Sareum Holdings — 2023 to be a year of clinical transition

Sareum Holdings (AIM: SAR)

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Research: Healthcare

Sareum Holdings — 2023 to be a year of clinical transition

Following a tumultuous H123 marked by UK regulatory challenges for SDC-1801, Sareum has pivoted to Australia as a clinical trial destination. With the trial application filed and awaiting confirmation (expected in Q223), we anticipate the long-due Phase Ia trial to commence by mid-2023, followed by the crucial Phase Ib study in 2024, if initial safety data are positive. The operating loss during the period increased c 72% y o y to £1.75m, reflecting increased investment in the preparation for clinical studies. We expect this figure to rise with trial commencement. This will likely translate to a material increase in cash burn in the coming months (vs the H123 run rate of £1.3m) and we expect Sareum will need to raise additional funds before the end of CY23 (H123 cash balance of £2.9m). We see initiation of the Phase I study as a key catalyst for a potential re-rating.

Soo Romanoff

Written by

Soo Romanoff

Managing Director - Head of Content, Healthcare

Sareum Holdings_resized

Healthcare

Sareum Holdings

2023 to be a year of clinical transition

Pharma and biotech

Spotlight – Update

23 March 2023

Price

87.5p

Market cap

£60m

Share price graph

Share details

Code

SAR

Listing

AIM

Shares in issue

68.07m

Net cash at 31 December 2022

£2.9m

Business description

Sareum Holdings is a UK-based drug development company, specialising in small molecule kinase inhibitors. Its lead programmes are its preclinical TYK2/JAK1 inhibitors, SDC-1801 for autoimmune diseases and SDC-1802 for cancer. Following the UK MHRA’s decision to not approve Sareum’s CTA for SDC-1081 in November 2022 (pending further review of pre-clinical data) the company now plans to launch clinical trials for the drug in Australia in mid-2023. Other programmes include the CHK1 inhibitor SRA737, the rights of which have recently been returned to Sareum’s co-development partner CRT Pioneer Fund LP from Sierra Oncology, and the de-prioritised FLT3+Aurora kinase inhibitor.

Bull

SDC-1801’s novel TYK2 selectivity may be attractive to partners, pending clinical validation.

First-in-class opportunity for SDC-1802 in multiple cancer indications.

Approval of Sotyktu provides regulatory feasibility of TYK2 inhibitors.

Bear

Safety profile of combined TYK2/JAK1 inhibitor not certain or proved yet.

Potential funding challenges delaying clinical progress of SDC-1801 and SDC-1802.

Markets sought by SDC-1801 and SDC-1802 are highly competitive.

Analysts

Soo Romanoff

+44 (0)20 3077 5700

Jyoti Prakash, CFA

+44 (0)20 3077 5700

Nidhi Singh

+44 (0)20 3077 5700

Sareum Holdings is a research client of Edison Investment Research Limited

Following a tumultuous H123 marked by UK regulatory challenges for SDC-1801, Sareum has pivoted to Australia as a clinical trial destination. With the trial application filed and awaiting confirmation (expected in Q223), we anticipate the long-due Phase Ia trial to commence by mid-2023, followed by the crucial Phase Ib study in 2024, if initial safety data are positive. The operating loss during the period increased c 72% yoy to £1.75m, reflecting increased investment in the preparation for clinical studies. We expect this figure to rise with trial commencement. This will likely translate to a material increase in cash burn in the coming months (vs the H123 run rate of £1.3m) and we expect Sareum will need to raise additional funds before the end of CY23 (H123 cash balance of £2.9m). We see initiation of the Phase I study as a key catalyst for a potential re-rating.

