Currency in SEK
Last close As at 26/05/2023
SEK8.30
▲ −0.68 (−7.57%)
Market capitalisation
SEK430m
Research: Healthcare
IRLAB successfully out-licensed its lead asset, mesdopetam, to Ipsen in FY21 and has shifted its operational focus on the upcoming initiation of the Phase IIb trial for pirepemat and progressing the rest of its preclinical pipeline. Mesdopetam will remain a key near-term value driver in our view and we now expect data from the Phase IIb/III PD-LIDs trial in H222, based on guidance from Ipsen. The balance sheet looks strong following the Ipsen deal and we forecast a cash runaway until at least 2024. We value IRLAB at SEK5.4bn or SEK105/share.
Written by
Sean Conroy
IRLAB Therapeutics |
Pirepemat and platform potential come into focus |
Q421 update |
Pharma & biotech |
22 November 2021 |
Share price performance
Business description
Next events
Analysts
IRLAB Therapeutics is a research client of Edison Investment Research Limited |
IRLAB successfully out-licensed its lead asset, mesdopetam, to Ipsen in FY21 and has shifted its operational focus on the upcoming initiation of the Phase IIb trial for pirepemat and progressing the rest of its preclinical pipeline. Mesdopetam will remain a key near-term value driver in our view and we now expect data from the Phase IIb/III PD-LIDs trial in H222, based on guidance from Ipsen. The balance sheet looks strong following the Ipsen deal and we forecast a cash runaway until at least 2024. We value IRLAB at SEK5.4bn or SEK105/share.
Year end |
Revenue (SEKm) |
PBT** |
EPS** |
DPS |
P/E |
Yield |
12/19 |
0.4 |
(95.1) |
(2.34) |
0.0 |
N/A |
N/A |
12/20 |
0.4 |
(91.4) |
(1.92) |
0.0 |
N/A |
N/A |
12/21e* |
207.9 |
91.1 |
1.76 |
0.0 |
N/A |
N/A |
12/22e |
42.9 |
(95.7) |
(1.85) |
0.0 |
N/A |
N/A |
Note: *Based on unaudited numbers. **PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Initiation of pirepemat Phase IIb trial is imminent
Pirepemat is a first-in-class drug being developed for the treatment of postural dysfunction and falls in Parkinson’s disease (PD). These are untapped markets that represent a significant burden on healthcare systems. A Phase IIb study has been cleared by regulators and is expected to start by end-Q122. The trial, which will enrol c 150 patients, will investigate pirepemat as an add-on therapy. Management has guided enrolment will take 18 months, so we now expect top-line data in H223.
CMD to outline IRLAB’s long-term strategy
IRLAB will host a capital markets day on 22 March where management will outline the long-term strategy of the business. We expect the day to focus on IRLAB’s core R&D competences utilising its proprietary discovery engine ISP, which helped deliver mesdopetam and pirepemat into the clinic and has generated several preclinical candidates. We also expect management to provide an update on the progress of IRLAB’s preclinical projects, which we believe could expand the company’s therapeutic scope beyond PD into other neurological disorders.
Financials: Cash runway until at least 2024
The SEK240m upfront payment from Ipsen was the highlight of FY21 and demonstrated IRLAB’s ability to crystallise value from its platform. SEK197m of this upfront was booked as revenue in FY21; the remaining SEK43m will be recognised in FY22, as reflected in our updated forecasts. Cash at end-2021 was SEK402m and based on current R&D plans we forecast a runway until at least 2024. We note that additional milestones from Ipsen (up to $335m due) could extend this further.
Valuation: SEK5.4bn or SEK105/share
Our valuation is virtually unchanged, but we have updated it for net cash and rolled forward our model in time. Mesdopetam remains the largest value contributor at c SEK64/share (PD-LIDs and PD-Psychosis) with pirepemat c SEK33/share (PD-Falls). We do not currently include the early stage, preclinical portfolio or the ISP platform in our valuation, but highlight these could provide additional upside.
