Celyad has presented an update on its CYAD-01 solid cancer trials with haematological data due in early December. There are strong indications that optimal effects can be gained by use of high doses, possibly with Cy-Flu preconditioning, or by combining CYAD-01 with chemotherapy in solid cancer. An allogenic colorectal trial will start in early 2019; an allogeneic product (CYAD-101) could have a major market in multiple cancer types. Our indicative value remains at €1,090m (€89/share) pending more data.
Written by
Celyad |
Highly encouraging data on dose responses |
Q3 update |
Pharma & biotech |
27 November 2018 |
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Celyad has presented an update on its CYAD-01 solid cancer trials with haematological data due in early December. There are strong indications that optimal effects can be gained by use of high doses, possibly with Cy-Flu preconditioning, or by combining CYAD-01 with chemotherapy in solid cancer. An allogenic colorectal trial will start in early 2019; an allogeneic product (CYAD-101) could have a major market in multiple cancer types. Our indicative value remains at €1,090m (€89/share) pending more data.
Year |
Revenue (€m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/16 |
8.52 |
(20.00) |
(2.09) |
0.0 |
N/A |
N/A |
12/17 |
3.54 |
(26.80) |
(2.79) |
0.0 |
N/A |
N/A |
12/18e |
0.00 |
(27.25) |
(2.43) |
0.0 |
N/A |
N/A |
12/19e |
0.00 |
(28.50) |
(2.38) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Leading position in solid cancers and allogeneic cells
NKR CAR T-cell therapy targets “stressed” cancer cells. In early data (at SITC in November) CYAD-01 with prior FOLFOX (which stresses cells) in metastatic colorectal cancer (mCRC) gave one complete and two partial pathological responses at a 3x108 dose; the study continues. In stand-alone therapy, three patients who had peak CYAD-01 blood levels of over 7,000 cells/ml showed stable disease (SD). Initial data from a trial using Cy-Flu preconditioning indicates much higher peak dose cell levels; more data is due in mid-2019. By year-end 2018, the first mCRC patients will be enrolled in a trial with allogeneic cells (CYAD-101) following FOLFOX. Potentially, CYAD-101 offers a more affordable, rapid -response therapy for thousands of patients. Celyad holds key patents in allogeneic therapy (licensed by Novartis). A shRNA approach (licensed from Horizon Discovery) is in preclinical development. These developments give Celyad a leading position in solid cancers, an area other CAR therapies find hard to access (see 2017 report).
Haematological update in December at ASH
At the ASH meeting on December 3rd, Celyad will provide an update on its trials in Acute Myeloid Leukaemia (AML). This is likely to be the first indication, in our view, to be filed for regulatory approval. The abstract shows that 3/7 (42%) patients had some form of CR; one of these led to a stem cell transplant; first reported in November 2017. Two others had SD with blast reductions. An eighth patient should be reported. The variable responses indicate that multiple factors besides dose are likely to be involved. There were no Multiple Myeloma (0/3) or MDS (0/1) responses; these were all treated at low doses. AML patients are likely to benefit from Cy-Flu preconditioning and multiple courses of treatment.
Valuation: Nominal remains at €89 per share
The data to date indicates that Celyad is closing in on the optimal dose and administration regimen for CYAD-01 and CYAD-101. Our indicative value remains at €1,090m (€89 per share). September 30 cash was €55.9m.
