Main menu
Edison Group
  • Home
  • Sparks
  • Equities

    Equities

    View All Equities

    Equities by Sector

    YXT.com

    MCap

    USD127m

    Last close

    USD23.43

    ▲ 20.23 (632.19%)

    Northern Data Group

    MCap

    EUR486m

    Last close

    EUR6.28

    ▲ −1.28 (−16.88%)

    Bodycote

    MCap

    GBP1,572m

    Last close

    GBP9.14

    ▲ −9.00 (−0.98%)

  • Sectors

    Sectors

  • Megatrends

    Megatrends

  • Thematics

    Thematics

    View All Thematics

    Latest

  • Audiovisual

    Audiovisual

    View All Audiovisual

    Latest

Biondvax Pharmaceuticals — Positive Phase IIb, preparing for pivotal Phase III

Biondvax Pharmaceuticals — Positive Phase IIb, preparing for pivotal Phase III

Following the positive Phase IIb trial results with universal flu vaccine, M-001, BiondVax is now preparing to initiate a Phase III study, which will likely evaluate M-001 as a universal, standalone vaccine – another major strategic decision by BiondVax – as opposed to a stepwise approach to develop M-001 as a primer and then as a standalone vaccine. A universal, standalone flu vaccine indication is the most lucrative and the pivotal trial could start in 2018. We increase our valuation of BiondVax to $165m (NIS577m), $26.8/ADS (NIS2.34/share), from $111m previously.

Analyst avatar placeholder

Written by

BiondVax Pharmaceuticals

Positive Phase IIb, preparing for pivotal Phase III

Q217 results

Pharma & biotech

8 October 2017

Price*

NIS0.64

Market cap

NIS168m

*Priced as at 29 September 2017.

NIS3.50/US$
NIS4.19/€

Net cash at end-Q217 + fundraise in September 2017

$20.5m (NIS71.8m)

Shares in issue

261.4m

Free float

75%

Code

BVXV

Primary exchange

TASE

Secondary exchange

NASDAQ

Share price performance

%

1m

3m

12m

Abs

(4.6)

(12.8)

76.9

Rel (local)

(8.1)

(13.6)

71.6

52-week high/low

NIS0.9

NIS0.3

Business description

BiondVax Pharmaceuticals is developing a potentially universal influenza vaccine and the lead candidate M-001 could be positioned as a primer for seasonal or pandemic vaccines or as a standalone influenza vaccine. So far M-001 has been tested in two Phase I/II and four Phase II trials and consistently demonstrated immunogenicity to multiple virus strains.

Next events

Further details about the Phase III trial

2018

Start of enrolment in Phase II with NIH in the US

2017

Analysts

Jonas Peciulis

+44 (0)20 3077 5728

Juan Pedro Serrate

+44 (0)20 3681 2534

Following the positive Phase IIb trial results with universal flu vaccine, M-001, BiondVax is now preparing to initiate a Phase III study, which will likely evaluate M-001 as a universal, standalone vaccine – another major strategic decision by BiondVax – as opposed to a stepwise approach to develop M-001 as a primer and then as a standalone vaccine. A universal, standalone flu vaccine indication is the most lucrative and the pivotal trial could start in 2018. We increase our valuation of BiondVax to $165m (NIS577m), $26.8/ADS (NIS2.34/share), from $111m previously.

Year end

Revenue (NISm)

PBT*
(NISm)

EPS*
(NIS)

DPS
(NIS)

P/E
(x)

Yield
(%)

12/15

0.0

(10.2)

(0.10)

0.0

N/A

N/A

12/16

0.0

(9.2)

(0.07)

0.0

N/A

N/A

12/17e

0.0

(15.0)

(0.08)

0.0

N/A

N/A

12/18e

0.0

(19.7)

(0.08)

0.0

N/A

N/A

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

M-001 as a universal, standalone vaccine

In July 2017, BiondVax announced results from the Phase IIb BVX-007 trial, which was one of the last two remaining trials before moving to Phase III. The results showed that both primary endpoints were met, with the safety profile confirmed. BiondVax now plans to move straight into a pivotal Phase III trial to evaluate M-001 as a universal, standalone flu vaccine initially targeting subjects aged 50 years or more. The company can initiate the trial standalone after it received substantial financial support from the EIB in the form of a €20m loan. This was further boosted by raising $10m gross during the recent share issue.

