Probiodrug
Written by
Probiodrug |
Combo trial data may boost early R&D |
R&D update |
Pharma & biotech |
13 September 2016 |
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Probiodrug is a research client of Edison Investment Research Limited |
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Today Probiodrug announced the results from a combination study of its lead Phase IIa product, glutaminylcyclase-inhibitor PQ912, and its specific monoclonal antibody PBD-C06, the company’s second asset in preclinical stage. This is the first preclinical proof-of-concept data and showed an additive effect of this two-pronged approach of inhibiting the formation and increasing the clearance of pyro-glutamyl-Amyloid beta (pGlu-Abeta), the toxic version of amyloid beta, potentially a key pathophysiological component in Alzheimer’s disease (AD). While PQ612 remains Probiodrug’s key asset, the encouraging preclinical findings in the combo study may boost the company’s earlier-stage programme, especially in light of Eli Lilly’s recent data from a Phase I study with a peer compound to PBD-C06 (see our outlook report).
Year end |
Revenue (€m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/14 |
0.0 |
(11.4) |
(2.35) |
0.0 |
N/A |
N/A |
12/15 |
0.0 |
(13.5) |
(1.96) |
0.0 |
N/A |
N/A |
12/16e |
0.0 |
(14.2) |
(1.91) |
0.0 |
N/A |
N/A |
12/17e |
0.0 |
(11.0) |
(1.48) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Additive effect in lowering pGlu-Abeta
The results from the study with PQ912 and PBD-C06 (mouse version) in the double transgenic AD animal model (AppswlhQC) showed an additive effect in lowering pGlu-Abeta as well as total Abeta. The study involved parallel trials with low doses of each of the drugs and then a combination trial at the same doses with the treatment lasting four months. No signs of toxicity were observed. Single agents led to a c 35% reduction in hippocampal pGlu-Abeta load, while the combination treatment significantly reduced plaque load by about 65% with total Abeta reduced as well.
Scope for more combination studies
There is also scope to explore Probiodrug’s products in combination with other compounds targeting AD. For example, the company is also running a preclinical trial with PQ912 in combination with BACE inhibitor. In addition to BACE inhibitors, which act upstream in the Abeta cascade, therapies targeting tau (a misfolded protein that is also a pathological hallmark of AD), acting on downstream effects, could theoretically be another potential combination partner. As they all act via a different approach, Probiodrug’s candidates could be well suited as part of a combination therapy targeting multiple steps in the Abeta cascade.
Valuation: rNPV of €309m or €41.5/share
We maintain our valuation of Probiodrug at €309.1m or €41.5/share. While the combination study results are encouraging, they are still at an early preclinical stage. We will revisit our valuation once the company clarifies further development plans and progresses into the clinic. The upcoming first Phase IIa data due around end-2016 and full readout in early 2017 are the main catalysts in the near term.
Exhibit 1: Financial summary
€000s |
2012 |
2013 |
2014 |
2015 |
2016e |
2017e |
||
Year end 31 December |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
||||||||
Revenue |
