Ultimovacs — Gathering steam with multiple inflections in FY23

Ultimovacs (OSE: ULTI)

Last close As at 29/02/2024

NOK134.60

3.60 (2.75%)

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Research: Healthcare

Ultimovacs — Gathering steam with multiple inflections in FY23

Ultimovacs’ Q422 and FY22 results reflected another busy period marked by continued development of its lead cancer vaccine, UV1, across multiple indications. Top-line results from the Phase II clinical trials INITIUM (in metastatic malignant melanoma) and NIPU (in metastatic pleural mesothelioma) are expected in H123 and are key catalysts for a potential licensing deal, should data be positive. Another clinical milestone will be the readout from the Phase I TENDU trial (prostate cancer), expected in H223. However, data readouts for the other Phase II trials have been adjusted due to the delayed initiation of DOVACC, change in standard of care for LUNGVAC and a minor delay in FOCUS (end FY23 to H124). We roll forward our model and adjust our estimates, resulting in a valuation of NOK7.4bn or NOK216/share (NOK7.9bn or NOK231/share previously). Our estimates do not include consideration for preclinical assets, which may offer upside on successful clinical progress. The end-FY22 cash position stood at NOK425.3m, which should provide funding to mid-2024, according to management.

Soo Romanoff

Written by

Soo Romanoff

Managing Director - Head of Content, Healthcare

Ultimovacs_resized

Healthcare

Ultimovacs

Gathering steam with multiple inflections in FY23

FY22 update

Pharma and biotech

21 February 2023

Price

NOK128.2

Market cap

NOK4,410m

NOK10.35/US$

Net cash (NOKm) at end-December 2022 (excluding leases)

425.3

Shares in issue

34.4m

Free float

56%

Code

ULTI

Primary exchange

Oslo Stock Exchange

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

15.5

28.2

53.9

Rel (local)

11.6

23.9

52.6

52-week high/low

NOK134

NOK60

Business description

Ultimovacs is developing novel immunotherapies against cancer. Its lead product candidate, UV1, is a peptide-based vaccine against the universal cancer antigen telomerase (hTERT), which is expressed in c 85% of all cancer types. UV1 therefore has a broad potential in a variety of different settings and combinations.

Next events

Phase II INITIUM top-line data

H123

Phase II NIPU top-line data

H123

Phase I TENDU initial data

H223

Analysts

Soo Romanoff

+44 (0)20 3077 5700

Dr Adam McCarter

+44 (0)20 3077 5700

Jyoti Prakash, CFA

+44 (0)20 3077 5700

Ultimovacs is a research client of Edison Investment Research Limited

Ultimovacs’ Q422 and FY22 results reflected another busy period marked by continued development of its lead cancer vaccine, UV1, across multiple indications. Top-line results from the Phase II clinical trials INITIUM (in metastatic malignant melanoma) and NIPU (in metastatic pleural mesothelioma) are expected in H123 and are key catalysts for a potential licensing deal, should data be positive. Another clinical milestone will be the readout from the Phase I TENDU trial (prostate cancer), expected in H223. However, data readouts for the other Phase II trials have been adjusted due to the delayed initiation of DOVACC, change in standard of care for LUNGVAC and a minor delay in FOCUS (end FY23 to H124). We roll forward our model and adjust our estimates, resulting in a valuation of NOK7.4bn or NOK216/share (NOK7.9bn or NOK231/share previously). Our estimates do not include consideration for preclinical assets, which may offer upside on successful clinical progress. The end-FY22 cash position stood at NOK425.3m, which should provide funding to mid-2024, according to management.

Year
end

Revenue
(NOKm)

PBT*
(NOKm)

EPS**
(NOK)

DPS
(NOK)

P/E
(x)

Yield
(%)

12/21

0.0

(164.7)

(5.09)

0.0

N/A

N/A

12/22

0.0

(167.8)

(4.89)

0.0

N/A

N/A

12/23e

0.0

(217.1)

(6.31)

0.0

N/A

N/A

12/24e

0.0

(279.3)

(8.12)

0.0

N/A

N/A

Note: *PBT is reported. **EPS is fully diluted.

