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Last close As at 09/06/2023
USD1.31
▲ −0.09 (−6.43%)
Market capitalisation
USD21m
Research: Healthcare
Context Therapeutics’ Q222 results provided an update on the company’s operating performance and pipeline. Operating losses of $4.0m, increased from $3.4m in Q122, largely due to the $500k milestone payment to Integral Molecular for its Claudin 6 program. R&D expenses were in line with the previous quarters ($1.5m) but we expect them to increase in H222 as the company progresses its clinical pipeline. Operating cash burn rate of $2.8m resulted in Q222 net cash of $42.9m, which we estimate to fund operations through Q423 (based on our projected FY22e and FY23e burn rates of $17.6m and $33.2m, respectively). The fourth quarter is anticipated to be catalyst rich, with three of the four ongoing clinical readouts in Q422 (earlier mid-2022) and the commencement of the combination trial with elacestrant (in Q4). Factoring in the current net cash position, our valuation reduces to $148.2m ($9.28/share) from $151m previously.
Context Therapeutics |
Anticipating a catalyst rich Q422 |
Q222 update |
Pharma and biotech |
12 August 2022 |
Share price performance
Business description
Next events
Analysts
Context Therapeutics is a research client of Edison Investment Research Limited |
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Context Therapeutics’ Q222 results provided an update on the company’s operating performance and pipeline. Operating losses of $4.0m, increased from $3.4m in Q122, largely due to the $500k milestone payment to Integral Molecular for its Claudin 6 program. R&D expenses were in line with the previous quarters ($1.5m) but we expect them to increase in H222 as the company progresses its clinical pipeline. Operating cash burn rate of $2.8m resulted in Q222 net cash of $42.9m, which we estimate to fund operations through Q423 (based on our projected FY22e and FY23e burn rates of $17.6m and $33.2m, respectively). The fourth quarter is anticipated to be catalyst rich, with three of the four ongoing clinical readouts in Q422 (earlier mid-2022) and the commencement of the combination trial with elacestrant (in Q4). Factoring in the current net cash position, our valuation reduces to $148.2m ($9.28/share) from $151m previously.
Year end |
Revenue ($m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/20 |
0.0 |
(3.2) |
(9.28) |
0.0 |
N/A |
N/A |
12/21 |
0.0 |
(10.6) |
(3.74) |
0.0 |
N/A |
N/A |
12/22e |
0.0 |
(21.9) |
(1.37) |
0.0 |
N/A |
N/A |
12/23e |
0.0 |
(34.2) |
(2.14) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalized, excluding exceptional items.
Pipeline progressing but readouts slightly delayed
While all three Phase II ONA-XR clinical programs (2nd/3rd line HR+/HER- metastatic breast cancer (mBC), endometrial cancer and granulosa cell tumor (GCT) of the ovary) continue to enroll patients, timelines for interim-data readouts have slipped slightly (as is sometimes the case with investigator-sponsored trials) and are now expected in Q422 (earlier mid-2022). The Phase Ib program evaluating ONA-XR as first-line treatment for HR+/HER2-mBC is enrolling behind schedule and is now expected to read-out in mid-2023 (earlier H222). As a reminder, the company recently presented encouraging results from the monotherapy portion of its Phase II trial of ONA-XR for GCT of the ovary (12-month progression-free survival rate of 20.1% and a clinical benefit rate of 35.7%).
Elacestrant combination trial a key catalyst
Earlier this month, Context reported a collaboration deal with the Menarini Group to undertake a Phase Ib/II study evaluation ONA-XR with category leader oral selective estrogen receptor degrader (SERD) elacestrant for HR+/HER2-mBC. This is a key development as elacestrant is the first oral SERD to demonstrate higher efficacy than fulvestrant (standard of care) in Phase III studies (refer to our note for more details) and we see the upcoming combination trial (expected to commence in Q422) as an encouraging pipeline advancement for the company.
Valuation: $148.2m or $9.28 per basic share
After adjusting for the Q222 results and cash balance of $42.9m, our valuation falls to $148.2m ($9.28/share), from $151m previously. The current cash balance should fund the company into Q423, but we estimate the need to raise $10m in FY23 and $160m between FY24 and FY26 before reaching profitability in FY27.
