Last close As at 05/08/2026
SEK0.77
▲ 0.01 (1.32%)
Market capitalisation
SEK71m
Research: Healthcare
The key takeaway from RhoVac’s Q419 results update released on 11 February 2020 was confirmation that the Phase IIb BRaVac study is progressing according to plan. All patient recruitment centres are expected to be up and running by May 2020. The trial should be fully enrolled (n=180) in September 2020 and key interim results, including primary endpoint assessment, are expected in H221. RhoVac has now received the first part (SEK12m) of the EU Horizon grant of €2.5m (c SEK27m). The existing and expected funding (further tax credits and Horizon 2020 payments) is more than sufficient to complete the ongoing Phase IIb study. Our valuation is largely unchanged at SEK889.5m or SEK46.7/share.
Written by
RhoVac |
Phase IIb study progressing to plan |
FY19 results |
Pharma & biotech |
21 January 2020 |
Share price performance
Business description
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Analyst
RhoVac is a research client of Edison Investment Research Limited |
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The key takeaway from RhoVac’s Q419 results update released on 11 February 2020 was confirmation that the Phase IIb BRaVac study is progressing according to plan. All patient recruitment centres are expected to be up and running by May 2020. The trial should be fully enrolled (n=180) in September 2020 and key interim results, including primary endpoint assessment, are expected in H221. RhoVac has now received the first part (SEK12m) of the EU Horizon grant of €2.5m (c SEK27m). The existing and expected funding (further tax credits and Horizon 2020 payments) is more than sufficient to complete the ongoing Phase IIb study. Our valuation is largely unchanged at SEK889.5m or SEK46.7/share.
Year end |
Revenue (SEKm) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/18 |
0.0 |
(20.2) |
(1.95) |
0.0 |
N/A |
N/A |
12/19 |
6.0 |
(35.9) |
(2.25) |
0.0 |
N/A |
N/A |
12/20e |
0.0 |
(59.4) |
(2.71) |
0.0 |
N/A |
N/A |
12/21e |
0.0 |
(59.6) |
(3.13) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Key Phase IIb data readout in H221
The study is testing RV001, a cancer immunotherapy targeting RhoC, for prostate cancer patients who have experienced biochemical failure after curative intent therapy. Most of the study centres are in Europe, but RhoVac has confirmed that it plans to open several US centres. The primary endpoint is time to PSA progression, defined as the time from randomization to doubling of PSA from baseline value. Key interim results are expected in H221, while follow-up data should be ready in H222.
Beyond prostate cancer
The therapy contains fragments of the protein RhoC, which is overexpressed in cells with metastatic potential across a range of cancers. In 2019, a comprehensive third party review article on this target was published – for the first time to our knowledge – which we reviewed in detail in our last report. RV001 offers a new approach by priming the immune system to recognise and kill tumour cells with metastatic potential. There are currently no drugs that can effectively prevent metastasis, therefore RV001 represents a differentiated approach and a potentially suitable partner drug in many anticancer combination therapies. RhoVac is looking at potential uses of RV001 beyond prostate cancer and, with the Q419 results, confirmed that it is exploring the best approach (preclinical and clinical).
Valuation: SEK889.5m or SEK46.7/share
We keep our RhoVac valuation virtually unchanged at SEK889.5m or SEK46.7/share. Near- to mid-term share price drivers are associated with the ongoing Phase IIb BRaVac study. Other significant R&D events include the start of an exploratory clinical study in other cancer indications (2020), and potential updates on the partnering process.
Financials and valuation
As we described in our previous report, RhoVac was awarded an EU Horizon 2020 grant of €2.5m (c SEK27m) to support the ongoing Phase IIb study. To date, the company has received SEK12m of that amount, which is already reflected in the balance sheet and will also be recognised in the P&L as income as the trial progresses (SEK6.0m booked in Q419). The remaining part of the grant SEK15m is yet to be received and is not yet recognised in the balance sheet.
RhoVac reported a positive amount of SEK827k in other external costs line (vs -SEK9.3m in Q319). This was a result of a pre-payment to CRO incorrectly booked as cost, rather than current asset. This has now been corrected. The grant income and cost accrual correction led to a positive Q419 EBIT of SEK5.6m vs -SEK10.6m in Q319.
The reported end-2019 cash position was SEK130m with no interest-bearing debt. However, RhoVac will also receive the remaining part of the grant of SEK15m and expects around SEK20m in tax credits during the duration of the Phase IIb trial. These expected amounts in addition to increased current assets after the cost accrual correction, mean that the total expected funding is around SEK172m, which is more than sufficient to complete the ongoing Phase IIb study. We maintain our financial estimates.
Our RhoVac valuation remains virtually unchanged at SEK889.5m or SEK46.7/share. We maintain the assumptions in our risk-adjusted NPV model. Our valuation is based on RV001 in prostate cancer only, specifically in patients with biochemical recurrence following radical prostatectomy or radiotherapy.
According to our model, a successful Phase IIb outcome would result in RhoVac’s rNPV increasing to SEK2.05bn or SEK107.1/share (not including the net cash estimate). This would include setting the probability of success at 40% as a Phase III-ready asset and changing the date of the valuation to the start of 2022, but leaving all other inputs unchanged.
