Last close As at 06/08/2026
—
— 0.00 (0.00%)
Market capitalisation
—
Research: Healthcare
SymBio reported sales of ¥2.838bn for 2019 and an operating loss of ¥4.301bn. Sales were down from 2018 due to the previously announced quality control issue for the supply of Treakisym from Astellas. We forecast sales of ¥3.433bn in 2020 as the company winds down its sales to Eisai in anticipation of the launch of its own internal salesforce and marketing effort for the drug in 2021.
Written by
SymBio Pharmaceuticals |
Supply issues continue |
FY19 earnings update |
Pharma & biotech |
13 May 2020 |
Share price performance
Business description
Next events
Analyst
SymBio Pharmaceuticals is a research client of Edison Investment Research Limited |
|||||||||||||||||||||||||||||||||||||||||||||||
SymBio reported sales of ¥2.838bn for 2019 and an operating loss of ¥4.301bn. Sales were down from 2018 due to the previously announced quality control issue for the supply of Treakisym from Astellas. We forecast sales of ¥3.433bn in 2020 as the company winds down its sales to Eisai in anticipation of the launch of its own internal salesforce and marketing effort for the drug in 2021.
Year end |
Revenue (¥m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/18 |
3,836 |
(2,749) |
(166) |
0 |
N/A |
N/A |
12/19 |
2,838 |
(4,377) |
(189) |
0 |
N/A |
N/A |
12/20e |
3,433 |
(5,078) |
(170) |
0 |
N/A |
N/A |
12/21e |
9,159 |
962 |
50 |
0 |
11.7 |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Quality and supply issues continue
The quantity control issues that were announced in August 2019 were expected to have a negative impact on sales for the year. Further, the company announced in the annual report that although Astellas replaced the initial bad shipments, there were additional quality control issues and missed delivery dates. This further exacerbated the revenue loss to the company from its August 2019 guidance of ¥3.092bn to the final total of ¥2.838bn. Astellas is reportedly addressing the issue, but SymBio is unable to confirm at this time.
Preparing for internal marketing of Treakisym
Treakisym is currently marketed through the company’s partner Eisai, but the rights to the drug will revert to SymBio at the beginning of 2021. In anticipation, the company will be building out its own internal salesforce and marketing program for the drug over the coming year. SymBio is also advancing two expansions of the program: the ready to dilute formulation (NDA submitted in September 2019) and a label expansion to diffuse large B-cell lymphoma (DLBCL, NDA submission expected Q220).
Valuation: Increased to ¥37.2bn or ¥1,351 per share
We have increased our valuation to ¥37.2bn ($338m) from ¥32.7bn ($300m), although it is up less on a per share basis (¥1,351 from ¥1,342). This increase is driven by rolling forward our NPVs, offset at the share level by a higher share count. We expect to update our valuation with the announcement of results for the Phase III myelodysplastic syndrome (MDS) clinical study of rigosertib from the drug’s sponsor, Onconova, planned for H120.
Supply issues with Astellas persist and continue to negatively affect sales and earnings
SymBio previously reported in August 2019 that shipments of Treakisym (bendamustine) from its supplier Astellas had suffered from a series of quality control issues. At the time management revised its 2019 revenue guidance down to ¥3.092bn from ¥4.465bn. However, the company reported in its 2019 financial report that quality control and supply issues have persisted, causing delays that continue to have a negative impact on sales. SymBio had net sales of ¥2.838bn for the year, down approximately ¥1bn from 2018. Furthermore, operating losses also exceeded expectations at ¥4.301bn (compared to the revised guidance of ¥3.587bn in August 2019).
Astellas eventually replaced all of the defective batches of drug, but these shipments were affected by unreliable delivery dates and further quality control issues. SymBio stated in its report that Astellas has implemented a corrective and preventative action program to address these issues, but it is too early to evaluate the effectiveness of these measures. As Astellas is the sole licensor of bendamustine rights worldwide, SymBio has relatively little recourse over the supply issues it has faced.
Shift towards internal sales
The company has guided toward sales of ¥3.404bn in 2020, although this reduction is driven by a planned rundown of deliveries to the company’s marketing partner Eisai rather than inventory issues. SymBio will gain full rights to market Treakisym in Japan at the beginning of 2021 and it intends to relaunch the drug with its own internal sales force at that time. In anticipation of this, deliveries to Eisai will be reduced to allow for a reduction in its inventory. Because of the planned reduction in volume, we expect the effects of continued supply issues (if they occur) to be limited.
