Kazia Therapeutics — Several upcoming catalysts

Kazia Therapeutics (NASDAQ: KZIA)

Last close As at 24/06/2024

1.32

0.04 (3.13%)

Market capitalisation

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Research: Healthcare

Kazia Therapeutics — Several upcoming catalysts

Patient recruitment in the pivotal GBM AGILE study for lead asset paxalisib remains on track, with data expected in CY23, to be followed by a potential regulatory filing, if data are positive. Recent C-suite appointments in the United States suggest an increased focus on commercialization, particularly in the US market. Second asset EVT801 has progressed to human studies, with the first patient enrolled in a Phase I trial in France in November 2021 and interim data expected in H2 CY22. We expect CY22 to be catalyst rich, with data anticipated from multiple investigator-sponsored studies evaluating paxalisib in the treatment of brain metastases (BMs), as well as pediatric brain cancers such as diffuse intrinsic pontine glioma (DIPG). Positive readouts from any study alone could potentially trigger a re-rating for the stock. We have increased our valuation to US$294m or US$22.28 per basic ADR mainly due to rolling forward our NPV, partially offset by lower cash and higher R&D estimates.

Jyoti Prakash

Written by

Jyoti Prakash

Analyst, Healthcare

Healthcare

Kazia Therapeutics

Several upcoming catalysts

Research update

Pharma & biotech

28 March 2022

ADR research

Price

US$7.54

Market cap

US$100m

ADR/ord conversion ratio 1:10

Net cash (US$m) at 31 December 2021

11.0

ADRs in issue

13.2m

ADR code

KZIA

ADR exchange

NASDAQ

Underlying exchange

ASX

Depository

BNY

ADR share price performance

52-week high/low

1,471c

561c

Business description

Kazia Therapeutics is a late-stage clinical pharmaceutical company with lead asset paxalisib (a PI3K inhibitor that can cross the blood-brain barrier, licensed from Genentech), in a pivotal study for GBM. It also recently in-licensed the Phase I drug EVT801, an inhibitor of lymphangiogenesis in tumors.

Next events

Start of paxalisib GBM AGILE recruitment in Europe and China

H1 CY22

Paxalisib initial data from brain metastases trials

H1 CY22

Analyst

Jyoti Prakash, CFA

+91 981 880 393

Kazia Therapeutics is a research client of Edison Investment Research Limited

Patient recruitment in the pivotal GBM AGILE study for lead asset paxalisib remains on track, with data expected in CY23, to be followed by a potential regulatory filing, if data are positive. Recent C-suite appointments in the United States suggest an increased focus on commercialization, particularly in the US market. Second asset EVT801 has progressed to human studies, with the first patient enrolled in a Phase I trial in France in November 2021 and interim data expected in H2 CY22. We expect CY22 to be catalyst rich, with data anticipated from multiple investigator-sponsored studies evaluating paxalisib in the treatment of brain metastases (BMs), as well as pediatric brain cancers such as diffuse intrinsic pontine glioma (DIPG). Positive readouts from any study alone could potentially trigger a re-rating for the stock. We have increased our valuation to US$294m or US$22.28 per basic ADR mainly due to rolling forward our NPV, partially offset by lower cash and higher R&D estimates.

Year end

Revenue (US$m)

PTP*
(US$m)

EPADR
(US$)

DPADR
(US$)

P/E
(x)

Gross yield
(%)

06/20

0.8

(7.8)

(1.04)

0.00

N/A

N/A

06/21

11.0

(3.2)

(0.26)

0.00

N/A

N/A

06/22e

0.0

(17.2)

(1.27)

0.00

N/A

N/A

06/23e

0.0

(19.9)

(1.47)

0.00

N/A

N/A

Note: Converted at A$1.38/US$. Dividend yield excludes withholding tax. Investors should consult their tax advisor regarding the application of any domestic and foreign tax laws.

