Last close As at 05/08/2026
—
— 0.00 (0.00%)
Market capitalisation
—
Research: Healthcare
Despite a challenging operating environment due to COVID-19, Hepion was able to advance its CRV431 development program (for the treatment of non-alcoholic steatohepatitis, NASH) without major disruption, despite widespread issues for many companies in enrolling clinical studies. The company completed Phase I testing during 2020 and initiated a Phase IIa study that is nearing completion (Q221).
Written by
Hepion Pharmaceuticals |
Phase IIa readout upcoming |
Earnings update |
Pharma & biotech |
7 April 2021 |
Share price performance
Business description
Next events
Analyst
Hepion Pharmaceuticals is a research client of Edison Investment Research Limited |
|||||||||||||||||||||||||||||||||||||||||||||
Despite a challenging operating environment due to COVID-19, Hepion was able to advance its CRV431 development program (for the treatment of non-alcoholic steatohepatitis, NASH) without major disruption, despite widespread issues for many companies in enrolling clinical studies. The company completed Phase I testing during 2020 and initiated a Phase IIa study that is nearing completion (Q221).
Year end |
Revenue ($m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/19 |
0.0 |
(7.9) |
(3.42) |
0.00 |
N/A |
N/A |
12/20 |
0.0 |
(17.9) |
(1.86) |
0.00 |
N/A |
N/A |
12/21e |
0.0 |
(19.6) |
(0.26) |
0.00 |
N/A |
N/A |
12/22e |
0.0 |
(17.0) |
(0.21) |
0.00 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortization of acquired intangibles, exceptional items and share-based payments.
Final stages of Phase IIa
Hepion’s Phase IIa study is currently examining patients in the ‘high dose’ (225mg) cohort, which is expected to be complete in Q221 and provide topline results shortly thereafter. The study already reported some very encouraging data from the low dose (75mg) arm in early 2021 showing a reduction in liver enzymes (18.4% decline in ALT and a 12.1% decline in AST). The primary endpoints of the study are safety, tolerability and pharmacokinetics, but we expect readouts from biomarker data gathered in the study to determine if this drug is active in these patients.
Biomarker data to provide ‘first look’ into activity
Historically it has been difficult to run smaller exploratory studies in NASH patients due to difficulties in quantifying fibrosis and heterogeneity in the study population. Hepion is aiming to provide some insight into the activity of the molecule using biomarkers in this smaller study (28 days, n=36) before committing to a bigger Phase IIb. Additionally, these data will be processed with the company’s AI-POWR platform it is developing, with the intent of improving the prediction of activity in this disease.
Valuation: Increased to $182.9m from $102.4m
We have increased our valuation to $182.9m from $102.4m, although it is lower on a per-share basis: $2.40 from $3.20 per basic share, previously. This increase is driven by the very large offering that was completed by the company in February 2021: $88.4m gross (44.2m shares at $2.00). This offering tripled the company’s equity on a pro-forma basis. Additionally, we have rolled forward our net present values (NPVs). We expect to update our valuation when data from the Phase IIa study are released.
Phase IIa to provide illuminating biomarker data
The major operational goal for Hepion in 2020 was to advance the clinical program for CRV431, and the company was able to complete its Phase I study and initiate and advance a Phase IIa study in NASH patients during the year. Many other pharmaceutical and biotech companies encountered significant hurdles running clinical studies in 2020 because COVID-19 affected enrolment rates in very significant ways. Medical resources were directed away from non-essential clinical studies, and patients were less likely to seek any type of non-COVID-19 related medical treatment, let alone enroll in clinical studies. Despite these headwinds, the company has been able move forward with only minor delays: the completion of the Phase IIa study has been moved to Q221 from Q121. The high dose cohort of 225mg is currently being examined.
The Phase IIa AMBITION study has a target enrolment of 36 F2 and F3 stage NASH patients after 28 days of treatment (Exhibit 1). The company reported some very encouraging data (albeit not rising to the level of statistical significance) on ALT and AST enzymes in January 2021 (18.4% decline in ALT and a 12.1% decline in AST, n=12, compared to a 0.65% reduction and a 2.52% increase respectively in the placebo arm, n=6). We discuss this data in more detail in our previous report. The primary endpoints of the study are safety, tolerability and pharmacokinetic parameters of the drug, but the company will also be examining a large number of other metrics to investigate the clinical activity of the drug. These include markers of fibrosis, lipid metabolism and genetic markers. The company is developing a platform for evaluating these parameters (AI-POWR) with the goal of finding useful biomarkers (or combinations thereof) that indicate clinical activity. This being said, although this will be the first look into the activity of the drug in patients, the study is small and NASH patients are very heterogeneous, so the study may not be powered for a statistical significance of p<0.05, but we believe that the results will be very meaningful despite this. It has proven very difficult to quantify NASH related fibrosis, which has limited the ability of companies to run smaller studies like this one, so we consider the company’s plan to gather rich biomarker data as a reasonable way to provide meaningful insight given this limitation.
|
Exhibit 1: Phase IIa trial design |
|
|
Source: Hepion |
The company is planning to run a much larger (n=300) Phase IIb study following the completion of the Phase IIa (guidance is for initiation in Q2 or Q321). The current plan for this study is to examine the same two dosing levels (75mg and 225mg) for six months. It will use the AI-POWR platform trained using data from the current Phase IIa study to evaluate patients as well as liver biopsy, with an endpoint of reduction in fibrosis.
