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Market capitalisation
EUR248m
Research: Healthcare
On 15 July 2019, Oryzon presented interim data from the Phase IIa ETHERAL trial at the Alzheimer’s Association International Conference (AAIC 2019) in Los Angeles. A randomised, double-blind, three-arm study is enrolling mild- to moderate Alzheimer’s disease (AD) patients to investigate vafidemstat, an LSD1/MAOB inhibitor. The interim analysis of the blinded data from the first 104 patients (out of 125 in European centres plus 30 more patients in the US) showed the drug was safe and well tolerated. The trial remains blinded, so no conclusions on efficacy can be made at this point, but Oryzon’s presentation included an initial assessment of certain functional parameters and some biomarker data. The placebo-controlled, 24-week treatment results from the European part of the trial are expected in H120. We maintain our valuation of €430m or €11.0/share.
Written by
Oryzon Genomics |
Interim data from Phase IIa ETHERAL AD study |
R&D results |
Pharma & biotech |
18 July 2019 |
Share price performance
Business description
Next events
Analysts
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On 15 July 2019, Oryzon presented interim data from the Phase IIa ETHERAL trial at the Alzheimer's Association International Conference (AAIC 2019) in Los Angeles. A randomised, double-blind, three-arm study is enrolling mild- to moderate Alzheimer’s disease (AD) patients to investigate vafidemstat, an LSD1/MAOB inhibitor. The interim analysis of the blinded data from the first 104 patients (out of 125 in European centres plus 30 more patients in the US) showed the drug was safe and well tolerated. The trial remains blinded, so no conclusions on efficacy can be made at this point, but Oryzon’s presentation included an initial assessment of certain functional parameters and some biomarker data. The placebo-controlled, 24-week treatment results from the European part of the trial are expected in H120. We maintain our valuation of €430m or €11.0/share.
Year end |
Revenue (€m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/17 |
4.3 |
(4.6) |
(0.14) |
0.0 |
N/A |
N/A |
12/18 |
6.8 |
(3.7) |
(0.03) |
0.0 |
N/A |
N/A |
12/19e |
6.1 |
(6.8) |
(0.17) |
0.0 |
N/A |
N/A |
12/20e |
6.1 |
(6.8) |
(0.17) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
No clinically relevant safety concerns
Although the primary endpoint of the study is safety and tolerability, secondary endpoints include measures of cognition, function, behaviour and CSF biomarkers, which will provide insights into efficacy. At the time of the interim analysis 87.5% (91/104) patients had completed at least one month of treatment and no clinically relevant effects on platelets, neutrophils and other haematological parameters have been observed. 36 patients completed six month of treatment with no significant safety issues. This confirmed the data from the Phase I trial with healthy volunteers and is a significant reassurance given that any AD treatment would likely be a life-long intervention and that LSD1 is a key regulator of haematopoiesis.
Initial analysis of blinded patient data
Because the trial remains blinded, no conclusions on efficacy can be made yet, but the poster did describe disease progression in the first 33 patients, who completed 24 weeks of therapy. The researchers said that ‘while some patients clearly progress, others maintain baseline values or even improve’. This was shown using selected functional scores (MMSE and CMAI) and the proinflammatory biomarker S100A9 (Exhibit 1). Only six patients showed a clear increase on S100A9 levels, whereas the other patients were stable or showed a significant decrease.
Valuation: €430m or €11.0/share
Our valuation remains €430m or €11.0/share and our forecasts are unchanged (Exhibit 3). The full results from the ETHERAL trial are the next catalyst in this indication and will prompt us to review our rNPV of the project. As a reminder, Oryzon recently presented interim data from the two cohorts of ADHD and borderline personality disorder patients from the Phase II REIMAGINE trial with vafidemstat, which showed improvements in aggression and agitation, as well as other core features of the diseases.
Oryzon Genomics is a research client of Edison Investment Research Limited
Next steps
By mid-June, 75% of patients were enrolled to the ETHERAL trial (total n = 104). This suggests the last patient may be recruited by end of July 2019. ETHERAL-US (n = 30) is also enrolling after the FDA approved the initial new drug application IND in early 2019. The patients are randomised into three arms (placebo, low dose, high dose) using an adaptive design. The first 24 weeks are placebo-controlled, following which the placebo patients are randomised into vafidemstat therapy (low dose or high dose) so that all patients receive treatment (ie no placebo control, Exhibit 2) for another 24 weeks. Oryzon plans to report the placebo-controlled results (ie from the first 24 weeks) from the European part of the trial in H120. The full results including the extension period and the US data should be reported later in 2020.
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Exhibit 1: Functional score and biomarker evolution in blinded data analysis |
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Source: Bullock et al, AAIC 2019, Oryzon. Note: MMSE = mini-mental state examination; CMAI = Cohen-Mansfield agitation inventory. |
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Exhibit 2: Phase IIa ETHERAL AD study design |
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Source: Oryzon. Note: FUP = follow up; V = visit; R = randomisation. |
Exhibit 3: Oryzon rNPV valuation
Product |
Indication |
Launch |
Peak sales |
Value |
Probability of success (%) |
rNPV |
NPV/share |
Iadademstat (ORY-1001) |
AML |
2023 |
927 |
284.1 |
15% |
56.3 |
1.4 |
Iadademstat (ORY-1001) |
SCLC |
2026 |
571 |
137.6 |
8% |
25.2 |
0.6 |
Vafidemstat (ORY-2001) |
AD |
2026 |
4,510 |
1,018.3 |
15% |
160.5 |
4.1 |
Vafidemstat (ORY-2001) |
MS |
2027 |
1,940 |
446.6 |
20% |
105.8 |
2.7 |
Vafidemstat (ORY-2001) |
BPD |
2027 |
1,290 |
277.0 |
20% |
65.7 |
1.7 |
Net cash (end-2018) |
16.1 |
100% |
16.1 |
0.4 |
|||
Valuation |
|
|
2,179.6 |
429.6 |
11.0 |
Source: Edison Investment Research. Note: AML = acute myeloid leukaemia; SCLC = small cell lung cancer; AD = Alzheimer’s disease; MS = multiple sclerosis; BPD = borderline personality disorder.