Q217 opex broadly in line with our expectations

BiondVax’s Q217 operating expenses were largely in line with our expectations, with R&D costs at $578m (NIS2.0m) and G&A expenses at $163k (NIS569k). BiondVax reported cash of $10.5m (NIS36.6m) at end-Q217, while we estimate cash to be at $21.0m (NIS73.6m) at end-2017. Notably, our forecast includes the first drawdown of €6m from the European Investment Bank (EIB) loan. However, according to the agreement the first drawdown could be completed within a 12-month period since the agreement was signed in June 2017, so it may slip into 2018. Citing the need to focus on global markets BiondVax has also announced a couple of strategic decisions: delisting from the Tel Aviv Stock Exchange by end-2017, while maintaining the listing on NASDAQ and searching for a new chairman with relevant international experience to support Phase III studies of M-001.

Valuation: Increased to $165m (NIS577m)

We have increased our valuation of BiondVax to $165m (NIS577m) or $26.8/ADS (NIS2.34/share) from $111m (NIS398m) or $26.4/ADS (NIS2.4/share) due to increasing the probability of success from 60% to 70% following the positive Phase IIb trial results, including newly raised funds and rolling our model forward. For the time being, we continue to base our valuation on the pandemic primer and seasonal primer indications; however, we will revise our model once the Phase III trial design is confirmed.

Phase IIb results allow move to Phase III

In July 2017, BiondVax announced the results from the Phase IIb BVX-007 trial, which reinforced the data from previous studies. Before BVX-007, M-001 had been tested in two Phase I/II and three Phase II trials involving 479 participants in total. M-001 elicited immunogenicity to multiple flu virus strains and activated both humoral and cellular immune responses (cell-mediated immunity), as opposed to the mainly strain-specific humoral arm stimulation elicited with conventional seasonal flu vaccines.

BVX-007 was one of two remaining studies before proceeding to Phase III. The trial was initiated in Hungary in September 2015 in collaboration with and financing from the UNISEC European Consortium. This was a randomised, double-blind, controlled trial that enrolled 219 adults into three arms: M-001 doses of 0.5mg and 1.0mg, and placebo. The total monitoring period was 180 days. The primary endpoints of safety and CMI response were both achieved:

■

The safety results had already been reported and confirmed by BiondVax.

■

Influenza-specific, cell-mediated immunity (CMI). CMI was evaluated by measuring cytokine levels produced by T-cells (Th1 subset). Statistically significant elevated interferon (IFN)-gamma, interleukin (IL)-2 and tumor necrosis factor (TNF) beta levels were found in the 1.0mg dose group compared to the placebo group (Exhibit 1). BiondVax also found that responders to M-001 expressed multiple cytokines significantly more often than placebo (Exhibit 2). T-cells producing multiple cytokine levels have been shown to be functionally superior to single cytokine-producing cells.

Exhibit 1: Levels of anti-viral cytokines compared to placebo

Exhibit 2: Number of cytokines expressed by responders

Source: BiondVax

Source: BiondVax

Exhibit 1: Levels of anti-viral cytokines compared to placebo

Source: BiondVax

Exhibit 2: Number of cytokines expressed by responders

Source: BiondVax

Antibody (hemagglutination inhibition assay, HAI) response to avian H5N1 pandemic vaccination after M-001 or placebo administration was the secondary endpoint. Current influenza vaccines are derived from surface proteins of three or four inactivated virus strains and rely predominantly on triggering antibody responses to the hemagglutinin protein. The M-001 vaccine does not induce the production of these antibodies by itself, therefore in this trial M-001 was used as a primer to the avian H5N1 pandemic vaccine to test the synergy. Only limited information has been released so far with regard to this endpoint, but BiondVax stated that with one of the four H5N1 strains tested, a statistically significant HAI elevation was observed in participants who had received M-001. More detailed results should be published in a peer-reviewed article.

Phase III trial with M-001 as standalone vaccine likely next

As we discussed before, BiondVax was considering several approaches to bring the M-001 vaccine to market. M-001 as a pandemic primer for national stockpile or as a seasonal primer for the at-risk population were seen as faster routes to market, while a standalone, universal vaccine indication was the ultimate goal. Following the recent €20m funding from the EIB and consultations with European and American regulatory experts, BiondVax announced that it is working on plans to initiate a pivotal Phase III trial, which would test M-001 as a standalone flu vaccine.