SymBio forecasts an operating loss of ¥5.090bn for 2020 as it gears up operations for its own internal salesforce. We currently forecast costs of approximately ¥1bn associated with building this organization and establishing its supply chain.
The company is targeting profitability in 2021 with the re-launch of Treakisym. In addition to bringing sales of the product in house, the company has also made multiple efforts to expand its market. The company submitted an NDA in September 2019 with the Japanese regulatory authorities for the ready-to-dilute (RTD) formulation of the drug. It is also planning an NDA submission for the label expansion to treat DLBCL in Q220; the drug previously showed positive results in Phase III for DLBCL in November 2019. The company expects approval for this NDA in Q221.
Valuation
We have increased our valuation to ¥37.2bn ($338m) from ¥32.7bn ($300m), although it is up less on a per share basis (¥1,351 from ¥1,342). The increase is largely due to rolling forward our NPVs to 2020, offset by the increase in shares following recent large exercises of share acquisition rights (1.1m shares issued in January 2020, for a total of ¥626m). The effect of the Astellas supply issues on the valuation is primarily due to unrealized sales in 2019 leading to lower than expected cash (or alternately more dilution to compensate), although we have adjusted our 2020 revenue estimates to align with company guidance. However, these negative effects have less of an impact than rolling forward our NPVs given the expected ramp in earnings in 2021 and beyond.
A major upcoming value inflection point for the company is the announcement of results for the ongoing Phase III MDS clinical study of rigosertib from the drug’s sponsor, Onconova, planned for H120.
Exhibit 1: Valuation of SymBio
Product |
Indication |
Launch |
Peak sales (¥m) |
NPV (¥m) |
Probability |
rNPV |
rNPV/share (¥) |
Treakisym |
Low grade NHL/MCL (r/r and first line); CLL |
2010 |
8,600 |
19,270 |
100–95% |
18,451 |
670.0 |
Treakisym (DLCBL) |
r/r DLBCL |
2021 |
9,600 |
12,975 |
90% |
11,610 |
421.6 |
Rigosertib (IV) |
r/r HR-MDS |
2023 |
3,800 |
2,820 |
50% |
1,324 |
48.1 |
Rigosertib (oral) |
LR-MDS (mono) or first-line HR-MDS (combo) |
2025 |
7,500 |
4,171 |
15% |
423 |
15.4 |
Brincidofovir |
vHC |
2025 |
4,200 |
3,280 |
30% |
855 |
31.1 |
Net cash (December 2019 + subsequent exercises) |
4,537 |
100% |
4,537 |
164.7 |
|||
Valuation |
|
|
|
47,052 |
|
37,199 |
1,350.9 |
Source: SymBio Pharmaceuticals reports, Edison Investment Research
Financials
We have lowered our revenue forecasts for 2020 to ¥3.4bn (from ¥4.0bn) to reflect the company’s predicted rundown in sales to Eisai. However, our forecasts for operational losses are roughly similar to previous estimates (¥5.1bn from ¥5.2bn), as we now forecast marginally lower SG&A costs associated with the commercial build out (¥3.5bn from ¥3.8bn). The company ended 2019 with ¥3.91bn in cash, and subsequently raised ¥626m through its ongoing rights offering. We currently include ¥607m in financing in 2020 (recorded as illustrative debt) primarily to provide a cash buffer (of ¥800m) going into the 2021 commercial launch.
