Enrolment of patients in Medigene’s MDG1011 Phase I/II trial continues, albeit at a slower rate than initially expected, with initial data from the first three dose cohorts expected in Q420. Following promising interim data earlier in the year, the company forecasts that top-line dendritic cell (DC) vaccine data will be presented in Q120. In expanding the clinical pipeline, Medigene has announced that MDG1021 (HA-1 targeting TCR) will start its clinical programme in H120. Partnerships continue to progress well with bluebird bio announcing that the MAGE-A4 product will enter the clinic in 2020. In addition, partner Cyotvant has announced that the first TCR (CVT-TCR-01) product candidate will focus on patients with either NY-ESO-1 expressing synovial sarcoma, MM or solid tumours, while a DC vaccine (CVT-DC-01) will be tested in patients with WT-1/PRAME expressing AML. We value Medigene at €465m (€18.94/share).
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Medigene |
Q319 results highlight successful year to date |
Q319 results |
Pharma & biotech |
14 November 2019 |
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MedigeneMedigene is a research client of Edison Investment Research Limited |
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Enrolment of patients in Medigene’s MDG1011 Phase I/II trial continues, albeit at a slower rate than initially expected, with initial data from the first three dose cohorts expected in Q420. Following promising interim data earlier in the year, the company forecasts that top-line dendritic cell (DC) vaccine data will be presented in Q120. In expanding the clinical pipeline, Medigene has announced that MDG1021 (HA-1 targeting TCR) will start its clinical programme in H120. Partnerships continue to progress well with bluebird bio announcing that the MAGE-A4 product will enter the clinic in 2020. In addition, partner Cyotvant has announced that the first TCR (CVT-TCR-01) product candidate will focus on patients with either NY-ESO-1 expressing synovial sarcoma, MM or solid tumours, while a DC vaccine (CVT-DC-01) will be tested in patients with WT-1/PRAME expressing AML. We value Medigene at €465m (€18.94/share).
Year end |
Revenue (€m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/17 |
8.9 |
(15.1) |
(0.72) |
0.0 |
N/A |
N/A |
12/18 |
7.8 |
(16.5) |
(0.70) |
0.0 |
N/A |
N/A |
12/19e |
10.7 |
(25.9) |
(1.05) |
0.0 |
N/A |
N/A |
12/20e |
9.7 |
(24.7) |
(1.01) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Financials: Guidance on track for FY19
Revenues from immunotherapies for the nine months to 30 September 2019 grew 32% y-o-y to €6.2m (9M18: €4.7m) as a result of the progression of the bluebird partnership and the new Roivant/Cytovant partnership. As forecast, R&D expenses increased in 9M19 by 24% to €16.5m (9M18: €13.3m) due to the advancing pipeline, in particular the clinical development of MDG1011. Underlying administrative costs decreased 2% y-o-y to €5.8m (9M18: €5.9m). In addition, the company incurred a non-cash €4.7m impairment loss on the Veregen disposal. Medigene confirmed its revenue (€10–11m), R&D expenditure (€24–29m) and EBITDA (loss of €23–28m) guidance for the year. We continue to forecast an FY19 net loss of €26.4m and a cash runway into 2021.
Measures in place to speed MDG1011 enrolment
Enrolment of patients in the Phase I/II trial testing MDG1011 in patients with either multiple myeloma (MM), acute myeloid leukaemia (AML) or myelodysplastic syndromes (MDS) has been slow to date. This has been primarily due to strict inclusion criteria (eg PRAME+ and HLA-A*02:01+). To accelerate enrolment, new treatment centres have been added, AML enrolment criteria have been broadened and earlier leukapheresis of patients is being done.
Valuation: €465m (€18.94/share)
We value Medigene at €465m (€18.94/share) vs €458m (€18.65/share) previously. We have rolled forward our model and updated for FX rates and net cash. Our model includes MDG1011, the AML DC vaccine, deal metrics for bluebird bio, the Roivant/Cytovant collaboration and Imlygic royalties. For a full overview of our valuation, please see our June outlook note, New assets, new partnerships.
