Paion |
Progressing towards filings in US and Japan |
Q218 update |
Pharma & biotech |
13 August 2018 |
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Paion and partner Cosmo took an important step towards a US filing for its ultra-short-acting sedative/anaesthetic remimazolam, with the completion of a successful pre-NDA meeting in July. Filing in Japan (via partner Mundipharma) is expected before the end of 2018. Paion took a step towards its goal of self-commercialising remimazolam in Europe with the initiation of a Phase III study in general anaesthesia (GA) in July. The company is funded beyond top-line data from the EU Phase III trial expected in 2019. We lift our valuation to €283m or €4.44 per share.
Year end |
Revenue (€m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/16 |
4.3 |
(25.1) |
(37.8) |
0.0 |
N/A |
N/A |
12/17 |
5.8 |
(15.9) |
(20.5) |
0.0 |
N/A |
N/A |
12/18e |
3.1 |
(16.6) |
(21.8) |
0.0 |
N/A |
N/A |
12/19e |
10.5 |
(6.4) |
(6.4) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding, exceptionals and share-based payments.
Successful pre-NDA meeting: US filing Q418 or Q119
Partner Cosmo has completed a successful pre-NDA meeting with the US FDA and remains on track to file for approval of remimazolam for procedural sedation in Q418 or Q119. Paion would receive a €7.5m milestone upon filing in the US.
Japan filing in 2018, progress in other territories
Partner Mundipharma has advised Paion that it is on track to file for approval of remimazolam for GA in Japan before the end of 2018. Partners in Russia and South Korea are expected to complete Phase III remimazolam studies in GA in 2018; R-Pharm expects to file for approval in Russia in 2018. Yichang Humanwell is conducting a Phase III in procedural sedation and a Phase II in GA in China. Partners in multiple other territories plan to file based on US or Japan dossiers.
Phase III for GA in Europe underway
Paion initiated a Phase III trial in GA in Europe on schedule in July. The primary endpoint of the randomised, single blind, confirmatory study in ~500 elderly or unwell (ASA III/IV) patients is to demonstrate non-inferiority to propofol, which is the standard of care. A secondary endpoint is to show fewer instances of a drop in blood pressure, which can lead to negative outcomes in these patients who are already in poor overall health. Recruitment is expected to complete in 2019.
Well funded beyond 2019 and EU Phase III data
Paion raised €5.2m (gross) from the issue of 2.6m shares in a private placement in June. It had cash and equivalents of €23.3m at 30 June, giving it cash reach beyond the end of 2019 in our forecasts, and past the expected reporting of data from the European Phase III trial. No change to guidance in the half-yearly report.
Valuation: Lifted to €283m
We increase our valuation to €283m, or €4.44 per share, from €269m or €4.40 per share, to account for the increase in cash and shares in issue following the capital raise in June and from rolling forward our model. Our assumptions are unchanged.
Exhibit 1: Financial summary
€'000s |
2015 |
2016 |
2017 |
2018e |
2019e |
||
Year end 31 December |
|||||||
PROFIT & LOSS |
|||||||
Revenue |
|
|
61 |
4,262 |
5,811 |
3,100 |
10,475 |
Cost of sales |
0 |
0 |
0 |
0 |
0 |
||
Gross profit |
61 |
4,262 |
5,811 |
3,100 |
10,475 |
||
R&D expenditure |
(29,385) |
(23,408) |
(17,854) |
(16,000) |
(13,000) |
