Medigene
Written by
Medigene |
Interim results in line and advancing as expected |
H1 results |
Pharma & biotech |
8 August 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 H1 results are in line with our expectations and highlight the continued progress the company is making with its immunotherapy-focused pipeline. It has a clear strategy in place to advance its DC vaccine and TCR programmes, which it is well-funded to achieve (H1 cash €48.7m). We have increased our valuation to £219m (vs £214m).
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.
Phase II DC vaccine CIT clinical trial underway
The company-initiated trial (CIT) with the DC vaccine is a Phase I/II study in 20 AML patients. Phase II was initiated in H1 following a positive recommendation by the Data and Safety Monitoring Board (having reviewed the safety and tolerability data from six patients in Phase I). Once patient recruitment is complete, the Phase II trial will take about two years to complete (one year of treatment and one year of follow-up), with expected completion in 2019 and data readout in 2020.
First TCR trial (IIT) moving forward
Medigene announced in H1 it has entered into a co-operation agreement, with grant funding, to conduct a German Phase I investigator-initiated TCR therapy trial (IIT) in patients with relapsed/refractory multiple myeloma. Medigene is supporting the trial and contributing to the regulatory aspects of trial approval, which once attained, will enable the Phase I trial to initiate. We expect initiation in 2017.
Expansion of platform technologies IP
Medigene has strengthened its DC platform and TCR platform portfolios in H1. This included US granted patents relating to the use of semi-allogeneic anti-tumour with HLA haplo-identical antigen-presenting cells and a method for the identification of antigens recognised by CD4+ T-cells, including tumour-infiltrating CD4+ T-cells respectively. The TCR patent is particularly important to Medigene as it offers an effective additional source for potential TCR candidates.
Valuation: Increased to €219m
Our rNPV-based valuation has increased to €219m (vs €214m) or €11.08 per share (vs €10.8/share). We have rolled the model forward by three months, updated the $:€ exchange rate (1.11 vs 1.09) and now use reported Q216 cash of €48.7m. The rest of our valuation assumptions are unchanged. Near-term expected newsflow, which could provide upside, include the TCR programme entering the clinic with the initiation of the Phase I IIT TCR therapy in cancer in mid-2017 and two CITs in TCR therapy in 2017 and 2018, and early data coming out of the DC vaccine programmes. Medigene is well-funded and focused on executing its clinical development strategy to the end of 2018, based on our forecasts.
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 (€) |
|
|
(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 and Edison Investment Research
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