BerGenBio |
Progressing towards key inflection points |
ASH data |
Pharma & biotech |
16 December 2020 |
Share price performance
Business description
Next events
Analysts
BerGenBio is a research client of Edison Investment Research Limited |
BerGenBio has presented two positive datasets for its lead asset bemcentinib in acute myeloid leukaemia (AML) and myelodysplastic syndromes (MDS) at ASH 2020. Following these data, we anticipate a registrational Phase III study of bemcentinib plus low-dose cytarabine (LDAC) in relapsed elderly AML patients to start in 2021. We still forecast the NDA submission for this indication in 2023 (FDA fast-track has been granted). Bemcentinib is an oral, first-in-class, highly selective AXL tyrosine kinase inhibitor in Phase II development for a range of cancers and could be the first selective AXL inhibitor to market. Data from the Phase II study in second-line NSCLC in combination with Keytruda are expected at WCLC (for details see our initiation report, Bemcentinib leading the AXL charge). We value BerGenBio at NOK59.1 per share.
Year end |
Revenue (NOKm) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/18 |
2.3 |
(191.7) |
(3.60) |
0.0 |
N/A |
N/A |
12/19 |
8.9 |
(199.3) |
(3.43) |
0.0 |
N/A |
N/A |
12/20e |
0.0 |
(249.1) |
(3.09) |
0.0 |
N/A |
N/A |
12/21e |
0.0 |
(300.9) |
(3.45) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Registrational Phase III AML study in sight
Interim Phase II (n=11) data presented at ASH 2020 for bemcentinib in combination with LDAC showed promising efficacy in elderly relapsed AML patients (cohort B2/B5) unfit for intensive chemotherapy. The combination achieved an overall response rate (ORR) of 45% with 36% of patients achieving durable complete remission (CR/CRi) and a disease control rate (DCR) of 73%. This is a significant improvement on LDAC monotherapy and could lead to a shift in the treatment paradigm for this growing unmet need. Notably, the AXL status of patients was not reported and these high response rates could negate the need for selecting patients with high AXL expression. The combination was safe and well tolerated.
BERGAMO monotherapy study hits primary endpoint
In August, the investigator-initiated Phase II BERGAMO study of bemcentinib monotherapy in AML and high-risk MDS patients (n=46) met its primary endpoint of ORR. This trial recruited patients who had failed (r/r) first-line treatment with HMAs, which represents an unmet need. Data presented at ASH 2020 highlight meaningful clinical efficacy in the MDS population (n=22) with 18% of patients achieving CR/CRi (four patients) and a DCR of 36%. The mDOR was already longer than the current mOS for this patient population. AXL status again proved to be predictive of responders. This population is less frail and has a higher likelihood of achieving an immune response and meaningful clinical benefit, so these results warrant further development and additional translational analyses are ongoing.
Valuation: NOK5.16bn or NOK59.1 per share
We continue to value BerGenBio at NOK5.16bn or NOK59.1 per share based on a risk-adjusted NPV analysis. Our forecasts remain unchanged. The key drivers are bemcentinib in second-line NSCLC (peak sales $1.2bn, NOK40.7/share) and AML (peak sales $588m, NOK13.3/share) plus COVID-19 opportunity (NOK5.9/share).
