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Research: Healthcare
ReNeuron Group
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ReNeuron Group |
PISCES-I long-term data published in The Lancet |
Stroke Phase I data |
Pharma & biotech |
5 August 2016 |
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ReNeuron has announced the publication of long-term Phase I stroke clinical trial (PISCES-I) data in The Lancet. The data indicate improvements in neurological status and limb function compared with pre-treatment baseline performance within three months of treatment and throughout long-term follow up. Alongside this there were no cell-related or immunological adverse events across the four ascending dose levels in the study. This is positive as the data from the first stroke study continue to demonstrate safety, tolerability and functional improvement from the CTX cell therapy treatment. Investor focus is currently on the three-month readout of ReNeuron’s Phase II stroke disability study (PISCES-II) with its CTX cells, due in Q416. We maintain our rNPV at £249m.
Year |
Revenue (£m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
03/15 |
0.0 |
(10.3) |
(0.50) |
0.0 |
N/A |
N/A |
03/16 |
0.0 |
(12.8) |
(0.44) |
0.0 |
N/A |
N/A |
03/17e |
0.0 |
(26.7) |
(0.74) |
0.0 |
N/A |
N/A |
03/18e |
0.0 |
(32.6) |
(0.91) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Long-term Phase I data published – PISCES-I study
PISCES was a Phase I study, which treated 11 stroke-disabled patients with a range of doses of CTX cells (2m, 5m, 10m, 20m) injected into the damaged area of the brain. On safety, no cell-related or immunological adverse events were reported. In terms of treatment benefit, three out of 11 patients (~25%) had a one-point improvement after 24 months in the modified Rankin Score, regarded as clinically meaningful. Median NIHSS improved by two points, from 7 at baseline to 5 after 24 months (p=0.002). Please click here to read the Lancet publication.
Focus on Phase II (PISCES-II) first data readout Q416
Primary investor focus is on the readout of the Phase II stroke study expected in Q416, with ≥ two responders in the revised 21-patient cohort required to pass the futility hurdle. The company has indicated that positive data would enable a Phase II/III study to commence in 2017, with potential data in 2019.
Additional potential newsflow
Newsflow is expected from the critical limb ischaemia (CLI) study (Phase I data readout in Q416), retinitis pigmentosa (RP) study (Phase I/II safety and efficacy data readout 2017) and further preclinical data from the exosome nanomedicine programme and potential clinical entry in H217. Further out, there could be an RP Phase II/III start (2018) with a readout in 2019 and CLI Phase II data in 2018.
Valuation: Maintained at £249m
We maintain our valuation at £249m or 7.9p per share. ReNeuron is well-funded to execute its clinical strategy over the next 24-36 months, which could offer a number of inflection points from the potential newsflow outlined above.
Exhibit 1: Financial summary
£'000s |
2013 |
2014 |
2015 |
2016 |
2017e |
2018e |
||
Year end 31 March |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
||||||||
Revenue |
|
|
17 |
22 |
30 |
29 |
29 |
29 |
Cost of Sales |
0 |
0 |
0 |
0 |
0 |
0 |
||
Gross Profit |
17 |
22 |
30 |
29 |
29 |
29 |
||
R&D expenses |
(4,786) |
(5,829) |
(7,250) |
(10,272) |
(23,112) |
