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Research: Healthcare
ReNeuron has announced that the nine-patient Phase IIa (2m cell dose) extension study (halted in June after a presumed eye infection case) has fully restarted with five patients left to treat. Two patients are scheduled for treatment in October. The company expects to report some data by March 2022, which could potentially open the way to a crucial partnering deal. Full efficacy data at six months post-treatment should be available around the middle of 2022. Our valuation remains £190m.
Written by
John Savin
ReNeuron Group |
Extension trial to produce data in Q122 |
Trial timing update |
Pharma & biotech |
8 October 2021 |
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Business description
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ReNeuron has announced that the nine-patient Phase IIa (2m cell dose) extension study (halted in June after a presumed eye infection case) has fully restarted with five patients left to treat. Two patients are scheduled for treatment in October. The company expects to report some data by March 2022, which could potentially open the way to a crucial partnering deal. Full efficacy data at six months post-treatment should be available around the middle of 2022. Our valuation remains £190m.
Year end |
Revenue (£m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
03/20 |
6.2 |
(13.9) |
(35.85) |
0.0 |
N/A |
N/A |
03/21 |
0.3 |
(13.4) |
(29.00) |
0.0 |
N/A |
N/A |
03/22e |
0.3 |
(13.1) |
(19.12) |
0.0 |
N/A |
N/A |
03/23e |
0.4 |
(13.2) |
(19.12) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
hRPC trial: Partial data by Q122
ReNeuron’s clinical portfolio is focused on the human retinal progenitor cell (hRPC) therapy for retinitis pigmentosa, an inherited, degenerative genetic eye disease. The trial is now in a Phase IIa extension study using 2m cells (given as two injections, or blebs, under the retina). The extended trial aims to recruit nine patients across four centres: two in the US, one in the UK and one in Spain. ReNeuron had a setback in early June 2021 as the fourth patient had a presumed infection (endophthalmitis) after a successful hRPC implantation. It is routine to halt trials to investigate if a possible safety signal emerges, and the subsequent review showed no fundamental issues. ReNeuron announced in October that all trial centres had restarted. Two patients are due to receive treatment in October, leaving three more to recruit and treat before the end of 2021.
Data outputs and pivotal study progression
By the end of March 2022, we expect that ReNeuron should be able to present six-month data on three patients and three-month data on up to five patients. The formal endpoint is at six months but patients have an interim three-month assessment. There is no update on the patient who suffered post-surgical complications - although they will have to be included in formal analysis - so it is possible that an additional patient might be recruited to give nine uncomplicated treatments. Six-month data for all patients is expected to be available by mid-year 2022. This could allow a pivotal study to start from Q422; this is expected to need 100 patients.
Valuation: Maintained at £190m till Q122 data
Management has stated that cash of £22.2m at March 2021 will cover costs for at least 12 months; we estimate that to Q4 FY23 is possible. An eye therapy deal from Q3FY23 might occur and could cover the pivotal trial costs. Exosome deals are possible. Our indicative value is unchanged at £190m and will be updated once the Q1CY22 initial data is presented and when pivotal trial timelines are confirmed.