Exhibit 1: Sum-of-the-parts RhoVac valuation
Product |
Launch |
Peak sales |
Unrisked NPV (SEKm) |
Technology probability (%) |
rNPV |
rNPV/share (SEK) |
|
RV001 – prostate cancer |
2027 |
888 |
3,451.1 |
15% |
759.5 |
39.9 |
|
Net cash at end-Q419 |
130.0 |
100% |
130.0 |
6.8 |
|||
Valuation |
3,581.1 |
889.5 |
46.7 |
||||
Source: Edison Investment Research. Note: WACC = 12.5% for product valuations.
Exhibit 2: Financial summary
SEK'000s |
2018 |
2019 |
2020e |
2021e |
||
December |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
||||||
Revenue |
|
|
0 |
5,979 |
0 |
0 |
Cost of Sales |
0 |
0 |
0 |
0 |
||
Gross Profit |
0 |
5,979 |
0 |
0 |
||
Research and development |
(19,154) |
(38,570) |
(60,000) |
(60,000) |
||
EBITDA |
|
|
(20,148) |
(36,325) |
(60,000) |
(60,000) |
Operating Profit (before amort. and except.) |
|
|
(20,148) |
(36,325) |
(60,000) |
(60,000) |
Intangible Amortisation |
0 |
0 |
0 |
0 |
||
Exceptionals |
0 |
0 |
0 |
0 |
||
Other |
0 |
0 |
0 |
0 |
||
Operating Profit |
(20,148) |
(36,325) |
(60,000) |
(60,000) |
||
Net Interest |
(64) |
382 |
577 |
363 |
||
Profit Before Tax (norm) |
|
|
(20,212) |
(35,943) |
(59,423) |
(59,637) |
Profit Before Tax (reported) |
|
|
(20,212) |
(35,943) |
(59,423) |
(59,637) |
Tax |
2,936 |
3,837 |
7,900 |
0 |
||
Profit After Tax (norm) |
(17,276) |
(32,106) |
(51,523) |
(59,637) |
||
Profit After Tax (reported) |
(17,276) |
(32,106) |
(51,523) |
(59,637) |
||
Average Number of Shares Outstanding (m) |
8.9 |
14.3 |
19.0 |
19.0 |
||
EPS - normalised (SEK) |
|
|
(1.95) |
(2.25) |
(2.71) |
(3.13) |
EPS - normalised and fully diluted (SEK) |
|
|
(1.95) |
(2.25) |
(2.71) |
(3.13) |
EPS - (reported) (SEK) |
|
|
(1.95) |
(2.25) |
(2.71) |
(3.13) |
Dividend per share (SEK) |
0.0 |
0.0 |
0.0 |
0.0 |
||
Gross Margin (%) |
N/A |
100.0 |
N/A |
N/A |
||
EBITDA Margin (%) |
N/A |
N/A |
N/A |
N/A |
||
Operating Margin (before GW and except.) (%) |
N/A |
N/A |
N/A |
N/A |
||
BALANCE SHEET |
||||||
Fixed Assets |
|
|
2,848 |
3,021 |
3,021 |
3,021 |
Intangible Assets |
2,848 |
3,021 |
3,021 |
3,021 |
||
Tangible Assets |
0 |
0 |
0 |
0 |
||
Investments |
0 |
0 |
0 |
0 |
||
Current Assets |
|
|
20,372 |
149,928 |
98,028 |
38,228 |
Stocks |
0 |
0 |
0 |
0 |
||
Debtors |
240 |
14,391 |
14,391 |
14,391 |
||
Cash |
16,060 |
129,543 |
77,643 |
17,843 |
||
Other |
4,071 |
5,994 |
5,994 |
5,994 |
||
Current Liabilities |
|
|
(4,380) |
(12,574) |
(12,574) |
(12,574) |
Creditors |
(4,380) |
(12,574) |
(12,574) |
(12,574) |
||
Short term borrowings |
0 |
0 |
0 |
0 |
||
Long Term Liabilities |
|
|
(596) |
(624) |
(624) |
(624) |
Long term borrowings |
0 |
0 |
0 |
0 |
||
Other long-term liabilities |
(596) |
(624) |
(624) |
(624) |
||
Net Assets |
|
|
18,245 |
139,751 |
87,851 |
28,051 |
CASH FLOW |
||||||
Operating Cash Flow |
|
|
(17,097) |
(43,309) |
(60,000) |
(60,000) |
Net Interest |
(64) |
(1,834) |
200 |
200 |
||
Tax |
2,229 |
2,986 |
7,900 |
0 |
||
Capex |
0 |
0 |
0 |
0 |
||
Acquisitions/disposals |
0 |
0 |
0 |
0 |
||
Financing |
21,756 |
154,715 |
0 |
0 |
||
Other |
(191) |
925 |
0 |
0 |
||
Dividends |
0 |
0 |
0 |
0 |
||
Net Cash Flow |
6,632 |
113,483 |
(51,900) |
(59,800) |
||
Opening net debt/(cash) |
|
|
(9,428) |
(16,060) |
(129,543) |
(77,643) |
HP finance leases initiated |
0 |
0 |
0 |
0 |
||
Other |
(0) |
0 |
0 |
0 |
||
Closing net debt/(cash) |
|
|
(16,060) |
(129,543) |
(77,643) |
(17,843) |
Source: RhoVac accounts, Edison Investment Research
|
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