(28,428) |
||
SG&A expenses |
(2,319) |
(2,824) |
(3,693) |
(4,015) |
(4,617) |
(5,079) |
||
EBITDA |
|
|
(6,966) |
(7,857) |
(10,269) |
(13,632) |
(27,094) |
(32,816) |
Operating Profit (before GW and except) |
|
(7,088) |
(7,969) |
(10,394) |
(13,724) |
(27,166) |
(32,944) |
|
Intangible Amortisation |
0 |
0 |
0 |
0 |
0 |
0 |
||
Exceptionals |
0 |
0 |
0 |
0 |
0 |
0 |
||
Operating Profit |
(7,088) |
(7,969) |
(10,394) |
(13,724) |
(27,166) |
(32,944) |
||
Other |
0 |
0 |
0 |
0 |
0 |
0 |
||
Net Interest |
29 |
149 |
91 |
878 |
493 |
317 |
||
Profit Before Tax (norm) |
|
|
(7,059) |
(7,820) |
(10,303) |
(12,846) |
(26,673) |
(32,627) |
Profit Before Tax (FRS 3) |
|
|
(7,059) |
(7,820) |
(10,303) |
(12,846) |
(26,673) |
(32,627) |
Tax |
714 |
754 |
1,397 |
1,492 |
3,201 |
3,915 |
||
Profit After Tax (norm) |
(6,345) |
(7,066) |
(8,906) |
(11,354) |
(23,473) |
(28,712) |
||
Profit After Tax (FRS 3) |
(6,345) |
(7,066) |
(8,906) |
(11,354) |
(23,473) |
(28,712) |
||
Average Number of Shares Outstanding (m) |
748.7 |
1,425.0 |
1,788.8 |
2,609.3 |
3,164.6 |
3,164.6 |
||
EPS - normalised (p) |
|
|
(0.85) |
(0.50) |
(0.50) |
(0.44) |
(0.74) |
(0.91) |
EPS - FRS 3 (p) |
|
|
(0.85) |
(0.50) |
(0.50) |
(0.44) |
(0.74) |
(0.91) |
Dividend per share (p) |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
BALANCE SHEET |
||||||||
Fixed Assets |
|
|
1,620 |
1,772 |
2,033 |
6,963 |
7,242 |
7,536 |
Intangible Assets |
1,272 |
1,272 |
1,591 |
1,591 |
1,591 |
1,591 |
||
Tangible Assets |
213 |
225 |
161 |
361 |
640 |
934 |
||
Other |
135 |
275 |
281 |
5,011 |
5,011 |
5,011 |
||
Current Assets |
|
|
4,602 |
22,347 |
14,054 |
64,894 |
41,837 |
13,539 |
Stocks |
0 |
0 |
0 |
0 |
0 |
0 |
||
Debtors |
341 |
676 |
400 |
1,421 |
1,421 |
1,421 |
||
Cash |
3,547 |
20,917 |
12,382 |
60,709 |
37,215 |
8,203 |
||
Other |
714 |
754 |
1,272 |
2,764 |
3,201 |
3,915 |
||
Current Liabilities |
|
|
(1,164) |
(2,036) |
(2,345) |
(4,199) |
(4,199) |
(4,199) |
Creditors |
(539) |
(1,234) |
(1,150) |
(3,700) |
(3,700) |
(3,700) |
||
Short term borrowings |
0 |
0 |
0 |
0 |
0 |
0 |
||
Short term leases |
(1) |
(1) |
(1) |
(1) |
(1) |
(1) |
||
Other |
(624) |
(801) |
(1,194) |
(498) |
(498) |
(498) |
||
Long Term Liabilities |
|
|
(150) |
(366) |
(606) |
0 |
0 |
0 |
Long term borrowings |
0 |
0 |
0 |
0 |
0 |
0 |
||
Long term leases |
0 |
(2) |
(1) |
0 |
0 |
0 |
||
Other long term liabilities |
(150) |
(364) |
(605) |
0 |
0 |
0 |
||
Net Assets |
|
|
4,908 |
21,717 |
13,136 |
67,658 |
44,880 |
16,877 |
CASH FLOW |
||||||||
Operating Cash Flow |
|
|
(6,637) |
(6,718) |
(9,124) |
(11,920) |
(26,399) |
(32,107) |
Net Interest |
(1) |
0 |
0 |
0 |
0 |
0 |
||
Tax |
616 |
714 |
879 |
0 |
2,764 |
3,201 |
||
Capex |
(37) |
(121) |
(380) |
(293) |
(352) |
(422) |
||
Acquisitions/disposals |
0 |
0 |
0 |
0 |
0 |
0 |
||
Financing |
5,601 |
23,435 |
0 |
65,195 |
0 |
0 |
||
Dividends |
0 |
0 |
0 |
0 |
0 |
0 |
||
Other |
30 |
61 |
91 |
345 |
493 |
317 |
||
Net Cash Flow |
(428) |
17,371 |
(8,534) |
53,327 |
(23,494) |
(29,012) |
||
Opening net debt/(cash) |
|
|
(3,974) |
(3,546) |
(20,914) |
(12,380) |
(60,708) |
(37,214) |
HP finance leases initiated |
0 |
(3) |
0 |
1 |
0 |
0 |
||
Other |
0 |
0 |
0 |
(0) |
(0) |
0 |
||
Closing net debt/(cash) |
|
|
(3,546) |
(20,914) |
(12,380) |
(65,708) |
(37,214) |
(8,202) |
Source: ReNeuron accounts, Edison Investment Research
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