Catalysts approaching in H123

The most significant near-term catalysts for Ultimovacs are top-line readouts from the Phase II INITIUM trial (first-line advanced/metastatic malignant melanoma in combination with ipilimumab and nivolumab) and the NIPU trial (in second-line metastatic pleural mesothelioma, with the same combination), both expected in H123. The INITIUM study is fully enrolled (n=156), and the last patient was enrolled for the NIPU study (n=118) in January 2023. We view the upcoming results as key milestones for UV1 as a potential treatment for patients with unmet clinical need.

Cash runway to support operations to mid-2024

We continue to anticipate increased R&D costs in FY23, due to the continued enrolment and treatment of patients across the five Phase II studies. The company had a net cash position of NOK425.3m at end-Q422, down from NOK469.1m at end-Q322. Based on the multiple ongoing clinical trials, Ultimovacs expects its current cash resources to provide a runway into mid-2024, by which time we expect to see progress on the partnering/licensing front, provided data are positive.

Valuation: NOK7.4bn or NOK216/share

We have revised our estimates for UV1’s clinical progress following the mostly minor readout delays for three Phase II programmes with the FY22 results. We also make adjustments to our operating expense estimates based on management guidance of increased expenses over FY23 and FY24. Overall, our valuation resets to NOK7.4bn or NOK216/share, from NOK7.9bn or NOK231/share previously, including a net cash position at end-FY22 of NOK425.3m.

Multiple trials in action for UV1

Ultimovacs is a clinical-stage biotechnology company developing novel immunotherapies against cancer. More specifically, it is focused on the development of a cancer vaccine with universal application, UV1. This vaccine triggers an immune response through recognition of human telomerase reverse transcriptase (hTERT), a protein that is estimated to be overexpressed in up to 90% of human cancers but not in healthy tissues. Aiming to demonstrate the combinational synergies between UV1’s immune priming ability and immune checkpoint inhibitors (ICIs), which can turn ‘cold’ (immunosuppressive) tumours to ‘hot’ (vulnerable to the immune system), Ultimovacs is pursuing the development of UV1 in combination with well-known ICIs, in multiple indications. These include ipilimumab, nivolumab, durvalumab and pembrolizumab.

While the expected INITIUM and NIPU updates represent important near-term readouts for UV1, three further Phase II studies are currently ongoing: FOCUS (head and neck cancer), DOVACC (ovarian cancer) and LUNGVAC (NSCLC). However, the timelines for these have been pushed back to H124, H224 and H225, respectively (previously end FY23, end FY23 and end FY24, respectively), driven by slower-than-expected enrolment due to regulatory requirements. We do not expect this to influence the ultimate potential of the cancer vaccine.

In addition to UV1, Ultimovacs is also evaluating the safety and tolerability of the first product candidate from the company’s second technology platform, TET (tetanus-epitope targeting). Patient enrolment for the Phase I TENDU trial (prostate cancer) was completed in mid-December 2022 and is expected to readout in H223.

UV1 gearing up for first Phase II readouts

In what is set to be a busy year of clinical activity for Ultimovacs, the most significant near-term catalysts for the company are top-line data from the INITIUM and NIPU studies in H123. The primary endpoint for the studies is progression-free survival (PFS), with overall survival (OS), objective response rate (ORR), duration of response (DOR) and safety being key secondary endpoints.

Exhibit 1: Ultimovacs’ clinical pipeline

Source: Ultimovacs Q422 results presentation deck

Phase II INITIUM trial

The Phase II INITIUM trial in metastatic malignant melanoma, fully sponsored by Ultimovacs, completed patient recruitment in June 2022 (n=156). The trial is randomised, where 78 patients receive first-line treatment with nivolumab (anti-PD-1) and ipilimumab (anti-CTLA-4), while the other 78 patients receive the combination of nivolumab, ipilimumab and UV1. Patients in the active arm will receive eight UV1 vaccinations over four cycles of nivolumab and ipilimumab. In the control arm, the patients will receive four cycles of nivolumab and ipilimumab. Subsequently, all patients in both arms will proceed to maintenance therapy (nivolumab every four weeks).

