Very busy second half

Immunicum 6 November 2018 Update
Download PDF

Immunicum

Very busy second half

Q2 results and clinical trial progress

Pharma & biotech

 

6 November 2018

Price

SEK8.9

Market cap

SEK454m

$/SEK9.1; €/SEK10.6

Net cash (SEKm) at end-Q2 (before proposed c SEK351m rights issues)

149.1

Shares in issue

51m

Free float

86.1%

Code

IMMU

Primary exchange

NASDAQ Stockholm

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(26.9)

34.2

11.0

Rel (local)

(22.3)

41.1

17.6

52-week high/low

SEK12.3

SEK6.0

Business description

Immunicum is a clinical-stage immunoncology company based in Gothenburg, Sweden. The company is developing an allogeneic off-the-shelf dendritic cell immune activator or immune primer for use in combination with tyrosine kinase inhibitors and checkpoint inhibitors in potentially any solid tumour indications.

Next events

Interim Q3 results

7 November 2018

Multi-indication Phase Ib/II (ILIAD) study start

H218

RCC Phase II (MERECA) top-line data

Q319

Multi-indication Phase Ib/II (ILIAD) interim data

2019

Analyst

Andy Smith

+44 (0)20 3077 5700

Immunicum is a research client of Edison Investment Research Limited

Immunicum’s second-quarter financial results have been superseded by significant product development and financing news. The agreement of the Phase Ib/II US protocol for ilixadencel with the FDA was an important milestone, but the negotiations on an agreement with a leading global pharmaceutical company for checkpoint inhibitor (CPI) access would be a significant endorsement. The recently proposed c SEK351m combined stock issues will be used to accelerate the manufacturing and potentially the development of ilixadencel, resulting in a cash runway until the end of 2021.

Year end

Revenue (SEKm)

PBT* (SEKm)

EPS* (SEK)

DPS (SEK)

P/E (x)

Yield (%)

12/17

0.0

(80.3)

(3.1)

0.0

N/A

N/A

12/18e

0.0

(83.8)

(1.7)

0.0

N/A

N/A

12/19e

0.0

(273.4)

(3.0)

0.0

N/A

N/A

12/20e

0.0

(70.6)

(0.8)

0.0

N/A

N/A

Note: *PBT and EPS are as reported.

Fund-raising trumps other recent news

Net cash at end June was SEK149.1m (SEK129m at end 2017), but the recently proposed rights issues are expected to generate c SEK351m gross, which Immunicum has suggested will give it cash runway until the end of 2021. We had assumed that ilixadencel would be partnered in 2019 based on the clinical results to be announced in H119, but the fund-raising now gives Immunicum the option to retain more value for shareholders by licensing a Phase III-ready asset at the end of 2020, rather than a Phase II-ready asset at the end of 2019.

Spotlight on the CPI collaboration and clinical supply

The agreement of a clinical trial protocol with the FDA is an important milestone in any company’s history, but more so for companies in the oncology space that are exploring the use of combinations of agents. However, a potential CPI clinical collaboration and supply agreement for the Phase II part of the ILIAD study will have a number of significant benefits, which include the endorsement of ilixadencel as an active oncology agent, as well as potentially faster trial recruitment. The performance of ilixadencel in three disease indications should also help Immunicum and its partners prioritise indications in subsequent studies.

Valuation: Multiple changes

We have made some initial adjustments to our model to reflect Q2 results and the impact on cash, investment and share count of the proposed directed and rights issues. In addition, as the publication of the Phase Ib/II study in hepatocellular carcinoma (HCC) is under review, so we have increased the probability of success from 7.5% to 17.4% and applied that probability across all of Immunicum’s Phase II studies. In total, our valuation moves to SEK1.52bn or SEK16.4 per share from SEK1.13bn or SEK22.10 per share, the latter incorporating the dilution from the higher share count.

