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Last close As at 09/06/2023
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Market capitalisation
USD21m
Research: Healthcare
Context Therapeutics’ Q122 results were broadly in line with recent trends as the company progresses on its development strategy. The operating loss stood at $3.4m, up from $0.8m in Q121 but in line with the Q421 figure of $3.1m. While the R&D expenses ($1.4m) were lower than our estimates, we expect these costs to go up in the coming quarters as the clinical pipeline progresses. The cash burn rate was $3.9m and the company ended Q122 with net cash of $45.7m, which we estimate to be sufficient to fund operations into 2024, based on our projected FY22e and FY23e burn rates of $13.7m and $23.7m, respectively. We see the upcoming ASCO presentation on ONA-XR monotherapy data from the ongoing Phase II study in granulosa cell tumor (GCT) of the ovary as a potential catalyst alongside anticipated read-outs from the other three clinical programs in 2022. Our valuation is largely unchanged at $133.5m ($8.36/share).
Context Therapeutics |
Q122 progress in line with development strategy |
Q122 update |
Pharma & biotech |
26 May 2022 |
Share price performance
Business description
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Analyst
Context Therapeutics is a research client of Edison Investment Research Limited |
Context Therapeutics’ Q122 results were broadly in line with recent trends as the company progresses on its development strategy. The operating loss stood at $3.4m, up from $0.8m in Q121 but in line with the Q421 figure of $3.1m. While the R&D expenses ($1.4m) were lower than our estimates, we expect these costs to go up in the coming quarters as the clinical pipeline progresses. The cash burn rate was $3.9m and the company ended Q122 with net cash of $45.7m, which we estimate to be sufficient to fund operations into 2024, based on our projected FY22e and FY23e burn rates of $13.7m and $23.7m, respectively. We see the upcoming ASCO presentation on ONA-XR monotherapy data from the ongoing Phase II study in granulosa cell tumor (GCT) of the ovary as a potential catalyst alongside anticipated read-outs from the other three clinical programs in 2022. Our valuation is largely unchanged at $133.5m ($8.36/share).
Year end |
Revenue ($m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/20 |
0.0 |
(3.2) |
(9.28) |
0.0 |
N/A |
N/A |
12/21 |
0.0 |
(10.6) |
(3.74) |
0.0 |
N/A |
N/A |
12/22e |
0.0 |
(16.8) |
(1.05) |
0.0 |
N/A |
N/A |
12/23e |
0.0 |
(23.8) |
(1.49) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalized, excluding exceptional items.
Pipeline update
While the Q122 report did not provide specific information on the progression across individual portfolio assets, timelines for key data readouts have remained broadly unchanged, with the exception of the Phase Ib program evaluating ONA-XR as first line treatment for metastatic breast cancer (mBC), which is now expected to read-out in H222 (versus mid-2022 previously). As a reminder, the company recently presented positive pre-clinical data at the American Association for Cancer Research (AACR), highlighting ONA-XR’s potential as a combination treatment with various therapeutic classes, such as checkpoint inhibitors and inhibitors of the AURKA/STAT3 oncogenic axis (refer to our note for more details).
Upcoming catalysts
In addition to the data read-outs for the four ongoing trials in 2022, the upcoming presentation at the American Society of Clinical Oncology (ASCO) on results from the monotherapy portion of the Phase II trial in GCT of the ovary could be another potential catalyst for the stock. While ONA-XR has largely been positioned thus far as a candidate for combination therapy, positive therapeutic efficacy as monotherapy could create a potentially larger market opportunity in the space. Selection of the final development candidate for the pre-clinical CLDN6xCD3 program (expected by end-2022) could be another key value driver.
Valuation: $133.5m or $8.36 per basic share
After adjusting for the Q122 results and cash balance of $45.7m, our valuation is largely unchanged at $133.5m (or $8.36 per basic share), from $134.1m previously. We continue to view the company as sufficiently capitalized to fund operations into 2024 and needing to raise $110m in funds between FY24 and FY26 (in the absence of partnering/licensing deals) before becoming profitable.