Phase II NIPU study

The randomised NIPU trial in metastatic pleural mesothelioma (n=118, two arms with 59 patients in each) completed patient enrolment in January 2023, with patients receiving the same combination treatment as in the INITIUM trial (UV1 plus ipilimumab plus nivolumab), but as second-line treatment. The objective of the study is to achieve a meaningful PFS after the progression on first-line standard platinum-doublet chemotherapy. Patients recruited in the trial must not have undergone previous treatment with ICIs (naïve). Bristol Myers Squibb (BMS) is supporting the study with the provision of its ICI therapies.

Melanoma a potentially low hanging fruit for vaccines

The existing standard of care for the treatment of metastatic melanoma depends on whether a tumour contains a driver BRAF mutation (ICIs are more commonly used in metastatic melanoma when there is no BRAF mutation). Around 40–50% of all metastatic melanomas have the driver BRAF mutation, in which case BRAF inhibitors are used in combination with MEK inhibitors to decrease MAPK-driven acquired resistance (dabrafenib/trametinib or vemurafenib/cobimetinib). In patients with no BRAF mutation, the guidelines from the National Comprehensive Cancer Network recommend single-agent immunotherapy with pembrolizumab or nivolumab or combination therapy, with nivolumab plus ipilimumab as the first choice (Exhibit 2). In February 2022, Opdualag was the second ICI combination treatment approved for first-line metastatic melanoma.

Exhibit 2: ICIs approved for first-line metastatic melanoma

Company

Drug

Target/s

2028 estimated sales according to EvaluatePharma

FDA approval basis

Bristol Myers Squibb

Nivolumab (Opdivo)

PD-1

$2.6bn

mPFS 5.1 months

Bristol Myers Squibb

Ipilimumab (Yervoy)

CTLA-4

$540m

Two-year survival rate 24%

Bristol Myers Squibb

Nivolumab plus ipilimumab

PD-1 / CTLA-4

See above

mPFS 11.5 months

Bristol Myers Squibb

Nivolumab plus relatlimab (combo brand name Opdualag)

PD-1/ LAG-3

$2.4bn

mPFS 10.1 months

Merck

Pembrolizumab (Keytruda)

PD-1

$2.5bn

ORR 34%

Source: EvaluatePharma, Edison Investment Research. Note: mPFS = median progression-free survival.

As melanoma is one of the most immunogenic tumour types, melanoma patients who are eligible to receive immunotherapy often respond well to ICI treatments. In contrast, historically, attempts to develop cancer vaccines as immunotherapies have been met with disappointing results. However, with the evolution of ICIs, there is potential for a synergistic relationship between ICIs and cancer vaccines, with the former making tumour cells vulnerable to attack by the immune system cells and the latter priming the body’s immune cells to fight tumours. In our view, this combinational approach opens the potential for cancer vaccines to begin realising their clinical utility.

Long-term survival data for UV1 provides encouraging signs

What we believe represents one the most significant clinical validations of Ultimovacs’ technology, to date, is the long-term survival data the company reported in October 2022 from its open-label Phase I study (UV1-103) in metastatic melanoma. The trial is investigating UV1 in combination with Merck’s ICI, pembrolizumab (Keytruda), in the first-line setting. The three-year OS rate from patients in cohort one of the study was 71% (12/17). This result builds on the consistently high OS rates already observed from the trial: 85% (17/20) after one year and 80% (16/20) after two-year follow-up. The UV1-103 trial had previously met its primary endpoints for safety and tolerability, and the latest data from cohort one patients demonstrate the long-term clinical efficacy of UV1. Of note, the three-year OS rate from the KEYNOTE-006 study investigating pembrolizumab as a monotherapy in first-line patients with metastatic melanoma was 51%.