Exhibit 2: Financial summary
Accounts: IFRS; year-end 31 December; SEK’000s |
|
|
2018 |
2019 |
2020 |
2021e* |
2022e |
PROFIT & LOSS |
|
|
|
|
|
|
|
Total revenues |
|
|
196 |
448 |
404 |
207,906 |
42,893 |
Cost of sales |
|
|
0 |
0 |
0 |
0 |
0 |
Gross profit |
|
|
196 |
448 |
404 |
207,906 |
42,893 |
Total operating expenses |
|
|
(74,093) |
(96,296) |
(91,862) |
(155,330) |
(138,078) |
Research and development expenses |
|
|
(58,927) |
(79,381) |
(75,989) |
(89,746) |
(114,746) |
EBITDA (reported) |
|
|
(72,565) |
(92,916) |
(89,202) |
56,050 |
(91,445) |
Operating income (reported) |
|
|
(73,897) |
(95,848) |
(91,458) |
52,576 |
(95,185) |
Operating margin % |
|
|
N/A |
N/A |
N/A |
N/A |
N/A |
Finance income/(expense) |
|
|
(202) |
(272) |
(195) |
(796) |
(796) |
Exceptionals and adjustments |
|
|
0 |
0 |
0 |
0 |
0 |
Profit before tax (reported) |
|
|
(74,099) |
(96,120) |
(91,653) |
51,780 |
(95,980) |
Profit before tax (normalised) |
|
|
(73,359) |
(95,121) |
(91,394) |
91,130 |
(95,721) |
Income tax expense (includes exceptionals) |
|
|
0 |
0 |
0 |
0 |
0 |
Net income (reported) |
|
|
(74,099) |
(96,120) |
(91,653) |
51,780 |
(95,980) |
Net income (normalised) |
|
|
(73,359) |
(95,121) |
(91,394) |
91,130 |
(95,721) |
Basic average number of shares, m |
|
|
38.2 |
40.6 |
47.7 |
51.7 |
51.7 |
Basic EPS (SEK) |
|
|
(1.94) |
(2.37) |
(1.92) |
1.00 |
(1.85) |
Adjusted EPS (SEK) |
|
|
(1.92) |
(2.34) |
(1.92) |
1.76 |
(1.85) |
Dividend per share (SEK) |
|
|
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
BALANCE SHEET |
|
|
|
|
|
|
|
Tangible assets |
|
|
1,197 |
5,919 |
4,317 |
8,348 |
8,582 |
Intangible assets |
|
|
83,269 |
82,270 |
82,011 |
42,661 |
42,402 |
Other non-current assets |
|
|
0 |
0 |
0 |
0 |
0 |
Total non-current assets |
|
|
84,466 |
88,189 |
86,328 |
51,009 |
50,984 |
Cash and equivalents |
|
|
134,442 |
110,527 |
277,009 |
401,897 |
264,252 |
Inventories |
|
|
0 |
0 |
0 |
0 |
0 |
Trade and other receivables |
|
|
6,028 |
9,351 |
6,732 |
19,542 |
19,542 |
Other current assets |
|
|
0 |
0 |
0 |
1 |
0 |
Total current assets |
|
|
140,470 |
119,878 |
283,741 |
421,440 |
283,794 |
Non-current loans and borrowings |
|
|
0 |
0 |
0 |
0 |
0 |
Non-current lease liabilities |
|
|
0 |
2,900 |
1,270 |
3,566 |
3,566 |
Other non-current liabilities |
|
|
0 |
0 |
0 |
0 |
0 |
Total non-current liabilities |
|
|
0 |
2,900 |
1,270 |
3,566 |
3,566 |
Accounts payable |
|
|
5,997 |
8,438 |
3,683 |
4,634 |
5,521 |
Non-current loans and borrowings |
|
|
0 |
0 |
0 |
0 |
0 |
Current lease liabilities |
|
|
0 |
1,643 |
1,657 |
3,034 |
3,034 |
Other current liabilities |
|
|
6,463 |
13,259 |
15,578 |
19,158 |
19,158 |
Total current liabilities |
|
|
12,460 |
23,340 |
20,918 |
26,826 |
27,713 |
Equity attributable to company |
|
|
212,476 |
181,826 |
347,879 |
399,480 |
303,500 |
CASH FLOW STATEMENT |
|
|
|
|
|
|
|
Operating income |
|
|
(73,897) |
(95,848) |
(91,458) |
52,576 |
(95,185) |
Depreciation and amortisation |
|
|
1,332 |
2,932 |
2,256 |
3,474 |
3,740 |
Share based payments |
|
|
0 |
0 |
0 |
0 |
0 |
Other adjustments |
|
|
(202) |
(244) |
(195) |
38,295 |
(796) |
Movements in working capital |
|
|
1,977 |
1,959 |
183 |
34,296 |
(41,689) |
Cash from operations (CFO) |
|
|
(70,790) |
(91,201) |
(89,214) |
128,641 |
(133,930) |
Capex |
|
|
(1,052) |
(137) |
(394) |
(708) |
(551) |
Acquisitions & disposals net |
|
|
0 |
0 |
0 |
0 |
0 |
Other investing activities |
|
|
0 |
0 |
0 |
0 |
0 |
Cash used in investing activities (CFIA) |
|
|
(1,052) |
(137) |
(394) |
(708) |
(551) |
Net proceeds from issue of shares |
|
|
131,575 |
68,970 |
257,706 |
(180) |
0 |
Movements in debt |
|
|
0 |
(1,547) |
(1,616) |
(2,865) |
0 |
Other financing activities |
|
|
0 |
0 |
0 |
0 |
(3,164) |
Cash from financing activities (CFF) |
|
|
131,575 |
67,423 |
256,090 |
(3,045) |
(3,164) |
Cash and equivalents at beginning of period |
|
|
74,709 |
134,442 |
110,527 |
277,009 |
401,897 |
Increase/(decrease) in cash and equivalents |
|
|
59,733 |
(23,915) |
166,482 |
124,888 |
(137,645) |
Effect of FX on cash and equivalents |
|
|
0 |
0 |
0 |
0 |
0 |
Cash and equivalents at end of period |
|
|
134,442 |
110,527 |
277,009 |
401,897 |
264,252 |
Net (debt)/cash |
|
|
134,442 |
110,527 |
277,009 |
401,897 |
264,252 |
Source: Company accounts, Edison Investment Research. Note: *Based on unaudited numbers.
|
|
Research: TMT
During H122, BluGlass focused on laser diode development, primarily on improving the reliability of its first-generation product. Recent performance data from prototypes demonstrated commercial light-output results and was very positively received by potential customers. BluGlass remains on track to launch its first laser diodes by mid-calendar 2022.
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