Potential CPI agreement should have multiple benefits

Immunicum’s recent news is that the supply of CPI in the Phase I/II ILIAD multi-indication study is being negotiated with a leading global pharmaceutical company to be provided to Immunicum at no cost. When signed, this will be the most significant announcement since the summer for the following reasons:

A collaboration and supply agreement between a big global pharmaceutical company and Immunicum implies at least some validation of ilixadencel’s therapeutic potential, in our view, otherwise a valuable CPI would be sold rather than supplied free of charge to Immunicum.

The number of collaborations where pharmaceutical companies supply a CPI for a combination clinical study has slowed more recently after the failure of the CPI combination studies with Bavarian Nordic’s Prostvac and Incyte’s IDO1 inhibitor. This suggests that the CPI supply agreements that are now being negotiated have passed a higher diligence hurdle.

We estimate that the collaboration and clinical supply agreement for a CPI and the on-label US reimbursement of CPIs remove c SEK10m in clinical supply costs (at list prices) which we had included in our initiation model or about one-third of the cost of the ILIAD study.

Depending on the CPI to be supplied, the Phase II portion of the ILIAD study could be expanded to Europe resulting in potentially faster trial results.

We now assume that the Phase Ib portion of the multi-indication ILIAD study (see below) will be conducted in the US where CPIs are the approved standard of care and is reimbursed. This means Immunicum does not need to buy CPI clinical trial supply for either the Phase Ib or potentially the II parts of the ILIAD study when the supply agreement has been signed and hence we have reduced the clinical trial costs in our model.

The availability of the CPIs across Europe can be described as patchy at best in 2018, so depending on whether the CPI being negotiated is approved in Europe the CPI backbone the ILIAD study could potentially enrol patients at European study sites. This brings the possibility of a faster recruitment in the Phase II portion of the study since European study sites, and therefore more patients, could be available.

Merck &Co’s CPI Keytruda overtook Bristol-Myers Squibb’s Opdivo (nivolumab) in Q218 sales for the first time since their launches at the end of 2014. Keytruda has become the standard of care in first and later lines of non-small cell lung cancer (NSCLC), hence our assumption of its status as at least a component of the backbone therapy in the US part of the ILIAD study. CPIs from other companies have launched and are playing selective catch-up with Keytruda and Opdivo in an attempt to demonstrate activity in combination studies that would be superior to either Keytruda or Opdivo alone. Nevertheless, Keytruda and Opdivo are being studied in 268 and 242 combination studies respectively, with 52 and 148 being immunoncology combination studies. Other CPIs from Roche, AstraZeneca and others appear to be more selective probably because many immunoncology studies have already failed (in combination with Opdivo, for example).

Fund-raising: Allows potentially faster trial results

In mid-October, Immunicum announced an underwritten fund-raising split between a directed share issue (about SEK178m) and a rights issue (about SEK173m), which management states will extend its cash runway to the end of 2021. The rights issue is contingent on shareholder approval at the 8 November EGM and the rights will trade separately between 26 November and 6 December. The issues propose two new shares for every current five – the outcome will be announced around 13 December.

Meanwhile, we have updated our model to reflect the following changes:

The total amount expected to be raised.

The consequent approximate maximum number of new shares to be issued.

The increased clinical and preclinical spend and supportive investment into manufacturing, which Immunicum has indicated will exhaust its funding at the end of 2021.

The Q2 financial results published in August 2018.

Lower clinical expenses as a result of the removal of the CPI costs from the ILIAD study.

Before considering the effect of the proposed rights issues, we updated our model to take account of the end-Q2 net cash position (SEK149.1m), adjusted for current exchange rates and reduced clinical trial spend in 2018 and 2019. The latter reflects our assumption of the removal of the cost of the CPIs from the ILIAD study. In our initiation note, we had modelled a licensing transaction for ilixadencel in Q419, which subsequently reduced R&D and SG&A spend and had the effect of concentrating the cash outflows in our model after 2019. The removal of the costs (SEK10m in 2018 and 2019) of the CPIs from the clinical trial spend has a positive effect on the valuation, but this is more than outweighed by the increased investment provided by the recent fund-raising.

