ASIT has announced renewed focus on its most advanced product, gp-ASIT+ for grass pollen allergies, which coincides with some changes in senior management. The increased focus has been well received by shareholders and, while our model changes to reflect the reduced future spend on the early-stage products, the products’ potential for cash flow generation remains as ASIT has also announced an emphasis on out-licensing and co-development for its earlier-stage products.
Written by
ASIT biotech |
New year, renewed focus |
Pipeline refocusing |
Pharma & biotech |
17 January 2019 |
Share price performance
Business description
Next events
Analyst
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ASIT has announced renewed focus on its most advanced product, gp-ASIT+ for grass pollen allergies, which coincides with some changes in senior management. The increased focus has been well received by shareholders and, while our model changes to reflect the reduced future spend on the early-stage products, the products’ potential for cash flow generation remains as ASIT has also announced an emphasis on out-licensing and co-development for its earlier-stage products.
Year end |
Revenue (€m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/17 |
0.0 |
(12.0) |
(0.94) |
0.0 |
N/A |
N/A |
12/18e |
0.0 |
(13.3) |
(0.82) |
0.0 |
N/A |
N/A |
12/19e |
0.0 |
(15.5) |
(0.88) |
0.0 |
N/A |
N/A |
12/20e |
0.0 |
(5.6) |
(0.22) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are both as reported.
Logical pipeline refocusing on gp-ASIT+
ASIT has reviewed the clinical plan, manufacturing and resource allocation for its core and most advanced product, gp-ASIT+ for grass pollen allergies in Phase III, and concluded that clinical development is better resourced and supported to conduct the pivotal study. This was also our conclusion, having reviewed the changes ASIT had made to maximise the chances of clinical success in this second Phase III study. There will be increased allocation of regulatory and business development resources, which means that ASIT’s earlier-stage programmes, in particular pnt-ASIT+ for peanut allergy, have been scheduled for partnering rather than continued internal development. There are a number of financial moving parts to this refocusing, some of which will net others off.
Senior management reorganisation
After discussions with shareholders, ASIT’s board has appointed Michel Baijot as CEO and Yves Désiront as interim CFO, and appointed Philippe Degeer to the board representing the Meusinvest group, a local investor supporting companies in Liège, Belgium. The refocusing of ASIT’s resources to support the conduct of the Phase III study of gp-ASIT+, its future registration and commercialisation, and the emphasis on partnering ASIT’s earlier products after the preclinical phase has been a result of these management changes.
Valuation: Removing pnt-ASIT+ clinical costs
With the focus on the gp-ASIT+ Phase III programme, partnering the earlier-stage assets – hdm-ASIT+ for house dust mite allergies and pnt-ASIT+ – will eventually remove the future clinical development costs of those earlier-stage products from our model, although we continue to expect royalties once those products are marketed by ASIT’s partners. While we expect more detail on these changes after the February board meeting and FY18 results, removing the pnt-ASIT+ clinical costs, updating for the higher share count and exchange rates leaves our risk-adjusted valuation unchanged at €118m or €6.3 per share.
ASIT biotech is a research client of Edison Investment Research Limited
Exhibit 1: Financial summary
|
|
|
EUR ('000) |
2015 |
2016 |
2017 |
2018e |
2019e |
2020e |
Year end 31 December |
|
|
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
|
INCOME STATEMENT |
|
|
|
|
|
|
|
|
|
Revenue |
|
|
|
4 |
0 |
0 |
0 |
0 |
0 |
Cost of Sales |
|
|
|
(3) |
0 |
0 |
0 |
0 |
0 |
Gross Profit |
|
|
|
1 |
0 |
0 |
0 |
0 |
0 |
General and Administrative Expenses |
|
(947) |
(1,822) |
(1,676) |
(2,547) |
(2,522) |
(2,497) |
||
Research and Development Expenses |
|
(6,691) |
(12,123) |
(10,903) |
(11,500) |
(13,940) |
(3,980) |
||
Other Operating Income |
|
|
(3) |
1,667 |
604 |
789 |
829 |
870 |
|
Reported operating profit |
|
|
(7,640) |