Exhibit 2: Financial summary
Accounts: JPN GAAP, Yr end: 31 December; ¥m |
|
|
2016 |
2017 |
2018 |
2019 |
2020e |
2021e |
2022e |
2023e |
2024e |
2025e |
Total revenues |
|
|
2,368 |
3,444 |
3,836 |
2,838 |
3,433 |
9,159 |
11,418 |
12,705 |
13,988 |
15,336 |
Cost of sales |
|
|
(1,464) |
(2,413) |
(2,663) |
(1,973) |
(2,403) |
(1,839) |
(2,254) |
(1,897) |
(2,090) |
(2,292) |
Gross profit |
|
|
904 |
1,031 |
1,173 |
865 |
1,030 |
7,321 |
9,164 |
10,808 |
11,898 |
13,044 |
SG&A (expenses) |
|
|
(1,364) |
(1,961) |
(1,996) |
(2,725) |
(3,525) |
(5,602) |
(6,460) |
(7,610) |
(7,517) |
(8,087) |
R&D costs |
|
|
(1,667) |
(3,018) |
(1,833) |
(2,442) |
(2,603) |
(765) |
(1,040) |
(1,815) |
(1,547) |
(866) |
Other income/(expense) included in adjusted |
|
|
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
Other income/(expense) excluded from adjusted |
|
|
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
Reported EBIT |
|
|
(2,127) |
(3,947) |
(2,656) |
(4,302) |
(5,098) |
954 |
1,665 |
1,383 |
2,834 |
4,092 |
Finance income/ (expense) |
|
|
5 |
3 |
1 |
0 |
20 |
8 |
24 |
64 |
103 |
172 |
Other income/(expense) included in adjusted |
|
|
7 |
3 |
(0) |
4 |
0 |
0 |
0 |
0 |
0 |
0 |
Other income/(expense) excluded from adjusted |
|
|
(195) |
(33) |
(93) |
(75) |
0 |
0 |
0 |
0 |
0 |
0 |
Reported PBT |
|
|
(2,309) |
(3,974) |
(2,749) |
(4,372) |
(5,078) |
962 |
1,689 |
1,447 |
2,937 |
4,264 |
Income tax expense |
|
|
(4) |
(4) |
(4) |
(4) |
396 |
404 |
83 |
(554) |
(1,120) |
(1,624) |
Reported net income |
|
|
(2,313) |
(3,978) |
(2,753) |
(4,376) |
(4,682) |
1,365 |
1,772 |
893 |
1,817 |
2,640 |
Average number of shares - basic (m) |
|
|
9.8 |
12.5 |
16.6 |
23.2 |
27.5 |
27.5 |
27.5 |
27.5 |
27.5 |
27.5 |
Basic EPS |
|
|
(235.27) |
(319.14) |
(165.54) |
(189.03) |
(170.02) |
49.59 |
64.35 |
32.44 |
65.98 |
95.86 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
|
(2,101) |
(3,917) |
(2,621) |
(4,264) |
(5,000) |
1,034 |
1,740 |
1,461 |
2,918 |
4,187 |
Adjusted EBIT |
|
|
(2,127) |
(3,947) |
(2,656) |
(4,302) |
(5,098) |
954 |
1,665 |
1,383 |
2,834 |
4,092 |
Adjusted PBT |
|
|
(2,317) |
(3,977) |
(2,749) |
(4,377) |
(5,078) |
962 |
1,689 |
1,447 |
2,937 |
4,264 |
Adjusted EPS |
|
|
(236.02) |
(319.35) |
(165.54) |
(189.22) |
(170.02) |
49.59 |
64.35 |
32.44 |
65.98 |
95.86 |
Adjusted diluted EPS |
|
|
(236.02) |
(319.35) |
(165.54) |
(189.22) |
(170.02) |
48.84 |
63.38 |
31.96 |
65.00 |
94.42 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance sheet |
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment |
|
|
75 |
47 |
57 |
75 |
87 |
141 |
204 |
266 |
325 |
380 |
Goodwill |
|
|
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
Intangible assets |
|
|
42 |
69 |
71 |
241 |
169 |
121 |
89 |
68 |
53 |
43 |
Other non-current assets |
|
|
77 |
100 |
73 |
70 |
70 |
70 |
70 |
70 |
70 |
70 |
Total non-current assets |
|
|
193 |
216 |
201 |
386 |
327 |
333 |
364 |
404 |
449 |
494 |
Cash and equivalents |
|
|
5,719 |
2,947 |
4,821 |
3,911 |
800 |
1,616 |
3,156 |
4,067 |
5,647 |
8,061 |
Inventories |
|
|
273 |
363 |
534 |
0 |
270 |
207 |
253 |
213 |
235 |
257 |
Trade and other receivables |
|
|
487 |
490 |
412 |
549 |
376 |
1,004 |
1,251 |
1,392 |
1,533 |
1,681 |
Other current assets |
|
|
205 |
237 |
272 |
427 |
427 |
427 |
427 |
427 |
427 |
427 |
Total current assets |
|
|
6,685 |
4,037 |
6,038 |
4,887 |
1,874 |
3,254 |
5,088 |
6,100 |
7,842 |
10,426 |
Non-current loans and borrowings |
|
|
450 |
0 |
0 |
0 |
607 |
607 |
607 |
607 |
607 |
607 |
Trade and other payables |
|
|
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
Other non-current liabilities |
|