|
|
6 |
0 |
0 |
0 |
0 |
0 |
Cost of Sales |
0 |
0 |
0 |
0 |
0 |
0 |
||
Gross Profit |
6 |
0 |
0 |
0 |
0 |
0 |
||
Research and development |
(9,255) |
(8,004) |
(8,008) |
(10,158) |
(11,105) |
(7,669) |
||
EBITDA |
|
|
(10,206) |
(9,387) |
(11,173) |
(13,337) |
(14,285) |
(11,018) |
Operating Profit (before amort. and except.) |
(10,521) |
(9,675) |
(11,241) |
(13,363) |
(14,311) |
(11,044) |
||
Intangible Amortisation |
(37) |
(26) |
(26) |
(30) |
(30) |
(26) |
||
Exceptionals |
0 |
0 |
0 |
0 |
0 |
0 |
||
Other |
0 |
0 |
0 |
0 |
0 |
0 |
||
Operating Profit |
(10,558) |
(9,701) |
(11,267) |
(13,393) |
(14,342) |
(11,070) |
||
Net Interest |
(314) |
(106) |
(170) |
(112) |
122 |
17 |
||
Profit Before Tax (norm) |
|
|
(10,835) |
(9,781) |
(11,411) |
(13,475) |
(14,190) |
(11,027) |
Profit Before Tax (FRS 3) |
|
|
(10,872) |
(9,807) |
(11,437) |
(13,505) |
(14,220) |
(11,053) |
Tax |
(656) |
0 |
0 |
0 |
0 |
0 |
||
Profit After Tax (norm) |
(11,491) |
(9,781) |
(11,411) |
(13,475) |
(14,190) |
(11,027) |
||
Profit After Tax (FRS 3) |
(11,528) |
(9,807) |
(11,437) |
(13,505) |
(14,220) |
(11,053) |
||
Average Number of Shares Outstanding (m) |
4.1 |
4.3 |
4.9 |
6.9 |
7.4 |
7.4 |
||
EPS - normalised (€) |
|
|
(2.84) |
(2.30) |
(2.35) |
(1.96) |
(1.91) |
(1.48) |
EPS - normalised and fully diluted (€) |
|
(2.84) |
(2.30) |
(2.35) |
(1.96) |
(1.91) |
(1.48) |
|
EPS - (IFRS) (€) |
|
|
(2.85) |
(2.30) |
(2.35) |
(1.97) |
(1.91) |
(1.49) |
Dividend per share (€) |
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 |
|
|
996 |
425 |
186 |
140 |
84 |
32 |
Intangible Assets |
67 |
101 |
82 |
56 |
26 |
0 |
||
Tangible Assets |
926 |
321 |
101 |
81 |
55 |
29 |
||
Investments |
3 |
3 |
3 |
3 |
3 |
3 |
||
Current Assets |
|
|
9,009 |
5,856 |
21,294 |
21,726 |
8,271 |
3,787 |
Stocks |
18 |
0 |
0 |
0 |
422 |
422 |
||
Debtors |
5 |
0 |
0 |
0 |
0 |
0 |
||
Cash |
7,726 |
4,421 |
20,920 |
21,361 |
7,484 |
3,000 |
||
Other |
1,260 |
1,435 |
374 |
365 |
365 |
365 |
||
Current Liabilities |
|
|
(3,570) |
(9,320) |
(4,580) |
(4,911) |
(4,656) |
(4,343) |
Creditors |
(3,570) |
(3,974) |
(4,580) |
(4,911) |
(4,656) |
(4,343) |
||
Short term borrowings |
0 |
(5,346) |
0 |
0 |
0 |
0 |
||
Long Term Liabilities |
|
|
(1,070) |
(1,265) |
(929) |
(822) |
(822) |
(6,688) |
Long term borrowings |
0 |
0 |
0 |
0 |
0 |
(5,866) |
||
Other long term liabilities |
(1,070) |
(1,265) |
(929) |
(822) |
(822) |
(822) |
||
Net Assets |
|
|
5,365 |
(4,304) |
15,971 |
16,133 |
2,877 |
(7,212) |
CASH FLOW |
||||||||
Operating Cash Flow |
|
|
(12,090) |
(8,477) |
(10,540) |
(12,149) |
(13,998) |
(10,367) |
Net Interest |
22 |
9 |
(54) |
0 |
122 |
17 |
||
Tax |
28 |
9 |
5 |
2 |
0 |
0 |
||
Capex |
(64) |
(4) |
(2) |
(6) |
0 |
0 |
||
Acquisitions/disposals |
0 |
0 |
0 |
0 |
0 |
0 |
||
Financing |
9,516 |
(188) |
32,436 |
12,594 |
0 |
0 |
||
Dividends |
0 |
0 |
0 |
0 |
0 |
0 |
||
Net Cash Flow |
(2,588) |
(8,651) |
21,845 |
441 |
(13,877) |
(10,351) |
||
Opening net debt/(cash) |
|
|
(10,314) |
(7,726) |
925 |
(20,920) |
(21,361) |
(7,484) |
HP finance leases initiated |
0 |
0 |
0 |
0 |
0 |
0 |
||
Other |
0 |
0 |
0 |
(0) |
0 |
0 |
||
Closing net debt/(cash) |
|
|
(7,726) |
925 |
(20,920) |
(21,361) |
(7,484) |
2,866 |
Source: Edison Investment Research, Probiodrug accounts
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