Merck/Moderna combo further validates vaccines in melanoma

Merck and Moderna released highly encouraging results in December 2022 from a Phase II study (KEYNOTE-942) investigating the jointly developed, personalised mRNA vaccine (mRNA-4157/V940) in combination with Merck’s ICI, Keytruda, for the treatment of stage III/IV melanoma. Notably, the combination therapy reduced the risk of tumour recurrence, or death, in patients by 44% compared to Keytruda alone. The partners intend to initiate a Phase III study in melanoma in 2023 with the intention of moving into additional tumour indications. While we caution against direct read-across between studies, the results provide further clinical validation for the application of cancer vaccines in the treatment of advanced melanoma and an encouraging precedent for the INITIUM study.

Universal treatment approaches may offer differentiation

While personalised therapy approaches may offer improved efficacies, with treatments tailored to an individual’s specific disease profile, it is likely that, from a cost and manufacturing perspective, patient-specific vaccines will encounter manufacturing issues similar to those faced by patient-specific cell therapies. Today, personalised cell therapies continue to struggle with production bottlenecks and timely supply of treatments, a serious issue for patients with aggressive cancers. In our view, the operational infrastructure to support the mass production of personalised treatments is not currently in place and may not be for quite some time. In the case of cancer vaccines, which aim to target larger patient populations across a broad range of indications, we believe more universal approaches looking to provide timelier, upfront access to treatment for patients offer significant potential to differentiate in the market.

With the advantages that ‘off-the-shelf’ therapies such as UV1 might possess, we believe this makes the upcoming readouts from the INITIUM study of even greater significance. Should UV1 demonstrate statistically significant improvements in PFS versus the nivolumab/ipilimumab combination, it not only may potentially disrupt existing first-line ICI treatment regimens, but, in our view, would provide UV1 with a distinct competitive advantage over personalised vaccine approaches and open up potential licensing opportunities. Positive clinical data may heighten the interest of BMS, whose ICI combination, nivolumab plus ipilimumab, is being used alongside UV1 in the INITIUM trial. BMS has publicly voiced support for the continued development of cancer vaccine technology and, if BMS looks to compete with Merck and Moderna’s mRNA candidate in melanoma, UV1 may be viewed as an attractive asset, provided upcoming clinical study readouts are positive.

Valuation

We value Ultimovacs based on a risk-adjusted net present value (rNPV) analysis using a 12.5% discount rate, including net cash of NOK425.3m. Our current valuation is wholly attributable to the five ongoing Phase II trials for UV1 and excludes other early-stage clinical (such as the Phase I TENDU trial) and preclinical assets, each of which offers upside on successful clinical progress. The rNPV valuation for all five indications is based on a similar bottom-up approach (for further details, see our initiation report). Following the announcement of the adjustment in the timelines for three of the Phase II readouts, as described earlier, we have updated our estimates for the clinical development timelines for these three programmes, pushing out the approval and launch estimates for each of these by around six months to a year. We continue to assume that a global out-licensing deal for UV1 across all indications will be secured by end-2024. Our updated valuation now stands at NOK7.4bn or NOK216 per share (NOK7.9bn or NOK231 per share previously).

Exhibit 3: Valuation of Ultimovacs

Product

Launch

Peak sales
($m)

NPV (NOKm)

NPV/share (NOK/share)

Probability

rNPV (NOKm)

rNPV/share (NOK/share)

UV1 – malignant melanoma

2028

1,270

5,510.4

160.2

25.0%

1,491.8

43.4

UV1 – mesothelioma

2028

570

2,573.9

74.8

25.0%

694.5

20.2

UV1 – ovarian cancer

2029

787

2,936.5

85.4

25.0%

818.5

23.8

UV1 – head and neck cancer

2029

1,370

5,335.3

155.1

25.0%

1,456.3

42.3

UV1 – NSCLC

2030

2,683

9,417.9

273.8

25.0%

2,544.2

74.0

Net cash, last reported

 

 

425.3

12.4

100.0%

425.3

12.4

Valuation

 

 

