Ultimovacs — All steady as Phase II trial readouts approach

Ultimovacs (OSE: ULTI)

Last close As at 21/05/2024

NOK7.02

−0.33 (−4.49%)

Market capitalisation

NOK253m

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Research: Healthcare

Ultimovacs — All steady as Phase II trial readouts approach

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.

Soo Romanoff

Written by

Soo Romanoff

Managing Director - Head of Content, Healthcare

Healthcare

Ultimovacs

All steady as Phase II trial readouts approach

Q123 results

Pharma and biotech

10 May 2023

12 May 2023

Price

NOK130

Market cap

NOK4,472m

NOK10.59/US$

Net cash (NOKm) at end-March 2023 (excluding leases)

405.5

Shares in issue

34.4m

Free float

53%

Code

ULTI

Primary exchange

Oslo Stock Exchange

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

5.9

4.7

89.2

Rel (local)

10.7

11.9

98.8

52-week high/low

NOK136

NOK60

Business description

Ultimovacs is developing novel immunotherapies against cancer. Its lead product candidate, UV1, is a peptide-based vaccine against the universal cancer antigen telomerase (hTERT), which is expressed in c 85% of all cancer types. UV1 therefore has a broad potential in a variety of different settings and combinations.

Next events

Phase II NIPU top-line data

Q223

Phase II INITIUM top-line data

H223

Phase I TENDU initial data

H223

Analysts

Soo Romanoff

+44 (0)20 3077 5700

Dr Adam McCarter

+44 (0)20 3077 5700

Ultimovacs is a research client of Edison Investment Research Limited

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
end

Revenue
(NOKm)

PBT*
(NOKm)

EPS**
(NOK)

DPS
(NOK)

P/E
(x)

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

General disclaimer and copyright

This report has been commissioned by Ultimovacs and prepared and issued by Edison, in consideration of a fee payable by Ultimovacs. 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

General disclaimer and copyright

This report has been commissioned by Ultimovacs and prepared and issued by Edison, in consideration of a fee payable by Ultimovacs. 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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