Biotie Therapies
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Biotie Therapies |
Pipeline progressing on track |
Q3 update |
Pharma & biotech |
20 November 2015 |
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Opexa Therapeutics is a research client of Edison Investment Research Limited |
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Initial recruitment is on track for the Phase III pivotal study (TOZ-PD) of Biotie’s lead product candidate, tozadenant. Tozadenant offers a novel mechanism of action for the treatment of Parkinson’s disease (PD) patients experiencing motor fluctuations on levodopa. Top-line data from the double-blind portion of the trial are expected by end 2017. Meanwhile, two other products, SYN120 (Parkinson’s disease dementia, PDD) and BTT1023 (primary sclerosing cholangitis, PSC), are in Phase II studies; data are expected by end 2016. We value Biotie at €273m, or €0.28/share.
Year end |
Revenue (€m) |
PBT* (€m) |
EPS* (€) |
DPS (€) |
P/E (x) |
Yield (%) |
12/13 |
27.7 |
3.7 |
0.01 |
0.0 |
15.8 |
N/A |
12/14 |
14.9 |
(7.6) |
(0.02) |
0.0 |
N/A |
N/A |
12/15e |
3.8 |
(32.3) |
(0.05) |
0.0 |
N/A |
N/A |
12/16e |
6.4 |
(31.8) |
(0.03) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding intangible amortisation, exceptional items.
Tozadenant in pivotal territory
TOZ-PD, along with the completed Phase IIb study, would form the basis of an NDA submission for tozadenant. Agreed under Special Protocol Assessment with the FDA, it is divided into two phases: a 24-week, placebo-controlled phase (n=450), followed by a 52-week, open-label phase. If the primary endpoint is met in the placebo-controlled phase, a second 52-week, open-label study will be performed (n=450) to generate the requisite 1,500 unique patient exposures for approval.
Mid-stage pipeline offers nearer-term catalysts
SYN120 could potentially offer a unique therapeutic profile for the treatment of neurodegenerative diseases, combining pro-cognitive and anti-psychotic effects. It is in a Phase IIa proof-of-concept (POC) study, SYNAPSE, for the treatment of PDD (n=80). BTT1023 is also in a Phase II POC study, BUTEO, in PSC, an orphan fibrotic disease for which there are no FDA-approved treatments. SYNAPSE initial data and a pre-planned interim analysis of BUTEO are both expected by end 2016.
Maintained outlook following Q315 financials
Lundbeck reported flat Selincro sales in Q315 (c €6.3m in Q315); accordingly, royalty income was steady at €0.8m; no milestones were received in Q315. R&D (€7.3m) and G&A (€2.2m) spend increased as the pipeline progresses through clinical trials (vs €4.2m and €1.6m in Q314). We maintain our forecast revenues of €3.8m for FY15e. Our net loss is largely unchanged at €32.3m (vs €32.6m); the reduced ‘other operating income’ (€0.5m vs €1m) is offset by the now positive net interest income owing to the increased cash position after the H115 equity raise.
Valuation: Risk-adjusted NPV of €273m
Our valuation has increased to €273m or €0.28/share (vs €268m or €0.27/share), primarily due to rolling the model forwards to 2016 and updating for end-FY15e gross cash (€74m). Our model continues to suggest a cash runway to end 2017, when initial data from the pivotal tozadenant study are expected.
Exhibit 1: Financial summary
Year end 31 December |
€000s |
2013 |
2014 |
2015e |
2016e |
2017e |
2018e |
|
Accounting basis |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
||||||||
Revenue |
|
|
27,712 |
14,901 |
3,849 |
6,373 |
9,216 |
11,776 |
of which: Selincro milestones |
4,000 |
6,000 |
500 |
800 |
1,500 |
0 |
||
Selincro royalties |
155 |
923 |
3,136 |
5,573 |
7,712 |
11,768 |
||
UCB payments for tozadenant |
23,457 |
7,853 |
213 |
0 |
0 |
0 |
||
Other |
100 |
125 |
0 |
0 |
0 |
0 |
||
Cost of sales |
0 |
0 |
0 |
0 |
0 |
0 |
||
Gross profit |
27,712 |
14,901 |
3,849 |
6,373 |
9,216 |
11,776 |
||
R&D expenses (continuing operations, excludes write-downs) |