Exhibit 1: Financial summary
€000s |
2016 |
2017 |
2018 |
2019e |
2020e |
||
Year end 31 December |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
|||||||
Revenue |
|
|
9,749 |
8,882 |
7,754 |
10,725 |
9,739 |
of which: Veregen revenues (royalties/milestones/supply) |
3,048 |
2,790 |
1,596 |
987 |
0 |
||
R&D partnering (SynCore/Falk Pharma/grants) |
3,155 |
0 |
0 |
0 |
0 |
||
Non-cash income (Eligard) |
2,493 |
1,206 |
178 |
0 |
0 |
||
Bluebird bio partnership |
1,053 |
4,886 |
5,980 |
5,738 |
5,739 |
||
Cytovant partnership |
0 |
0 |
4,000 |
4,000 |
|||
Cost of sales |
(1,402) |
(1,621) |
(849) |
(275) |
0 |
||
Gross profit |
8,347 |
7,261 |
6,905 |
10,450 |
9,739 |
||
Selling, general & administrative spending |
(10,025) |
(8,266) |
(7,613) |
(11,451) |
(7,333) |
||
R&D expenditure |
(11,538) |
(14,877) |
(17,117) |
(27,387) |
(29,578) |
||
Other operating spending |
0 |
0 |
0 |
0 |
0 |
||
Operating profit |
(8,974) |
(15,882) |
(17,825) |
(28,388) |
(27,173) |
||
Goodwill & intangible amortisation |
(525) |
(524) |
(523) |
(522) |
(521) |
||
Exceptionals |
4,242 |
0 |
0 |
0 |
0 |
||
Share-based payment |
0 |
0 |
0 |
0 |
0 |
||
EBITDA |
|
|
(12,371) |
(14,615) |
(16,253) |
(27,641) |
(26,426) |
Operating Profit (before amort. and except.) |
|
|
(12,691) |
(15,358) |
(17,302) |
(27,866) |
(26,652) |
Net interest |
(1,009) |
(435) |
74 |
467 |
74 |
||
Other (forex gains/losses; associate profit/loss) |
263 |
672 |
747 |
1,546 |
1,849 |
||
Profit Before Tax (norm) |
|
|
(13,437) |
(15,121) |
(16,481) |
(25,853) |
(24,728) |
Profit before tax (reported) |
|
|
(9,720) |
(15,645) |
(17,004) |
(26,375) |
(25,249) |
Tax |
228 |
(344) |
(45) |
(45) |
(45) |
||
Profit/(loss) from discontinued operations |
0 |
0 |
0 |
0 |
0 |
||
Profit after tax (norm) |
(13,209) |
(15,465) |
(16,526) |
(25,898) |
(24,773) |
||
Profit after tax (reported) |
(9,492) |
(15,989) |
(17,049) |
(26,420) |
(25,294) |
||
Average number of shares outstanding (m) |
20.0 |
21.5 |
23.7 |
24.6 |
24.6 |
||
EPS - normalised (c) |
|
|
(66.20) |
(71.93) |
(69.82) |
(105.46) |
(100.88) |
EPS - Reported (€) |
|
|
(0.48) |
(0.74) |
(0.72) |
(1.08) |
(1.03) |
Dividend per share (c) |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
BALANCE SHEET |
|||||||
Fixed assets |
|
|
47,742 |
48,595 |
67,394 |
82,206 |
82,572 |
Intangible assets & goodwill |
35,767 |
36,292 |
36,225 |
42,903 |
42,382 |
||
Tangible assets |
3,323 |
4,329 |
4,261 |
5,097 |
5,984 |
||
Other non-current assets |
8,652 |
7,974 |
26,908 |
34,206 |
34,206 |
||
Current assets |
|
|
63,973 |
63,342 |
62,196 |
45,629 |
16,242 |
Stocks |
7,866 |
7,724 |
7,298 |
0 |
0 |
||
Debtors |
1,175 |
1,699 |
787 |
787 |
787 |
||
Cash |
52,630 |
51,724 |
51,408 |
42,139 |
12,752 |
||
Other |
2,302 |
2,195 |
2,703 |
2,703 |
2,703 |
||
Current liabilities |
|
|
(11,966) |
(8,124) |
(8,821) |
(8,821) |
(8,821) |
Trade accounts payable |
(973) |
(725) |
(1,358) |
(1,358) |
(1,358) |
||
Short-term borrowings |
0 |
0 |
0 |
0 |
0 |
||
Deferred income |
(3,575) |
(3,575) |
(3,474) |
(3,474) |
(3,474) |
||
Other |
(7,418) |
(3,824) |
(3,989) |
(3,989) |
(3,989) |
||
Long-term liabilities |
|
|
(21,157) |
(10,315) |
(13,344) |
(10,007) |
(6,669) |
Pension provisions |
(408) |
(405) |
(414) |
(414) |
(414) |
||
Long-term borrowings |
0 |
0 |
0 |
0 |
0 |
||
Other liabilities (Deferred taxes; Trianta milestones) |
(2,395) |
(4,548) |
(4,246) |
(4,246) |
(4,246) |
||
Deferred revenues (Eligard non-cash income & bluebird bio) |
(18,354) |
(5,362) |
(8,684) |
(5,347) |
(2,009) |
||
Net assets |
|
|
78,592 |
93,498 |
107,425 |
109,007 |
83,325 |
CASH FLOW |
|||||||
Operating cash flow |
|
|
(3,611) |
(20,729) |
(10,013) |
(9,430) |
(29,102) |
Net interest |
(45) |
(45) |
(26) |
1,267 |
874 |
||
Tax |
(102) |
(75) |
(103) |
(45) |
(45) |
||
Capex |
(1,677) |
(1,533) |
(1,010) |
(1,061) |
(1,114) |
||
Expenditure on intangibles |
0 |
0 |
0 |
0 |
0 |
||
Acquisitions/disposals |
10,537 |
480 |
537 |
0 |
0 |
||
Equity financing |
(77) |
19,329 |
29,923 |
0 |
0 |
||
Other |
846 |
1,667 |
(19,624) |
0 |
0 |
||
Net cash flow |
5,871 |
(906) |
(316) |
(9,269) |
(29,387) |
||
Opening net debt/(cash) |
|
|
(46,759) |
(52,630) |
(51,724) |
(51,408) |
(42,139) |
HP finance leases initiated |
0 |
0 |
0 |
0 |
0 |
||
Other (foreign exchanges differences) |
0 |
0 |
0 |
(0) |
0 |
||
Closing net debt/(cash) |
|
|
(52,630) |
(51,724) |
(51,408) |
(42,139) |
(12,752) |
Source: Medigene, Edison Investment Research
|
|
Research: Healthcare
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