Exhibit 1: Financial summary
$000s |
2020 |
2021 |
2022e |
2023e |
2024e |
||
Year end 31 December |
US GAAP |
US GAAP |
US GAAP |
US GAAP |
US GAAP |
||
INCOME STATEMENT |
|||||||
Revenue |
|
|
0 |
0 |
0 |
0 |
0 |
Cost of Sales |
0 |
0 |
0 |
0 |
0 |
||
Gross Profit |
0 |
0 |
0 |
0 |
0 |
||
Research and Development Expenses |
(1,642) |
(6,893) |
(10,536) |
(15,804) |
(29,576) |
||
Sales, General and Administrative Expenses |
(931) |
(3,633) |
(7,266) |
(8,719) |
(9,591) |
||
EBITDA |
|
|
(2,572) |
(10,526) |
(17,802) |
(24,523) |
(39,167) |
Operating profit (before amort. and excepts.) |
|
(2,572) |
(10,526) |
(17,802) |
(24,523) |
(39,167) |
|
Amortisation of acquired intangibles |
0 |
0 |
0 |
0 |
0 |
||
Exceptionals |
0 |
0 |
0 |
0 |
0 |
||
Share-based payments |
0 |
0 |
0 |
0 |
0 |
||
Reported operating profit |
(2,572) |
(10,526) |
(17,802) |
(24,523) |
(39,167) |
||
Net Interest |
(661) |
(64) |
994 |
719 |
245 |
||
Joint ventures & associates (post tax) |
0 |
0 |
0 |
0 |
0 |
||
Exceptionals |
9,878 |
133 |
0 |
0 |
0 |
||
Profit Before Tax (norm) |
|
|
(3,233) |
(10,590) |
(16,808) |
(23,804) |
(38,923) |
Profit Before Tax (reported) |
|
|
6,644 |
(10,457) |
(16,808) |
(23,804) |
(38,923) |
Reported tax |
0 |
0 |
0 |
0 |
0 |
||
Profit After Tax (norm) |
(3,233) |
(10,590) |
(16,808) |
(23,804) |
(38,923) |
||
Profit After Tax (reported) |
6,644 |
(10,457) |
(16,808) |
(23,804) |
(38,923) |
||
Minority interests |
0 |
0 |
0 |
0 |
0 |
||
Discontinued operations |
0 |
0 |
0 |
0 |
0 |
||
Net income (normalised) |
(3,233) |
(10,590) |
(16,808) |
(23,804) |
(38,923) |
||
Net income (reported) |
6,644 |
(10,457) |
(16,808) |
(23,804) |
(38,923) |
||
Average Number of Shares Outstanding (m) |
0 |
3 |
16 |
16 |
16 |
||
EPS - basic normalised ($) |
|
|
(9.28) |
(3.74) |
(1.05) |
(1.49) |
(2.44) |
EPS - normalised fully diluted ($) |
|
|
(9.28) |
(3.74) |
(1.05) |
(1.49) |
(2.44) |
EPS - basic reported ($) |
|
|
19.07 |
(3.69) |
(1.05) |
(1.49) |
(2.44) |
Dividend ($) |
0 |
0 |
0 |
0 |
0 |
||
BALANCE SHEET |
|||||||
Fixed Assets |
|
|
118 |
0 |
0 |
0 |
0 |
Intangible Assets |
0 |
0 |
0 |
0 |
0 |
||
Tangible Assets |
0 |
0 |
0 |
0 |
0 |
||
Investments & other |
118 |
0 |
0 |
0 |
0 |
||
Current Assets |
|
|
350 |
51,306 |
36,594 |
12,888 |
14,942 |
Stocks |
0 |
0 |
0 |
0 |
0 |
||
Debtors |
0 |
0 |
0 |
0 |
0 |
||
Cash & cash equivalents |
341 |
49,686 |
35,946 |
12,240 |
14,294 |
||
Other |
9 |
1,620 |
648 |
648 |
648 |
||
Current Liabilities |
|
|
(9,548) |
(3,033) |
(5,130) |
(5,228) |
(6,205) |
Creditors |
(2,708) |
(1,826) |
(3,089) |
(2,978) |
(3,330) |
||
Tax and social security |
0 |
0 |
0 |
0 |
0 |
||
Short term borrowings |
(5,884) |
0 |
0 |
0 |
0 |
||
Other |
(956) |
(1,207) |
(2,042) |
(2,250) |
(2,875) |
||
Long Term Liabilities |
|
|
(69) |
0 |
0 |
0 |
(40,000) |
Long term borrowings |
(69) |
0 |
0 |
0 |
(40,000) |
||
Other long term liabilities |
0 |
0 |
0 |
0 |
0 |
||
Net Assets |
|
|
(9,150) |
48,272 |
31,464 |
7,660 |
(31,263) |
Convertible preferred stock |
(7,771) |
0 |
0 |
0 |
0 |
||
Minority interests |
0 |
0 |
0 |
0 |
0 |
||
Shareholders' equity |
|
|
(16,921) |
48,272 |
31,464 |
7,660 |
(31,263) |
CASH FLOW |
|||||||
Operating Cash Flow |
(2,572) |
(10,526) |
(17,802) |
(24,523) |
(39,167) |
||
Working capital |
1,318 |
(2,225) |
3,069 |
98 |
976 |
||
Exceptional & other |
219 |
3,951 |
994 |
719 |
245 |
||
Tax |
0 |
0 |
0 |
0 |
0 |
||
Net operating cash flow |
|
|
(1,035) |
(8,799) |
(13,739) |
(23,706) |
(37,946) |
Capex |
0 |
(250) |
0 |
0 |
0 |
||
Acquisitions/disposals |
0 |
0 |
0 |
0 |
0 |
||
Net interest |
0 |
0 |
0 |
0 |
0 |
||
Equity financing |
0 |
58,394 |
0 |
0 |
0 |
||
Dividends |
0 |
0 |
0 |
0 |
0 |
||
Other |
0 |
0 |
0 |
0 |
0 |
||
Net Cash Flow |
(1,035) |
49,345 |
(13,739) |
(23,706) |
(37,946) |
||
Opening net debt/(cash) |
|
|
21,742 |
13,384 |
(49,686) |
(35,946) |
(12,240) |
FX |
0 |
0 |
0 |
0 |
0 |
||
Other non-cash movements |
9,393 |
13,725 |
0 |
0 |
0 |
||
Closing net debt/(cash) |
|
|
13,384 |
(49,686) |
(35,946) |
(12,240) |
25,706 |
Source: Context Therapeutics reports, Edison Investment Research
|
|
Research: Investment Companies
Deutsche Beteiligungs (DBAG) reported a 5.3% NAV decrease to â¬631.6m (defined as equity value) in H122 in total return terms. The main driver of the decrease was the revaluation of the held portfolio, which reduced NAV by 8pp, on the back of contracting market valuation multiples (amid the recent public market sell-off) and higher discount rates to reflect the risk of several companies not achieving their respective FY22 budgets. Meanwhile, DBAG continues its capital deployment agenda and invested a significant â¬92m in H122 versus its â¬114m annual investment target and has sufficient resources to continue to do so.
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