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▲ 0.05 (1.56%)
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EUR77m
Research: Healthcare
OSE Immunotherapeutics has announced a global licence and collaboration agreement with AbbVie to develop OSE-230, a novel monoclonal antibody, for the treatment of chronic and severe inflammation. The announcement marks a positive milestone and much needed endorsement within a sector hindered by funding challenges. This follows sizable transactions in December 2023 and early 2024, including AbbVie’s foray into CNS (Cerevel for $8.7bn) and entry into immunotherapy (ImmunoGen for $10.1bn), covered in our outlook note. The arrangement provides further external recognition of OSE’s innovative R&D capabilities and early-stage pipeline. Deal terms include an upfront payment of $48m, with OSE eligible to receive up to $665m in additional milestone payments. The market response to the news was highly positive, with OSE’s share price increasing by over 60% on the morning of the announcement.
Written by
OSE Immunotherapeutics |
Confidence boost with AbbVie partnership |
Partnership update |
Pharma and biotech |
28 February 2024 |
Share price performance
Business description
Analysts
OSE Immunotherapeutics is a research client of Edison Investment Research Limited |
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OSE Immunotherapeutics has announced a global licence and collaboration agreement with AbbVie to develop OSE-230, a novel monoclonal antibody, for the treatment of chronic and severe inflammation. The announcement marks a positive milestone and much needed endorsement within a sector hindered by funding challenges. This follows sizable transactions in December 2023 and early 2024, including AbbVie’s foray into CNS (Cerevel for $8.7bn) and entry into immunotherapy (ImmunoGen for $10.1bn), covered in our outlook note. The arrangement provides further external recognition of OSE’s innovative R&D capabilities and early-stage pipeline. Deal terms include an upfront payment of $48m, with OSE eligible to receive up to $665m in additional milestone payments. The market response to the news was highly positive, with OSE’s share price increasing by over 60% on the morning of the announcement.
Year |
Revenue |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/21 |
26.3 |
(17.2) |
(0.95) |
0.0 |
N/A |
N/A |
12/22 |
18.3 |
(18.0) |
(0.97) |
0.0 |
N/A |
N/A |
12/23e |
2.7 |
(26.2) |
(1.34) |
0.0 |
N/A |
N/A |
12/24e |
15.0 |
(21.8) |
(0.98) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
As per the announcement, AbbVie has the global right to develop, manufacture and commercialise OSE-230, which we believe fits AbbVie’s pipeline in the autoimmune space. In exchange, OSE will receive an upfront payment of $48m and could receive up to $665m in additional payments based on clinical development, regulatory and commercial milestones. OSE is also eligible to receive potential tiered royalty payments based on global net sales of the therapy.
OSE-230 is one of the company’s preclinical monoclonal antibody assets, originating from its myeloid platform. It is designed to activate ChemR23 (also called CMKLR1), a G-Protein Coupled Receptor target. Activation of ChemR23 is believed to offer a novel mechanism of action for the treatment of inflammation by modulating the function of macrophages and neutrophils. Conventionally, anti-inflammatory therapies target pro-inflammation pathways, but OSE’s approach is differentiated in that OSE-230 has the potential to drive affected tissues to complete the inflammation programme and restore tissue integrity. OSE presented encouraging preclinical data in October 2020 at the Federation of Clinical Immunology Societies’ annual meeting. These results showed that OSE-230 successfully targeted the receptors associated with restoring tissue homeostasis. OSE-230 demonstrated inflammation resolution in vivo in models for: acute inflammatory models, chronic colitis, type 1 diabetes and multiple sclerosis.
The partnership marks an important milestone for OSE in progressing all stages of its active pipeline. We look forward to following the clinical development of OSE-230, with the next step being entry to the clinic. Further, we believe that the funds should enable OSE to continue progressing its clinical-stage assets, including lead asset Tedopi, to the market. Management is preparing for a confirmatory Phase III trial for Tedopi in second-line non-small cell lung cancer, which is expected to commence from Q224 in the US, with extension to European sites in H224.
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Research: Metals & Mining
Pan American Silver (PAAS) has released its FY23 financial results, which are in line with our estimates at the EBITDA level, an encouraging outcome given the operationally challenging year. While the bottom line was once again affected by non-cash one-offs, cash flow generation was robust, with FY23 operating cash flow of US$450m. We have slightly adjusted our FY24 estimates and rolled the model forward, resulting in a marginally updated valuation of US$22.2/share. The company’s decision to launch a buyback should partly compensate for the weak share price performance, which we believe does not reflect supportive gold market fundamentals and what is likely to be a year of more consistent operating performance.