Exhibit 4: Financial summary
€000s |
|
2017 |
2018 |
2019e |
2020e |
||
Year end 31 December |
Local GAAP |
Local GAAP |
Local GAAP |
Local GAAP |
|||
PROFIT & LOSS |
|||||||
Revenue |
|
|
4,317 |
6,781 |
6,119 |
6,137 |
|
Cost of Sales |
0 |
0 |
0 |
0 |
|||
Gross Profit |
4,317 |
6,781 |
6,119 |
6,137 |
|||
Research and development |
(5,306) |
(7,412) |
(9,454) |
(9,560) |
|||
EBITDA |
|
|
(3,498) |
(2,766) |
(6,046) |
(6,175) |
|
Operating Profit (before amort. and except.) |
(3,660) |
(2,905) |
(3,660) |
(2,905) |
|||
Intangible Amortisation |
(664) |
(7) |
(8) |
(9) |
|||
Exceptionals |
0 |
(4) |
0 |
0 |
|||
Other |
0 |
0 |
0 |
0 |
|||
Operating Profit |
(4,324) |
(2,916) |
(6,194) |
(6,324) |
|||
Exceptionals |
0 |
0 |
0 |
0 |
|||
Net Interest |
(928) |
(796) |
(586) |
(471) |
|||
Profit Before Tax (norm) |
|
|
(4,588) |
(3,701) |
(6,771) |
(6,786) |
|
Profit Before Tax (reported) |
|
|
(5,252) |
(3,712) |
(6,780) |
(6,795) |
|
Tax |
55 |
2,535 |
0 |
0 |
|||
Profit After Tax (norm) |
(4,533) |
(1,166) |
(6,771) |
(6,786) |
|||
Profit After Tax (reported) |
(5,197) |
(1,177) |
(6,780) |
(6,795) |
|||
Average Number of Shares Outstanding (m) |
31.7 |
31.7 |
34.6 |
39.1 |
|||
EPS - normalised (€) |
|
|
(0.14) |
(0.03) |
(0.17) |
(0.17) |
|
EPS - reported (€) |
|
|
(0.16) |
(0.03) |
(0.17) |
(0.17) |
|
Dividend per share (€) |
0.0 |
0.0 |
0.0 |
0.0 |
|||
Gross Margin (%) |
100.0 |
100.0 |
100.0 |
100.0 |
|||
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 |
|
|
24,914 |
31,786 |
37,758 |
43,807 |
|
Intangible Assets |
22,458 |
29,330 |
35,441 |
41,569 |
|||
Tangible Assets |
638 |
665 |
526 |
447 |
|||
Investments |
1,818 |
1,791 |
1,791 |
1,791 |
|||
Current Assets |
|
|
36,130 |
35,664 |
16,488 |
3,856 |
|
Stocks |
7 |
135 |
71 |
103 |
|||
Debtors |
857 |
971 |
914 |
943 |
|||
Cash |
34,950 |
34,320 |
15,264 |
2,572 |
|||
Other |
316 |
239 |
239 |
239 |
|||
Current Liabilities |
|
|
(8,696) |
(10,441) |
(4,017) |
(4,229) |
|
Creditors |
(1,343) |
(2,192) |
(1,767) |
(1,979) |
|||
Short term borrowings |
(7,354) |
(8,249) |
(2,249) |
(2,249) |
|||
Long Term Liabilities |
|
|
(17,915) |
(11,884) |
(11,884) |
(11,884) |
|
Long term borrowings |
(16,041) |
(9,977) |
(9,977) |
(9,977) |
|||
Other long term liabilities |
(1,874) |
(1,907) |
(1,907) |
(1,907) |
|||
Net Assets |
|
|
34,432 |
45,125 |
38,345 |
31,550 |
|
CASH FLOW |
|||||||
Operating Cash Flow |
|
|
(4,281) |
(2,799) |
(6,936) |
(6,495) |
|
Net Interest |
(426) |
2,133 |
(586) |
(471) |
|||
Tax |
0 |
0 |
0 |
0 |
|||
Capex |
(105) |
(170) |
0 |
0 |
|||
Acquisitions/disposals |
0 |
0 |
0 |
0 |
|||
Financing |
16,887 |
11,949 |
0 |
0 |
|||
Other* |
653 |
(6,576) |
(5,534) |
(5,726) |
|||
Dividends |
0 |
0 |
0 |
0 |
|||
Net Cash Flow |
12,728 |
4,538 |
(13,055) |
(12,692) |
|||
Opening net debt/(cash) |
|
|
1,172 |
(11,555) |
(16,093) |
(3,038) |
|
HP finance leases initiated |
0 |
0 |
0 |
0 |
|||
Other |
0 |
0 |
0 |
0 |
|||
Closing net debt/(cash) |
|
|
(11,555) |
(16,093) |
(3,038) |
9,655 |
|
Source: Edison Investment Research, Oryzon Genomics accounts. Note: Oryzon reports in Spanish GAAP. *Includes cash outflows related to development costs that were capitalised.
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