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Last close As at 09/06/2023
USD1.32
▲ 0.04 (3.13%)
Market capitalisation
USD22m
Research: Healthcare
Novogen is on track to commence a Phase II trial of GDC-0084 in glioblastoma in Q4 CY17, in line with previous guidance. It plans to meet with the FDA to discuss trial design as it finalises preparations for the study. A Phase I trial of Cantrixil in ovarian cancer is well underway, with initial data expected in late 2017 or early 2018 – efficacy data from an expansion cohort at the MTD are likely in H2 CY18. We lift our valuation range slightly to between A$87m and A$152m (A$0.18-0.31 per share), while noting that additional funds may be needed in FY18.
Novogen |
GDC-0084 Phase II on track to commence Q417 |
FY17 results update |
Pharma & biotech |
11 September 2017 |
Share price performance
Business description
Next events
Analysts
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Novogen is on track to commence a Phase II trial of GDC-0084 in glioblastoma in Q4 CY17, in line with previous guidance. It plans to meet with the FDA to discuss trial design as it finalises preparations for the study. A Phase I trial of Cantrixil in ovarian cancer is well underway, with initial data expected in late 2017 or early 2018 – efficacy data from an expansion cohort at the MTD are likely in H2 CY18. We lift our valuation range slightly to between A$87m and A$152m (A$0.18-0.31 per share), while noting that additional funds may be needed in FY18.
Year |
Revenue |
PBT* |
EPS* |
DPS |
P/E |
Yield |
06/16 |
3.7 |
(11.6) |
(2.8) |
0.0 |
N/A |
N/A |
06/17 |
8.6 |
(10.9) |
(2.3) |
0.0 |
N/A |
N/A |
06/18e |
7.5 |
(17.3) |
(3.6) |
0.0 |
N/A |
N/A |
06/19e |
17.6 |
(10.8) |
(2.2) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding exceptionals and share-based payments.
GDC-0084 Phase II to start in Q417
Novogen is on track to initiate a Phase II trial of GDC-0084 (a small molecule inhibitor of the PI3K/Akt/mTOR pathway) in glioblastoma (brain cancer) in Q417. It has appointed Chiltern Oncology to manage the trial, and the manufacture of finished dosage capsules of the drug is almost complete. Consultations with the FDA to discuss key features of the clinical trial design are expected before the study commences. The trial will test GDC-0084 in a subset of glioblastoma patients who are known to obtain little benefit from standard temozolomide chemotherapy; the study is supported by encouraging Phase I data. The clear unmet medical need in this patient group could open access to accelerated approval pathways.
Cantrixil ovarian cancer study progressing
The Phase I trial of Cantrixil in ovarian cancer is recruiting patients at three sites in Australia and two sites in the US. The maximum tolerated dose (MTD) of intra-peritoneal Cantrixil in advanced ovarian cancer is likely to be determined in late 2017 or early 2018. In addition to dosage, safety and tolerability, the study will also assess indicators of efficacy such as radiological responses and biomarkers. After six weeks of single-agent Cantrixil therapy, patients may continue to receive weekly Cantrixil in combination with a chemotherapy agent such as carboplatin. Efficacy data are likely in H2 CY18 from a 12-patient expansion cohort at the MTD.
Valuation: A$87-152m in two GDC-0084 scenarios
We lift our indicative valuation range slightly to between A$87m and A$152m or A$0.18-0.31 per share (vs A$86m to A$146m, A$0.18-0.30 per share), under either post-Phase III approval or accelerated approval scenarios for GDC-0084. The valuation changes reflect rolling forward our DCF model to FY18 and reducing FY18 R&D expenses, offset by a deferral to FY28 of the forecast market launch of the preclinical Trilexium drug as the company focuses on its clinical programmes. Novogen had A$14.5m cash at 30 June 2017 and we estimate that it may require A$7m in additional funding in FY18 and A$12m in FY19.