Exhibit 1: Financial summary
£'000s |
2020 |
2021 |
2022e |
2023e |
||
Year end 31 March |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
||||||
Revenue |
|
|
6,165 |
335 |
300 |
350 |
Cost of Sales |
0 |
0 |
0 |
0 |
||
Gross Profit |
6,165 |
335 |
300 |
350 |
||
R&D expenses |
(16,335) |
(9,503) |
(10,500) |
(10,600) |
||
SG&A expenses |
(4,239) |
(3,746) |
(2,933) |
(2,900) |
||
EBITDA |
|
|
(13,997) |
(12,534) |
(12,773) |
(12,810) |
Operating Profit (before amort. and except.) |
|
(14,409) |
(12,914) |
(13,133) |
(13,150) |
|
Intangible Amortisation |
0 |
0 |
0 |
0 |
||
Exceptionals |
0 |
0 |
0 |
0 |
||
Operating Profit |
(14,409) |
(12,914) |
(13,133) |
(13,150) |
||
Other |
0 |
0 |
0 |
0 |
||
Net Interest |
551 |
(496) |
(13) |
(18) |
||
Profit Before Tax (norm) |
|
|
(13,858) |
(13,410) |
(13,146) |
(13,168) |
Profit Before Tax (FRS 3) |
|
|
(13,858) |
(13,410) |
(13,146) |
(13,168) |
Tax |
2,446 |
2,063 |
2,276 |
2,298 |
||
Profit After Tax (norm) |
(11,412) |
(11,347) |
(10,870) |
(10,870) |
||
Profit After Tax (FRS 3) |
(11,412) |
(11,347) |
(10,870) |
(10,870) |
||
Average Number of Shares Outstanding (m) |
31.8 |
39.1 |
56.8 |
56.9 |
||
EPS - normalised (p) |
|
|
(35.85) |
(29.00) |
(19.12) |
(19.12) |
EPS - FRS 3 (p) |
|
|
(35.85) |
(29.00) |
(19.12) |
(19.12) |
Dividend per share (p) |
0.0 |
0.0 |
0.0 |
0.0 |
||
BALANCE SHEET |
||||||
Fixed Assets |
|
|
1,229 |
872 |
629 |
436 |
Intangible Assets |
186 |
186 |
186 |
186 |
||
Tangible Assets |
452 |
213 |
88 |
13 |
||
Other |
591 |
473 |
355 |
237 |
||
Current Assets |
|
|
19,147 |
24,479 |
13,695 |
2,861 |
Stocks |
0 |
0 |
0 |
0 |
||
Debtors |
696 |
444 |
444 |
444 |
||
Cash and deposits |
12,625 |
22,203 |
11,206 |
350 |
||
Other |
5,826 |
1,832 |
2,045 |
2,067 |
||
Current Liabilities |
|
|
(6,446) |
(5,884) |
(5,884) |
(5,884) |
Creditors |
(6,280) |
(5,727) |
(5,727) |
(5,727) |
||
Short term borrowings |
0 |
0 |
0 |
0 |
||
Short term leases |
(166) |
(157) |
(157) |
(157) |
||
Other |
0 |
0 |
0 |
0 |
||
Long Term Liabilities |
|
|
(707) |
(562) |
(405) |
(248) |
Long term borrowings |
0 |
0 |
0 |
0 |
||
Long term leases |
0 |
0 |
0 |
0 |
||
Other long term liabilities |
(707) |
(562) |
(405) |
(248) |
||
Net Assets |
|
|
13,223 |
18,905 |
8,035 |
(2,835) |
CASH FLOW |
||||||
Operating Cash Flow |
|
|
(13,651) |
(12,075) |
(12,865) |
(12,932) |
Net Interest |
258 |
(6) |
(13) |
(18) |
||
Tax |
(611) |
6,056 |
2,063 |
2,276 |
||
Capex |
(119) |
(25) |
(25) |
(25) |
||
Acquisitions/disposals |
0 |
0 |
0 |
0 |
||
Financing |
188 |
17,502 |
0 |
0 |
||
Dividends |
0 |
0 |
0 |
0 |
||
Other |
6,242 |
(1,865) |
(157) |
(157) |
||
Net Cash Flow |
(7,693) |
9,587 |
(10,997) |
(10,856) |
||
Opening net debt/(cash) |
|
|
(20,152) |
(12,459) |
(22,046) |
(11,049) |
HP finance leases initiated |
0 |
0 |
0 |
0 |
||
Other |
0 |
0 |
0 |
0 |
||
Closing net debt/(cash) |
|
|
(12,459) |
(22,046) |
(11,049) |
(193) |
Source: ReNeuron accounts, Edison Investment Research
|
|
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