(17,807) |
(17,192) |
(27,500) |
(30,000) |
(29,000) |
(25,000) |
||
G&A expenses (continuing operations, excludes exceptionals) |
(8,971) |
(7,326) |
(8,791) |
(9,451) |
(9,734) |
(10,026) |
||
Other operating income (includes grants, eg MJFF) |
565 |
1,132 |
500 |
1,000 |
1,000 |
1,000 |
||
EBITDA |
|
|
1,499 |
(8,485) |
(31,942) |
(32,077) |
(28,518) |
(22,250) |
Operating profit (before GW and except) |
|
|
1,499 |
(8,485) |
(31,942) |
(32,077) |
(28,518) |
(22,250) |
Intangible amortisation |
0 |
0 |
0 |
0 |
0 |
0 |
||
Exceptionals (R&D write-downs) |
0 |
(27,605) |
0 |
0 |
0 |
0 |
||
Currency translation differences |
0 |
0 |
0 |
0 |
0 |
0 |
||
Operating profit |
|
|
1,499 |
(36,090) |
(31,942) |
(32,077) |
(28,518) |
(22,250) |
Net interest |
2,152 |
925 |
(333) |
260 |
210 |
160 |
||
Profit before tax (norm) |
|
|
3,651 |
(7,560) |
(32,275) |
(31,817) |
(28,308) |
(22,090) |
Profit before tax (FRS 3) |
|
|
3,651 |
(35,165) |
(32,275) |
(31,817) |
(28,308) |
(22,090) |
Tax (credit) |
2,195 |
0 |
0 |
0 |
0 |
0 |
||
Profit after tax (norm) |
|
|
5,846 |
(7,560) |
(32,275) |
(31,817) |
(28,308) |
(22,090) |
Profit after tax (FRS3) |
|
|
5,846 |
(35,165) |
(32,275) |
(31,817) |
(28,308) |
(22,090) |
Average number of shares outstanding (m)* |
446.2 |
450.7 |
717.1 |
978.2 |
978.2 |
978.2 |
||
EPS - normalised (€) |
|
|
0.01 |
(0.02) |
(0.05) |
(0.03) |
(0.03) |
(0.02) |
EPS - FRS 3 (€) |
|
|
0.01 |
(0.08) |
(0.05) |
(0.03) |
(0.03) |
(0.02) |
BALANCE SHEET |
||||||||
Fixed assets |
|
|
75,745 |
54,132 |
62,613 |
62,838 |
63,062 |
63,285 |
Intangible assets |
74,059 |
53,155 |
57,883 |
57,933 |
57,983 |
58,033 |
||
Tangible assets |
627 |
653 |
803 |
978 |
1,152 |
1,325 |
||
Other non-current assets |
1,059 |
324 |
3,927 |
3,927 |
3,927 |
3,927 |
||
Current assets |
|
|
44,253 |
34,199 |
75,608 |
43,306 |
14,563 |
2,090 |
Debtors |
575 |
1,806 |
1,500 |
1,500 |
1,500 |
1,500 |
||
Cash |
43,678 |
32,393 |
74,108 |
41,806 |
13,063 |
590 |
||
Other |
0 |
0 |
0 |
0 |
0 |
0 |
||
Current liabilities |
|
|
(6,483) |
(2,677) |
(2,500) |
(2,500) |
(2,500) |
(2,500) |
Creditors |
(5,740) |
(2,677) |
(2,500) |
(2,500) |
(2,500) |
(2,500) |
||
Short-term borrowings |
0 |
0 |
0 |
0 |
0 |
0 |
||
Deferred revenue |
(743) |
0 |
0 |
0 |
0 |
0 |
||
Long-term liabilities |
|
|
(33,149) |
(33,031) |
(33,031) |
(33,031) |
(33,031) |
(43,031) |
Long-term borrowings |
(20,690) |
(20,690) |
(20,690) |
(20,690) |
(20,690) |
(30,690) |
||
Provisions |
(569) |
(670) |
(670) |
(670) |
(670) |
(670) |
||
Other long-term liabilities (includes loan interest) |
(8,918) |
(9,671) |
(9,671) |
(9,671) |
(9,671) |
(9,671) |
||
Non-current deferred revenues |
(2,972) |
(2,000) |
(2,000) |
(2,000) |
(2,000) |
(2,000) |
||
Net assets |
|
|
80,366 |
52,623 |
102,690 |
70,613 |
42,094 |
19,844 |
CASH FLOW |
||||||||
Operating cash flow |
|
|
10,590 |
(14,065) |
(32,350) |
(32,027) |
(28,468) |
(22,200) |
Net interest |
(13) |
(27) |
(75) |
(50) |
(50) |
(50) |
||
Tax |
0 |
0 |
0 |
0 |
0 |
0 |
||
Capex |
(329) |
(146) |
(150) |
(175) |
(174) |
(173) |
||
Expenditure on intangibles |
(52) |
(50) |
(50) |
(50) |
(50) |
(50) |
||
Acquisitions/disposals |
0 |
1,350 |
0 |
0 |
0 |
0 |
||
Financing |
370 |
126 |
74,340 |
0 |
0 |
0 |
||
Dividends |
0 |
0 |
0 |
0 |
0 |
0 |
||
Other |
(214) |
323 |
0 |
0 |
0 |
0 |
||
Net cash flow |
|
|
10,352 |
(12,489) |
41,715 |
(32,302) |
(28,742) |
(22,473) |
Opening net debt/(cash) |
|
|
(1,866) |
(14,070) |
(2,032) |
(43,747) |
(11,445) |
17,298 |
Other |
1,852 |
451 |
0 |
0 |
0 |
0 |
||
Closing net debt/(cash) |
|
|
(14,070) |
(2,032) |
(43,747) |
(11,445) |
17,298 |
39,771 |
Source: Biotie accounts; Edison Investment Research. Note: *The 978m outstanding shares do not include the 106m shares issued to Biotie itself in October 2015 to cover the half of the warrants issued in May 2015.
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