Medigene
Written by
Medigene |
Co-operation agreement for Phase I IIT TCR trial |
IIT TCR trial update |
Pharma & biotech |
5 July 2016 |
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Medigene is a research client of Edison Investment Research Limited |
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Medigene has announced it has entered into a co-operation agreement to conduct a Phase I investigator-initiated TCR therapy trial (IIT), with grant funding, in patients with relapsed/refractory multiple myeloma. This is an important step forward in the process of bringing its TCR therapy to patients, a potentially transformational approach to treating certain cancers. The final aspect is the regulatory approval for the trial, to which Medigene is contributing. We expect the Phase I trial to initiate at end 2016/early 2017. We maintain our rNPV-based valuation at €214m, or €10.8 per share, with upside expected when the Phase I trial is initiated.
Year end |
Revenue |
PBT* |
EPS* |
DPS |
P/E |
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.
A step closer to initiation of Phase I IIT TCR trial
Medigene has entered into a co-operation agreement, with grant funding, to conduct a Phase I investigator-initiated TCR therapy trial (IIT) in patients with relapsed/refractory multiple myeloma. The agreement is with the Max Delbrück Centre for Molecular Medicine in the Helmholtz Association, Berlin and the Charité – Universitätsmedizin Berlin. They are responsible for the clinical aspects of the trial and the analytics and good manufacturing practice (GMP) respectively. Medigene is supporting the trial and contributing to the regulatory aspects of the trial approval, which once attained, will enable the Phase I trial to initiate. We expect it to initiate at end 2016/early 2017. Medigene holds a first right of negotiation for an exclusive licence to commercially exploit the outcome of the study alongside profit participation if commercially exploited elsewhere.
Cell-based therapies in the spotlight
Cell-based therapies are currently in the spotlight, with strong interest around CAR-T candidates and technology. Medigene’s TCRs, in which a patient’s own T-cells are modified to detect and kill tumour cells, are similar to CAR-Ts, but with some technological distinctions that could offer efficacy/safety advantages. The aim of this trial is to investigate the safety and tolerability of Medigene’s TCR therapy approach which, if successful, could attract particular investment interest.
Valuation: Maintained at €214m
We maintain our rNPV-based valuation at €214m, or €10.8/share. This news is a positive development and we expect upside to our valuation once the Phase I trial is initiated. Medigene is well-funded and focused on executing its clinical development strategy over the next few years, which includes its ongoing Phase II company-initiated DC vaccine trial (CIT) in AML and two CITs in TCR therapy expected to start 2017 and 2018.
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 |
||
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 (c) |
|
|
(0.42) |
(0.74) |
(0.66) |
(0.67) |
EPS - FRS 3 (c) |
|
|
(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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