||
General, administrative & selling |
(5,729) |
(5,129) |
(3,828) |
(3,820) |
(3,935) |
||
Other |
965 |
(807) |
(2) |
51 |
51 |
||
Operating profit |
(34,088) |
(25,841) |
(16,219) |
(17,069) |
(6,709) |
||
Depreciation and amortisation |
0 |
(759) |
(347) |
(400) |
(300) |
||
Share-based payments |
0 |
0 |
0 |
0 |
0 |
||
Exceptionals |
0 |
0 |
0 |
0 |
0 |
||
EBITDA |
|
|
(34,088) |
(25,082) |
(15,872) |
(16,669) |
(6,409) |
Operating profit (before GW and except) |
(34,088) |
(25,082) |
(15,872) |
(16,669) |
(6,409) |
||
Net interest |
42 |
21 |
20 |
20 |
20 |
||
Profit before tax (norm) |
|
|
(34,046) |
(25,061) |
(15,852) |
(16,649) |
(6,389) |
Profit before tax (reported) |
|
|
(34,046) |
(25,061) |
(15,852) |
(16,649) |
(6,389) |
Tax |
5,834 |
4,944 |
3,759 |
3,040 |
2,340 |
||
Profit after tax (norm) |
(28,212) |
(20,118) |
(12,093) |
(13,609) |
(4,049) |
||
Profit after tax (reported) |
(28,212) |
(20,118) |
(12,093) |
(13,609) |
(4,049) |
||
Average number of shares outstanding (m) |
50.7 |
53.2 |
59.1 |
62.4 |
63.7 |
||
EPS - normalised (c) |
|
|
(55.7) |
(37.8) |
(20.5) |
(21.8) |
(6.4) |
EPS - reported (c) |
|
|
(55.7) |
(37.8) |
(20.5) |
(21.8) |
(6.4) |
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 |
|
|
3,417 |
2,855 |
2,529 |
2,529 |
2,529 |
Intangible assets |
3,362 |
2,688 |
2,415 |
2,415 |
2,415 |
||
Tangible assets |
56 |
167 |
114 |
114 |
114 |
||
Refund from assumption of dev costs |
0 |
0 |
0 |
0 |
0 |
||
Other |
0 |
0 |
0 |
0 |
0 |
||
Current assets |
|
|
40,051 |
35,128 |
29,357 |
20,815 |
16,766 |
Stocks |
0 |
0 |
0 |
0 |
0 |
||
Debtors |
0 |
0 |
37 |
25 |
25 |
||
Cash |
32,680 |
30,111 |
24,839 |
16,309 |
12,260 |
||
Other |
7,371 |
5,017 |
4,481 |
4,481 |
4,481 |
||
Current liabilities |
|
|
(7,901) |
(13,040) |
(6,656) |
(6,656) |
(6,656) |
Trade payables |
(7,332) |
(6,353) |
(5,921) |
(5,921) |
(5,921) |
||
Short-term borrowings |
0 |
0 |
0 |
0 |
0 |
||
Provisions |
(224) |
(555) |
(391) |
(391) |
(391) |
||
Finance lease liabilities |
0 |
0 |
0 |
0 |
0 |
||
Other current liabilities |
(305) |
(359) |
(325) |
(325) |
(325) |
||
Current deferred income |
(39) |
(5,774) |
(19) |
(19) |
(19) |
||
Long-term liabilities |
|
|
(6) |
0 |
0 |
0 |
0 |
Long-term borrowings |
0 |
0 |
0 |
0 |
0 |
||
Provisions |
0 |
0 |
0 |
0 |
0 |
||
Long-term deferred income |
(6) |
0 |
0 |
0 |
0 |
||
Deferred taxes |
0 |
0 |
0 |
0 |
0 |
||
Other long-term liabilities |
0 |
0 |
0 |
0 |
0 |
||
Net assets |
|
|
35,562 |
24,943 |
25,229 |
16,687 |
12,638 |
CASH FLOW |
|||||||
Operating cash flow |
|
|
(28,212) |
(17,135) |
(22,318) |
(16,657) |
(6,409) |
Net interest |
43 |
19 |
20 |
20 |
20 |
||
Tax |
2,575 |
5,529 |
4,577 |
3,040 |
2,340 |
||
Capex |
0 |
7 |
0 |
0 |
0 |
||
Purchase of intangibles |
(33) |
0 |
0 |
0 |
0 |
||
Acquisitions/disposals |
0 |
(199) |
(25) |
0 |
0 |
||
Equity Financing |
22 |
9,212 |
12,494 |
5,067 |
0 |
||
Dividends |
0 |
0 |
0 |
0 |
0 |
||
Other |
0 |
0 |
0 |
0 |
0 |
||
Net cash flow |
(25,605) |
(2,567) |
(5,251) |
(8,530) |
(4,049) |
||
Opening net debt/(cash) |
|
|
(58,912) |
(32,680) |
(30,111) |
(24,839) |
(16,309) |
Effect of exchange rate changes |
(66) |
(2) |
(22) |
0 |
0 |
||
Other |
(560) |
0 |
0 |
0 |
0 |
||
Closing net debt/(cash) |
|
|
(32,680) |
(30,111) |
(24,839) |
(16,309) |
(12,260) |
Source: Edison Investment Research, Paion accounts
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