Historical financials

Year
end

Revenue
(£m)

PBT
(£m)

EPS*
(p)

DPS
(p)

P/E
(x)

Yield
(%)

06/19

0.00

(1.7)

(2.6)

0.0

N/A

N/A

06/20

0.04

(1.1)

(1.6)

0.0

N/A

N/A

06/21

0.00

(1.7)

(2.3)

0.0

N/A

N/A

06/22

0.00

(2.6)

(3.2)

0.0

N/A

N/A

Source: Company data. Note: *EPS figures have been adjusted retrospectively for the 50-to-one share consolidation in March 2022.

Australia the new clinical destination for SDC-1801

We view Sareum’s decision to conduct clinical trials of SDC-1801 in Australia as a sensible move given the ongoing hold up with the UK MHRA for its clinical trial authorisation (CTA). Australia is an attractive destination for early-stage pharma/biotech companies given its strong infrastructure and conducive regulatory environment. Study costs in Australia are significantly lower, with the government offering tax advantages to early-stage companies (rebates of up to 43.5% of eligible R&D expenditure). We see clinical trial application approval and subsequent initiation of the Phase Ia study as major upcoming catalysts with potential to improve investor sentiment.

Recent newsflow highlights TYK2’s promise as target

The September 2022 approval of Bristol Myers Squibb’s (BMS’s) TYK2 inhibitor Sotyktu, without the typical black box warning for this class of drugs, and the more recent acquisition of Nimbus Therapeutics’ TYK2 inhibitor NDI-034858 by Takeda for a hefty US$6bn consideration (US$4bn upfront and US$2bn related to sales milestones) highlight the potential for TYK2 as a therapeutic target and bode well for SDC-1801, provided safety and efficacy are demonstrated in clinical trials.

Access to funds crucial to progress pipeline

With £2.9m in cash at end December 2022 and likely trial initiation by mid-2023, we estimate that Sareum will need to raise capital by end-CY23 to continue progressing its clinical pipeline. It could consider further equity issues or out-licensing/partnerships to progress SDC-1801.

SDC-1801 back in the running for clinical entry

SDC-1801, a novel TYK2/JAK1 inhibitor, is Sareum’s lead asset, targeting autoimmune indications, with the initial focus on psoriasis (see Exhibit 1). The drug selectively targets the TYK2/JAK1 isoforms, thereby circumventing the safety and toxicity issues related to the JAK2 and JAK3 isoforms. Final preclinical toxicology and safety studies for SDC-1801 were completed in Q421 and Sareum subsequently filed a CTA with the UK Medicines and Healthcare products Regulatory Agency (MHRA) in July 2022, with the intention of commencing a Phase Ia trial in Q4 CY22. However, the company’s efforts to progress its lead drug to the clinic hit a roadblock in November 2022, as the MHRA informed Sareum that it was unable to approve the application until an additional review of certain preclinical data by the UK Good Laboratory Practice Monitoring Authority. Progress on this front remains at a standstill, prompting Sareum to evaluate alternative locations to conduct the clinical studies.

Exhibit 1: Sareum’s development pipeline

Source: Sareum H123 corporate presentation

As a result, Sareum recently announced that it had filed an application to commence Phase I studies for SDC-1801 in Australia under the Clinical Trial Notification (CTN) scheme. Sareum submitted the required documents to a Human Research Ethics Committee (HREC) in Australia and the decision regarding HREC approval and CTN acceptance by the Therapeutic Goods Administration (TGA, Australia’s medicines regulator) is expected in Q2 CY23. If approved, the company plans to commence the first part of the Phase Ia/b clinical trial, which will investigate the safety and tolerability of an oral formulation of SDC-1801 in ascending doses administered to healthy subjects. This would be followed by the Phase Ib study in psoriasis patients in 2024, provided safety is established. Sareum had previously planned to enrol up to 120 subjects across the Phase Ia/Ib studies, but it is possible (although currently unclear) that a similar cohort size will be recruited for the Australian trial as well. Sareum has communicated that all prerequisites for the Phase I clinical trial (including synthesis of the drug substance and capsules in accordance with good manufacturing practice) have been completed and the study can commence as soon as approval is received from the Australian authorities.

