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Setting the stage for the confirmatory Phase III

ASIT biotech 27 September 2018 Update
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ASIT biotech

Setting the stage for the confirmatory Phase III

H118 results

Healthcare equipment and services

 

27 September 2018

Price

€3.13

Market cap

€55m

US$/€0.86

Net cash (€m) at 30 June 2018

13.0m

Shares in issue

17.5m

Free float

72.6%

Code

ASIT

Primary exchange

Euronext Brussels

Secondary exchange

Euronext Paris

Share price performance

%

1m

3m

12m

Abs

(8.7)

(14.5)

(21.8)

Rel (local)

(7.2)

(15.3)

(17.0)

52-week high/low

€5.7

€3.0

Business description

ASIT biotech is a clinical-stage company focused on the development of short-course therapies for allergies. ASIT’s products are based on the proprietary ASIT+ technology platform, allowing the development of products containing highly purified allergen fragments in an adjuvant-free formulation, selected to be safe while maintaining the capacity to stimulate immune tolerance

Next events

Start of confirmatory Phase III of gp-ASIT+

Q418

hdm-ASIT+ and peanut-ASIT+ updates

2018

FY18 results

March 2019

Analyst

Andy Smith

+44 (0)20 3077 5700

ASIT biotech is a research client of Edison Investment Research Limited

ASIT Biotech’s H1 results statement included an outline of its preparations for the confirmatory Phase III study of its short-course gp-ASIT+ for grass pollen allergy, including the appointment of a single CRO. ASIT’s H118 operating loss was €5.4m, within which R&D comprised €4.5m. End of June net cash of €13.0m and the July convertible bond issue leave ASIT comfortably funded through 2020 in our model.

Year end

Revenue (€m)

PBT* (€m)

EPS* (€)

DPS (€)

P/E (x)

Yield (%)

12/17

0

(12.0)

(0.9)

0.0

N/A

N/A

12/18e

0

(13.3)

(0.9)

0.0

N/A

N/A

12/19e

0

(16.1)

(0.9)

0.0

N/A

N/A

12/20e

0

(6.2)

(0.3)

0.0

N/A

N/A

Note: *PBT and EPS are both as reported.

H118 results bolstered by recent fund-raising

Operating losses of €5.4m in H118 (versus €6.8m in H117) were predominantly outlays on R&D (€4.5m, or 83% of operating loss) and G&A (€1.3m), and were countered by other operating (grant) income of €0.4m (versus €0.3m in H117). The end of June gross cash balance was €13.5m (€2.1m at end-2017), bolstered by the capital increases and the more recent convertible bond issue, which brought the total raised in the past 12 months to c €25m.

Enhanced confirmatory Phase III design

ASIT has announced improvements to the design of the 600-patient ABT011 confirmatory Phase III study for grass pollen-allergies. It has appointed a single CRO with significant experience of respiratory diseases. The CRO will select more centres and those with a recent history of high pollen counts. The Phase III protocol also limits the number of patients that can be recruited at a single site. This should counter over-recruitment at a single centre during a mild pollen season, as was experienced in the first Phase III study.

Valuation hardly changed

We have updated the cash and share count for the H1 results and increased our forecast of R&D costs in 2018 and 2019 to reflect the investment in the gp-ASIT+, hdm-ASIT+ and pnt-ASIT+ programmes announced at the H118 results. We note the recent €12m convertible bond issue results in 20 equal monthly cash payments (which started in July) and up to a further €4m could be raised by the end of 2019 through exercise of warrants, potentially adding a degree of volatility in the share price. We include an illustrative €7m debt as a place-holder for the expected licensing transaction for gp-ASIT+ ex-Europe in 2020. Overall, our risk-adjusted NPV valuation is lowered slightly from €121m to €118m, with the per-share value dropping from €7.4 to €6.7, taking into account both the higher number of shares in issue and the increased R&D costs.

Exhibit 1: Financial Summary

 

 

 

EUR ('000)

2015

2016

2017

2018e

2019e

2020e

Year end 31 December

 

 

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

 

 

 

 

 

 

 

 

Revenue

 

 

 

4

0

0

0

0

0

Cost of Sales

 

 

 

(3)

0

0

0

0

0

Gross Profit

 

 

 

1

0

0

0

0

0

General and Administrative Expenses

 

(947)

(1,822)

(1,676)

(2,547)

(2,522)

(2,497)

Research and Development Expenses

 

(6,691)

(12,123)

(10,903)

(11,500)

(14,480)

(4,520)

Other Operating Income

 

 

(3)

1,667

604

789

829

870

Reported operating profit

 

 

(7,640)

(12,278)

(11,975)

(13,258)

(16,173)

(6,146)

Net Interest

 

 

 

(75)

(60)

(9)

(40)

113

(49)

Profit before tax (as reported)

 

 

(7,715)

(12,338)

(11,984)

(13,298)

(16,060)

(6,196)

Reported tax

 

 

 

0

(1)

(2)

(1)

3

1,859

Profit after tax (reported)

 

 

(7,715)