Exhibit 1: Financial summary
|
A$'000s |
2015 |
2016 |
2017 |
2018e |
2019e |
|
Year end 30 June |
AASB |
AASB |
AASB |
AASB |
AASB |
||
PROFIT & LOSS |
|||||||
Sales, royalties, milestones |
0 |
0 |
0 |
0 |
9,250 |
||
Other (includes R&D tax rebate) |
1,637 |
3,665 |
8,563 |
7,483 |
8,341 |
||
Revenue |
|
|
1,637 |
3,665 |
8,563 |
7,483 |
17,591 |
R&D expenses |
(5,935) |
(9,894) |
(11,136) |
(19,184) |
(22,447) |
||
SG&A expenses |
(3,269) |
(4,343) |
(7,596) |
(4,329) |
(4,408) |
||
Other |
0 |
0 |
0 |
0 |
0 |
||
EBITDA |
|
|
(7,567) |
(10,572) |
(10,169) |
(16,030) |
(9,264) |
Operating Profit (before GW and except.) |
|
|
(7,572) |
(10,671) |
(10,287) |
(16,128) |
(9,613) |
Intangible Amortisation |
(570) |
(1,320) |
(66) |
(1,273) |
(1,172) |
||
Exceptionals |
1,116 |
(569) |
0 |
0 |
0 |
||
Operating Profit |
(7,026) |
(12,560) |
(10,353) |
(17,402) |
(10,784) |
||
Net Interest |
(280) |
406 |
(516) |
145 |
13 |
||
Profit Before Tax (norm) |
|
|
(8,422) |
(11,586) |
(10,869) |
(17,257) |
(10,772) |
Profit Before Tax (reported) |
|
|
(7,306) |
(12,154) |
(10,869) |
(17,257) |
(10,772) |
Tax benefit |
0 |
0 |
199 |
0 |
0 |
||
Profit After Tax (norm) |
(8,422) |
(11,586) |
(10,670) |
(17,257) |
(10,772) |
||
Profit After Tax (reported) |
(7,306) |
(12,154) |
(10,670) |
(17,257) |
(10,772) |
||
Average Number of Shares Outstanding (m) |
238.4 |
427.4 |
467.8 |
483.3 |
483.3 |
||
EPS - normalised (c) |
|
|
(2.99) |
(2.84) |
(2.28) |
(3.57) |
(2.23) |
EPS - diluted |
|
|
(2.99) |
(2.84) |
(2.28) |
(3.57) |
(2.23) |
Dividend per share (A$) |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
BALANCE SHEET |
|||||||
Fixed Assets |
|
|
1,491 |
1,427 |
16,430 |
16,408 |
16,138 |
Intangible Assets |
1,390 |
822 |
15,918 |
14,645 |
13,473 |
||
Tangible Assets |
85 |
592 |
490 |
1,742 |
2,643 |
||
Investments |
16 |
13 |
22 |
22 |
22 |
||
Current Assets |
|
|
44,649 |
34,090 |
19,480 |
9,647 |
10,154 |
Stocks |
0 |
0 |
0 |
0 |
0 |
||
Debtors |
151 |
199 |
4,263 |
7,622 |
8,476 |
||
Cash |
44,371 |
33,453 |
14,455 |
1,262 |
914 |
||
Other |
127 |
438 |
763 |
763 |
763 |
||
Current Liabilities |
|
|
(1,777) |
(1,432) |
(5,384) |
(5,384) |
(3,974) |
Creditors |
(1,619) |
(1,300) |
(1,873) |
(1,873) |
(463) |
||
Short term borrowings |
0 |
0 |
0 |
0 |
0 |
||
Other |
(159) |
(132) |
(3,512) |
(3,512) |
(3,512) |
||
Long Term Liabilities |
|
|
0 |
(154) |
(5,188) |
(12,188) |
(24,188) |
Long term borrowings |
0 |
0 |
0 |
(7,000) |
(19,000) |
||
Other long term liabilities |
0 |
(154) |
(5,188) |
(5,188) |
(5,188) |
||
Net Assets |
|
|
44,362 |
33,931 |
25,338 |
8,483 |
(1,870) |
CASH FLOW |
|||||||
Operating Cash Flow |
|
|
(5,759) |
(12,383) |
(11,683) |
(18,987) |
(11,110) |
Net Interest |
0 |
405 |
248 |
145 |
13 |
||
Tax |
0 |
0 |
0 |
0 |
0 |
||
Capex |
(97) |
(525) |
(20) |
(1,350) |
(1,250) |
||
Acquisitions/disposals |
8 |
3 |
(7,097) |
0 |
0 |
||
Equity Financing |
47,415 |
782 |
(18) |
0 |
0 |
||
Dividends |
0 |
0 |
0 |
0 |
0 |
||
Other |
0 |
0 |
0 |
0 |
0 |
||
Net Cash Flow |
41,566 |
(11,719) |
(18,570) |
(20,193) |
(12,347) |
||
Opening net debt/(cash) |
|
|
205 |
(44,371) |
(33,453) |
(14,455) |
5,738 |
HP finance leases initiated |
0 |
0 |
0 |
0 |
0 |
||
Other |
3,011 |
800 |
(429) |
0 |
0 |
||
Closing net debt/(cash) |
|
|
(44,371) |
(33,453) |
(14,455) |
5,738 |
18,086 |
Source: Novogen accounts, Edison Investment Research
|
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Research: Consumer
bet-at-home is a long-established sports betting brand with positive online growth drivers. H117 revenues grew an impressive 17.5%, with an EBITDA margin of 22.6%. After heavy investment in marketing, the company now has 4.7m customers and is well positioned to benefit from the 2018 FIFA World Cup. Following regulatory concerns in Poland, the stock has fallen from its highs and now trades at 15.0x 2018e EV/EBITDA, which is still a premium to the peer group. However, management has reiterated its FY17 guidance. Solid cash position and 4.3% 2018e dividend yield are attractive.
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