Currency in SEK
Last close As at 02/06/2023
SEK1.28
▲ −0.17 (−11.72%)
Market capitalisation
SEK255m
Research: Healthcare
Mendus is gearing up for a catalyst rich H222 as its focus remains centred on the development of the company’s cancer relapse vaccine, DCP-001. Readouts from DCP-001’s use in acute myeloid leukaemia (AML) and ovarian cancer are expected in Q422 and October 2022 respectively, which we see as important near-term catalysts for the company. Mendus has reported an operating loss of SEK55.0m for H122, significantly lower than H121 (SEK72.1m) due to reduced R&D expenditure over the period. The company had a gross cash position of SEK84.9m at end-H122, which we see as sufficient to fund operations to end-FY22. However, Mendus also announced the securing of up to SEK250m in financing commitments, which we expect to significantly lengthen our estimated cash runway to H224, if fully utilised. We value Mendus at SEK1.87bn or SEK9.35 per share (previously SEK1.78bn or SEK8.93 per share).
Mendus |
Funding secured; catalyst rich H222 incoming |
H122 results |
Pharma and biotech |
26 August 2022 |
Share price performance
Business description
Next events
Analysts
Mendus is a research client of Edison Investment Research Limited |
Mendus is gearing up for a catalyst-rich H222 as its focus remains centred on the development of the company’s cancer relapse vaccine, DCP-001. Readouts from DCP-001’s use in acute myeloid leukaemia (AML) and ovarian cancer are expected in Q422 and October 2022 respectively, which we see as important near-term catalysts for the company. Mendus has reported an operating loss of SEK55.0m for H122, significantly lower than H121 (SEK72.1m) due to reduced R&D expenditure over the period. The company had a gross cash position of SEK84.9m at end-H122, which we see as sufficient to fund operations to end-FY22. However, Mendus also announced the securing of up to SEK250m in financing commitments, which we expect to significantly lengthen our estimated cash runway to H224, if fully utilised. We value Mendus at SEK1.87bn or SEK9.35 per share (previously SEK1.78bn or SEK8.93 per share).
Year end |
Revenue (SEKm) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/20 |
0.0 |
(89.2) |
(1.17) |
0.0 |
N/A |
N/A |
12/21 |
0.0 |
(133.4) |
(0.73) |
0.0 |
N/A |
N/A |
12/22e |
1.9 |
(126.0) |
(0.63) |
0.0 |
N/A |
N/A |
12/23e |
0.0 |
(128.9) |
(0.65) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Preparing for a catalyst rich H222
Mendus expects to report key six-month relapse-free survival and overall survival data, from the ADVANCE II study (NCT03697707) of DCP-001 in AML maintenance therapy, in Q422. We see this as an important near-term catalyst for the company as the data will be important in defining the treatment’s clinical utility, in our view. Additionally, the company expects to present interim data from the Phase I ALISON (NCT04739527) trial (DCP-001 in ovarian cancer) at the European Society of Gynaecological Oncology conference in October 2022.
Up to SEK250m financing secured
In parallel with H122 results, Mendus announced financing commitments of up to SEK250m: a shareholder loan of SEK50k (Van Herk Investments) and up to SEK200m in convertible bonds (Negma Group). With a H122 cash position of SEK84.9m and H122 burn rate of SEK70.7m, we estimate a cash runway into Q123, previously end-FY22. However, assuming Mendus fully exercises the committed financing, we believe this could extend our runway estimate to H224.
Valuation: SEK1.87bn or SEK9.35 per share
We value Mendus at SEK1.87bn or SEK9.35 per share (previously SEK1.78bn or SEK8.93 per share) based on our risk-adjusted NPV and including a net cash position of SEK45.6m at end-H122. We have rolled our model forward two months and updated our FX assumptions and net cash position. We have reduced our FY22 profit before tax loss estimate to SEK126m (previously SEK134m) post the H122 results but will revisit our estimates as more details on the financing are made public.