Cash runway to end-2021 suggests accelerated investment

The funding announcement noted that the equity issues will provide a cash runway through to the end of 2021. In terms of our model, this materially alters the pattern of our forecast cash outflows, concentrating much of this investment between the end of 2018 and the out-licensing of ilixadencel at the end of 2019 and resulting in the exhaustion of the pro forma Q418 cash balance by the end of 2021. Incorporating the anticipated maximum fund-raising proceeds of SEK351m gross, we estimate a year-end FY18 net cash balance of SEK423.1m. In our previous model, we had assumed illustrative funding of SEK50m in Q220, which is now obviated by the funding from the forthcoming rights issues.

The recent funding is expected to result in earlier initiations of the clinical trials, for example the Phase II portion of the ILIAD study, and to bring the GMP manufacture of ilixadencel to commercial-grade quality faster than we previously assumed. The fund-raising also puts Immunicum in a stronger position to negotiate the licensing transaction for ilixadencel after the next tranche of clinical trial results are issued in 2019.

Exhibit 1: Changes to financials

EPS (SEK)

PBT (SEKm)

Reported operating profit (SEKm)

Old

New

% chg.

Old

New

% chg.

Old

New

% chg.

2018e

(1.9)

(1.7)

(10.5)

(91.2)

(83.8)

(8.1)

(80.7)

(84.1)

4.2

2019e

(1.5)

(3.0)

100.0

(78.3)

(273.4)

278.0

(82.9)

(260.4)

214.1

2020e

(0.4)

(0.8)

100.0

(21.7)

(70.6)

225.4

(26.3)

(39.1)

48.7

Source: Edison Investment Research. Note: Forecasts assume successful conclusion of proposed rights issues.

Q218 financial results

Foreign exchange rate movements in Q218 resulted in gains of SEK54m (SEK0m in Q217). Updating for current exchange rates in our model results in a 10% increase in our valuation. At the operating level, administrative Q218 costs were SEK6.4m vs SEK5.3m in Q217. R&D costs were the most significant operational expense at SEK12.8m (SEK13.7m in Q217), in large part due to the preparations for the US Phase Ib/II (ILIAD), as well as the ongoing Phase II renal cell carcinoma (MERECA) studies. Administrative costs were SEK6.4m vs SEK5.3m in Q218, which were slightly lower than we had forecast. The operating loss for Q218 was SEK19.3m (vs SEK13.7m). Net cash at end June 2018 was SEK149.1m (SEK62m in Q217 and SEK128.0m at end 2017). Operating cash outflow for Q218 was SEK18.1m vs SEK23.1m in Q217, and included share issue costs of SEK32.5m from the issue that raised SEK167.5m net and completed in early Q118.

Clinical trial progress on multiple fronts

Immunicum’s clinical trial programme seems to follow a trend of threes: three clinical studies – renal cell carcinoma (RCC), HCC and the multi-indication ILIAD study. The Phase Ib/II ILIAD study will include patients with three diagnoses: HNSCC, NSCLC and gastric adenocarcinoma. The staggered portion of the ILIAD will dose three patients at each dose.

Phase Ib/II ILIAD study

The multi-indication ILIAD study is the earliest of the three studies and, in our opinion, is the most interesting. The ILIAD protocol was agreed with the FDA over the summer and enrolment is expected to start in H218. The study will be in two parts:

Phase Ib in 21 patients will be enrolled in a staggered format (Exhibit 2); and

Phase II in up to 150 patients will include a higher dose of ilixadencel, which would not have been tested in Phase Ib and up to one more administration than would have been tested in Phase Ib.

