Last close As at 05/08/2026
EUR2.92
▲ −0.01 (−0.41%)
Market capitalisation
EUR248m
Research: Healthcare
On 9 December 2019, Oryzon presented more data from the Phase II ALICE trial at the 61st ASH annual meeting in Orlando, Florida. The single-arm, open-label study enrolled newly diagnosed, elderly acute myeloid leukaemia (AML) patients and investigated iadademstat in combination with standard of care chemotherapy drug azacitidine. Six of the eight evaluable patients (75%) achieved objective (OR) responses, which was in line with the first results reported in June 2019. For comparison, OR rates are 25–32% in AML patients treated with azacitidine monotherapy. Our valuation is €437m or €9.5/share.
Written by
Oryzon Genomics |
Maturing ALICE trial dataset continues to impress |
R&D results |
Pharma & biotech |
10 December 2019 |
Share price performance
Business description
Next events
Analyst
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On 9 December 2019, Oryzon presented more data from the Phase II ALICE trial at the 61st ASH annual meeting in Orlando, Florida. The single-arm, open-label study enrolled newly diagnosed, elderly acute myeloid leukaemia (AML) patients and investigated iadademstat in combination with standard of care chemotherapy drug azacitidine. Six of the eight evaluable patients (75%) achieved objective (OR) responses, which was in line with the first results reported in June 2019. For comparison, OR rates are 25–32% in AML patients treated with azacitidine monotherapy. Our valuation is €437m or €9.5/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) |
(0.16) |
0.0 |
N/A |
N/A |
12/20e |
6.1 |
(6.8) |
(0.15) |
0.0 |
N/A |
N/A |
Note: *Normalised, excluding amortisation of acquired intangibles and exceptional items.
Second, positive batch of data from Ph II ALICE trial
ORs were assessed by bone marrow (BM) aspirate. Of the 13 enrolled patients, eight had at least one bone marrow aspirate, and therefore were evaluable. Three patients died before their first BM evaluation and two were just starting treatment. Six of the eight evaluable patients (75%) achieved ORs: two complete responses (CRs), three complete responses with incomplete haematologic recovery (CRi) and one partial response (PR). As a reminder, in the first set of data published in June 2019, the OR rate was 80% in five evaluable patients (3/5 CRi and 1/5 PR). Given the small sample size, an outcome in just one patient can significantly influence the results. In addition, the trial is not complete yet. However, the OR rates have been consistent so far within the 75–80% range and compare very favourably with the classical chemotherapy, but also with venetoclax. The latter is a novel drug approved for front-line AML treatment in November 2018. Venetoclax (AbbVie/Genentech) plus azacitidine or decitabine achieved an OR rate of 67%.
Next steps
The second part of the ALICE study will enrol 18 patients, so these results will be expanded in coming months with additional patients and longer follow-up times. Oryzon also indicated that even though the results are not final yet, the existing evidence ‘may warrant further trials with this combination therapy in a confirmatory study setting’. Oryzon will obviously need to complete the ALICE trial before designing a confirmative study. However, the statement, which was part of the poster presentation, seems confident.
Valuation: €437m or €9.5/share
Our valuation is €437m or €9.5/share (versus €430m or €11.0/share) after a technical adjustment to include a private placement in July 2019. The full results from the ALICE trial (expected next year) will be a substantial catalyst for the share price, as Oryzon indicated that one of the goals of the trial is to understand the broader application of iadademstat in other leukaemias, with another haematological indication a possible next step.
Oryzon Genomics is a research client of Edison Investment Research Limited
Phase IIa ALICE data from Part 2
The single-arm, open-label study is enrolling newly diagnosed, elderly acute myeloid leukaemia (AML) patients and is investigating iadademstat in combination with standard of care chemotherapy drug azacitidine. Oryzon intends to enrol 18 patients in the ongoing Part 2 (expansion cohort) of the ALICE trial. At the time of writing the ASH poster, 13 patients have been enrolled in ALICE. The main endpoints include:
■
Dose finding data,
■
PK/PD evaluation (including a set of six blood biomarkers), and
■
Initial efficacy (OR measured by bone marrow aspirate).