Exhibit 1: Financial summary
$000s |
2020 |
2021 |
2022e |
2023e |
2024e |
||
31-December |
US GAAP |
US GAAP |
US GAAP |
US GAAP |
US GAAP |
||
INCOME STATEMENT |
|||||||
Revenue |
|
|
0 |
0 |
0 |
0 |
0 |
Cost of Sales |
0 |
0 |
0 |
0 |
0 |
||
Gross Profit |
0 |
0 |
0 |
0 |
0 |
||
Research and Development Expenses |
(1,642) |
(6,893) |
(13,536) |
(21,654) |
(35,546) |
||
Sales, General and Administrative Expenses |
(931) |
(3,633) |
(8,356) |
(12,534) |
(13,787) |
||
EBITDA |
|
|
(2,572) |
(10,526) |
(21,892) |
(34,188) |
(49,333) |
Operating profit (before amort. and excepts.) |
|
|
(2,572) |
(10,526) |
(21,892) |
(34,188) |
(49,333) |
Amortization of acquired intangibles |
0 |
0 |
0 |
0 |
0 |
||
Exceptionals |
0 |
0 |
0 |
0 |
0 |
||
Share-based payments |
0 |
0 |
0 |
0 |
0 |
||
Reported operating profit |
(2,572) |
(10,526) |
(21,892) |
(34,188) |
(49,333) |
||
Net Interest |
(661) |
(64) |
0 |
0 |
0 |
||
Joint ventures & associates (post tax) |
0 |
0 |
0 |
0 |
0 |
||
Exceptionals |
9,878 |
133 |
0 |
0 |
0 |
||
Profit Before Tax (norm) |
|
|
(3,233) |
(10,590) |
(21,892) |
(34,188) |
(49,333) |
Profit Before Tax (reported) |
|
|
6,644 |
(10,457) |
(21,892) |
(34,188) |
(49,333) |
Reported tax |
0 |
0 |
0 |
0 |
0 |
||
Profit After Tax (norm) |
(3,233) |
(10,590) |
(21,892) |
(34,188) |
(49,333) |
||
Profit After Tax (reported) |
6,644 |
(10,457) |
(21,892) |
(34,188) |
(49,333) |
||
Minority interests |
0 |
0 |
0 |
0 |
0 |
||
Discontinued operations |
0 |
0 |
0 |
0 |
0 |
||
Net income (normalized) |
(3,233) |
(10,590) |
(21,892) |
(34,188) |
(49,333) |
||
Net income (reported) |
6,644 |
(10,457) |
(21,892) |
(34,188) |
(49,333) |
||
Average Number of Shares Outstanding (m) |
0 |
3 |
16 |
16 |
16 |
||
EPS - basic normalized ($) |
|
|
(9.28) |
(3.74) |
(1.37) |
(2.14) |
(3.09) |
EPS - normalized fully diluted ($) |
|
|
(9.28) |
(3.74) |
(1.37) |
(2.14) |
(3.09) |
EPS - basic reported ($) |
|
|
19.07 |
(3.69) |
(1.37) |
(2.14) |
(3.09) |
Dividend ($) |
0 |
0 |
0 |
0 |
0 |
||
BALANCE SHEET |
|||||||
Fixed Assets |
|
|
118 |
0 |
0 |
0 |
0 |
Intangible Assets |
0 |
0 |
0 |
0 |
0 |
||
Tangible Assets |
0 |
0 |
0 |
0 |
0 |
||
Investments & other |
118 |
0 |
0 |
0 |
0 |
||
Current Assets |
|
|
350 |
51,306 |
32,689 |
9,481 |
20,674 |
Stocks |
0 |
0 |
0 |
0 |
0 |
||
Debtors |
0 |
0 |
0 |
0 |
0 |
||
Cash & cash equivalents |
341 |
49,686 |
32,041 |
8,833 |
20,026 |
||
Other |
9 |
1,620 |
648 |
648 |
648 |
||
Current Liabilities |
|
|
(9,548) |
(3,033) |
(6,309) |
(7,289) |
(7,815) |
Creditors |
(2,708) |
(1,826) |
(3,798) |
(4,152) |
(4,194) |
||
Tax and social security |
0 |
0 |
0 |
0 |
0 |
||
Short term borrowings |
(5,884) |
0 |
0 |
0 |
0 |
||
Other |
(956) |
(1,207) |
(2,511) |
(3,137) |
(3,621) |
||
Long Term Liabilities |
|
|
(69) |
0 |
0 |
(10,000) |
(70,000) |
Long term borrowings |
(69) |
0 |
0 |
(10,000) |
(70,000) |
||
Other long term liabilities |
0 |
0 |
0 |
0 |
0 |
||
Net Assets |
|
|
(9,150) |
48,272 |
26,380 |
(7,807) |
(57,141) |
Convertible preferred stock |
(7,771) |
0 |
0 |
0 |
0 |
||
Minority interests |
0 |
0 |
0 |
0 |
0 |
||
Shareholders' equity |
|
|
(16,921) |
48,272 |
26,380 |
(7,807) |
(57,141) |
CASH FLOW |
|||||||
Operating Cash Flow |
(2,572) |
(10,526) |
(21,892) |
(34,188) |
(49,333) |
||
Working capital |
1,318 |
(2,225) |
4,248 |
980 |
526 |
||
Exceptional & other |
219 |
3,951 |
0 |
0 |
0 |
||
Tax |
0 |
0 |
0 |
0 |
0 |
||
Net operating cash flow |
|
|
(1,035) |
(8,799) |
(17,644) |
(33,208) |
(48,807) |
Capex |
0 |
(250) |
0 |
0 |
0 |
||
Acquisitions/disposals |
0 |
0 |
0 |
0 |
0 |
||
Net interest |
0 |
0 |
0 |
0 |
0 |
||
Equity financing |
0 |
58,394 |
0 |
0 |
0 |
||
Dividends |
0 |
0 |
0 |
0 |
0 |
||
Other |
0 |
0 |
0 |
0 |
0 |
||
Net Cash Flow |
(1,035) |
49,345 |
(17,644) |
(33,208) |
(48,807) |
||
Opening net debt/(cash) |
|
|
21,742 |
13,384 |
(49,686) |
(32,041) |
1,167 |
FX |
0 |
0 |
0 |
0 |
0 |
||
Other non-cash movements |
9,393 |
13,725 |
0 |
0 |
0 |
||
Closing net debt/(cash) |
|
|
13,384 |
(49,686) |
(32,041) |
1,167 |
49,974 |
Source: Context Therapeutics reports, Edison Investment Research
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Research: Healthcare
OpGen’s Q222 revenue growth re-accelerated with the post-pandemic normalization in demand. Revenues of $0.97m increased 19% y-o-y, largely driven by strength in its core offering, Unyvero. Management announced several notable wins that provide momentum to close the back half of the year strong, including the signing of two commercial Acuitas AMR Gene Panel contracts, extension of the Unyvero distribution agreement with Menarini in Europe, new distribution agreements in the Middle East and Kosovo, and the steady growth of subsidiary Ares Genetics. Incorporating the quarterly results, lower net cash balance and a higher share count (following the initial utilization of the $10.7m at-the-market sales facility) lowers our valuation to $1.7/share (vs $2.0/share previously).
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