26,199.3

761.7

7,430.6

216.0

Source: Edison Investment Research

Financials

Total operating expenses for FY22 came in at NOK183.6m, a 12.1% increase year-on-year and higher than our estimate of NOK170.5m. This increase was primarily driven by a 15% growth in payroll expenses, specifically related to higher share-based payments. External R&D expenses remained broadly unchanged compared to the previous year (NOK95.2m versus NOK96.7m in FY21) likely due to patient enrolment on certain trials temporarily slowing down, as highlighted in the previous sections. Net cash flow from operating activities stood at NOK167.7m in FY22 (NOK125.8m in FY21, although the figure was affected by the release of working capital in FY21). Management expects operating expense levels to rise in the coming years, as patient enrolment to the remaining Phase II trials increases. We have updated our FY23 estimates for R&D and other operating expenses to reflect this guidance and have now introduced FY24 estimates as we roll forward our model by a year. Ultimovacs ended the year with a net cash position of NOK425.3m, which management expects to be sufficient to fund operations to mid-2024, by which time we expect to see progress on the partnering/licensing front for the most clinically advanced assets, should trial outcomes be positive. Since our model assumes an out-licensing deal by end-2024, we estimate that the company would be required to raise c NOK150m in funds in H224. We account for this raise as illustrative debt in our model. Alternatively, if the funding is realised through an equity issue instead (assuming at the current trading price of NOK128/share), Ultimovacs would have to issue 1.25m shares, resulting in our per share valuation coming down to NOK208.5 from NOK216 currently (shares outstanding would increase from 34.4m to 35.7m).

Exhibit 4: Financial summary

Accounts IFRS; year end 31 December; NOKm

 

2019

2020

2021

2022

2023e

2024e

Income statement

 

 

 

 

 

 

 

Total revenues

 

0.00

0.00

0.00

0.00

0.00

0.00

Cost of sales

 

0.00

0.00

0.00

0.00

0.00

0.00

Gross profit

 

0.00

0.00

0.00

0.00

0.00

0.00

SG&A (expenses)

 

(20.16)

(50.99)

(61.92)

(71.47)

(85.76)

(102.91)

R&D costs

 

(35.53)

(64.66)

(96.74)

(95.18)

(109.52)

(136.90)

Other income/(expense)

 

(8.47)

(5.78)

(2.48)

(14.34)

(27.38)

(34.22)

Exceptionals and adjustments

 

0.00

0.00

0.00

0.00

0.00

0.00

Reported EBITDA

 

(64.15)

(121.43)

(161.13)

(180.98)

(222.65)

(274.03)

Depreciation and amortisation

 

(2.06)

(2.72)

(2.70)

(2.65)

(2.44)

(2.38)

Reported Operating Profit/(loss)

 

(66.22)

(124.15)

(163.83)

(183.63)

(225.09)

(276.41)

Finance income/(expense)

 

5.05

3.59

(0.89)

15.84

8.02

(2.93)

Other income/(expense)

 

0.00

0.00

0.00

0.00

0.00

0.00

Exceptionals and adjustments

 

0.00

0.00

0.00

0.00

0.00

0.00

Reported PBT

 

(61.17)

(120.55)

(164.72)

(167.79)

(217.08)

(279.34)

Income tax expense

 

0.00

0.00

0.00

0.00

0.00

0.00

Reported net income

 

(61.17)

(120.55)

(164.72)

(167.79)

(217.08)

(279.34)

Basic average number of shares, m

 

22.93

30.26

32.37

34.31

34.40

34.40

Basic EPS (NOK)

 

(2.67)

(3.98)

(5.09)

(4.89)

(6.31)

(8.12)

Diluted EPS (NOK)

 

(2.67)

(3.98)

(5.09)

(4.89)

(6.31)

(8.12)

Balance sheet

 

 

 

 

 

 

 

Property, plant and equipment

 

0.536

0.377

0.212

0.220

0.125

0.007

Intangible assets

 

66.370

76.346

71.119

68.429

66.280

64.211

Other non-current assets

 

