Currency in NOK
Last close As at 08/06/2023
NOK117.00
▲ 0.80 (0.69%)
Market capitalisation
NOK4,024m
Research: Healthcare
Ultimovacs’ Q123 report is largely focused on the upcoming readouts from two of its five ongoing randomised Phase II studies. Results from the NIPU and INITIUM trials in second-line malignant pleural mesothelioma and first-line unresectable metastatic melanoma are expected in Q223 and H223, respectively. In our view, positive results from NIPU and INITIUM would represent the most compelling evidence to date of UV1’s clinical utility for treating solid tumours and the most significant potential catalysts for investor attention in FY23. We also see the slight delay in trial readouts from the INITIUM trial due to lack of disease progression as a potentially encouraging sign for the outcome of the trial; however, we caveat that as the study is blinded, we cannot conclude whether the effect is due to UV1. For more details on the upcoming readouts, see our previous note. We have made minor adjustments to our forecasts, but our valuation of Ultimovacs remains unchanged at NOK8.0bn or NOK234/share; however, it is likely to be materially affected by the NIPU and INITIUM results.
Ultimovacs |
All steady as Phase II trial readouts approach |
Q123 results |
Pharma and biotech |
10 May 2023 |
12 May 2023
Share price performance
Business description
Next events
Analysts
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Ultimovacs’ Q123 report is largely focused on the upcoming readouts from two of its five ongoing randomised Phase II studies. Results from the NIPU and INITIUM trials in second-line malignant pleural mesothelioma and first-line unresectable metastatic melanoma are expected in Q223 and H223, respectively. In our view, positive results from NIPU and INITIUM would represent the most compelling evidence to date of UV1’s clinical utility for treating solid tumours and the most significant potential catalysts for investor attention in FY23. We also see the slight delay in trial readouts from the INITIUM trial due to lack of disease progression as a potentially encouraging sign for the outcome of the trial; however, we caveat that as the study is blinded, we cannot conclude whether the effect is due to UV1. For more details on the upcoming readouts, see our previous note. We have made minor adjustments to our forecasts, but our valuation of Ultimovacs remains unchanged at NOK8.0bn or NOK234/share; however, it is likely to be materially affected by the NIPU and INITIUM results.
Year |
Revenue |
PBT* |
EPS** |
DPS |
P/E |
Yield |
12/21 |
0.0 |
(164.7) |
(5.09) |
0.0 |
N/A |
N/A |
12/22 |
0.0 |
(167.8) |
(4.89) |
0.0 |
N/A |
N/A |
12/23e |
0.0 |
(210.8) |
(6.13) |
0.0 |
N/A |
N/A |
12/24e |
0.0 |
(277.9) |
(8.08) |
0.0 |
N/A |
N/A |
Note: *PBT is reported. **EPS is fully diluted.
Trial readout pushback a positive for INITIUM
Management previously communicated that it expected the results from INITIUM in H123; however, this has been delayed slightly due to patients taking longer than expected to experience disease progression (cancer progression must be verified in 70 patients). As the trial is blinded, we cannot yet ascertain whether the extension in disease progression is due to the influence of UV1. However, we note the historical median progression-free survival reported in melanoma patients treated with ipilimumab plus nivolumab is 11.5 months, providing encouraging signs for the study.
Costs stable with cash runway into mid-2024
Following the Q123 results, our estimates for Ultimovacs are mostly unchanged. At end Q123 Ultimovacs reported a net cash position of NOK405.5m, in line with Edison expectations and management guidance; this should be sufficient to provide a cash runway for the company into mid-2024. By this point we expect the company may be engaged in discussions with potential strategic/licensing partners if positive top-line readouts are achieved from the NIPU and INITIUM studies. Additionally, the delay in the INITIUM study readouts is not expected to significantly affect the current runway.
Valuation: NOK8.0bn or NOK234/share
We value Ultimovacs at NOK802m or NOK234/share. We note that the results of the upcoming NIPU and INITIUM studies are likely to have a material impact on our valuation and we will look to revise it after the readouts are announced.