Regulatory authorities currently evaluate seasonal vaccines based on HA antibodies, which correlate with protection, ie seasonal vaccine manufacturers do not need to conduct robust, large-scale clinical trials every year. Since the M-001 vaccine does not induce the production of these antibodies, BiondVax plans to evaluate the clinical efficacy of vaccination with M-001 by measuring the reduction in flu illness rate and severity, a robust primary endpoint. The clinical trial design (Exhibit 3) is yet to be confirmed, but BiondVax’s preliminary plans are to recruit around 7,500 participants and will target 50+ year olds. M-001 will be administered twice intramuscularly. At least one season will be allowed for follow-ups, with interim reports likely after each season. The trial could start in 2018.

Exhibit 3: Potential Phase III trial with M-001 design

Trial

Season 1

Season 2

Season 3 (optional)

Day 1

Day 21

Day 180 follow-up

Follow-up

Follow-up

Intervention

1mg M-001

1mg M-001

Safety, PCR and culture testing if influenza like illness is observed in subjects

Control

Placebo

Placebo

Source: BiondVax

Valuation

Our valuation of BiondVax is increased to $165m (NIS577m) or $26.8/ADS (NIS2.34/share) from $111m (NIS398m) or $26.4/ADS (NIS2.35/share). We note that there are c 100m out-of-the money options and warrants outstanding. We value BiondVax based on a risk-adjusted NPV analysis using a 12.5% discount rate and including net cash of $20.0m (NIS70.0m), which includes cash at end-Q217 and the recent fund-raise. On 18 September 2017, BiondVax closed a private placement with gross proceeds of $10m by issuing in total c 1.7m ADSs or 37% of the total outstanding prior to the issue and priced with a 21% discount to the prior day’s close (each ADS represents 40 shares listed on TASE). BiondVax indicated that besides the support from the existing shareholders, new US-based healthcare investors also came on board.

In our initiation report, we assumed a scenario in which BiondVax would develop M-001 in a stepwise manner, with pandemic primer and seasonal primer for at-risk populations being the first indications, and then expanding to universal, standalone influenza indication, which is the ultimate goal, but also the most R&D-intensive. With the new funds from the EIB and the recent share issue, BiondVax is able to initiate and partly fund the large Phase III on its own. For the time being, we make no significant changes in our valuation approach, but we will revise our model accordingly once Phase III details are confirmed. We adjusted the technology probability of success from 60% to 70%, which is the only change in our model. While the company will consider different funding sources to complete the Phase III trial, we maintain our previous approach and assume a partnering deal where each party will co-fund the Phase III trial, as described in our last report.

Exhibit 4: Sum-of-the parts summary of BiondVax valuation

Product

Launch

Peak sales ($m)

Full rNPV ($m)

Technology probability

Licensing deal probability

BiondVax’s rNPV ($m)

rNPV/
ADS ($)

rNPV/
share (NIS)

Comments

M-001 as pandemic vaccine primer

2023

670

249.3

70%

30%

87.4

14.18

1.24

Full rNPV reflects the valuation as if BiondVax develops and markets M-001 by itself assuming all associated costs. The licensing deal was modelled on the basis of full rNPV split at 35% (BiondVax):65% (partner). See our initiation report.

M-001 as seasonal vaccine primer

2027

1,380

169.5

70%

30%

57.6

9.35

0.82

Net cash ($)

20.0

100%

20.0

3.25

0.28

Valuation ($)

438.7

165.0

26.77

Valuation (NIS)

1,535.6

577.3

2.34

Source: Edison Investment Research. Note: WACC = 12.5% for product valuations.

Exhibit 5: Financial summary

NIS'000s

2013

2014

2015

2016

2017e

2018e

December

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

0

0

0

0

0

0

Cost of Sales

0

0

0

0

0

0

Gross Profit

0

0

0

0

0

0

Research and development

(5,451)

(5,492)

(7,906)

(7,794)

(10,500)

(18,375)

EBITDA

 

 

(6,932)

(7,465)

(10,675)

(11,279)

(14,503)

(18,563)

Operating Profit (before amort. and except.)