GBM AGILE progressing to plan

Recruitment to GBM AGILE (first patient enrolled on the paxalisib arm was in January 2021) remains on track (approximately 200 patients are to be recruited for this arm) with data expected in CY23. The first site outside of the US (in Canada) became operational in November 2021 and site expansion into Europe and China is planned for H1 CY22 (partner Simcere’s investigative new drug application was approved in China in January 2022). Recent C-level appointments in the US (chief financial officer, CFO, and chief medical officer, CMO) mark early groundwork for the prospective commercialization of paxalisib in glioblastoma (GBM), provided the study data are positive.

Multiple near-term catalysts

With multiple programs expected to read out in CY22, including studies assessing paxalisib in BMs in H1 CY22 (one Phase I and two Phase II trials, sponsored by Sloan-Kettering, the NIH and Dana-Farber, respectively) and interim data from the EVT801 Phase I study in H2 CY22, we foresee several potential inflection points for the company in the coming months. However, we also note that data from the BM studies have already missed the earlier CY21 deadline, so the readout remains overdue.

Valuation: US$294m or US$22.28 per basic ADR

Our valuation increases to US$294m or US$22.28 per basic ADR from US$277m or US$20.92 per basic ADR mainly due to rolling forward our NPV. This was partially offset by lower net cash and higher R&D expectations. Kazia reported net cash of US$11.0m (A$15.2m) at 31 December 2021, which extends the runway into H123 (H2 CY22). Our estimates for financing requirements rise to US$51m from US$44m (including US$22m in FY23 and FY24, each).

Kazia’s development pipeline

Kazia’s primary asset is paxalisib, which is a small molecule PI3K and mTOR inhibitor being assessed in eight clinical trials involving cancers in the brain, most notably GBM, the most aggressive form of brain cancer. The GBM treatment landscape remains challenging with only three drugs approved for treatment: temozolomide (chemotherapy, standard of care), bevacizumab (anti-VEGF monoclonal antibody; not approved in Europe) and Nitrosourea/gliadel wafer (chemotherapy). Within GBM, paxalisib is being evaluated in the pivotal, one-of-a-kind GBM AGILE study (refer to our previous update note for more details) and holds orphan drug and fast track designations from the US FDA. The drug is also being evaluated in other primary brain cancers: DIPG, an aggressive form of pediatric cancer, and primary central nervous system lymphoma as well as secondary cancers that have metastasized to the brain. All trials are investigator sponsored and in the early-to-mid stage of clinical development, with the exception of GBM AGILE, which is a pivotal study.

The second asset, EVT801, is a small-molecule inhibitor of vascular endothelial growth factor receptor 3 (VEGFR3). It was in-licensed from Evotec in April 2021 and began Phase I clinical trials in advanced solid tumors in November 2021.

GBM AGILE advancing at a steady pace

According to the latest available information, the GBM AGILE study is progressing to plan (unhindered by COVID-19) and has screened over 1,000 patients. In January 2022, the study sponsor, Global Coalition for Adaptive Research (GCAR), announced the inclusion of a further two therapeutic arms to the study: Biohaven Pharmaceuticals’ troriluzole and Vigeo Therapeutics’ VT1021. This makes for a total of five participants to date, including the existing three drug candidates: Kazia’s paxalisib, Bayer’s regorafenib and Kintara Therapeutics’ VAL-083.

A year in from the first patient enrollment (January 2021), the paxalisib arm is recruiting across two dozen sites in the United States and another site in Ontario, Canada (opened in November 2021). While the company had indicated a further three sites expected to come onboard in Canada, it is unclear if that has materialized yet. Geographical expansion of the study is expected to pick up pace in the coming months, with Kazia’s Chinese partner Simcere receiving IND approval for paxalisib in January 2022 and site openings planned for Q2/Q3 of CY22. European expansion of the GBM AGILE study commenced in March 2022 with the GCAR opening its first European site in Zurich, Switzerland, although information on which drug arm will be recruiting is not available yet. Further sites are expected to be opened in Austria, France, Germany and Italy in the coming weeks.