Exhibit 1: Financial summary
€000s |
2016 |
2017 |
2018e |
2019e |
||
Year end 31 December |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
||||||
Revenue |
|
|
8,523 |
3,540 |
0 |
0 |
Cost of Sales |
(53) |
(515) |
(500) |
(500) |
||
Gross Profit |
8,470 |
3,025 |
(500) |
(500) |
||
EBITDA |
|
|
(21,246) |
(22,317) |
(26,500) |
(27,750) |
Operating Profit (before amort. and except). |
|
|
(22,006) |
(23,283) |
(27,500) |
(28,750) |
Intangible Amortisation |
(756) |
(748) |
(750) |
(750) |
||
Other income and charges |
0 |
(26,273) |
0 |
0 |
||
Share-based payments |
(2,847) |
(2,569) |
(2,600) |
(2,600) |
||
Operating Profit |
(25,609) |
(52,873) |
(30,850) |
(32,100) |
||
Net Interest |
1,997 |
(3,521) |
250 |
250 |
||
Profit Before Tax (norm) |
|
|
(20,009) |
(26,804) |
(27,250) |
(28,500) |
Profit Before Tax (FRS 3) |
|
|
(23,612) |
(56,394) |
(30,600) |
(31,850) |
Tax |
6 |
1 |
0 |
0 |
||
Profit After Tax (norm) |
(20,003) |
(26,803) |
(27,250) |
(28,500) |
||
Profit After Tax (FRS 3) |
(23,606) |
(56,393) |
(30,600) |
(31,850) |
||
Average Number of Shares Outstanding (m) |
9.3 |
9.6 |
11.2 |
12.0 |
||
EPS - normalised (c) |
|
|
(209) |
(279) |
(243) |
(238) |
EPS - (IFRS) (c) |
|
|
(253) |
(586) |
(273) |
(267) |
Dividend per share (c) |
0.0 |
0.0 |
0.0 |
0.0 |
||
Gross Margin (%) |
N/A |
N/A |
N/A |
N/A |
||
EBITDA Margin (%) |
N/A |
N/A |
N/A |
N/A |
||
Operating Margin (before GW and except) (%) |
N/A |
N/A |
N/A |
N/A |
||
BALANCE SHEET |
||||||
Fixed Assets |
|
|
53,440 |
41,232 |
40,492 |
39,752 |
Intangible Assets |
49,566 |
36,508 |
35,768 |
35,028 |
||
Tangible Assets |
3,563 |
3,290 |
3,290 |
3,290 |
||
Investments |
311 |
1,434 |
1,434 |
1,434 |
||
Current Assets |
|
|
85,366 |
36,393 |
50,659 |
22,149 |
Stocks |
0 |
0 |
0 |
0 |
||
Debtors |
1,359 |
233 |
233 |
233 |
||
Cash (cash plus deposits) |
82,587 |
33,905 |
48,171 |
19,661 |
||
Other |
1,420 |
2,255 |
2,255 |
2,255 |
||
Current Liabilities |
|
|
(11,275) |
(7,944) |
(7,944) |
(7,944) |
Creditors |
(9,960) |
(7,509) |
(7,509) |
(7,509) |
||
Deferred revenue |
0 |
0 |
0 |
0 |
||
Walloon loans and bank loan |
(1,315) |
(435) |
(435) |
(435) |
||
Long Term Liabilities |
|
|
(36,646) |
(22,146) |
(22,146) |
(22,146) |
Loans (non-current) Bank and Walloon |
(7,866) |
(1,870) |
(1,870) |
(1,870) |
||
Other long term liabilities |
(28,780) |
(20,276) |
(20,276) |
(20,276) |
||
Net Assets |
|
|
90,885 |
47,535 |
61,061 |
31,811 |
CASH FLOW |
||||||
Operating Cash Flow |
|
|
(26,695) |
(46,027) |
(26,514) |
(27,471) |
Net Interest |
1,997 |
(3,521) |
264 |
(29) |
||
Tax |
0 |
0 |
0 |
0 |
||
Capex |
(1,782) |
(858) |
(1,010) |
(1,010) |
||
Acquisitions/disposals |
(1,561) |
0 |
0 |
0 |
||
Financing |
0 |
625 |
46,140 |
0 |
||
Dividends |
0 |
0 |
0 |
0 |
||
Other |
3,109 |
1,099 |
(4,614) |
0 |
||
Net Cash Flow |
(24,932) |
(48,682) |
14,266 |
(28,510) |
||
Opening net debt/(cash) |
|
|
(96,131) |
(73,406) |
(31,600) |
(45,866) |
HP finance leases initiated |
0 |
0 |
0 |
0 |
||
Loan and finance movements |
2,207 |
6,876 |
(0) |
0 |
||
Closing net debt/(cash) |
|
|
(73,406) |
(31,600) |
(45,866) |
(17,356) |
Source: Edison Investment Research estimates, Celyad reports and announcements
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Research: TMT
GB Group’s H119 results confirm that it is on track to reach its targets for 10%+ organic growth and 20%+ operating margins. As previously flagged, H119 reported growth rates are skewed by the large perpetual licence signed a year ago; adjusting for this the group achieved 11% underlying organic growth and 8% adjusted operating profit growth. We maintain our revenue and profitability forecasts, with small adjustments to our net cash forecasts.