(7,627)

(8,142)

(11,303)

(11,900)

(15,222)

(19,815)

Intangible Amortisation

(14)

0

0

0

0

0

Exceptionals

0

0

0

0

0

0

Other

0

0

0

0

0

0

Operating Profit

(7,641)

(8,142)

(11,303)

(11,900)

(15,222)

(19,815)

Net Interest

(395)

378

1,104

2,716

265

140

Profit Before Tax (norm)

 

 

(8,022)

(7,764)

(10,199)

(9,184)

(14,957)

(19,675)

Profit Before Tax (reported)

 

 

(8,036)

(7,764)

(10,199)

(9,184)

(14,957)

(19,675)

Tax

0

0

0

0

0

0

Profit After Tax (norm)

(8,022)

(7,764)

(10,199)

(9,184)

(14,957)

(19,675)

Profit After Tax (reported)

(8,036)

(7,764)

(10,199)

(9,184)

(14,957)

(19,675)

Average Number of Shares Outstanding (m)

47.9

54.3

105.5

135.1

198.2

261.4

EPS - normalised (NIS)

 

 

(0.17)

(0.14)

(0.10)

(0.07)

(0.08)

(0.08)

EPS - normalised and fully diluted (NIS)

 

(0.17)

(0.14)

(0.10)

(0.07)

(0.08)

(0.08)

EPS - (reported) (NIS)

 

 

(0.17)

(0.14)

(0.10)

(0.07)

(0.08)

(0.08)

Dividend per share (NIS)

0.0

0.0

0.0

0.0

0.0

0.0

Gross Margin (%)

N/A

N/A

N/A

N/A

N/A

N/A

EBITDA Margin (%)

N/A

N/A

N/A

N/A

N/A

N/A

Operating Margin (before GW and except.) (%)

N/A

N/A

N/A

N/A

N/A

N/A

BALANCE SHEET

Fixed Assets

 

 

5,458

5,753

4,379

3,971

5,335

11,403

Intangible Assets

0

0

0

0

0

0

Tangible Assets

3,285

2,638

2,044

1,443

2,807

10,925

Investments

2,173

3,115

2,335

2,528

2,528

478

Current Assets

 

 

20,365

12,709

36,928

26,139

80,092

80,251

Stocks

0

0

0

0

0

0

Debtors

489

1,081

1,442

815

1,262

1,262

Cash

17,863

9,612

33,470

15,705

73,563

78,990

Other*

2,013

2,016

2,016

9,619

5,267

0

Current Liabilities

 

 

(1,782)

(1,813)

(1,699)

(1,375)

(2,297)

(2,999)

Creditors

(1,782)

(1,813)

(1,699)

(1,375)

(2,297)

(2,999)

Short term borrowings

0

0

0

0

0

0

Long Term Liabilities

 

 

(55)

(62)

(69)

(76)

(24,016)

(47,956)

Long term borrowings

0

0

0

0

(23,940)

(47,880)

Other long term liabilities

(55)

(62)

(69)

(76)

(76)

(76)

Net Assets

 

 

23,986

16,587

39,539

28,659

59,113

40,699

CASH FLOW

Operating Cash Flow

 

 

(4,338)

(7,624)

(10,262)

(9,688)

(12,766)

(16,600)

Net Interest

133

52

(5)

35

265

140

Tax

0

0

0

0

0

0

Capex

(196)

(30)

(34)

0

(2,083)

(9,371)

Acquisitions/disposals

0

0

0

0

0

0

Financing

9,248

(782)

33,753

0

44,150

0

Other

1,987

133

406

(8,112)

4,352

7,317

Dividends

0

0

0

0

0

0

Net Cash Flow

6,834

(8,251)

23,858

(17,765)

33,918

(18,514)

Opening net debt/(cash)

 

 

(11,029)

(17,863)

(9,612)

(33,470)

(15,705)

(49,623)

HP finance leases initiated

0

0

0

0

0

0

Other

0

0

0

0

0

0

Closing net debt/(cash)

 

 

(17,863)

(9,612)

(33,470)

(15,705)

(49,623)

(31,110)

Source: Edison Investment Research, BiondVax accounts. Note: *Other = other liquid cash resources.