We view Sareum’s decision to choose Australia as the alternative clinical trial destination as logical given the country’s strong infrastructure and conducive regulatory environment. Study costs are believed to be significantly lower in Australia (as high as 3050%) compared to the US or Europe, helped by government tax incentives to early-stage companies (rebates of up to 43.5% of eligible R&D expenditure for companies with revenue of less than A$20m). The clinical trial review process in Australia is delegated to ethics committees by the TGA and the regulatory body only needs to be notified once approval is granted and before commencement of the trial. This helps expedite application processing, with approvals received within four to six weeks of the time of application filing in most cases. This is another key positive for Sareum, allowing it to receive a decision on its application by early Q2 CY23 and possibly initiate the Phase Ia study by mid-2023. We highlight that psoriasis afflicts more than eight million adults in the US (125 million worldwide) and was estimated to be worth US$22.9bn in 2021 (expected to grow to US$55.8bn by 2021, at a CAGR of 9.3%).

TYK2 opportunity shows promise

BMS’s success in receiving FDA approval for its first-in-class, selective TYK2 asset Sotyktu (deucravacitinib), without the typical class-level black box warnings (increased risk of malignancy, thrombosis and cardiac events) and without restricted usage (limited to patients refractory to biologics and other available treatments), has heightened the market’s interest in this class of drugs as a safe and potent orally delivered alternative to currently approved intravenous/injectable treatments. EvaluatePharma estimates Sotyktu’s 2028 worldwide sales at US$2.3bn, solely for the psoriasis indication for which it is currently approved (US$2.7bn overall). BMS’s internal estimates peg peak sales potential at c US$4bn (including label expansion opportunities) by 2029.

We believe the recent acquisition of Nimbus Therapeutics’ Phase III-ready TYK2 programme NDI-034858 (now TAK-279) by Takeda for US$6bn (US$4bn upfront and US$2bn related to sales milestones) provides additional validation of the commercial potential for this class of drugs. Takeda recently presented impressive data from the Phase IIb study investigating TAK-279 (oral, once-daily dosage) in people with moderate-to-severe plaque psoriasis. In the study, 259 patients were randomised equally to receive one of four doses of TAK-279 (2mg, 5mg, 15mg and 30mg) or a placebo, once-daily for 12 weeks. The study met both its primary and secondary endpoints, with two-thirds of patients receiving the highest two doses achieving PASI 75 (or 75% skin clearance). More importantly, nearly 50% of patients on the highest dose achieved PASI 90 and one-third of patients on this dose reported a score of PASI 100 (total skin clearance). These are, by far, the best results seen in an oral treatment for psoriasis, although these data would need to be reproduced in larger pivotal Phase III studies to establish confirmed efficacy. We see these results having a strong read-across for other TYK2 programmes in the clinic, including SDC-1801, although we note that the mechanism of action of Sotyktu and TAK-279 is different to that of SDC-1801 (it has an allosteric approach, which allows it to bind to TYK2’s non-active regulatory domain versus the traditional adenosine triphosphate approach that Sareum uses).

Given SDC-1801’s dual inhibition of both TYK2 and JAK1 (versus the selective TKY2 inhibition of the aforementioned drugs), we expect it to be positioned closer to Priovant Therapeutics’ (spun out of Pfizer and Roivant Sciences in June 2022; Pfizer holds a 25% stake in the venture) lead asset brepocitinib (due to its similar mechanism of action and TYK2/JAK1 selectivity). Consequently, we expect its clinical readouts to have a more material bearing on the market perception of Sareum’s TYK2/JAK1 candidate, although we highlight that the initial indications targeted are different – dermatomyositis (Phase III) and systemic lupus erythematosus (Phase IIb). Sareum asserts that by selectively inhibiting both TYK2 and JAK1, SDC-1801 is engineered to supress signalling of a wider range of autoimmunity-linked cytokines, such as IL-6, IL-12, IL-23 and interferon alpha (IFNa). Exhibit 2 provides a snapshot of approved/clinical-stage TYK2 assets.