Valuation
We have increased our valuation to $182.9m from $102.4m, although it is lower on a per share basis: $2.40 from $3.20 per basic share, previously. This increase is driven by updated net cash following the company’s February public offering ($82.1m net, more information below) to $122.7m from $45.2m previously (Q320 pro forma). We have also rolled forward our NPVs to 2021. Otherwise our forecasts remain unchanged. We expect to update our models with the results from the Phase IIa study.
Exhibit 2: Valuation of Hepion
Program |
Market |
Prob. of success |
Launch |
Peak revenue ($m) |
Valuation ($m) |
|||
CRV431 |
US |
15% |
2026 |
370.8 |
38.89 |
|||
Europe |
15% |
2027 |
373.0 |
31.87 |
||||
R&D & milestones |
(10.56) |
|||||||
Total |
60.20 |
|||||||
Net cash and equivalents (YE20 + offering) |
122.65 |
|||||||
Total firm value ($m) |
182.85 |
|||||||
Total basic shares (m) |
76.23 |
|||||||
Value per basic share ($) |
2.40 |
|||||||
Convertible preferred stock (m) |
0.02 |
|||||||
Dilutive options and warrants (m) |
0.69 |
|||||||
Total diluted shares (m) |
76.94 |
|||||||
Value per diluted share ($) |
2.39 |
|||||||
Source: Hepion reports, Edison Investment Research
Financials
Hepion recently reported its 2020 results, which were largely within our expectations. The company reported a net loss of $20.4m for the year, of which a majority was attributable to R&D costs ($12.0m). We had modelled some cost increases for 2020 on account of COVID-19 that we expect will not be required in 2021, but we expect this to be offset by a $3m milestone payable (to former Ciclofilin shareholders), which is included in our R&D line. G&A expenses for the year were $8.15m, which was slightly higher than expectations ($7.2m) and we have adjusted our run rate going forward.
In February the company completed a major offering of 44.2m shares at $2.00 per share, for gross proceeds of $88.4m ($82.1m net). We are impressed by the company’s ability to pull off an offering of such a size, as it effectively tripled the company’s equity ($40.5m in equity at YE20). We expect this to be sufficient to finance the company through to completion of its Phase IIb clinical study. We have reduced our financing requirement for the company to $25m (in 2025) from $100m previously.
Exhibit 3: Financial summary
$000s |
2019 |
2020 |
2021e |
2022e |
||
Year-end 31 December |
IFRS |
IFRS |
IFRS |
IFRS |
||
INCOME STATEMENT |
||||||
Revenue |
|
|
0.0 |
0.0 |
0.0 |
0.0 |
Cost of Sales |
0.0 |
0.0 |
0.0 |
0.0 |
||
Gross Profit |
0.0 |
0.0 |
0.0 |
0.0 |
||
R&D |
(3,184.1) |
(11,997.3) |
(13,537.3) |
(10,724.4) |
||
SG&A |
(4,586.0) |
(8,148.8) |
(8,393.3) |
(8,645.1) |
||
EBITDA |
|
|
(7,677.2) |
(17,732.2) |
(19,551.2) |
(16,990.1) |
Normalised operating profit |
|
|
(7,703.9) |
(17,766.7) |
(19,551.2) |
(16,990.1) |
Amortization of acquired intangibles |
0.0 |
0.0 |
0.0 |
0.0 |
||
Exceptionals |
0.0 |
0.0 |
0.0 |
0.0 |
||
Share-based payments |
(66.2) |
(2,379.4) |
(2,379.4) |
(2,379.4) |
||
Reported operating profit |
(7,770.1) |
(20,146.1) |
(21,930.5) |
(19,369.5) |
||
Net Interest and financial income |
(175.9) |
(177.3) |
0.0 |
0.0 |
||
Joint ventures & associates (post tax) |
0.0 |
0.0 |
0.0 |
0.0 |
||
Exceptionals |
0.0 |
0.0 |
0.0 |
0.0 |
||
Profit Before Tax (norm) |
|
|
(7,879.8) |
(17,944.0) |
(19,551.2) |
(16,990.1) |
Profit Before Tax (reported) |
|
|
(7,946.0) |
(20,323.4) |
(21,930.5) |
(19,369.5) |
Reported tax |
908.7 |
(30.6) |
(33.0) |
(29.1) |
||
Profit After Tax (norm) |
(6,978.7) |
(17,971.0) |
(19,580.6) |
(17,015.7) |
||
Profit After Tax (reported) |