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

EDISON ISRAEL DISCLAIMER

Disclosure regarding the scheme to enhance the awareness of investors to public companies in the technology and biomed sectors that are listed on the Tel Aviv Stock Exchange and participate in the scheme (hereinafter respectively “the Scheme”, “TASE”, “Participant” and/or “Participants”). Edison Investment Research (Israel) Ltd, the Israeli subsidiary of Edison Investment Research Ltd (hereinafter respectively “Edison Israel” and “Edison”), has entered into an agreement with the TASE for the purpose of providing research analysis (hereinafter “the Agreement”), regarding the Participants and according to the Scheme (hereinafter “the Analysis” or “Analyses”). The Analysis will be distributed and published on the TASE website (Maya), Israel Security Authority (hereinafter “the ISA”) website (Magna), and through various other distribution channels. The Analysis for each participant will be published at least four times a year, after publication of quarterly or annual financial reports, and shall be updated as necessary after publication of an immediate report with respect to the occurrence of a material event regarding a Participant. As set forth in the Agreement, Edison Israel is entitled to fees for providing its investment research services. The fees shall be paid by the Participants directly to the TASE, and TASE shall pay the fees directly to Edison. Subject to the terms and principals of the Agreement, the Annual fees that Edison Israel shall be entitled to for each Participant shall be in the range of $35,000-50,000. As set forth in the Agreement and subject to its terms, the Analyses shall include a description of the Participant and its business activities, which shall inter alia relate to matters such as: shareholders; management; products; relevant intellectual property; the business environment in which the Participant operates; the Participant's standing in such an environment including current and forecasted trends; a description of past and current financial positions of the Participant; and a forecast regarding future developments in and of such a position and any other matter which in the professional view of the Edison (as defined below) should be addressed in a research report (of the nature published) and which may affect the decision of a reasonable investor contemplating an investment in the Participant's securities. To the extent it is relevant, the Analysis shall include a schedule of scientific analysis of an expert in the field of life sciences. An "equity research abstract" shall accompany each Equity Research Report, describing the main points addressed. The full scope reports and reports where the investment case has materially changed will include a thorough analysis and discussion. Short update notes, where the investment case has not materially changed, will include a summary valuation discussion. The Agreement with TASE regarding the participation of Edison in the scheme for the research analysis of public companies does not and shall not constitute an approval or consent on the part of TASE or the ISA or any other exchange on which securities of the Company are listed, or any other securities’ regulatory authority which regulates the issuance of securities by the Company to the content of the Report or to the recommendation contained therein. A summary of this report is also published in the Hebrew language. In the event of any contradiction, inconsistency, discrepancy, ambiguity or variance between the English Report and the Hebrew summary of said Report, the English version shall prevail; and a note to this effect shall appear in any Hebrew summary of a Report. Edison is regulated by the Financial Conduct Authority. According to Article 12.3.2, Chapter 12 of the Conduct of Business Sourcebook, Edison, which produces or disseminates non-independent research, must ensure that it: 1) is clearly identified as a marketing communication; and 2) contains a clear and prominent statement that (or, in the case of an oral recommendation, to the effect that) it: a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research; and b) is not subject to any prohibition on dealing ahead of the dissemination of investment research. The financial promotion rules apply to non-independent research as though it were a marketing communication.

EDISON INVESTMENT RESEARCH DISCLAIMER

Copyright 2017 Edison Investment Research Limited. All rights reserved. This report has been 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

