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Research: Healthcare
BerGenBio (BGBIO) has announced preliminary data for lead asset bemcentinib, an oral once daily highly selective AXL inhibitor for the treatment of severe COVID-19 infections requiring hospitalisation. In the Phase II ACCORD-2 and BGBC020 trials, treatment with bemcentinib led to numerically fewer deaths versus standard of care up to day 29. Preliminary analysis of the primary endpoint, time to clinical improvement of at least two points on the WHO nine-point ordinal scale, or live discharge from the hospital, was numerically in bemcentinib’s favour but not statistically significant in this small study with a diverse patient population and demographic. Detailed top-line data are expected in May. If favourable, we expect an additional global Phase III study will be required before emergency use authorisation. We value BGBIO at NOK4.72bn.
Written by
BerGenBio |
Bemcentinib preliminary data in COVID-19 |
COVID-19 clinical update |
Pharma & biotech |
20 April 2021 |
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BerGenBio is a research client of Edison Investment Research Limited |
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BerGenBio (BGBIO) has announced preliminary data for lead asset bemcentinib, an oral once daily highly selective AXL inhibitor for the treatment of severe COVID-19 infections requiring hospitalisation. In the Phase II ACCORD-2 and BGBC020 trials, treatment with bemcentinib led to numerically fewer deaths versus standard of care up to day 29. Preliminary analysis of the primary endpoint, time to clinical improvement of at least two points on the WHO nine-point ordinal scale, or live discharge from the hospital, was numerically in bemcentinib’s favour but not statistically significant in this small study with a diverse patient population and demographic. Detailed top-line data are expected in May. If favourable, we expect an additional global Phase III study will be required before emergency use authorisation. We value BGBIO at NOK4.72bn.
Year end |
Revenue (NOKm) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/19 |
8.9 |
(199.3) |
(3.43) |
0.0 |
N/A |
N/A |
12/20 |
0.6 |
(257.0) |
(3.43) |
0.0 |
N/A |
N/A |
12/21e |
0.0 |
(300.3) |
(3.43) |
0.0 |
N/A |
N/A |
12/22e |
0.0 |
(317.6) |
(3.62) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Early data, more details expected in May
Bemcentinib has a unique dual mechanism of action that could prevent viral intracellular entry and augment the type 1 interferon response (a key antiviral defence mechanism). Additionally, as it does not directly target the SARS-CoV-2 spike protein-ACE2 pathway, it is expected to be variant (spike protein) agnostic. Bemcentinib was given as an add-on therapy to current standard of care (remdesivir and dexamethasone) for hospitalised patients who were not intubated or ventilated. Both studies used the same trial design and clinical endpoints. Preliminary data reported that in ACCORD-2 there was one death in 28 patients in the bemcentinib arm versus five in 32 patients receiving only standard of care, and two versus three in BGBC020 (115 patients enrolled, 58 received bemcentinib).
COVID-19 could expediate route to market
While bemcentinib is primarily being developed for oncology indications (see ‘Bemcentinib leading the AXL charge‘), COVID-19 could expediate its route to market in 2022. Its potential dual mechanism of action and convenient once-a-day oral dosing is initially being assessed in a hospitalised setting. Clinical development work to assess its potential use in a community setting or as a post-exposure prophylactic may be appropriate depending on the future status of the pandemic. We maintain our peak sales of $300m and adopt a ‘wait-and-see’ approach in light of global vaccination programmes and the progress of other potential treatments.
Valuation: NOK4.72bn or NOK53.8 per share
We continue to value BerGenBio at NOK4.72bn or NOK 53.8/share. Our forecasts remain unchanged. The key value drivers are bemcentinib in second-line NSCLC (peak sales $1.2bn, NOK37.2/share) and AML (peak sales $598m, NOK12.2/share) plus the COVID-19 opportunity (peak sales $300m, NOK5.4/share).