Paxalisib Phase II GBM final data encouraging

Kazia reported final data from its Phase II study assessing paxalisib as first-line therapy for newly diagnosed GBM (unmethylated MGMT promotor status) in December 2021. Median overall survival (OS) was reported to be 15.7 months (11.1–19.1 months) and median progression-free survival (PFS) was 8.4 months (6.6–10.2 months). These values compare favorably to historical controls using temozolomide alone in a similar patient population (Exhibit 1). Patients with an unmethylated MGMT promoter are more resistant to temozolomide. It is difficult to draw definitive conclusions using historical controls given the variability between patient populations, so these data should be interpreted with some caution, but they are what is expected with an active drug.

Exhibit 1: OS and PFS in GBM with unmethylated MGMT promoter treated with radiotherapy plus adjuvant temozolomide

Median overall
survival (months)

Median PFS
(months)

PFS
at six months

Two-year
survival rate

Hegi et al, NEJM 2005

12.7

5.3

40%

14%

Nabors et al, Neuro-Oncology 2015

13.4

4.1

N/A

N/A

Gilbert et al, JCO, 2013

14.0

5.7

N/A

N/A

AVAGLIO ASCO, 2013

14.6

5.8

N/A

N/A

RTOG-0825, ASCO, 2013

14.3

N/A

N/A

N/A

Average

13.8

5.2

Source: Edison Investment Research; Hegi et al N Engl J Med 2005;352(10):997-1003; Nabors et al. Neuro-Oncology 2015 17(5):708-717; Gilbert et al. J Clin Oncol 2013 31(32):4085-4091. Note: RTOG, Radiation Therapy Oncology Group.

We note the OS figure for the final data is lower than the 17.5 months reported in the interim data in November 2020. The company attributes this to the last few patients in the study underperforming the earlier cohort. Nevertheless, given the aggressive nature of the cancer and paucity of therapeutic options, we consider the results to still be clinically meaningful. This observation is also supported by data from primary market research commissioned by Kazia in mid-2021 that indicated an improved survival benefit of 2.6 months versus current standard of care could yield an adoption rate of 84% among clinicians in the United States (Exhibit 2).

Exhibit 2: Highlights from Kazia commissioned primary research for GBM

Source: Kazia Therapeutics corporate presentation, January 2022

While the paxalisib Phase II company-sponsored GBM study was a fairly small (30 participants), single-arm, non-randomized study, if results in the larger, randomized GBM AGILE trials are comparable, paxalisib’s commercial prospects could be significantly boosted in this indication. We note the GBM AGILE study is evaluating paxalisib both in the newly diagnosed unmethylated as well as in recurrent cohorts, but we believe the former (newly diagnosed) is likely to be the target patient population for paxalisib.

More than a GBM play

Although GBM is the most clinically advanced target indication for paxalisib, the drug is being investigated in a further seven clinical trials, both in other primary brain cancers (DIPG and primary central nervous system lymphoma) and secondary cancers that have metastasized to the brain. Exhibit 3 presents the clinical trials assessing paxalisib in GBM and other oncology indications.

Exhibit 3: Paxalisib’s ongoing clinical trials

Source: Kazia Therapeutics corporate presentation, January 2022

In February 2022 the company announced the initiation of a Phase II study investigating paxalisib in combination with metformin and a ketogenic diet for newly diagnosed and recurrent GBM. The study, which is sponsored by the Weill Cornell Medical Center, will recruit between 30 and 60 patients and will run for two years (patient enrollment is expected to start in H1 CY22). Earlier, in November 2021, the company announced the inclusion of paxalisib in a multi-drug Phase II study in DIPG and diffuse midline gliomas sponsored by the Pacific Pediatric Neuro-Oncology Consortium. The trial will examine multiple therapies concurrently, both as single agents and in combination, to determine the optimal approach to treatment. DIPG is an ultra-rare pediatric brain cancer (150–300 newly diagnosed cases per year in the US, c 1,000 globally) with extremely poor prognosis (average survival period of 9–10 months following standard treatment). There are no approved therapies for this indication. The market opportunity for any approved treatment is c US$100m.

