Medigene
Written by
Medigene |
Continuing to progress its clinical pipeline |
Q1 results |
Pharma & biotech |
19 May 2016 |
Share price performance
Business description
Next events
Analysts
Medigene is a research client of Edison Investment Research Limited |
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Medigene’s Q1 results continue to underpin its transformation to a cancer immunotherapy-focused company. Progress across its clinical pipeline continues to create further focus on clinical development and future commercialisation. Alongside management changes, this indicates that the company is executing its strategy. It is well funded, with a net cash position of €46.3m (Q116).
Year end |
Revenue (€m) |
PBT* (€m) |
EPS* (€) |
DPS (€) |
P/E (x) |
Yield (%) |
12/14 |
13.8 |
(5.3) |
(0.42) |
0.0 |
N/A |
N/A |
12/15 |
6.8 |
(12.8) |
(0.74) |
0.0 |
N/A |
N/A |
12/16e |
7.1 |
(13.1) |
(0.66) |
0.0 |
N/A |
N/A |
12/17e |
7.3 |
(13.5) |
(0.67) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Promising early IIT DC vaccine data presented
Promising early data have been presented from its investigator-initiated trials (IITs) in both prostate cancer and acute myeloid leukaemia (AML) at the American Association for Cancer Research (AACR) and the Association for Cancer Immunotherapy (CIMT) conferences respectively. The use of Medigene’s dendritic cell (DC) vaccine in prostate cancer is being trialled in patients that are high-risk prostate cancer patients. 50% of this patient population develop an early biochemical relapse (raised levels of prostate-specific antigen), for which there is no curative therapy currently available. The preliminary data indicated that three out of 15 patients who had received a DC vaccine (matured via the investigator’s original approach) experienced a biochemical relapse and none of a further five patients who had received the DC vaccine (matured via Medigene’s new generation approach) had yet suffered a relapse. While these are early data and follow-up continues, they are promising as the new maturation approach is also being utilised in the company-initiated DC vaccine trial. The AML IIT data continue to demonstrate an excellent safety profile and the capacity to induce T-cell responses in elderly patients unable to undergo stem cell transplantation.
Pipeline progresses
The Phase II DC vaccine company-initiated trial (CIT) in AML continues as expected, with seven patients (out of 20) now recruited. Once patient recruitment is complete, the Phase II trial will take two years to complete (one year of treatment and one year of follow-up), with expected data readout in 2019. Also due to start (at end 2016/early 2017) is the IIT of TCR therapy in cancer, currently being prepared for its clinical trial application and pending grant funding to progress. Two CITs in TCR therapy are being prepared, due to start in 2017 and 2018.
Valuation: No change to fundamentals
We now use Q116 reported cash, which reduces our rNPV-based valuation to €214m (vs €216m) or €10.8 per share (vs €10.96). The rest of our valuation assumptions are unchanged. Medigene is well funded and focused on executing its clinical development strategy over the next few years.
Exhibit 1: Financial summary
€'000s |
2014 |
2015 |
2016e |
2017e |
||
Year end 31 December |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
||||||
Revenue |
|
|
13,784 |
6,808 |
7,056 |
7,330 |
of which: Veregen revenues (royalties/milestones/supply) |
5,195 |
3,101 |
3,462 |
3,737 |
||
R&D partnering (SynCore/Falk Pharma/grants) |