Tel Aviv +44 (0)20 3734 1007
Medinat Hayehudim 60

Herzilya Pituach, 46766

Israel

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

Tel Aviv +44 (0)20 3734 1007
Medinat Hayehudim 60

Herzilya Pituach, 46766

Israel

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

EDISON ISRAEL DISCLAIMER

Disclosure regarding the scheme to enhance the awareness of investors to public companies in the technology and biomed sectors that are listed on the Tel Aviv Stock Exchange and participate in the scheme (hereinafter respectively “the Scheme”, “TASE”, “Participant” and/or “Participants”). Edison Investment Research (Israel) Ltd, the Israeli subsidiary of Edison Investment Research Ltd (hereinafter respectively “Edison Israel” and “Edison”), has entered into an agreement with the TASE for the purpose of providing research analysis (hereinafter “the Agreement”), regarding the Participants and according to the Scheme (hereinafter “the Analysis” or “Analyses”). The Analysis will be distributed and published on the TASE website (Maya), Israel Security Authority (hereinafter “the ISA”) website (Magna), and through various other distribution channels. The Analysis for each participant will be published at least four times a year, after publication of quarterly or annual financial reports, and shall be updated as necessary after publication of an immediate report with respect to the occurrence of a material event regarding a Participant. As set forth in the Agreement, Edison Israel is entitled to fees for providing its investment research services. The fees shall be paid by the Participants directly to the TASE, and TASE shall pay the fees directly to Edison. Subject to the terms and principals of the Agreement, the Annual fees that Edison Israel shall be entitled to for each Participant shall be in the range of $35,000-50,000. As set forth in the Agreement and subject to its terms, the Analyses shall include a description of the Participant and its business activities, which shall inter alia relate to matters such as: shareholders; management; products; relevant intellectual property; the business environment in which the Participant operates; the Participant's standing in such an environment including current and forecasted trends; a description of past and current financial positions of the Participant; and a forecast regarding future developments in and of such a position and any other matter which in the professional view of the Edison (as defined below) should be addressed in a research report (of the nature published) and which may affect the decision of a reasonable investor contemplating an investment in the Participant's securities. To the extent it is relevant, the Analysis shall include a schedule of scientific analysis of an expert in the field of life sciences. An "equity research abstract" shall accompany each Equity Research Report, describing the main points addressed. The full scope reports and reports where the investment case has materially changed will include a thorough analysis and discussion. Short update notes, where the investment case has not materially changed, will include a summary valuation discussion. The Agreement with TASE regarding the participation of Edison in the scheme for the research analysis of public companies does not and shall not constitute an approval or consent on the part of TASE or the ISA or any other exchange on which securities of the Company are listed, or any other securities’ regulatory authority which regulates the issuance of securities by the Company to the content of the Report or to the recommendation contained therein. A summary of this report is also published in the Hebrew language. In the event of any contradiction, inconsistency, discrepancy, ambiguity or variance between the English Report and the Hebrew summary of said Report, the English version shall prevail; and a note to this effect shall appear in any Hebrew summary of a Report. Edison is regulated by the Financial Conduct Authority. According to Article 12.3.2, Chapter 12 of the Conduct of Business Sourcebook, Edison, which produces or disseminates non-independent research, must ensure that it: 1) is clearly identified as a marketing communication; and 2) contains a clear and prominent statement that (or, in the case of an oral recommendation, to the effect that) it: a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research; and b) is not subject to any prohibition on dealing ahead of the dissemination of investment research. The financial promotion rules apply to non-independent research as though it were a marketing communication.

EDISON INVESTMENT RESEARCH DISCLAIMER

Copyright 2017 Edison Investment Research Limited. All rights reserved. This report has been 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

Tel Aviv +44 (0)20 3734 1007
Medinat Hayehudim 60

Herzilya Pituach, 46766

Israel

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

Tel Aviv +44 (0)20 3734 1007
Medinat Hayehudim 60

Herzilya Pituach, 46766

Israel

Research: TMT

XP Power — Entering the RF power supply market

XP has acquired Comdel, a US-based RF power supply company, for $23m/£17m. This marks the entry into a new market for XP and gives it the potential to expand the amount it sells to a sub-sector of its customer base. We have revised our forecasts to reflect both the acquisition and the strengthening pound versus the dollar. We increase our normalised EPS forecast by 1.2% in FY17 and 1.7% in FY18

Continue Reading
Cookie Policy Overview
Edison Group

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping us understand which section of the website you find more interesting and useful. See our Cookie Policy for more information.

Strictly necessary and functional

These cookies are used to deliver our website and content. Strictly necessary cookies relate to our hosting environment, and functional cookies are used to facilitate social logins, social sharing and rich-media content embeds.

Advertising

Advertising Cookies collect information about your browsing habits such as the pages you visit and links you follow. These audience insights are used to make our website more relevant.

Performance

Performance Cookies collect anonymous information designed to help us improve the site and respond to the needs of our audiences. We use this information to make our site faster, more relevant and improve the navigation for all users.