Exhibit 1: Financial summary
Accounts: IFRS, year-end 31 December, SEK’000s |
2019 |
2020 |
2021 |
2022e |
2023e |
Income statement |
|
|
|
|
|
Total revenue |
0 |
0 |
31 |
1,946 |
0 |
Cost of sales |
0 |
0 |
0 |
0 |
0 |
Gross profit |
0 |
0 |
31 |
1,946 |
0 |
SG&A (expenses) |
(11,734) |
(37,193) |
(43,490) |
(40,656) |
(41,876) |
R&D costs |
(48,980) |
(47,883) |
(85,796) |
(82,504) |
(82,504) |
Other income/(expense) |
16,689 |
(64) |
(845) |
0 |
0 |
Exceptionals and adjustments |
0 |
0 |
0 |
0 |
0 |
Reported EBITDA |
(44,025) |
(85,140) |
(130,100) |
(121,214) |
(124,380) |
Depreciation and amortisation |
(831) |
(887) |
0 |
(842) |
(4,485) |
Reported Operating Profit/(loss) |
(44,856) |
(86,027) |
(130,100) |
(122,057) |
(128,865) |
Finance income/(expense) |
(2,915) |
(3,220) |
(3,310) |
(3,896) |
0 |
Other income/(expense) |
0 |
(1) |
0 |
0 |
0 |
Exceptionals and adjustments |
0 |
0 |
0 |
0 |
0 |
Reported PBT |
(47,771) |
(89,248) |
(133,410) |
(125,953) |
(128,865) |
Adjusted PBT |
(47,771) |
(89,248) |
(133,410) |
(125,953) |
(128,865) |
Income tax expense |
0 |
0 |
0 |
0 |
0 |
Reported net income |
(47,771) |
(89,248) |
(133,410) |
(125,953) |
(128,865) |
Basic average number of shares, m |
73.9 |
76.2 |
182.8 |
199.4 |
199.4 |
Basic EPS (SEK) |
(0.65) |
(1.17) |
(0.73) |
(0.63) |
(0.65) |
Diluted EPS (SEK) |
(0.65) |
(1.17) |
(0.73) |
(0.63) |
(0.65) |
|
|
|
|
|
|
Balance sheet |
|
|
|
|
|
Property, plant and equipment |
4,328 |
2,909 |
2,470 |
13,152 |
9,545 |
Intangible assets |
0 |
532,441 |
532,441 |
532,441 |
532,441 |
Right of use assets |
0 |
0 |
0 |
25,868 |
25,868 |
Other non-current assets |
442 |
678 |
843 |
609 |
609 |
Total non-current assets |
4,770 |
536,028 |
535,754 |
572,070 |
568,463 |
Cash and equivalents |
14,032 |
167,643 |
155,313 |
12,756 |
500 |
Trade and other receivables |
0 |
0 |
0 |
0 |
0 |
Other current assets |
19,117 |
24,990 |
29,917 |
30,982 |
30,982 |
Total current assets |
33,150 |
192,633 |
185,230 |
43,738 |
31,482 |
Non-current loans and borrowings* |
31,062 |
18,982 |
36,666 |
39,268 |
152,270 |
Total non-current liabilities |
32,292 |
19,285 |
36,666 |
63,186 |
176,188 |
Trade and other payables |
1,898 |
10,365 |
11,610 |
6,941 |
6,941 |
Other current liabilities |
8,537 |
22,158 |
15,657 |
12,632 |
12,632 |
Total current liabilities |
11,306 |
48,282 |
27,576 |
21,832 |
21,832 |
Equity attributable to company |
(5,677) |
661,094 |
656,742 |
530,789 |
401,924 |
|
|
|
|
|
|
Cashflow statement |
|
|
|
|
|
Operating Profit/(loss) |
(44,856) |
(86,027) |
(130,100) |
(122,057) |
(128,865) |
Depreciation and amortisation |
831 |
887 |
992 |
842 |
4,485 |
Other adjustments |
0 |
0 |
0 |
0 |
0 |
Movements in working capital |
(14,186) |
27,731 |
(10,089) |
(8,759) |
0 |
Interest paid / received |
(166) |
(103) |
(140) |
(3,896) |
0 |
Income taxes paid |
0 |
0 |
0 |
0 |
0 |
Cash from operations (CFO) |
(57,569) |
(56,626) |
(138,031) |
(133,635) |
(124,380) |
Capex |
(809) |
(464) |
(1,361) |
(11,524) |
(878) |
Acquisitions & disposals net |
0 |
0 |
0 |
0 |
0 |
Other investing activities |
0 |
0 |
0 |
0 |
0 |
Cash used in investing activities (CFIA) |
(809) |
157,298 |
(1,361) |
(11,524) |
(878) |
Net proceeds from issue of shares |
0 |
0 |
128,949 |
0 |
0 |
Movements in debt |
(760) |
(725) |
(1,922) |
2,602 |
113,002 |
Other financing activities |
67,818 |
51,629 |
0 |
0 |
0 |
Cash flow from financing activities |
67,058 |
50,904 |
127,027 |
2,602 |
113,002 |
Increase/(decrease) in cash and equivalents |
9,627 |
153,611 |
(12,330) |
(142,557) |
(12,256) |
Cash and equivalents at beginning of period |
4,405 |
14,032 |
167,643 |
155,313 |
12,756 |
Cash and equivalents at end of period |
14,032 |
167,643 |
155,313 |
12,756 |
500 |
Net (debt) cash |
(17,030) |
133,782 |
118,647 |
(26,512) |
(151,770) |
Source: Mendus company accounts, Edison Investment Research. Note: *Long term debt used instead of equity issue.
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Research: Oil & Gas
Hellenic Petroleum reported Q222 adjusted EBITDA of €535m, almost seven times higher than a year earlier (€79m) and c 50% ahead of consensus (c €350m; six analysts). This was driven by a strong performance across all divisions. Refining saw record-high EBITDA with strong refining margins and export performance, due to market disruption and energy security concerns, following Russia’s invasion of Ukraine, along with strong demand from improved economic activity. This was despite a scheduled maintenance and higher energy costs. Marketing saw improved performance in most markets, with Greece’s exposure to tourism and GDP growth reflected in the results. RES (Renewable Energy Sources) delivered results of €6m due a full quarter performance from Kozani solar plant (204MW), which started up in April. Annualised run rate for RES is c €50m assisted by a 55MW wind farm acquired on 28 July 2022. Given the strong performance, our forecasts and valuation are under review.
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