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NetScientific — PDS collaborates with Merck

NetScientific — PDS collaborates with Merck

One of NetScientific’s portfolio companies, PDS Biotechnology (17.4% stake, 14.5% fully diluted), announced on 10 July 2017 that it has entered into a collaboration agreement with Merck to investigate the combination of the cancer vaccine PDS0101 with the PD-1 inhibitor Keytruda. PDS will be initiating a Phase IIb clinical study of the combination for the treatment of human papilloma virus-16 mediated forms of recurrent and metastatic head and neck cancer.

Analyst avatar placeholder

Written by

NetScientific

PDS collaborates with Merck

Clinical update

Pharma & biotech

13 July 2017

Price

49.00p

Market cap

£34m

$1.29/£

Net cash (£m) at 31 December 2016
+ offering

17.3

Shares in issue (est)

69.0m

Free float*

*Company estimate

6.2%

Code

NSCI

Primary exchange

AIM

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(3.0)

(13.3)

(31.0)

Rel (local)

(0.4)

(12.9)

(37.8)

52-week high/low

83.00p

48.50p

Business description

NetScientific is a transatlantic biomedical and healthcare technology group. Its portfolio of five core investments and one material investment is focused on three main sectors: digital heath (Wanda), diagnostics (Vortex, ProAxsis, Glycotest) and therapeutics (PDS Biotechnology).

Next events

Glycotest Series A

H217

bla

bla

NEATstik PoC launch

H217

Analysts

Maxim Jacobs

+1 646 653 7027

Nathaniel Calloway

+1 646 653 7036

NetScientific is a research client of Edison Investment Research Limited

One of NetScientific’s portfolio companies, PDS Biotechnology (17.4% stake, 14.5% fully diluted), announced on 10 July 2017 that it has entered into a collaboration agreement with Merck to investigate the combination of the cancer vaccine PDS0101 with the PD-1 inhibitor Keytruda. PDS will be initiating a Phase IIb clinical study of the combination for the treatment of human papilloma virus-16 mediated forms of recurrent and metastatic head and neck cancer.

Year end

Revenue (£m)

PBT*
(£m)

EPS*
(p)

DPS
(p)

P/E
(x)

Yield
(%)

12/15

0.1

(11.3)

(24)

0.0

N/A

N/A

12/16

0.5

(12.3)

(21)

0.0

N/A

N/A

12/17e

2.7

(14.1)

(18)

0.0

N/A

N/A

12/18e

11.6

(11.6)

(13)

0.0

N/A

N/A

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

A smart combo for next-gen immunotherapy

The premise of PD-1 inhibition is that it enables the body to leverage a natural T-cell mediated immune response against cancer cells. However, only 16% of patients with head and neck cancer respond to Keytruda, potentially because they lack natural targeting of T-cells to their cancer. PDS0101’s ability to specifically sensitise T-cells to cancer antigens without significant toxicity therefore has the potential to unlock significant synergies with PD-1 inhibitors, such as Keytruda.

Lots of combos, not so many for head and neck

Given the high impact of checkpoint inhibitors and their capacity for significant synergies with other treatments, there has been an unprecedented number of combination studies initiated with these drugs: 783 according to Evaluate Pharma. However, only a fraction of these (less than 25) are sponsored by industry and are looking at recurrent head and neck cancer, and even fewer (less than 10) combine checkpoint inhibition with a cancer vaccine for the disease.

Newly capitalised with a £8.1m offering

NetScientific underwent a financing that combined an £8.1m offering (at 45p per share) in May 2017, resulting in the approximately 18m new shares. The proceeds from this offering substantially offset the financing needs for the portfolio, which we now estimate at £15.9m, although we expect this cash to be provided by outside investors in the portfolio companies.

Valuation: Changed to £68.4m or 99p per share

We have changed our valuation to £68.4m or 99p per share from £60.3m or 118p per share, based on increased cash and share counts following the offering. Otherwise, our model remains unchanged. We have not updated our valuation for PDS given the limited in-human data for the underlying technology, although we expect to update this in the future. The company announced that it intends to complete the Series A financing for Glycotest in H217 (delayed from H117).

Leveraging the immune system from multiple angles

On 10 July 2017, PDS announced that it had initiated a collaboration with Merck & Co to investigate the combination of its PDS0101 cancer vaccine technology with Merck’s checkpoint inhibitor Keytruda (pembrolizumab) in a Phase IIb clinical trial for the treatment of recurrent or metastatic head and neck cancer (HNC). PDS0101 is a nanoparticle mediated cancer vaccine programme targeting human papilloma virus (HPV) mediated cancers, and the collaboration with Merck will target HNC as a result of HPV16 strain. HPV is a causative agent in approximately 25% of HNC, 90% of which are due to HPV16.1 The national cancer institute estimates that there are approximately 11.2 new cases of HNC per 100,000 person-years, accounting for all causes and stages of the disease.

  Gillison ML, et al. (2000) Evidence for a Causal Association Between Human Papillomavirus and a Subset of Head and Neck Cancers. J. Nat. Can. Inst. 92, 709-720.