Exhibit 1: Financial summary
Accounts: IFRS, Year end 31 December, NOK000s |
|
2018 |
2019 |
2020 |
2021e |
2022e |
Profit & Loss |
|
|
|
|
|
|
Operating revenues |
|
2,335 |
8,900 |
601 |
0 |
0 |
Licensing revenues |
|
2,335 |
8,900 |
601 |
0 |
0 |
Other revenues |
|
0 |
0 |
0 |
0 |
0 |
Total operating expenses |
|
(196,874) |
(213,274) |
(261,692) |
(305,499) |
(319,862) |
Other operating expenses (R&D) |
|
(133,699) |
(141,630) |
(163,442) |
(205,937) |
(216,234) |
EBITDA (reported) |
|
(194,335) |
(203,589) |
(260,365) |
(305,120) |
(319,562) |
Depreciation and amortisation |
|
(204) |
(785) |
(726) |
(379) |
(299) |
Reported operating income |
|
(194,539) |
(204,374) |
(261,091) |
(305,499) |
(319,862) |
Operating margin % |
|
N/A |
N/A |
N/A |
N/A |
N/A |
Finance income/(expense) |
|
2,793 |
5,096 |
4,062 |
5,166 |
2,277 |
Exceptionals and adjustments |
|
|
0 |
0 |
0 |
0 |
Profit before tax (reported) |
|
(191,746) |
(199,278) |
(257,029) |
(300,333) |
(317,585) |
Income tax expense |
|
0 |
0 |
0 |
0 |
0 |
Net income (reported) |
|
(191,746) |
(199,278) |
(257,029) |
(300,333) |
(317,585) |
Basic average number of shares (m) |
|
53.3 |
58.0 |
74.9 |
87.7 |
87.8 |
Year-end number of shares (m) |
|
54.7 |
61.1 |
87.3 |
87.8 |
87.8 |
Basic EPS (NOK) |
|
(3.60) |
(3.43) |
(3.43) |
(3.43) |
(3.62) |
Adjusted EPS (NOK) |
|
(3.60) |
(3.43) |
(3.43) |
(3.43) |
(3.62) |
Dividend per share (NOK) |
|
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
|
|
|
|
|
|
|
Balance sheet |
|
|
|
|
|
|
Property, plant and equipment |
|
581 |
974 |
2,332 |
2,020 |
1,787 |
Intangible assets |
|
0 |
0 |
0 |
0 |
0 |
Total non-current assets |
|
581 |
974 |
2,332 |
2,020 |
1,787 |
Cash and equivalents |
|
360,414 |
253,586 |
721,641 |
432,656 |
118,128 |
Other current assets |
|
17,831 |
15,818 |
14,228 |
15,023 |
14,626 |
Total current assets |
|
378,245 |
269,404 |
735,869 |
447,679 |
132,753 |
Total non-current liabilities |
|
0 |
0 |
1,367 |
1,367 |
1,367 |
Trade and other payables |
|
23,939 |
26,746 |
22,550 |
33,841 |
35,668 |
Other current liabilities |
|
12,875 |
21,803 |
38,046 |
38,585 |
39,185 |
Provisions |
|
4,732 |
2,074 |
6,008 |
6,008 |
6,008 |
Total current liabilities |
|
41,546 |
50,623 |
66,604 |
78,434 |
80,861 |
Equity attributable to company |
|
337,280 |
219,754 |
670,229 |
369,896 |
52,311 |
|
|
|
|
|
|
|
Cashflow statement |
|
|
|
|
|
|
Profit before taxes |
|
(191,746) |
(199,278) |
(257,029) |
(300,333) |
(317,585) |
Depreciation and amortisation |
|
204 |
785 |
726 |
379 |
299 |
Share based payments |
|
1,678 |
3,842 |
7,412 |
0 |
0 |
Other adjustments |
|
1,712 |
(2,990) |
4,644 |
0 |
0 |
Movements in working capital |
|
1,446 |
13,164 |
13,572 |
11,620 |
3,410 |
Interest paid/received |
|
0 |
(2,206) |
(3,614) |
0 |
0 |
Income taxes paid |
|
0 |
0 |
0 |
0 |
0 |
Cash from operations (CFO) |
|
(186,706) |
(186,683) |
(234,290) |
(288,333) |
(313,876) |
Capex |
|
(228) |
0 |
(67) |
(67) |
(67) |
Acquisitions & disposals net |
|
0 |
0 |
0 |
0 |
0 |
Other investing activities |
|
0 |
2,206 |
3,614 |
0 |
0 |
Cash used in investing activities (CFIA) |
|
(228) |
2,206 |
3,548 |
(67) |
(67) |
Net proceeds from issue of shares |
|
176,998 |
77,910 |
700,092 |
0 |
0 |
Movements in debt |
|
0 |
0 |
0 |
0 |
0 |
Other financing activities |
|
0 |
(593) |
(585) |
(585) |
(585) |
Cash from financing activities (CFF) |
|
176,998 |
77,317 |
699,507 |
(585) |
(585) |
Cash and equivalents at beginning of period |
|
370,350 |
360,414 |
253,586 |
721,641 |
432,656 |
Increase/(decrease) in cash and equivalents |
|
(9,936) |
(107,160) |
468,765 |
(288,985) |
(314,528) |
Effect of FX on cash and equivalents |
|
0 |
332 |
(710) |
0 |
0 |
Cash and equivalents at end of period |
|
360,414 |
253,586 |
721,641 |
432,656 |
118,128 |
Net (debt)/cash |
|
360,414 |
253,586 |
720,274 |
431,289 |
116,761 |
Source: Company accounts, Edison Investment Research
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