(12,278) |
(11,975) |
(13,258) |
(15,633) |
(5,606) |
|
Net Interest |
|
|
|
(75) |
(60) |
(9) |
(40) |
148 |
6 |
Profit before tax (as reported) |
|
|
(7,715) |
(12,338) |
(11,984) |
(13,298) |
(15,485) |
(5,600) |
|
Reported tax |
|
|
|
0 |
(1) |
(2) |
(1) |
3 |
1,680 |
Profit after tax (reported) |
|
|
(7,715) |
(12,339) |
(11,986) |
(13,298) |
(15,482) |
(3,920) |
|
Minority interests |
|
|
0 |
0 |
0 |
0 |
0 |
0 |
|
Net income (reported) |
|
|
(7,715) |
(12,339) |
(11,986) |
(13,298) |
(15,482) |
(3,920) |
|
|
|
|
|
|
|
|
|
|
|
Basic average number of shares outstanding ('m) |
|
8,504 |
11,219 |
12,806 |
16,240 |
17,507 |
17,507 |
||
EPS - basic, as reported (EUR) |
|
(0.91) |
(1.10) |
(0.94) |
(0.82) |
(0.88) |
(0.22) |
||
|
|
|
|
|
|
|
|
|
|
BALANCE SHEET |
|
|
|
|
|
|
|
|
|
Non Current Assets |
|
|
506 |
1,770 |
1,837 |
2,008 |
2,126 |
2,027 |
|
Property Plant and equipment, net |
|
494 |
736 |
691 |
693 |
811 |
712 |
||
Other intangible assets |
|
|
0 |
0 |
0 |
0 |
0 |
0 |
|
Other Non Current Assets |
|
|
12 |
1,034 |
1,146 |
1,315 |
1,315 |
1,315 |
|
Current Assets |
|
|
4,968 |
13,785 |
2,448 |
10,941 |
2,561 |
13,099 |
|
Cash and cash equivalents |
|
|
4,621 |
13,387 |
2,126 |
10,688 |
2,308 |
12,846 |
|
Accounts receivable |
|
|
2 |
3 |
0 |
0 |
0 |
0 |
|
Inventories |
|
|
|
11 |
0 |
0 |
0 |
0 |
0 |
Other current assets |
|
|
334 |
395 |
322 |
253 |
253 |
253 |
|
Current Liabilities |
|
|
6,332 |
2,004 |
2,654 |
4,196 |
4,216 |
2,775 |
|
Accounts payable |
|
|
1,611 |
1,707 |
1,264 |
2,354 |
2,374 |
933 |
|
Short term debt and borrowings |
|
4,232 |
12 |
34 |
38 |
38 |
38 |
||
Other current liabilities |
|
|
489 |
285 |
1,356 |
1,804 |
1,804 |
1,804 |
|
Non Current Liabilities |
|
|
0 |
419 |
432 |
446 |
446 |
7,446 |
|
Loans and borrowings |
|
|
0 |
419 |
432 |
446 |
446 |
7,446 |
|
Other non-current liabilities |
|
|
0 |
0 |
0 |
0 |
0 |
0 |
|
Equity |
|
|
|
(858) |
13,132 |
1,199 |
6,126 |
(2,157) |
(4,277) |
Common stock / Capital |
|
|
11,625 |
17,506 |
9,989 |
13,125 |
13,125 |
13,125 |
|
Additional paid-in capital / Share premium |
|
0 |
21,957 |
21,957 |
26,958 |
18,675 |
16,555 |
||
Other reserves and surplus |
|
|
(12,483) |
(24,229) |
(28,645) |
(33,957) |
(33,957) |
(33,957) |
|
Other Equity |
|
|
|
0 |
(2,102) |
(2,102) |
0 |
0 |
0 |
CASH FLOW |
|
|
|
|
|
|
|
|
|
Cash Flow from Operations |
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
|
(7,715) |
(12,339) |
(11,986) |
(13,298) |
(15,482) |
(3,920) |
|
Depreciation and Amortization |
|
|
80 |
141 |
205 |
176 |
195 |
211 |
|
Interest income/expense |
|
|
75 |
60 |
9 |
40 |
(148) |
(6) |
|
Stock-based compensation |
|
|
18 |
0 |
54 |
0 |
0 |
0 |
|
Non Cash Adjustments |
|
|
0 |
11 |
(492) |
0 |
0 |
0 |
|
(Increase) decrease in inventories |
|
3 |
0 |
0 |
0 |
0 |
0 |
||
(Increase) decrease in trade receivables |
|
(819) |
(62) |
74 |
0 |
0 |
0 |
||
(Increase) decrease in other current assets |
|
0 |
(1,016) |
(112) |
69 |
0 |
0 |
||
Increase (decrease) in trade payables |
|
751 |
(492) |
(586) |
2,180 |
20 |
(1,441) |
||
Net cash used in Operating activities |
|
(7,606) |
(13,697) |
(12,834) |
(10,833) |
(15,415) |
(5,157) |
||
Cash Flow from Investing |
|
|
|
|
|
|
|
|
|
Purchases of fixed assets |
|
|
(372) |
(383) |
(161) |
(265) |
(313) |
(112) |
|
Other Investing Activities |
|
|
1 |
(6) |
0 |
0 |
0 |
0 |
|
Net cash used in Investing activities |
|
(371) |
(389) |
(161) |
(265) |
(313) |
(112) |
||
Cash Flow from Financing |
|
|
|
|
|
|
|
|
|
Change in Debt |
|
|
4,130 |
0 |
0 |
0 |
0 |
7,000 |
|
Change in Capital Stock |
|
|
0 |
22,199 |
0 |
16,900 |
7,200 |
1,800 |
|
Interest paid |
|
|
|
(6) |
(204) |
(10) |
(42) |
(24) |
(24) |
Other Financing Activities |
|
|
33 |
857 |
1,743 |
2 |
172 |
31 |
|
Net cash used in Financing activities |
|
4,157 |
22,852 |
1,733 |
16,860 |
7,348 |
8,806 |
||
Net Changes in Cash and Cash Equivalent |
|
(3,820) |
8,766 |
(11,262) |
5,761 |
(8,380) |
3,538 |
||
Net cash (debt) at the beginning of the period |
|
8,441 |
4,621 |
12,968 |
1,694 |
10,242 |
1,862 |
||
Net cash (debt) at the end of the period |
|
4,621 |
12,968 |
1,694 |
10,242 |
1,862 |
5,400 |
||
Source: Company accounts, Edison Investment Research
|
|
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