Exhibit 1: Financial summary
NOK'000s |
2018 |
2019 |
2020e |
2021e |
||
Year end 31 December |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
||||||
Operating revenues |
2,335 |
8,900 |
0 |
0 |
||
Licensing revenues |
2,335 |
8,900 |
0 |
0 |
||
Other revenues |
0 |
0 |
0 |
0 |
||
Total operating expenses |
(196,874) |
(213,274) |
(260,665) |
(305,224) |
||
Other operating expenses (R&D) |
(133,699) |
(141,630) |
(164,325) |
(205,406) |
||
EBITDA (reported) |
(194,335) |
(203,589) |
(259,720) |
(304,844) |
||
Depreciation and amortisation |
|
|
(204) |
(785) |
(945) |
(379) |
Operating income (reported) |
|
|
(194,539) |
(204,374) |
(260,665) |
(305,224) |
Operating margin % |
n/a |
n/a |
n/a |
n/a |
||
Finance income/(expense) excl lease expense |
4,858 |
11,530 |
22,015 |
7,344 |
||
Exceptionals and adjustments |
0 |
0 |
0 |
0 |
||
Profit before tax (reported) |
(191,746) |
(199,278) |
(249,052) |
(300,930) |
||
Income tax expense |
0 |
0 |
0 |
0 |
||
Net income (reported) |
|
|
(191,746) |
(199,278) |
(249,052) |
(300,930) |
Average Number of Shares Outstanding (m) |
53.3 |
58.0 |
80.6 |
87.3 |
||
EPS - normalised (NOK) |
|
|
(3.6) |
(3.4) |
(3.1) |
(3.5) |
Dividend per share (NOK) |
0.0 |
0.0 |
0.0 |
0.0 |
||
BALANCE SHEET |
||||||
Property, plant and equipment |
|
|
581 |
974 |
429 |
450 |
Intangible assets |
0 |
0 |
0 |
0 |
||
Total non-current assets |
581 |
974 |
429 |
450 |
||
Cash and equivalents |
|
|
360,414 |
253,586 |
716,292 |
418,494 |
Other current assets |
17,831 |
15,818 |
16,825 |
16,321 |
||
Total current assets |
378,245 |
269,404 |
733,117 |
434,815 |
||
Total non-current liabilities |
|
|
0 |
0 |
0 |
0 |
Trade and other payables |
|
|
23,939 |
26,746 |
38,814 |
40,863 |
Other current liabilities |
12,875 |
21,803 |
22,393 |
22,993 |
||
Provisions |
4,732 |
2,074 |
2,074 |
2,074 |
||
Total current liabilities |
41,546 |
50,623 |
63,281 |
65,930 |
||
Equity attributable to company |
337,280 |
219,754 |
670,264 |
369,334 |
||
CASH FLOW |
||||||
Operating profit/(loss) |
|
|
(191,746) |
(199,278) |
(249,052) |
(300,930) |
Depreciation and amortisation |
204 |
785 |
945 |
379 |
||
Share based payments |
1,678 |
3,842 |
0 |
0 |
||
Other adjustments |
0 |
0 |
0 |
0 |
||
Movements in working capital |
1,446 |
13,164 |
12,244 |
3,745 |
||
Interest paid/received |
5,847 |
11,151 |
13,251 |
3,242 |
||
Income taxes paid |
0 |
0 |
0 |
0 |
||
Cash from operations (CFO) |
(186,706) |
(184,145) |
(235,863) |
(296,805) |
||
Capex |
(228) |
0 |
-400 |
-400 |
||
Acquisitions & disposals net |
|
|
0 |
0 |
0 |
0 |
Other investing activities |
0 |
0 |
0 |
0 |
||
Cash used in investing activities (CFIA) |
(228) |
0 |
(400) |
(400) |
||
Net proceeds from issue of shares |
176,998 |
77,910 |
699,562 |
0 |
||
Movements in debt |
0 |
0 |
0 |
0 |
||
Other financing activities |
0 |
(593) |
(593) |
(593) |
||
Cash from financing activities (CFF) |
176,998 |
77,317 |
698,969 |
(593) |
||
Cash and equivalents at beginning of period |
370,350 |
360,414 |
253,586 |
716,292 |
||
Increase/(decrease) in cash and equivalents |
(9,936) |
(106,828) |
462,706 |
(297,798) |
||
Cash and equivalents at end of period |
360,414 |
253,586 |
716,292 |
418,494 |
||
Net (debt)/cash |
|
|
360,414 |
253,586 |
716,292 |
418,494 |
Source: BerGenBio accounts, Edison Investment Research
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