Scientific rationale

Keytruda is an inhibitor of programmed cell death 1 (PD-1) and its approval in 2014, along with other similar checkpoint inhibitors, has been lauded as a breakthrough in cancer treatment based on its ability to leverage the body’s immune system to fight cancer. The immune system recognises cells with an aberrant biology either due to infectious disease or cancer through the interaction of cytotoxic T-cells (aka CD8+ cells) with the class I major histocompatibility complex (MHC-I) protein on the surface of the affected cell. MHC-I binds to foreign or mutated proteins in the cytoplasm of the cell and displays these antigens on the cell surface for identification by the immune system. The body is capable of routinely identifying and destroying very early stage cancer before it poses a health risk via this method.

However, cancers that progress develop some method of avoiding detection from the immune system. One method employed by many cancers is to express the ligand for PD-1 (PD-L1), which directs cytotoxic T-cells to ignore MHC-I antigens on these cells. By masking PD-1 on T-cells, Keytruda enables these T-cells to recognise MHC-I antigens and attack these cancer cells.

However, a limitation of checkpoint inhibitors is that the cancer cells must be expressing MHC-I antigens that have induced a cytotoxic T-cell response. Only 16% of patients with refractory head and neck squamous cell carcinoma respond to treatment with Keytruda, and these low response rates can potentially be explained by a lack of endogenous immune response in some cases. Therefore, there is tremendous potential to use checkpoint inhibitors in combination with cancer vaccines such as PDS0101, which can provide this targeting. PDS0101, in particular, is well chosen to be paired with checkpoint inhibition because it is specifically designed to induce a robust cytotoxic T-cell response (as opposed to an antibody or other immune response). PDS0101 directly introduces antigenic protein to the cytoplasm of cells, which is subsequently presented by MHC-I.

Competitive development landscape

Given the high potential for synergies between checkpoint inhibitors and cancer therapies, there has been an unprecedented number of combination studies of these agents. Evaluate Pharma reported in May 2017 that there were 783 ongoing combination studies employing PD-1 or PD-L1 inhibitors, 268 of which employed Keytruda. However, by our estimation from data available on clinicaltrials.gov, there are fewer than 60 industry-sponsored studies in HNC, and fewer than 25 are for recurrent forms of the disease. There are a relatively small number of clinical studies investigating the combination of Keytruda with cancer vaccines for this disease (Exhibit 1). We believe that the PDS technology is well positioned among this group given the straightforward mechanism of action and strong potentiation of cytotoxic T-cell responses.

Exhibit 1: Selected HNC vaccine/checkpoint combination studies

Drug

Company

Stage

Combination

Notes

PDS0101

PDS

Phase II

Keytruda

Nanoparticle HPV-16 antigen

TG4001

Transgene

Phase I/II

Bavencio

Viral HPV-16 antigen

Axalimogene filolisbac

Advaxis

Phase II

Imfinzi

Listeria vaccine

Source: Various

Valuation

We have not updated our model at this time except to account for the new estimated cash and share count following the May 2017 offering. £8.1m was raised via a public placement at 45p per share (and a small private placement of 45,700 shares). Our new valuation is £68.4m or 99p per share from £60.3m or 118p per share. Although we believe that PDS’s newly announced collaboration with Merck has potential, we currently do not have sufficient patient data with the underlying technology to revise our probability of success, although we expect to update our assumptions upon the release of more information on the activity of this drug. NetScientific has a 17.4% interest in PDS, 14.5% on a fully diluted basis. Additionally, we expect to update our valuation once reports of sales for the recently launched products from Vortex, ProAxsis, and Glycotest are available.

Exhibit 2: NetScientific valuation

Development Program

Probability of success (%)

Profitability

Peak sales (£m)

Margin (%)

rNPV (£m)

Ownership

Share Value (£m)

Vortex

15.0%

2020

150

44%

18.0

95.0%

17.1

Wanda

5.0%

2019

352

52%

11.3

70.9%

8.0

ProAxsis

10.0%

2020

50

51%

8.6

56.5%

4.9

Glycotest

10.0%

2019

123

51%

16.4

87.5%

14.4

PDS

10.0%

2021

302

57%

38.7

17.4%

6.7

Total

 

 

 

 

 

 

51.0

Net cash and equivalents (YE16 + offering) (£m)

17.3

Total firm value (£m)

68.4

Total shares (m)

69.0

Value per share (p)

99

Source: NetScientific reports, Edison Investment Research

Financials

The recent raise of £8.1m supplements the £9.2m in net cash available at the end of 2016. This brings the total outstanding financing requirement for the constituent companies to £15.9m, which we include in our forecasts as illustrative debt, although we expect the financing to be from outside investment in these companies. For instance, NetScientific stated that it expects Glycotest to complete its Series A in H217 (a delay from previous reports of H117). Otherwise, our financial projections remain unchanged.