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Exhibit 1: Patients enrolled in the Phase IIa ALICE trial |
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Source: C Buesa et al. Iadademstat Shows Efficacy in Elderly AML Patients in Combination with Azacitidine. ALICE Trial. Poster presentation at ASH 2019. |
Safety/tolerability
Overall, the authors of the ASH poster concluded that the combination of iadademstat and azacitidine shows a good safety profile in elderly AML patients. In Part 1 (dose finding), the recommended dose of 90µg/m2 was established. Later, the dose was lowered to 60µg/m2 by the safety monitoring committee (SMC). This decision was made after one patient withdrew consent after experiencing severe fatigue and another patient died due to an intracranial haemorrhage. Oryzon did not see any clinically relevant non-haematological adverse events.
LSD1 inhibitor class drugs are known to have haematological sides effects at higher doses, however, these are usually predictable and manageable. We note that a clear drug-side effect relationship is not always straightforward to prove. For example, intracranial haemorrhage (haemorrhagic stroke) can have many causes, especially in such elderly, highly ill patients. So, the decision to lower the dose could serve as a precaution. The tolerability of the drug will improve at the lower dose and, more importantly, Oryzon believes this will not come at the expense of efficacy, as existing PK/PD data show that a 60μg/m2/d level is also able to saturate LSD1 target engagement with a clear biomarker effect.
Putting Iadademstat efficacy results in perspective
OR rates in AML patients treated with azacitidine monotherapy are 25–32% depending on age (Seymour et al, 2016). A recently published article (DiNardo et al, 2019) described a clinical trial (n=145) where AML patients received venetoclax plus azacitidine or decitabine (both chemical analogs of cytidine) and the ORR was 67%. Venetoclax (Venclexta, AbbVie/Genentech) is a novel anticancer drug approved (accelerated approval) by the FDA for frontline treatment of AML in combination with azacitidine or decitabine or low-dose cytarabine. Iadademstat’s initial 75–80% OR rate is much higher than the historical response rates with classic chemotherapy and compares well with Venetoclax’s OR of 67%.
Iadademstat, as a selective LSD1 inhibitor, has been shown to be effective in preclinical models, including combinations with azacitidine. In addition, Oryzon has already completed a Phase I first-in-man trial, where iadademstat was given as a monotherapy, and demonstrated preliminary antileukaemic activity (reviewed in detail in our initiation report).
Exhibit 2: 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-2019e) |
23.0 |
100% |
23.0 |
0.5 |
|||
Valuation |
|
|
2,186.6 |
436.6 |
9.5 |
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 3: 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) |
(6,186) |
(6,314) |
||
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 |
34.6 |
42.5 |
45.8 |
||
EPS - normalised (€) |
|
|
(0.14) |
(0.03) |
(0.16) |
(0.15) |
EPS - reported (€) |
|
|
(0.16) |
(0.03) |
(0.16) |
(0.15) |
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 |
36,488 |
23,856 |
Stocks |
7 |
135 |
71 |
103 |
||
Debtors |
857 |
971 |
914 |
943 |
||
Cash |
34,950 |
34,320 |
35,264 |
22,572 |
||
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 |
58,345 |
51,550 |
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 |
20,000 |
0 |
||
Other* |
653 |
(6,576) |
(5,534) |
(5,726) |
||
Dividends |
0 |
0 |
0 |
0 |
||
Net Cash Flow |
12,728 |
4,538 |
6,945 |
(12,692) |
||
Opening net debt/(cash) |
|
|
1,172 |
(11,555) |
(16,093) |
(23,038) |
HP finance leases initiated |
0 |
0 |
0 |
0 |
||
Other |
0 |
0 |
0 |
0 |
||
Closing net debt/(cash) |
|
|
(11,555) |
(16,093) |
(23,038) |
(10,345) |
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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Research: Industrials
The search for a strategic partner is moving forward with the announcement that Advanced Maritime Transports SA (AMT) is to be acquired by Medserv via a share-for-share exchange, following which AMT’s owners will purchase the stakes of the majority holders and launch a voluntary bid for the minority holdings at €1.102. The bid represents a 10% premium to the deal for the majority shares. With no financial information provided it is difficult to assess the merits of the offer to shareholders and we await further details. Medserv expects to beat its forecast for FY19 and we have lifted our estimates for this year modestly. However, the challenges for the year ahead have increased and we are lowering our FY20 estimates as a result.