In the BM space, paxalisib is being investigated in three clinical studies: one Phase I and two Phase II studies, sponsored by Sloan-Kettering, the NIH and Dana-Farber, respectively, all of which are expected to provide headline data in H1 CY22. Of these, the breast cancer BM (BCBM) indication looks to be the most compelling, given it affects 2024% of all breast cancer cases and is a major cause of mortality for metastatic patients (due to the inability of current treatments to cross the blood-brain barrier). This study is investigating paxalisib in combination with Herceptin (trastuzumab) in HER2+ breast cancer patients. Positive readouts from any of these trials could potentially trigger a re-rating for the stock, in our opinion. However, timelines have previously been pushed out on more than one occasion (a common caveat attached to investigator-sponsored trials) so the read-out is overdue, in our view.

EVT801 progressing rapidly

Kazia’s second asset EVT801 is a small molecule VEGFR3 inhibitor, and it commenced Phase I clinical trials in advanced cancers in November 2021. The study, which is expected to recruit a maximum of 60 patients, is designed as a two-stage study. The first stage will be a dose escalation study in subjects with advanced solid tumors designed to determine the maximum tolerated dose and recommended Phase II dose (RP2D) for EVT801. The second stage will recruit 12 patients, six with renal cell carcinoma and six with soft-tissue sarcoma (two cancer types that frequently overexpress VEGFR3), who will be administered the RP2D of EVT801. The Phase I study would primarily assess the safety, tolerability and pharmacokinetics of EVT801 but will also explore preliminary signals of clinical efficacy. The study is ongoing at two sites in France and Kazia has indicated that recruitment remains on track, with initial data anticipated by H2 CY22.

New C-level appointments strengthen the management team

Kazia recently announced two senior level appointments: John Friend as CMO in November 2021 and Karen Krumeich as CFO in December 2021. Both have strong technical and leadership backgrounds, with years of executive experience between them. The new appointments come at an important juncture for Kazia, as it looks to start the groundwork to potentially commercialize paxalisib in GBM (assuming success in GBM-AGILE) and progress the other asset EVT801 through clinical development. Both these positions are US domiciled, which we believe is strategic given the company’s increasing focus on the US market as it progresses its pipeline.

Valuation

Our valuation for Kazia increases to US$294.2m or US$22.28 per basic ADR, from US$277m or US$20.92 per basic ADR, mainly due to rolling forward our NPV. This was partially offset by lower net cash at the end of H122 and higher R&D expectations. We have maintained the probability of success in BCBMs at 5% but will reassess this after expected data readouts in the coming months.

Exhibit 4: Kazia valuation

Development program

Indication

Clinical stage

Probability of success

Launch year

Patent/exclusivity protection

Launch pricing (US$/course)

Peak sales (US$m)

rNPV (US$m)

Paxalisib

GBM

Phase II/III

35%

2025

2037

169,000

450

224.51

BCBMs

Phase II

5%

2029

2037

183,000

249

6.13

Cantrixil

OC

Phase I complete

15%

2027

2040

124,000

174

7.66

EVT801

RCC

Phase I

10%

2028

2037

120,000

807

44.87

Total

283.18

Net cash and equivalents (H122) (US$m)

11.01

Total firm value (US$m)

294.18

Total basic ADRs (m)

13.2

Value per basic ADR (US$)

22.28

Dilutive options (as ADRs, m)

0.61

Total diluted ADRs (m)

13.8

Value per diluted ADR (US$)