Exhibit 2: TYK2 competitive landscape in autoimmune diseases

Company

Drug

Selectivity

Indications

Comments

Bristol Myers Squibb

Sotyktu (deucravacitinib)

TYK2

Approved (US, EU and Japan) – PS
Phase III – PsA, SLE
Phase II – UC, CD, AA

The CHMP of the EMA recommended the approval of Sotyktu for moderate-to-severe plaque psoriasis in January 2023. The US FDA approved Sotyktu for moderate-to-severe plaque psoriasis in September 2022 (without warnings), along with approval in Japan for plaque psoriasis, generalised pustular psoriasis and erythrodermic psoriasis. First TKY2 inhibitor to be marketed.

Priovant Therapeutics (Pfizer spin-out)

Brepocitinib

TYK2/JAK1

Phase III (oral) – dermatomyositis Phase II – SLE

Single registrational Phase III study evaluating brepocitinib in dermatomyositis patients initiated in Q222 with top-line results expected in H225. Phase IIb study ongoing in lupus with top-line results expected in H223.

Takeda/Nimbus Therapeutics

NDI-034858/
TAK-279

TYK2

Phase II – NDI-031407

Nimbus Therapeutics’ TYK2 program was acquired by Takeda in December 2022 for an upfront payment of US$4bn. Takeda recently presented excellent data from Phase IIb study in plaque psoriasis – one-third of patients receiving the highest dose of the drug achieved PASI100 (total skin clearance). A Phase III study is expected to start in 2023.

Ventyx Biosciences

VTX958

TYK2

Phase II – PS, PsA, CD

First patient dosing in Phase II SERENITY trial (n=200, 16 weeks) for the treatment of moderate to severe plaque psoriasis initiated in December 2022. Two additional Phase II trials initiated subsequently in psoriatic arthritis and Crohn’s disease. Top-line Phase II data in plaque psoriasis expected in Q423.

Alumis Therapeutics (former Esker Therapeutics)

ESK-001

TYK2

Phase II – PS

Initiated patient dosing in September 2022 in Phase II trial Stride trial (n=200, 12 weeks) evaluating ESK-001 for the treatment of plaque psoriasis. Plans to start additional Phase II trials in the near future. Phase I data demonstrated that the drug was generally well-tolerated, along with full, sustained TYK2 inhibition.

Galapagos

GLPG3667

TYK2

Phase II – dermatomyositis
Phase I – SLE

First patient recruited in the Phase II trial in dermatomyositis in early 2023. Phase II study in patients with SLE expected to start in 2023.

Sudo Biosciences

Unnamed

TYK2

Preclinical/lead optimisation

Sudo is developing multiple highly potent and selective small molecule TYK2 pseudokinase inhibitors across a broad range of autoimmune disorders. In September 2022, the company raised US$37m to advance its lead drug candidates into the clinic.

Neuron23

Unnamed

TYK2

Preclinical: systemic inflammation, neuroinflammation, MS

Neuron23 asserts its TYK2 candidate can penetrate the blood-brain barrier, giving it the potential to address disorders characterised by neuroinflammation, such as multiple sclerosis. Preclinical studies are expected to start in early 2023.

Source: EvaluatePharma, Edison Investment Research. Note: PS = psoriasis; PsA = psoriatic arthritis; UC = ulcerative colitis; AD = atopic dermatitis; AA = alopecia areata; SLE = systemic lupus erythematosus; HS = hidradenitis suppurativa; MS = multiple sclerosis; CHMP = Committee for Medicinal Products for Human Use; EMA = European Medicines Agency; PASI = Psoriasis Area and Severity Index; PASI 75 denotes a 75% reduction from baseline in the PASI index.