Exhibit 1: Financial summary
Accounts: IFRS, Yr end: December, NOK: million |
|
2019 |
2020 |
2021 |
2022 |
2023e |
2024e |
Income statement |
|
|
|
|
|
|
|
Total revenues |
|
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
Cost of sales |
|
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
Gross profit |
|
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
SG&A (expenses) |
|
(20.16) |
(50.99) |
(61.92) |
(71.47) |
(85.76) |
(102.91) |
R&D costs |
|
(35.53) |
(64.66) |
(96.74) |
(95.18) |
(109.52) |
(136.90) |
Other income/(expense) |
|
(8.47) |
(5.78) |
(2.48) |
(14.34) |
(27.38) |
(34.22) |
Exceptionals and adjustments |
|
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
Reported EBITDA |
|
(64.15) |
(121.43) |
(161.13) |
(180.98) |
(222.65) |
(274.03) |
Depreciation and amortisation |
|
(2.06) |
(2.72) |
(2.70) |
(2.65) |
(2.44) |
(2.38) |
Reported Operating Profit/(loss) |
|
(66.22) |
(124.15) |
(163.83) |
(183.63) |
(225.09) |
(276.41) |
Finance income/(expense) |
|
5.05 |
3.59 |
(0.89) |
15.84 |
14.30 |
(1.50) |
Other income/(expense) |
|
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
Exceptionals and adjustments |
|
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
Reported PBT |
|
(61.17) |
(120.55) |
(164.72) |
(167.79) |
(210.79) |
(277.91) |
Income tax expense |
|
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
Reported net income |
|
(61.17) |
(120.55) |
(164.72) |
(167.79) |
(210.79) |
(277.91) |
|
|
|
|
|
|
|
|
Basic average number of shares, m |
|
22.93 |
30.26 |
32.37 |
34.31 |
34.40 |
34.40 |
Basic EPS (NOK) |
|
(2.67) |
(3.98) |
(5.09) |
(4.89) |
(6.13) |
(8.08) |
Diluted EPS (NOK) |
|
(2.67) |
(3.98) |
(5.09) |
(4.89) |
(6.13) |
(8.08) |
|
|
|
|
|
|
|
|
Balance sheet |
|
|
|
|
|
|
|
Property, plant and equipment |
|
0.536 |
0.377 |
0.212 |
0.220 |
0.125 |
0.007 |
Intangible assets |
|
66.370 |
76.346 |
71.119 |
68.429 |
66.280 |
64.211 |
Other non-current assets |
|
3.523 |
3.630 |
1.951 |
5.444 |
5.444 |
5.444 |
Total non-current assets |
|
70.429 |
80.353 |
73.282 |
74.093 |
71.849 |
69.662 |
Cash and equivalents |
|
399.607 |
440.925 |
574.168 |
425.309 |
226.907 |
111.739 |
Trade and other receivables |
|
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
Other current assets |
|
8.004 |
8.438 |
8.087 |
10.270 |
10.270 |
10.270 |
Total current assets |
|
407.611 |
449.363 |
582.255 |
435.579 |
237.177 |
122.009 |
Non-current loans and borrowings |
|
2.301 |
2.075 |
0.457 |
3.713 |
3.713 |
153.713 |
Deferred tax liabilities |
|
10.851 |
11.795 |
11.031 |
10.701 |
10.701 |
10.701 |
Total non-current liabilities |
|
13.152 |
13.870 |
11.488 |
14.414 |
14.414 |
164.414 |
Trade and other payables |
|
11.768 |
8.611 |
22.555 |
7.655 |
9.383 |
11.523 |
Other current liabilities |
|
8.489 |
18.856 |
28.342 |
38.252 |
38.252 |
38.252 |
Total current liabilities |
|
20.257 |
27.467 |
50.897 |
45.907 |
47.635 |
49.775 |
Equity attributable to company |
|
444.632 |
488.380 |
593.152 |
449.351 |
246.977 |
(22.518) |
|
|
|
|
|
|
|
|
Cashflow statement |
|
|
|
|
|
|
|
Operating Profit/(loss) |
|
(66.217) |
(124.146) |
(163.833) |
(183.630) |
(225.093) |
(276.412) |
Depreciation and amortisation |
|
2.063 |
2.720 |
2.703 |
2.648 |
2.439 |
2.382 |
Other adjustments |
|
(2.023) |
3.215 |
12.331 |
4.437 |
(6.367) |
2.747 |
Movements in working capital |
|
(1.862) |
6.395 |
23.860 |
(6.988) |
1.728 |
2.139 |
Interest paid / received |
|
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
Income taxes paid |
|
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
Cash from operations (CFO) |
|
(62.988) |
(108.223) |
(125.828) |
(167.694) |
(212.994) |
(270.646) |
Capex |
|
(0.172) |
(0.282) |
(0.085) |
(0.195) |
(0.195) |
(0.195) |
Acquisitions & disposals net |
|
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
Other investing activities |
|
4.490 |
(0.455) |
3.062 |
8.887 |
14.787 |
5.673 |
Cash used in investing activities (CFIA) |
|
4.318 |
(0.737) |
2.977 |
8.692 |
14.592 |
5.478 |
Net proceeds from issue of shares |
|
344.582 |
152.933 |
261.852 |
5.484 |
0.000 |
0.000 |
Movements in debt |
|
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
150.000 |
Other financing activities |
|
(1.579) |
(1.916) |
(1.895) |
(1.907) |
0.000 |
0.000 |
Cash flow from financing activities |
|
343.003 |
151.017 |
259.957 |
3.577 |
0.000 |
150.000 |
Increase/(decrease) in cash and equivalents |
|
284.333 |
42.057 |
137.106 |
(155.425) |
(198.402) |
(115.168) |
Cash and equivalents at beginning of period |
|
115.540 |
399.607 |
440.925 |
574.168 |
425.309 |
226.907 |
Cash and equivalents at end of period |
|
399.608 |
440.925 |
574.168 |
425.310 |
226.907 |
111.739 |
Net (debt) cash (including lease liabilities) |
|
395.982 |
437.143 |
572.083 |
419.830 |
221.427 |
(43.741) |
Source: Edison Investment Research, Ultimovacs company accounts
|
|
Research: Healthcare
SIGA’s Q123 results were largely driven by US TPOXX deliveries under existing contracts. Q123 product revenues of $5.7m ($7.3m in Q122) were primarily attributed to $5.1m in TPOXX deliveries to the US Department of Defense (DoD). An additional $2.6m in R&D-related income took total revenue to $8.3m (down 21% y-o-y). While TPOXX deliveries (oral and intravenous, IV) to the US strategic national stockpile and international expansion remain key growth areas, the potential post-exposure prophylactic (PEP) label expansion following the projected data readout within the next two months (FDA submission targeted for early 2024) is anticipated to be the next key revenue growth catalyst. With a longer duration of treatment required (28 days versus 14 for smallpox), the PEP opportunity could materially expand SIGA’s addressable market, in our view. SIGA remains well capitalized (end-Q123 cash of $115.7m), resulting in the company announcing a special cash dividend of $0.45/share, payable in June 2023. We now obtain a valuation of $17.53/share (ex-dividend), from $17.70/share previously.
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