6,096 |
1,214 |
1,100 |
1,100 |
||
Non-cash income (Eligard) |
2,493 |
2,493 |
2,493 |
2,493 |
||
Cost of sales |
(2,086) |
(1,103) |
(1,305) |
(1,415) |
||
Gross profit |
11,698 |
5,705 |
5,751 |
5,915 |
||
Selling, general & administrative spending |
(7,081) |
(7,615) |
(7,833) |
(8,057) |
||
R&D expenditure |
(7,498) |
(8,529) |
(9,808) |
(10,789) |
||
Other operating spending |
0 |
0. |
0 |
0 |
||
Operating profit |
(2,881) |
(10,439) |
(11,890) |
(12,931) |
||
Goodwill & intangible amortisation |
(527) |
(526) |
(525) |
(524) |
||
Exceptionals |
0 |
0 |
0 |
0 |
||
Share-based payment |
(66) |
(111) |
(50) |
(50) |
||
EBITDA |
|
|
(2,005) |
(9,384) |
(11,090) |
(12,132) |
Operating profit (before GW and except.) |
|
|
(2,288) |
(9,802) |
(11,315) |
(12,357) |
Net interest |
(1,774) |
(2,914) |
(2,529) |
(2,361) |
||
Other (forex gains/losses; associate profit/loss) |
(1,257) |
(46) |
719 |
1,204 |
||
Profit before tax (norm) |
|
|
(5,319) |
(12,762) |
(13,126) |
(13,514) |
Profit before tax (FRS 3) |
|
|
(5,912) |
(13,399) |
(13,701) |
(14,088) |
Tax |
155 |
400 |
0 |
0 |
||
Profit/(loss) from discontinued operations |
0 |
0 |
0 |
0 |
||
Profit after tax (norm) |
(5,164) |
(12,362) |
(13,126) |
(13,514) |
||
Profit after tax (FRS 3) |
(5,757) |
(12,999) |
(13,701) |
(14,088) |
||
Average number of shares outstanding (m) |
12.2 |
16.8 |
19.9 |
20.2 |
||
EPS - normalised (€) |
|
|
(0.42) |
(0.74) |
(0.66) |
(0.67) |
EPS - FRS 3 (€) |
|
|
(0.47) |
(0.77) |
(0.69) |
(0.70) |
Dividend per share (€) |
0.0 |
0.0 |
0.0 |
0.0 |
||
BALANCE SHEET |
||||||
Fixed assets |
|
|
46,617 |
53,631 |
45,730 |
46,309 |
Intangible assets & goodwill |
38,377 |
37,792 |
35,188 |
34,664 |
||
Tangible assets |
951 |
2,502 |
3,605 |
4,708 |
||
Other non-current assets |
7,289 |
13,337 |
6,937 |
6,937 |
||
Current assets |
|
|
24,666 |
59,900 |
54,364 |
37,836 |
Stocks |
4,406 |
6,654 |
6,654 |
6,654 |
||
Debtors |
1,733 |
763 |
763 |
763 |
||
Cash |
14,976 |
46,759 |
45,679 |
29,151 |
||
Other |
3,551 |
5,724 |
1,268 |
1,268 |
||
Current liabilities |
|
|
(7,755) |
(9,664) |
(8,376) |
(8,376) |
Trade accounts payable |
(1,785) |
(1,354) |
(1,354) |
(1,354) |
||
Short-term borrowings |
0 |
0 |
0 |
0 |
||
Deferred income |
(57) |
(226) |
(226) |
(226) |
||
Other |
(5,913) |
(8,084) |
(6,796) |
(6,796) |
||
Long-term liabilities |
|
|
(14,457) |
(13,879) |
(13,879) |
(13,879) |
Pension provisions |
(413) |
(359) |
(359) |
(359) |
||
Long-term borrowings |
0 |
0 |
0 |
0 |
||
Other liabilities (Deferred taxes; Trianta milestones) |
(3,221) |
(2,915) |
(2,915) |
(2,915) |
||
Deferred revenues (Eligard non-cash income) |
(10,823) |
(10,605) |
(10,605) |
(10,605) |
||
Net assets |
|
|
49,071 |
89,988 |
77,839 |
61,890 |
CASH FLOW |
||||||
Operating cash flow |
|
|
(8,765) |
(10,585) |
(9,495) |
(14,339) |
Net interest |
9 |
(20) |
(1,029) |
(861) |
||
Tax |
0 |
0 |
0 |
0 |
||
Capex |
(873) |
(1,328) |
(1,328) |
(1,328) |
||
Expenditure on intangibles |
0 |
0 |
0 |
0 |
||
Acquisitions/disposals |
0 |
0 |
9,953 |
0 |
||
Equity financing |
14,502 |
43,695 |
819 |
0 |
||
Other |
(62) |
21 |
0 |
0 |
||
Net cash flow |
4,811 |
31,783 |
(1,080) |
(16,528) |
||
Opening net debt/(cash) |
|
|
(10,166) |
(14,976) |
(46,759) |
(45,679) |
HP finance leases initiated |
0 |
0 |
0 |
0 |
||
Other (foreign exchanges differences) |
(1) |
0 |
(0) |
0 |
||
Closing net debt/(cash) |
|
|
(14,976) |
(46,759) |
(45,679) |
(29,151) |
Source: Company accounts, Edison Investment Research
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