|
1 |
1 |
1 |
2 |
2 |
2 |
2 |
2 |
2 |
2 |
Total non-current liabilities |
|
|
451 |
1 |
1 |
2 |
609 |
609 |
609 |
609 |
609 |
609 |
Trade and other payables |
|
|
322 |
604 |
726 |
121 |
496 |
517 |
610 |
768 |
738 |
728 |
Current loans and borrowings |
|
|
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
Other current liabilities |
|
|
620 |
407 |
610 |
751 |
751 |
751 |
751 |
751 |
751 |
751 |
Total current liabilities |
|
|
942 |
1,011 |
1,336 |
872 |
1,247 |
1,268 |
1,362 |
1,520 |
1,489 |
1,479 |
Equity attributable to company |
|
|
5,485 |
3,239 |
4,902 |
4,400 |
344 |
1,710 |
3,482 |
4,375 |
6,192 |
8,832 |
Non-controlling interest |
|
|
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cashflow statement |
|
|
|
|
|
|
|
|
|
|
|
|
Profit before tax |
|
|
(2,309) |
(3,974) |
(2,749) |
(4,372) |
(5,078) |
962 |
1,689 |
1,447 |
2,937 |
4,264 |
Depreciation and Amortisation |
|
|
26 |
30 |
35 |
38 |
97 |
80 |
75 |
77 |
84 |
95 |
Share based payments |
|
|
137 |
121 |
148 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
Other adjustments |
|
|
197 |
42 |
61 |
229 |
(20) |
(8) |
(24) |
(64) |
(103) |
(172) |
Movements in working capital |
|
|
(13) |
(35) |
184 |
(242) |
278 |
(543) |
(201) |
57 |
(192) |
(181) |
Interest paid / received |
|
|
6 |
3 |
1 |
1 |
20 |
8 |
24 |
64 |
103 |
172 |
Income taxes paid |
|
|
(4) |
(4) |
(4) |
(4) |
396 |
404 |
83 |
(554) |
(1,120) |
(1,624) |
Cash from operations (CFO) |
|
|
(1,960) |
(3,817) |
(2,325) |
(4,351) |
(4,307) |
903 |
1,647 |
1,028 |
1,709 |
2,554 |
Capex |
|
|
(28) |
(57) |
(40) |
(217) |
(37) |
(87) |
(106) |
(118) |
(129) |
(140) |
Acquisitions & disposals net |
|
|
0 |
0 |
0 |
|
|
|
|
|
|
|
Other investing activities |
|
|
(16) |
(20) |
14 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
Cash used in investing activities (CFIA) |
|
|
(44) |
(78) |
(26) |
(216) |
(37) |
(87) |
(106) |
(118) |
(129) |
(140) |
Net proceeds from issue of shares |
|
|
3,226 |
1,164 |
4,272 |
3,738 |
626 |
0 |
0 |
0 |
0 |
0 |
Movements in debt |
|
|
450 |
0 |
0 |
0 |
607 |
0 |
0 |
0 |
0 |
0 |
Other financing activities |
|
|
(18) |
0 |
0 |
2 |
0 |
0 |
0 |
0 |
0 |
0 |
Cash from financing activities (CFF) |
|
|
3,658 |
1,164 |
4,272 |
3,740 |
1,233 |
0 |
0 |
0 |
0 |
0 |
Currency translation differences and other |
|
|
(196) |
(42) |
(47) |
(83) |
0 |
0 |
0 |
0 |
0 |
0 |
Increase/(decrease) in cash and equivalents |
|
|
1,458 |
(2,772) |
1,874 |
(911) |
(3,111) |
816 |
1,540 |
910 |
1,580 |
2,414 |
Opening Net (debt) cash |
4,261 |
5,719 |
2,947 |
4,821 |
3,911 |
193 |
1,009 |
2,549 |
3,459 |
5,039 |
||
Cash and equivalents at end of period |
|
|
5,719 |
2,947 |
4,821 |
3,911 |
800 |
1,616 |
3,156 |
4,067 |
5,647 |
8,061 |
Net (debt) cash |
|
|
5,269 |
2,947 |
4,821 |
3,911 |
193 |
1,009 |
2,549 |
3,459 |
5,039 |
7,453 |
Movement in net (debt) cash over period |
|
|
1,008 |
(2,322) |
1,874 |
(911) |
(3,718) |
816 |
1,540 |
910 |
1,580 |
2,414 |
Source: SymBio Pharmaceuticals reports, Edison Investment Research
|
||||||||||||
|
||||||||||||
Research: Financials
Ebiquity’s pre-close update indicates that trading has been in line with management and market estimates and we are making no changes to our numbers at this point. Post year-end news flow has been constructive (the Digital Decisions acquisition and the buy-in of the Italian minority). A potentially bigger opportunity comes from the news that Accenture is planning to withdraw from media measurement. Ebiquity’s share price has been trading near 10-year lows, putting the valuation at a marked discount to the smaller marcomms companies on an EV/EBITDA and on a P/E basis.