Kiadis Pharma
Written by
Kiadis Pharma |
One dose safer than two |
Clinical update |
Pharma & biotech |
6 January 2017 |
Share price performance
Business description
Next events
Analysts
Kiadis Pharma is a research client of Edison Investment Research Limited |
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Kiadis has announced an update on the second dose Phase II study of ATIR101 in patients with haematological malignancies to investigate whether a second dose could be administered if needed. There were cases of grade III/IV Graft vs Host Disease (GVHD) in some of the six patients who underwent a second dose of the product. Kiadis shares initially dropped 8% on the news, but have since recovered some of the losses. We see no impact on our valuation or forecasts following this news, as the market opportunity we forecast is predicated on a single dose of ATIR101, which will be investigated in the upcoming Phase III trial. Furthermore, safety has already been established for the single dose in previous studies. This second dose trial was purely to see if a second dose strategy could improve patient outcomes. We maintain our valuation of €383.2m.
Year |
Revenue |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/14 |
0.00 |
(7.21) |
(0.75) |
0.0 |
N/A |
N/A |
12/15 |
0.00 |
(17.35) |
(1.36) |
0.0 |
N/A |
N/A |
12/16e |
0.00 |
(10.00) |
(0.72) |
0.0 |
N/A |
N/A |
12/17e |
0.00 |
(13.47) |
(0.96) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding intangible amortisation, exceptional items and share-based payments.
Study update: No second dose for now
Data from an exploratory Phase II study (n=15) have been announced. So far, at least one dose of ATIR101 has been administered to 10 patients and safety has been consistent with the previous Phase II study, showing no grade III/IV GVHD. A second dose of ATIR101 was administered to six patients to investigate whether this approach could further improve the outcome of haematopoietic stem cell transplantation (HSCT). Some of the six patients experienced grade III/IV GVHD, which prompted the Independent Data Monitoring Committee (IDMC) to recommend proceeding with the study with only one dose. The IDMC review was a pre-planned safety measure of the study protocol.
Concerns overstated, investment thesis unchanged
We believe the market may have overestimated the potential revenues from a second dose of ATIR101. This put Kiadis shares under pressure when the study results were announced. We believe the market overreacted and maintain our investment thesis, which is based on only one single dose; we did not assign any value to a second dose. Furthermore, the Phase III study will test only one dose; its design has been published on clinicaltrials.gov which should mean it can start imminently, broadly in line with management’s targeted timelines.
Valuation: No changes to our rNPV of €383.2m
Our valuation stands at €383.2m or €27.4 per share. We maintain the probability of success for ATIR101 in the EU at 75% to reflect our positive stance on Kiadis receiving EMA approval, based on positive Phase II data and the precedent of MolMed (see our previous note).
Exhibit 1: Financial summary
€'000s |
2013 |
2014 |
2015 |
2016e |
2017e |
2018e |
||
Year end 31 December |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
||||||||
Revenue |
|
|
0 |
0 |
0 |
0 |
0 |
3,906 |
Cost of Sales |
0 |
0 |
0 |
0 |
0 |
(1,953) |
||
Gross Profit |
0 |
0 |
0 |
0 |
0 |
1,953 |
||
R&D expenses |
(3,548) |
(4,692) |
(7,715) |
(7,230) |
(10,000) |
(10,000) |
||
SG&A expenses |
(1,444) |
(1,476) |
(8,292) |
(1,476) |
(2,000) |
(4,000) |
||
EBITDA |
|
|
(4,890) |
(6,042) |
(15,867) |
(8,606) |