3.523

3.630

1.951

5.444

5.444

5.444

Total non-current assets

 

70.429

80.353

73.282

74.093

71.849

69.662

Cash and equivalents

 

399.607

440.925

574.168

425.309

212.206

87.189

Trade and other receivables

 

0.000

0.000

0.000

0.000

0.000

0.000

Other current assets

 

8.004

8.438

8.087

10.270

10.270

10.270

Total current assets

 

407.611

449.363

582.255

435.579

222.476

97.459

Non-current loans and borrowings

 

2.301

2.075

0.457

3.713

3.713

153.713

Deferred tax liabilities

 

10.851

11.795

11.031

10.701

10.701

10.701

Total non-current liabilities

 

13.152

13.870

11.488

14.414

14.414

164.414

Trade and other payables

 

11.768

8.611

22.555

7.655

9.383

11.523

Other current liabilities

 

8.489

18.856

28.342

38.252

38.252

38.252

Total current liabilities

 

20.257

27.467

50.897

45.907

47.635

49.775

Equity attributable to company

 

444.632

488.380

593.152

449.351

232.276

(47.067)

Cashflow statement

 

 

 

 

 

 

 

Operating Profit/(loss)

 

(66.217)

(124.146)

(163.833)

(183.630)

(225.093)

(276.412)

Depreciation and amortisation

 

2.063

2.720

2.703

2.648

2.439

2.382

Other adjustments

 

(2.023)

3.215

12.331

4.437

(8.506)

(4.244)

Movements in working capital

 

(1.862)

6.395

23.860

(6.988)

1.728

2.139

Interest paid / received

 

0.000

0.000

0.000

0.000

0.000

0.000

Income taxes paid

 

0.000

0.000

0.000

0.000

0.000

0.000

Cash from operations (CFO)

 

(62.988)

(108.223)

(125.828)

(167.694)

(221.414)

(279.066)

Capex

 

(0.172)

(0.282)

(0.085)

(0.195)

(0.195)

(0.195)

Acquisitions & disposals net

 

0.000

0.000

0.000

0.000

0.000

0.000

Other investing activities

 

4.490

(0.455)

3.062

8.887

8.506

4.244

Cash used in investing activities (CFIA)

 

4.318

(0.737)

2.977

8.692

8.311

4.049

Net proceeds from issue of shares

 

344.582

152.933

261.852

5.484

0.000

0.000

Movements in debt

 

0.000

0.000

0.000

0.000

0.000

150.000

Other financing activities

 

(1.579)

(1.916)

(1.895)

(1.907)

0.000

0.000

Cash flow from financing activities

 

343.003

151.017

259.957

3.577

0.000

150.000

Increase/(decrease) in cash and equivalents

 

284.333

42.057

137.106

(155.425)

(213.103)

(125.017)

Cash and equivalents at beginning of period

 

115.540

399.608

440.925

574.168

425.310

212.206

Cash and equivalents at end of period

 

399.608

440.925

574.168

425.310

212.206

87.189

Net (debt) cash (including lease liabilities)

 

395.982

437.143

572.083

419.830

206.726

(68.291)

Source: company reports, Edison Investment Research

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The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

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United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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Copyright: Copyright 2023 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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Respiri has announced the successful completion of the Michigan Children’s Hospital’s pilot programme assessing the wheezo SAAS (Respiri and partner Access Telehealth) platform. The initial March 2022 agreement enabled pulmonologists to employ wheezo to increase the engagement of paediatric patients with asthma. The hospital will include the wheezo RPM programme in its current standard of care for eligible asthma patients. We expect the paediatric population to be one of the cohorts to find the most utility from the wheezo monitoring protocol (given this population is not always able to self-identify and flag symptoms) and usage feedback from these patients is anticipated to be crucial for Respiri. We also note the Michigan Children’s Hospital is a part of the of the NYSE-listed Tenet Healthcare Corporation (over 60 hospitals across the US) and uptake, if encouraging, can support a broader roll out.

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