(12,339)

(11,986)

(13,298)

(16,057)

(4,337)

Minority interests

 

 

0

0

0

0

0

0

Net income (reported)

 

 

(7,715)

(12,339)

(11,986)

(13,298)

(16,057)

(4,337)

 

 

 

 

 

 

 

 

 

 

Basic average number of shares outstanding

 

8,504

11,219

12,806

15,694

17,507

17,507

EPS - basic, as reported (EUR)

 

(0.91)

(1.10)

(0.94)

(0.85)

(0.92)

(0.25)

 

 

 

 

 

 

 

 

 

 

BALANCE SHEET

 

 

 

 

 

 

 

 

Non Current Assets

 

 

506

1,770

1,837

2,008

2,136

2,044

Property Plant and equipment, net

 

494

736

691

693

821

729

Other intangible assets

 

 

0

0

0

0

0

0

Other Non Current Assets

 

 

12

1,034

1,146

1,315

1,315

1,315

Current Assets

 

 

4,968

13,785

2,448

9,851

(126)

9,987

Cash and cash equivalents

 

 

4,621

13,387

2,126

9,598

(379)

9,734

Accounts receivable

 

 

2

3

0

0

0

0

Inventories

 

 

 

11

0

0

0

0

0

Other current assets

 

 

334

395

322

253

253

253

Current Liabilities

 

 

6,332

2,004

2,654

5,286

4,294

2,853

Accounts payable

 

 

1,611

1,707

1,264

3,444

2,452

1,011

Short term debt and borrowings

 

4,232

12

34

38

38

38

Other current liabilities

 

 

489

285

1,356

1,804

1,804

1,804

Non Current Liabilities

 

 

0

419

432

446

446

7,446

Loans and borrowings

 

 

0

419

432

446

446

7,446

Other non-current liabilities

 

 

0

0

0

0

0

0

Equity

 

 

 

(858)

13,132

1,199

6,126

(2,731)

(5,268)

Common stock / Capital

 

 

11,625

17,506

9,989

13,125

13,125

13,125

Additional paid-in capital / Share premium

 

0

21,957

21,957

26,958

18,101

15,564

Other reserves and surplus

 

 

(12,483)

(24,229)

(28,645)

(33,957)

(33,957)

(33,957)

Other Equity

 

 

 

0

(2,102)

(2,102)

0

0

0

CASH FLOW

 

 

 

 

 

 

 

 

 

Cash Flow from Operations

 

 

 

 

 

 

 

 

Net income (loss)

 

 

(7,715)

(12,339)

(11,986)

(13,298)

(16,057)

(4,337)

Depreciation and Amortization

 

 

80

141

205

176

196

214

Interest income/expense

 

 

75

60

9

40

(113)

49

Stock-based compensation

 

 

18

0

54

0

0

0

Non Cash Adjustments

 

 

0

11

(492)

0

0

0

(Increase) decrease in inventories

 

3

0

0

0

0

0

(Increase) decrease in trade receivables

 

(819)

(62)

74

0

0

0

(Increase) decrease in other current assets

 

0

(1,016)

(112)

69

0

0

Increase (decrease) in trade payables

 

751

(492)

(586)

2,180

(992)

(1,441)

Net cash used in Operating activities

 

(7,606)

(13,697)

(12,834)

(10,833)

(16,966)

(5,515)

Cash Flow from Investing

 

 

 

 

 

 

 

 

Purchases of fixed assets

 

 

(372)

(383)

(161)

(265)

(323)

(123)

Other Investing Activities

 

 

1

(6)

0

0

0

0

Net cash used in Investing activities

 

(371)

(389)

(161)

(265)

(323)

(123)

Cash Flow from Financing

 

 

 

 

 

 

 

 

Change in Debt

 

 

4,130

0

0

0

0

7,000

Change in Capital Stock

 

 

0

22,199

0

16,900

7,200

1,800

Interest paid

 

 

 

(6)

(204)

(10)

(42)

(24)

(24)

Other Financing Activities

 

 

33

857

1,743

2

137

(25)

Net cash used in Financing activities

 

4,157

22,852

1,733

16,860

7,313

8,751

Net Changes in Cash and Cash Equivalent

 

(3,820)

8,766

(11,262)

5,761

(9,976)

3,113

Net cash (debt) at the beginning of the period

 

8,441

4,621

12,968

1,694

9,152

(825)

Net cash (debt) at the end of the period

 

4,621

12,968

1,694

9,152

(825)

2,288

Source: Company accounts, Edison Investment Research

 

 

 

 

 

 

 

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. 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 Pty Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER Copyright 2018 Edison Investment Research Limited. All rights reserved. This report has been commissioned by ASIT biotech 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 Investment Research Pty Ltd (Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd (AFSL: 427484)) and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. 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 2018. “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

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. 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 Pty Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER Copyright 2018 Edison Investment Research Limited. All rights reserved. This report has been commissioned by ASIT biotech 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 Investment Research Pty Ltd (Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd (AFSL: 427484)) and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. 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 2018. “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

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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