(11,900) |
(12,142) |
Operating Profit (before GW and except.) |
(4,992) |
(6,168) |
(16,007) |
(8,706) |
(12,000) |
(12,242) |
||
Intangible Amortisation |
0 |
0 |
0 |
0 |
0 |
0 |
||
Exceptionals/Other |
0 |
0 |
0 |
0 |
0 |
0 |
||
Operating Profit |
(4,992) |
(6,168) |
(16,007) |
(8,706) |
(12,000) |
(12,242) |
||
Net Interest |
(831) |
(1,045) |
(1,344) |
(1,292) |
(1,466) |
(1,437) |
||
Exceptionals |
0 |
0 |
0 |
0 |
0 |
0 |
||
Other |
(1,062) |
(598) |
894 |
0 |
0 |
0 |
||
Profit Before Tax (norm) |
|
|
(5,823) |
(7,213) |
(17,351) |
(9,998) |
(13,466) |
(13,680) |
Profit Before Tax (IFRS) |
|
|
(6,885) |
(7,811) |
(16,457) |
(9,998) |
(13,466) |
(13,680) |
Tax |
0 |
(2) |
(1) |
0 |
0 |
0 |
||
Discontinued operations |
0 |
0 |
0 |
0 |
0 |
0 |
||
Profit After Tax (norm) |
(6,885) |
(7,813) |
(16,458) |
(9,998) |
(13,466) |
(13,680) |
||
Profit After Tax (IFRS) |
(6,885) |
(7,813) |
(16,458) |
(9,998) |
(13,466) |
(13,680) |
||
Average Number of Shares Outstanding (m) |
10.90 |
10.47 |
12.06 |
13.97 |
13.97 |
13.97 |
||
EPS - normalised (€) |
|
|
(0.63) |
(0.75) |
(1.36) |
(0.72) |
(0.96) |
(0.98) |
EPS - IFRS (€) |
|
|
(0.63) |
(0.75) |
(1.36) |
(0.72) |
(0.96) |
(0.98) |
Dividend per share (€) |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
||
Gross Margin (%) |
N/A |
N/A |
N/A |
N/A |
N/A |
N/A |
||
EBITDA Margin (%) |
N/A |
N/A |
N/A |
N/A |
N/A |
N/A |
||
Operating Margin (before GW and except.) (%) |
N/A |
N/A |
N/A |
N/A |
N/A |
N/A |
||
BALANCE SHEET |
||||||||
Fixed Assets |
|
|
13,428 |
14,100 |
13,047 |
13,047 |
13,047 |
13,047 |
Intangible Assets |
13,148 |
13,687 |
12,714 |
12,614 |
12,514 |
12,414 |
||
Tangible Assets |
280 |
413 |
333 |
433 |
533 |
633 |
||
Other |
0 |
0 |
0 |
0 |
0 |
0 |
||
Current Assets |
|
|
6,760 |
6,112 |
29,229 |
19,232 |
17,765 |
3,891 |
Stocks |
0 |
0 |
0 |
0 |
0 |
98 |
||
Debtors |
51 |
196 |
145 |
145 |
145 |
391 |
||
Cash |
6,482 |
5,674 |
28,666 |
18,669 |
17,202 |
2,984 |
||
Other |
227 |
242 |
418 |
418 |
418 |
418 |
||
Current Liabilities |
|
|
(1,619) |
(8,727) |
(2,913) |
(1,747) |
(1,746) |
(1,745) |
Creditors |
(1,235) |
(1,598) |
(1,747) |
(1,747) |
(1,747) |
(1,747) |
||
Short term borrowings |
(384) |
(7,129) |
(1,166) |
0 |
0 |
0 |
||
Deferred revenues |
0 |
0 |
0 |
0 |
0 |
0 |
||
Other short term liabilities |
0 |
0 |
0 |
0 |
1 |
2 |
||
Long Term Liabilities |
|
|
(13,210) |
(8,820) |
(13,713) |
(14,879) |
(26,879) |
(26,684) |
Long term borrowings |
(10,021) |
(5,090) |
(13,713) |
(14,879) |
(26,879) |
(26,684) |
||
Deferred revenues |
0 |
0 |
0 |
0 |
0 |
0 |
||
Other long term liabilities |
(3,189) |
(3,730) |
0 |
0 |
0 |
0 |
||
Net Assets |
|
|
5,359 |
2,665 |
25,650 |
15,653 |
2,187 |
(11,491) |
CASH FLOW |
||||||||
Operating Cash Flow |
|
|
(4,369) |
(6,062) |
(7,955) |
(8,606) |
(11,900) |
(12,485) |
Net Interest |
(28) |
(13) |
(141) |
(1,292) |
(1,466) |
(1,437) |
||
Tax |
0 |
0 |
0 |
0 |
0 |
0 |
||
Capex |
(102) |
(259) |
(59) |
(100) |
(100) |
(100) |
||
Acquisitions/disposals |
0 |
0 |
1 |
2 |
3 |
4 |
||
Financing |
0 |
5,051 |
31,229 |
0 |
0 |
0 |
||
Dividends |
0 |
0 |
0 |
0 |
0 |
0 |
||
Other |
89 |
28 |
4 |
0 |
0 |
0 |
||
Net Cash Flow |
(4,410) |
(1,255) |
23,079 |
(9,996) |
(13,463) |
(14,019) |
||
Opening net debt/(cash) |
|
|
(505) |
3,923 |
6,545 |
(13,787) |
(3,790) |
9,677 |
HP finance leases initiated |
0 |
0 |
0 |
0 |
0 |
1 |
||
Exchange rate movements |
25 |
(8) |
22 |
0 |
0 |
0 |
||
Other |
(43) |
(1,359) |
(2,769) |
(1) |
(3) |
(5) |
||
Closing net debt/(cash) |
|
|
3,923 |
6,545 |
(13,787) |
(3,790) |
9,677 |
23,699 |
Source: Source: Edison Investment Research, Kiadis Pharma.
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