Exhibit 2: Phase Ib/II multi-indication CPI combination ILIAD study design

Source: Immunicum

Two key points can be derived from the announcement of the FDA’s approval of the ILIAD study protocol. First, the CPI that will be dosed in combination with ilixadencel in the Phase I portion (and we assume for the moment at least the NSCLC patients in the Phase II portion) has now been disclosed as Keytruda. Keytruda is Merck & Co’s best-selling anti-PD1 monoclonal antibody, which has well-known efficacy and safety in NSCLC, HNSCC and gastric cancer (among others). However, it is not benign and significant dose-limiting toxicities like pneumonitis, colitis and hepatitis have been reported. In contrast, ilixadencel has a benign safety profile that is largely confined to mild-to-moderate adverse events in small numbers of patients such as fever, chills and rash. Unlike the CPIs, no dose-limiting toxicity has been found with ilixadencel, hence the top dose in the Phase II part of the ILIAD study will escalate up to 40m cells over three administrations. The protocol for the Phase Ib part involves a six-week staggered period between the dosing of the first six patients. The staggered part of the ILIAD study almost certainly represents the FDA’s usual caution resulting from additive or overlapping toxicity in a number of historical CPI combination studies. Based on ilixadencel’s side effect profile to date, we do not expect any significant additive toxicity with CPIs in the Phase Ib/II portions of the ILIAD study. The Phase II NSCLC portion of the ILIAD study is randomised 2:1 ilixadencel plus CPI vs CPI alone.

Although safety and the optimal administration regimen are the main aims of the Phase Ib part of the study, efficacy will also be measured and the expanded 21 patient group to be reported during 2019 will give more weight to any positive indications of efficacy. The expansion of the Phase Ib part of the protocol from nine to 21 patients may have an additional advantage. Very strong efficacy differentiation in one of the three indications (NSCLC, HNSCC and gastric adenocarcinoma) may provide a rationale for prioritising the indications in the subsequent studies.

ILIAD protocol agreed by the FDA

The agreement of a clinical trial protocol with the FDA is a significant milestone in any company’s history, but more so for companies in the oncology space that are exploring the use of combinations of agents. The ILIAD study is an open-label, multi-centre, Phase Ib/II study in 21 and up to 150 patients to evaluate ilixadencel when injected intratumourally in combination with the world’s best-selling CPI Keytruda (pembrolizumab). The cautious six-week observation between patients (staggered) in the Phase Ib portion of the study could imply recognition of efficacy by the FDA. The performance of ilixadencel in three disease indications should help Immunicum and its partners prioritise indications in subsequent studies.

RCC

Patient enrolment for the Phase II (MERECA) study in 88 newly diagnosed, metastatic RCC patients completed in early January. The patients were treated with ilixadencel in combination with a subsequent nephrectomy (removal of the kidney) and the tyrosine kinase inhibitor (TKI) Sutent (sunitinib) vs nephrectomy and TKI alone. The primary endpoints of the study are the hard clinical endpoints of median overall survival and median survival after 18 months, in addition to other safety and efficacy endpoints. Reporting these hard clinical data in Q319 should enable any prospective partners to make a fully informed business development decision. We assume these data could be combined with those from ILIAD combinations so that ilixadencel’s first Phase III RCC study could include a CPI combination arm.

HCC

Ilixadencel has completed a Phase I/II study in 18 HCC patients and was shown to be safe and well tolerated when given as a single treatment, or in combination with Nexavar (sorafenib), and evidence of tumour-specific immune activation was observed in the majority of evaluable patients. The commercial opportunity for ilixadencel in HCC is the lowest (11.4% of the product rNPV) due to the smaller number of patients. This supports Immunicum’s strategy of prioritising the future development of the HCC indication after the multi-indication and RCC studies because the global distribution of HCC is not concentrated in Western markets. About 75% of liver cancer occurs in Asia, with China accounting for over 50% of global incidence.1 Although we have not yet included a licensing transaction for ilixadencel in China in our model, the high healthcare burden in China suggests that we could include royalties on Chinese sales at some point.