21.47

Source: Edison Investment Research

Financials

Kazia’s operating loss for H122 (the six months ending 31 December 2021) was US$9.67m (A$13.4m), ahead of our estimate (c US$7.2m) due to higher than anticipated R&D expenses (US$8.0m/A$11m) during the period, following the commencement of EVT801’s clinical trials. Our revised forecasts for FY22 and FY23 incorporate two major changes. First, we have removed any contribution from R&D rebates in our revenue estimates following the company’s communication on not having sufficient R&D activities in Australia to be eligible for tax rebates for the foreseeable future.1 Second, we have increased our estimates for R&D expenses for the forecast years, based on the recent run rate. Both revisions affect our normalized operating loss estimates, which rise to US$17.2m and US$19.9m in FY22 and FY23, respectively (up from our previously estimated figures of US$12.1m and US$11.3m). Our estimates for net loss during the period increase accordingly.

  Form 20-F for FY21, page no. 22

The company reported net cash of US$11.0m (A$15.2m) at 31 December 2021. Based on our forecasts, the funds should be sufficient to take Kazia into H123 (H2 CY22). Based on our revised projections for R&D and other operating expenses, we estimate that pending any out-licensing deals or partnerships, the company would now be required to raise US$51m in total (including US$22m in FY23 and FY24 each and US$7m and FY25). Our model presents these fund raises as illustrative debt.

Exhibit 5: Financial summary

US$'000s

2020

2021

2022e

2023e

30-June

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

768.8

11,034.2

19.5

0.0

Cost of Sales

0.0

0.0

0.0

0.0

Gross Profit

768.8

11,034.2

19.5

0.0

R&D

6,879.9

10,537.2

16,282.6

18,565.2

SG&A

2,673.8

5,088.3

3,237.6

3,657.4

EBITDA

 

 

(7,809.3)

(3,213.3)

(17,156.6)

(19,878.6)

Normalized operating profit

 

 

(7,809.3)

(3,213.3)

(17,156.6)

(19,878.6)

Amortization of acquired intangibles

(785.8)

(916.9)

(1,415.2)

(1,415.2)

Exceptionals

(465.5)

(1,862.5)

(53.7)

0.0

Share-based payments

(189.9)

(461.1)

(928.8)

(928.8)

Reported operating profit

(9,250.5)

(6,453.8)

(19,554.4)

(22,222.6)

Net Interest

0.0

0.0

0.0

0.0

Joint ventures & associates (post tax)

0.0

0.0

0.0

0.0

Exceptionals

0.0

0.0

0.0

0.0

Pre-Tax Profit (norm)

 

 

(7,809.3)

(3,213.3)

(17,156.6)

(19,878.6)

Pre-Tax Profit (reported)

 

 

(9,250.5)

(6,453.8)

(19,554.4)

(22,222.6)

Reported tax

216.1

351.0

463.2

526.4

Profit After Tax (norm)

(7,626.9)

(3,038.6)

(16,750.2)

(19,407.7)

Profit After Tax (reported)

(9,034.4)

(6,102.9)

(19,091.2)

(21,696.2)

Minority interests

0.0

0.0

0.0

0.0

Discontinued operations

0.0

0.0

0.0

0.0

Net income (normalized)

(7,626.9)

(3,038.6)

(16,750.2)

(19,407.7)

Net income (reported)

(9,034.4)

(6,102.9)

(19,091.2)

(21,696.2)

Basic average number of ADRs outstanding (m)

7.3

11.8

13.2

13.2

EPADR - basic normalized (US$)

 

 

(1.04)

(0.26)

(1.27)

(1.47)

EPADR - diluted normalized (US$)

 

 

(1.04)

(0.26)

(1.27)

(1.47)

EPADR - basic reported (US$)

 

 

(1.24)

(0.52)

(1.44)

(1.64)

Dividend (US$)

0.00

0.00

0.00

0.00

BALANCE SHEET

Fixed Assets

 

