)

(4,199)

Creditors

(539)

(1,234)

(1,150)

(3,700)

(3,700)

(3,700)

Short term borrowings

0

0

0

0

0

0

Short term leases

(1)

(1)

(1)

(1)

(1)

(1)

Other

(624)

(801)

(1,194)

(498)

(498)

(498)

Long Term Liabilities

 

 

(150)

(366)

(606)

0

0

0

Long term borrowings

0

0

0

0

0

0

Long term leases

0

(2)

(1)

0

0

0

Other long term liabilities

(150)

(364)

(605)

0

0

0

Net Assets

 

 

4,908

21,717

13,136

67,658

44,880

16,877

CASH FLOW

Operating Cash Flow

 

 

(6,637)

(6,718)

(9,124)

(11,920)

(26,399)

(32,107)

Net Interest

(1)

0

0

0

0

0

Tax

616

714

879

0

2,764

3,201

Capex

(37)

(121)

(380)

(293)

(352)

(422)

Acquisitions/disposals

0

0

0

0

0

0

Financing

5,601

23,435

0

65,195

0

0

Dividends

0

0

0

0

0

0

Other

30

61

91

345

493

317

Net Cash Flow

(428)

17,371

(8,534)

53,327

(23,494)

(29,012)

Opening net debt/(cash)

 

 

(3,974)

(3,546)

(20,914)

(12,380)

(60,708)

(37,214)

HP finance leases initiated

0

(3)

0

1

0

0

Other

0

0

0

(0)

(0)

0

Closing net debt/(cash)

 

 

(3,546)

(20,914)

(12,380)

(65,708)

(37,214)

(8,202)

Source: ReNeuron accounts, Edison Investment Research

Edison, the investment intelligence firm, is the future of investor interaction with corporates. Our team of over 100 analysts and investment professionals work with leading companies, fund managers and investment banks worldwide to support their capital markets activity. We provide services to more than 400 retained corporate and investor clients from our offices in London, New York, Frankfurt, Sydney and Wellington. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison and is not regulated by the Australian Securities and Investment Commission. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2016 Edison Investment Research Limited. All rights reserved. This report has been commissioned by ReNeuron Group and prepared and issued by Edison for publication globally. 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. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Aus and any access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US 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. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and 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 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. This document is provided 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.
Edison has a restrictive policy relating to personal dealing. 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. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. 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. 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 (ie 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. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2016. “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.

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

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 9258 1161

Level 25, Aurora Place

88 Phillip St, Sydney

NSW 2000, Australia

Wellington +64 (0)48 948 555

Level 15, 171 Featherston St

Wellington 6011

New Zealand

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

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 9258 1161

Level 25, Aurora Place

88 Phillip St, Sydney

NSW 2000, Australia

Wellington +64 (0)48 948 555

Level 15, 171 Featherston St

Wellington 6011

New Zealand

Edison, the investment intelligence firm, is the future of investor interaction with corporates. Our team of over 100 analysts and investment professionals work with leading companies, fund managers and investment banks worldwide to support their capital markets activity. We provide services to more than 400 retained corporate and investor clients from our offices in London, New York, Frankfurt, Sydney and Wellington. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison and is not regulated by the Australian Securities and Investment Commission. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2016 Edison Investment Research Limited. All rights reserved. This report has been commissioned by ReNeuron Group and prepared and issued by Edison for publication globally. 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. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Aus and any access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US 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. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and 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 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. This document is provided 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.
Edison has a restrictive policy relating to personal dealing. 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. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. 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. 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 (ie 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. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2016. “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.

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

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 9258 1161

Level 25, Aurora Place

88 Phillip St, Sydney

NSW 2000, Australia

Wellington +64 (0)48 948 555

Level 15, 171 Featherston St

Wellington 6011

New Zealand

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

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 9258 1161

Level 25, Aurora Place

88 Phillip St, Sydney

NSW 2000, Australia

Wellington +64 (0)48 948 555

Level 15, 171 Featherston St

Wellington 6011

New Zealand

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