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4712629/pdf/nihms732346.pdf

The pipeline emerges

As well as the ongoing gastrointestinal stromal tumour (GIST) Phase I/II study in combination with a TKI, Immunicum provided an update on the progress of its preclinical assets IMM-2 (Subcuvax/adenovirus vector) and IMM-3 (CD70, ex vivo CAR-T expansion) at its recent quarterly results announcement. Despite ilixadencel being in Phase I/II in GIST patients, we have not yet included this indication in our valuation, as the number of patients is considerably lower than those with HCC. Neither of Immunicum’s preclinical programmes IMM-2 and IMM-3 is included in our valuation, although Immunicum’s proven ability to turn a product into a multi-indication platform, as it has done with ilixadencel, suggests that at some point we will include them in our model.

Valuation

We have made adjustments to our model to reflect changes in exchange rates (which are minor) and the Q218 balance sheet, which showed net cash at the end June of SEK149.1m (SEK62m at the end of Q217). As discussed in our financials section, we have reduced clinical trial cost estimates for FY18, reflecting the reimbursement of the CPI in the US. Should the potential CPI supply agreement be signed, it would add more than big pharma endorsement to our investment case for Immunicum as we assume CPI availability as part of a clinical trial protocol would speed the conduct of the study and avoid waiting for the reimbursement of the CPI to be confirmed by the patients’ payers.

In addition, as the Phase I/II study in HCC has now been reported, and we have assumed the company finalises the CPI collaboration and clinical supply agreement, our probability of success2 has increased from 7.5% to 17.4% and applied that probability across all of Immunicum’s Phase II studies. This change alone increased our valuation by just over 11% or SEK2.66 per share before other changes are taken into account.

https://www.bio.org/sites/default/files/Clinical%20Development%20Success%20Rates%202006-2015%20-%20BIO,%20Biomedtracker,%20Amplion%202016.pdf

Additional substantive pipeline changes increase our valuation

However, the main change to our valuation lies in incorporating the proposed capital raise, the associated accelerated investment levels and the increased share count.

Exhibit 3: Components of rNPV valuation

Product

rNPV (SEKm)

rNPV per share (SEK)

Ilixadencel RCC

247.0

2.7

Ilixadencel – HCC

141.9

1.5

Ilixadencel – NSCLC

456.0

4.9

Ilixadencel – HNSCC

226.5

2.5

Ilixadencel – gastric adenocarcinoma

173.8

1.9

Unallocated costs

(278.5)

(3.0)

Net cash at end FY17

128.0

1.4

Estimated net proceeds of 2018 issues*

421.2

4.6

Valuation

1,515.9

16.4

Share count (92.3m)*

Source: Edison Investment Research. Note: *Assumes successful completion of proposed (approximately SEK351m gross) rights issues.

For the most advanced indication in RCC, the rNPV valuation decreases by c 11% as a larger proportion of the proposed investment arising from the fund-raising affects its value earlier in the NPV calculation, is unaffected by the saving of the CPI costs in the ILIAD study and not offset by the increase in probability of success. For the other later clinical programmes, the savings from not bearing the cost of the CPIs and the increase in probabilities of success have a positive effect, the magnitude of which is related to how much of the programme Immunicum funds before ilixadencel is licensed. We have also absorbed some of the investment into unallocated costs until 2021, which have risen by 54% between our initiation and our latest model. When the cash raised in the fund-raisings, the cost savings in the clinical programmes and the investment apportioned by product are all included (in Exhibit 3, above), our valuation increases to SEK1.52bn or SEK16.4 per share from SEK1.13bn or SEK22.10 per share. The lower per-share value results from the expected 41% dilution from the new share issues.