 

8,992.9

20,794.4

17,929.9

15,065.4

Intangible Assets

8,992.9

15,943.9

14,528.7

13,113.5

Tangible Assets

0.0

0.0

0.0

0.0

Investments & other

0.0

4,850.5

3,401.2

1,951.9

Current Assets

 

 

7,720.0

21,297.7

6,197.5

10,173.6

Stocks

0.0

0.0

0.0

0.0

Debtors

979.9

61.1

64.2

0.0

Cash & cash equivalents

6,350.8

19,990.4

4,887.1

8,927.5

Other

389.4

1,246.2

1,246.2

1,246.2

Current Liabilities

 

 

(3,672.1)

(6,033.7)

(6,694.6)

(7,360.9)

Creditors

(2,528.2)

(3,574.4)

(4,235.2)

(4,901.6)

Tax and social security

0.0

0.0

0.0

0.0

Short term borrowings

0.0

0.0

0.0

0.0

Other

(1,143.9)

(2,459.3)

(2,459.3)

(2,459.3)

Long Term Liabilities

 

 

(2,804.8)

(8,630.3)

(8,167.0)

(29,379.7)

Long term borrowings

0.0

0.0

0.0

(21,739.1)

Other long term liabilities

(2,804.8)

(8,630.3)

(8,167.0)

(7,640.6)

Net Assets

 

 

10,235.9

27,428.1

9,265.7

(11,501.6)

Minority interests

0.0

0.0

0.0

0.0

Shareholders' equity

 

 

10,235.9

27,428.1

9,265.7

(11,501.6)

CASH FLOW

Op Cash Flow before WC and tax

(7,809.3)

(3,213.3)

(17,156.6)

(19,878.6)

Working capital

1,209.5

(4,051.3)

1,643.8

1,653.4

Exceptional & other

216.1

662.8

409.5

526.4

Tax

0.0

0.0

0.0

0.0

Net operating cash flow

 

 

(6,383.7)

(6,601.8)

(15,103.3)

(17,698.8)

Capex

0.0

0.0

0.0

0.0

Acquisitions/disposals

0.0

0.0

0.0

0.0

Net interest

0.0

0.0

0.0

0.0

Equity financing

8,796.9

20,368.7

0.0

0.0

Dividends

0.0

0.0

0.0

0.0

Other

0.0

0.0

0.0

0.0

Net Cash Flow

2,413.2

13,766.9

(15,103.3)

(17,698.8)

Opening net debt/(cash)

 

 

(3,937.6)

(6,350.8)

(19,990.4)

(4,887.1)

FX

0.0

(127.3)

0.0

0.0

Other non-cash movements

0.0

0.0

0.0

0.0

Closing net debt/(cash)

 

 

(6,350.8)

(19,990.4)

(4,887.1)

12,811.7

Source: Company reports, Edison Investment Research

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This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison 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. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

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

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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Copyright: Copyright 2022 Edison Investment Research Limited (Edison).

Australia

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New Zealand

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. 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 (i.e. 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.

United Kingdom

This document is prepared and provided by Edison 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.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison 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. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

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

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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European Opportunities Trust — Tough times expected to reaffirm a tested strategy

European Opportunities Trust’s (EOT’s) manager, Alexander Darwall, aims to construct an ‘all weather’ portfolio comprising stocks able to generate profits and capital growth in all economic climates. He seeks out globally focused companies with unique technologies, favourable industry structures and multiple growth channels. Recent performance has been mixed, in part due to the trust’s quality bias, but long-term performance has been strong in absolute and relative terms. EOT made annualised returns over the 10 years to end February 2022 of 11.4% in NAV terms and 10.9% on a share price basis, compared to a benchmark return of 8.7%. Darwall is confident that his consistent, high-conviction investment approach will ensure the trust weathers the challenges posed by the current climate and continues to deliver capital growth over the long term.

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