Exhibit 3: Financial summary

£'000s

2014

2015

2016

2017e

2018e

Year end 31 December

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

24

122

518

2,682

11,630

Cost of Sales

0

(6)

(255)

(656)

(4,130)

Gross Profit

24

116

263

2,025

7,500

Research and development

(3,098)

(7,256)

(7,443)

(9,677)

(10,081)

Selling, general & administrative

(3,212)

(4,260)

(5,001)

(6,063)

(7,397)

EBITDA

 

 

(6,352)

(11,530)

(12,570)

(13,856)

(10,119)

Operating Profit (before GW and except.)

(6,286)

(11,400)

(12,429)

(13,715)

(9,978)

Intangible Amortisation

0

0

0

0

0

Exceptionals/Other

(948)

(1,518)

(666)

0

0

Operating Profit

(7,234)

(12,918)

(13,095)

(13,715)

(9,978)

Net Interest

77

78

86

(400)

(1,600)

Other (change in fair value of warrants)

0

0

(49)

0

0

Profit Before Tax (norm)

 

 

(6,209)

(11,322)

(12,343)

(14,115)

(11,578)

Profit Before Tax (IFRS)

 

 

(7,157)

(12,840)

(13,058)

(14,115)

(11,578)

Tax

30

94

(18)

71

58

Deferred tax

0

0

0

0

0

Profit After Tax (norm)

(6,179)

(11,229)

(12,361)

(14,044)

(11,520)

Profit After Tax (IFRS)

(7,127)

(12,746)

(13,076)

(14,044)

(11,520)

Minority interest

702

1,905

1,881

3,216

2,596

Profit After Tax after minority interest (FRS 3)

(6,425)

(10,842)

(11,195)

(10,828)

(8,924)

Average Number of Shares Outstanding (m)

35.9

38.2

51.1

60.1

69.0

EPS - normalised (p)

 

 

(15)

(24)

(21)

(18)

(13)

EPS - IFRS (p)

 

 

(18)

(28)

(22)

(18)

(13)

Dividend per share (p)

0

0

0

0

0

BALANCE SHEET

Fixed Assets

 

 

3,040

2,946

4,054

5,063

7,029

Intangible Assets

10

1

0

0

0

Tangible Assets

348

285

779

638

497

Other

2,681

2,660

3,275

4,425

6,532

Current Assets

 

 

17,720

23,799

11,034

21,060

8,268

Stocks

0

0

0

894

2,326

Debtors

853

560

1,578

268

1,163

Cash

16,867

23,239

9,456

19,897

4,779

Other

0

0

0

0

0

Current Liabilities

 

 

(1,324)

(2,206)

(2,172)

(2,947)

(3,273)

Creditors

(1,281)

(2,156)

(2,044)

(2,947)

(3,273)

Short term borrowings

(43)

(50)

(128)

0

0

Long Term Liabilities

 

 

(740)

0

(80)

(15,997)

(15,997)

Long term borrowings

(687)

0

(80)

(15,997)

(15,997)

Other long term liabilities

(53)

0

0

0

0

Net Assets

 

 

18,696

24,538

12,836

7,178

(3,972)

Minority Interest

(1,098)

(1,805)

(3,875)

(7,091)

(9,686)

Shareholder Equity

 

 

17,598

22,733

8,961

88

(13,659)

CASH FLOW

Operating Cash Flow

 

 

(6,698)

(10,752)

(12,939)

(11,952)

(11,469)

Net Interest

67

38

43

(400)

(1,600)

Tax

19

83

112

71

58

Capex

(336)

(299)

(457)

0

0

Acquisitions/disposals

(2,181)

(144)

(1,261)

(1,150)

(2,108)

Financing

0

18,208

0

8,083

0

Dividends

0

0

0

0

0

Other

119

39

66

0

0

Net Cash Flow

(9,010)

7,172

(14,436)

(5,348)

(15,119)

Opening net debt/(cash)

 

 

(25,069)

(16,136)

(23,189)

(9,248)

(3,900)

HP finance leases initiated

0

0

0

0

0

Exchange rate movements

(140)

(212)

(603)

0

0

Other

218

92

1,098

0

0

Closing net debt/(cash)

 

 

(16,136)

(23,189)

(9,248)

(3,900)

11,219

Source: NetScientific reports, Edison Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison and is not regulated by the Australian Securities and Investment Commission. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2017 Edison Investment Research Limited. All rights reserved. This report has been commissioned by NetScientific and prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Aus and any access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research. Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (ie without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2017. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

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Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison and is not regulated by the Australian Securities and Investment Commission. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2017 Edison Investment Research Limited. All rights reserved. This report has been commissioned by NetScientific and prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Aus and any access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research. Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (ie without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2017. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

TxCell — Getting production in order

TxCell has agreed an important manufacturing supply contract with Lentigen, a German-US producer of the critical lentivirus reagent essential for modifying T-cells. This is a core element for the development of CAR-modified regulatory T-cells (CAR Treg). Production of any modified T-cell therapy is complex and companies need to be able to scale up production and keep costs and prices under control. In 2018, warrants could bring a further €10.8m in cash covering costs until the IND is filed for the first ever CAR Treg clinical trial. Our indicative valuation remains at €74m.

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Edison Group

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