Exhibit 4: Financial summary

 

 

 

SEK'000s

2017

2018e

2019e

2020e

2021e

Year end 31 December

 

 

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

 

 

 

 

 

 

 

Revenue

 

 

 

0

0

0

0

0

Operating expenses

 

 

(80,847)

(84,003)

(260,427)

(39,075)

(39,573)

Depreciation

 

 

 

(71)

(65)

(1)

0

0

Operating income

 

 

218

258

284

312

343

Reported operating profit

 

 

(80,700)

(84,068)

(260,428)

(39,076)

(39,574)

Net Interest

 

 

 

362

(20)

6

(13)

6

Profit before tax (reported)

 

 

(80,338)

(83,765)

(273,416)

(70,592)

(76,688)

Reported tax

 

 

 

0

0

0

0

0

Profit after tax (reported)

 

 

(80,338)

(83,765)

(273,416)

(70,592)

(76,688)

Minority interests

 

 

0

0

0

0

0

Net income (reported)

 

 

(80,338)

(83,765)

(273,416)

(70,592)

(76,688)

Basic average number of shares outstanding

 

25,959

49,444

92,258

92,258

92,258

EPS - basic reported (SEK)

 

 

(3.09)

(1.69)

(2.96)

(0.77)

(0.83)

BALANCE SHEET

 

 

 

 

 

 

 

Non-current assets

 

 

105,309

3

2

1

1

Property plant and equipment, net

 

69

2

1

0

0

Other financial assets

 

 

1

1

1

1

1

Other non-current assets

 

 

105,239

0

0

0

0

Current assets

 

 

140,837

432,508

159,530

89,600

13,126

Cash and cash equivalents

 

 

128,883

423,944

150,782

80,660

3,982

Accounts receivable

 

 

0

3,675

3,859

4,052

4,254

Marketable securities and short-term investments

0

0

0

0

0

Prepaid expenses

 

 

8,454

4,889

4,889

4,889

4,889

Current liabilities

 

 

55,740

12,134

12,570

13,233

13,446

Accounts payable

 

 

11,714

842

1,278

1,941

2,154

Accrued other liabilities

 

 

43,694

10,066

10,066

10,066

10,066

Other current liabilities

 

 

331

1,226

1,226

1,226

1,226

Non-current liabilities

 

 

850

850

850

850

850

Long-term debt

 

 

850

850

850

850

850

Equity

 

 

 

189,557

418,264

(44,803)

87,429

4,644

Retained earnings

 

 

(151,447)

(235,212)

(508,628)

(579,220)

(655,908)

Total shareholder’s Equity

 

 

189,557

418,264

(44,803)

87,429

4,644

CASH FLOW

 

 

 

 

 

 

 

 

Cash flow from operations

 

 

 

 

 

 

 

EBIT (operating profit)

 

 

(80,700)

(84,068)

(260,428)

(39,076)

(39,574)

Depreciation

 

 

 

71

65

1

0

0

Income tax paid

 

 

0

0

0

0

0

Other working capital changes

 

34,455

(46,092)

252

469

11

Cash interest paid

 

 

(274)

(13)

(26)

(26)

0

Cash interest received

 

 

0

0

32

13

6

Net cash used in operating activities

 

(46,447)

(129,784)

(273,162)

(70,122)

(76,677)

Cash flow from investing

 

 

 

 

 

 

 

Purchase of fixed assets

 

 

0

0

0

0

0

Sale of investments

 

 

10,162

0

0

0

0

Net cash used in investing activities

 

10,162

0

0

0

0

Cash flow from financing

 

 

 

 

 

 

 

Change in capital stock

 

 

62,269

421,229

0

0

0

Net cash from financing activities

 

62,269

421,229

0

0

0

Net changes in cash and cash equivalent

 

25,984

291,445

(273,162)

(70,122)

(76,677)

Cash and cash equivalents - beginning

 

102,899

128,883

420,328

147,165

77,043

Cash and cash equivalents - end

 

128,883

420,328

147,165

77,043

366

Net cash

128,033

423,094

149.932

79,810

3,132

Source: Company data, Edison Investment Research. Note: Forecasts incorporate the proposed rights issues, the associated accelerated investment levels and the expected increased share count.

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 Immunicum 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 Immunicum 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

Share this with friends and colleagues