(7,037.3) |
(20,353.9) |
(21,963.5) |
(19,398.6) |
||
Minority interests |
0.0 |
0.0 |
0.0 |
0.0 |
||
Deemed Dividend |
(5,442.9) |
(5.3) |
0.0 |
0.0 |
||
Discontinued operations |
0.0 |
0.0 |
0.0 |
0.0 |
||
Net income (normalised) |
(6,978.7) |
(17,971.0) |
(19,580.6) |
(17,015.7) |
||
Net income (reported) |
(12,480.3) |
(20,359.2) |
(21,963.5) |
(19,398.6) |
||
Basic average number of shares outstanding (m) |
2.0 |
9.7 |
76.2 |
80.0 |
||
EPS - normalised ($) |
|
|
(3.42) |
(1.86) |
(0.26) |
(0.21) |
EPS - diluted normalised ($) |
|
|
(3.42) |
(1.86) |
(0.26) |
(0.21) |
EPS - basic reported ($) |
|
|
(6.11) |
(2.10) |
(0.29) |
(0.24) |
Dividend ($) |
0.00 |
0.00 |
0.00 |
0.00 |
||
BALANCE SHEET |
||||||
Fixed Assets |
|
|
6,222.9 |
6,011.0 |
5,847.0 |
5,683.0 |
Intangible Assets |
1,870.9 |
1,870.9 |
1,870.9 |
1,870.9 |
||
Tangible Assets |
57.2 |
108.4 |
108.4 |
108.4 |
||
Investments & other |
4,294.8 |
4,031.6 |
3,867.6 |
3,703.6 |
||
Current Assets |
|
|
14,388.7 |
42,634.3 |
104,319.1 |
87,148.1 |
Stocks |
0.0 |
0.0 |
0.0 |
0.0 |
||
Debtors |
0.0 |
0.0 |
0.0 |
0.0 |
||
Cash & cash equivalents |
13,923.0 |
40,726.8 |
102,411.6 |
85,240.6 |
||
Other |
465.7 |
1,907.5 |
1,907.5 |
1,907.5 |
||
Current Liabilities |
|
|
(1,609.5) |
(4,661.8) |
(3,643.2) |
(3,327.4) |
Creditors |
(491.6) |
(3,722.4) |
(2,703.8) |
(2,388.0) |
||
Tax and social security |
0.0 |
0.0 |
0.0 |
0.0 |
||
Short term borrowings |
0.0 |
0.0 |
0.0 |
0.0 |
||
Other |
(1,117.9) |
(939.4) |
(939.4) |
(939.4) |
||
Long Term Liabilities |
|
|
(3,385.4) |
(3,463.0) |
(3,463.0) |
(3,463.0) |
Long term borrowings |
0.0 |
(176.6) |
(176.6) |
(176.6) |
||
Other long term liabilities |
(3,385.4) |
(3,286.5) |
(3,286.5) |
(3,286.5) |
||
Net Assets |
|
|
15,616.7 |
40,520.4 |
103,059.8 |
86,040.6 |
Minority interests |
0.0 |
0.0 |
0.0 |
0.0 |
||
Shareholders' equity |
|
|
15,616.7 |
40,520.4 |
103,059.8 |
86,040.6 |
CASH FLOW |
||||||
Op Cash Flow before WC and tax |
(7,677.2) |
(17,732.2) |
(19,551.2) |
(16,990.1) |
||
Working capital |
(826.2) |
1,628.8 |
(1,018.7) |
(315.8) |
||
Exceptional & other |
29.7 |
(31.2) |
164.0 |
164.0 |
||
Tax |
908.7 |
(30.6) |
(33.0) |
(29.1) |
||
Net operating cash flow |
|
|
(7,565.1) |
(16,165.2) |
(20,438.8) |
(17,171.0) |
Capex |
(51.5) |
(88.0) |
0.0 |
0.0 |
||
Acquisitions/disposals |
0.0 |
2.2 |
0.0 |
0.0 |
||
Net interest |
0.0 |
0.0 |
0.0 |
0.0 |
||
Equity financing |
19,826.5 |
42,878.3 |
82,123.6 |
0.0 |
||
Dividends |
0.0 |
0.0 |
0.0 |
0.0 |
||
Other |
(1,119.4) |
0.0 |
0.0 |
0.0 |
||
Net Cash Flow |
11,090.5 |
26,627.3 |
61,684.8 |
(17,171.0) |
||
Opening net debt/(cash) |
|
|
(1,392.4) |
(13,922.9) |
(40,550.3) |
(102,235.0) |
FX |
0.0 |
0.0 |
0.0 |
0.0 |
||
Other non-cash movements |
1,440.0 |
0.0 |
0.0 |
0.0 |
||
Closing net debt/(cash) |
|
|
(13,922.9) |
(40,550.3) |
(102,235.0) |
(85,064.0) |
Source: Hepion reports, Edison Investment Research
|
|
Research: Industrials
AAC Clyde Space has agreed the proposed acquisition of Swedish scientific instrument maker Omnisys Instruments for an initial consideration of c SEK75m in a cash and equity deal. It has also undertaken a contingent directed share issue raising SEK100m gross. Prior to the deals, management had indicated revenues of SEK500m are in prospect as soon as 2024. We expect a positive EBITDA in 2021 with positive operating cash flow to be followed by further strong organic progress in FY22, with positive EPS and net cash generation. Omnisys is well established and profitable with market leading positions that should further enhance group performance.