SDC-1802 progressing with translational studies

With SDC-1801’s clinical progression, the immediate focus for Sareum given the limited funding headroom is Sareum’s other TYK2/JAK1 candidate, SDC-1802 (targeting multiple oncology indications, in both haematological, or blood-related, malignancies and solid tumours), which is making slower progress. The drug continues to undergo translational studies to identify an optimal cancer indication and patient population before undertaking further toxicology studies. We highlight that SDC-1802’s TYK2 selectivity accords it first-in-class potential for therapeutic treatment in cancer, although it remains a risky undertaking given past failures in this space (see our initiation note for more details). We maintain that the clinical progression for SDC-1802 would be contingent on the headway made with SDC-1801.

SRA737 update

In November 2022, Sierra Oncology returned the rights to the out-licensed checkpoint kinase 1 (CHK1) asset SRA737 (held in partnership with the CRT Pioneer Fund, CPF; Sareum has a 27.5% economic interest) following GSK’s US$1.9bn acquisition of Sierra in July 2022 for its lead asset momelotinib (targeting myelofibrosis, a haematological cancer of the bone marrow). We see this development as a minor setback for Sareum given that GSK’s support could have accelerated development activity on the drug, triggering a US$0.55m payment to Sareum from first patient dosing in a new clinical trial. However, it does provide Sareum and partner CPF with an opportunity to actively assess future development plans for SRA737, leveraging the positive clinical data.

As a reminder, SRA737 is a clinical-stage (Phase I/II) oral CHK1 inhibitor targeting the DNA damage response network for treatment of solid tumours. Developed in collaboration with the Institute of Cancer Research and the CPF, SRA737 was out-licensed by the CPF to Sierra Oncology in 2016 for up to US$328.5m in milestone payments (subsequently reduced to US$290m). Sareum was a passive partner in the programme with a 27.5% stake in future out-license fees and has received a total of US$2.5m in upfront and milestone payments from Sierra for its stake in the deal. SRA737 had completed two Phase I/II trials, as monotherapy and as adjunct to low-dose gemcitabine, with encouraging headline data, before being deprioritised by Sierra due to funding constraints. Data from the second study was published in the November 2022 edition of Clinical Cancer Research (a peer-reviewed journal). Following the return of the clinical study reports and other associated documents in March 2023, Sareum and partner CPF are exploring the potential development opportunities for SRA737.

Financials

Sareum reported an H123 operating loss of £1.75m, up from £1.0m in H122, driven by increased investments in preparatory activities to progress SDC-1801 to the clinic. The net loss came in at £1.45m, including an R&D tax credit of £0.3m received in December 2022. Given the higher R&D expenses related to clinical trials, operating expenses will likely continue to increase as SDC-1801 enters the clinic. Reflecting the higher operating expenses during the period, net cash outflow from operating activities increased to £1.34m from £0.78m in H122.

The cash balance at the end of H123 was £2.9m, versus £4.3m at the end of FY22, which was backed by three equity issues to high-net-worth individuals in July, August and December 2021 for total net proceeds of £3.7m. Based on the current run-rate (cash burn of £1.3m in H123), the cash balance would provide funding into Q1 CY24, although we believe spending is likely to be materially higher once the Phase Ia trial starts. While we expect Sareum to be able to commence the Phase Ia trial with the current cash on hand, additional funds (secured either through partnerships and/or equity issues) would be required to advance the programmes further.

General disclaimer and copyright

This report has been commissioned by Sareum Holdings and prepared and issued by Edison, in consideration of a fee payable by Sareum Holdings. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: 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 and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. 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.

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Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. 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, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2023 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

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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. 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 (i.e. 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.

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General disclaimer and copyright

This report has been commissioned by Sareum Holdings and prepared and issued by Edison, in consideration of a fee payable by Sareum Holdings. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: 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 and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. 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.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, 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 securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. 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, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2023 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

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. 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 (i.e. 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.

United Kingdom

This document is prepared and provided by Edison 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.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison 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. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

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