Celyad has provided an update on its trial plans and announced 2016 preliminary results. The THINK Phase Ib trial is a major expansion of CAR therapy with five solid tumours plus AML and MM being explored. The THINK dose escalation results are expected in Q417 with six-month efficacy results possible from H218. The colorectal, SHRINK trial starting in Q2 will explore combining NKR-2 therapy with chemotherapy. The Q3 LINK trial will explore direct delivery of NKR-2 cells to metastatic liver tumours. The move into solid tumours puts Celyad in a leading position. Our interim indicative value remains at €45 per share. Cash remains strong at €82.6m.
Written by
Celyad |
THINK, SHRINK and LINK |
FY16 results and trial plans |
Pharma & biotech |
3 April 2017 |
Share price performance
Business description
Next events
Analysts
Celyad is a research client of Edison Investment Research Limited |
|||||||||||||||||||||||||||||||||||||||||||||||||||||
Celyad has provided an update on its trial plans and announced 2016 preliminary results. The THINK Phase Ib trial is a major expansion of CAR therapy with five solid tumours plus AML and MM being explored. The THINK dose escalation results are expected in Q417 with six-month efficacy results possible from H218. The colorectal, SHRINK trial starting in Q2 will explore combining NKR-2 therapy with chemotherapy. The Q3 LINK trial will explore direct delivery of NKR-2 cells to metastatic liver tumours. The move into solid tumours puts Celyad in a leading position. Our interim indicative value remains at €45 per share. Cash remains strong at €82.6m.
Year |
Revenue (€m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/15 |
0.15 |
(27.80) |
(3.20) |
0.0 |
N/A |
N/A |
12/16 |
8.52 |
(22.83) |
(2.09) |
0.0 |
N/A |
N/A |
12/17e |
0.00 |
(35.51) |
(3.73) |
0.0 |
N/A |
N/A |
12/18e |
9.00 |
(25.21) |
(2.65) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
NKR-2 moving through dose escalation
Celyad is now running both Belgian and US arms of the immuno-oncology autologous NKR-2 trials (THINK). The first dose cohorts have been recruited. Data on the final dose (up to 3bn (3 x 109) cells is expected in Q417. One arm has two haematological cancers: AML and MM. The other has five solid tumours: colorectal, triple negative breast, pancreatic, bladder and ovarian. At the highest dose, each tumour type then moves into a 14-patient efficacy phase. Data (six-month) are possible from H218. Tumour types showing efficacy could then move directly into expanded studies allowing BLA filings, perhaps from 2019-20. Other CAR companies are in the congested CD19 area with few trials in solid tumours.
Shrinking and linking with two new programmes
Two new NKR-2 projects are being planned. SHRINK will take colorectal patients receiving a standard chemotherapy regime (FOLFOX) given every two weeks and administer a few days after each chemotherapy course. The chemotherapy should generate more tumour cell NKR-2 target ligands, which may improve efficacy by better targeting; there is a possible risk of increased side effects on normal cells. LINK will recruit colorectal cancer patients with metastatic liver tumours. The NKR-2 cells will be infused using a catheter into the liver near to the metastases. This should give more NKR-2 cells in the tumour sites.
Valuation: Unchanged at €45 per share
Our valuation focuses on NKR-2 indications and includes five solid tumours plus the AML and multiple myeloma (MM). Celyad is planning to spend between €35m and €40m in 2017 and 2018, which gives cash into 2019. We assume a possible ONO allogeneic deal milestone of €12m (less 25% royalty) in 2018. The indicative value is unchanged at €45 per share. The C-Cure cardiac project is being outsourced to a partner; this process is ongoing.
Exhibit 1: Financial summary
€000s |
2015 |
2016 |
2017e |
2018e |
||
Year end 31 December |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
||||||
Revenue |
|
|
0 |
8,523 |
0 |
9,000 |
Cost of Sales |
(1) |
(53) |
0 |
0 |
||
Gross Profit |
(1) |
8,470 |
0 |
9,000 |
||
EBITDA |
|
|
(28,089) |
(24,065) |
(35,000) |
(24,700) |
Operating Profit (before amort and except) |
|
|
(28,362) |
(24,825) |
(35,760) |
(25,460) |
Intangible Amortisation |
(760) |
(756) |
(756) |
(756) |
||
Other income and charges |
0 |
(521) |
0 |
0 |
||
Share-based payments |
(795) |
493 |
0 |
0 |
||
Operating Profit |
(29,917) |
(25,609) |
(36,516) |
(26,216) |
||
Net Interest |
558 |
1,997 |
250 |
250 |
||
Profit Before Tax (norm) |
|
|
(27,804) |
(22,828) |
(35,510) |
(25,210) |
Profit Before Tax (FRS 3) |
|
|
(29,359) |
(23,612) |
(36,266) |
(25,966) |
Tax |
0 |
6 |
0 |
0 |
||
Profit After Tax (norm) |
(27,804) |
(19,482) |
(35,510) |
(25,210) |
||
Profit After Tax (FRS 3) |
(29,359) |
(23,606) |
(36,266) |
(25,966) |
||
Average Number of Shares Outstanding (m) |
8.7 |
9.3 |
9.5 |
9.5 |
||
EPS - normalised (c) |
|
|
(320) |
(209) |
(373) |
(265) |
EPS - (IFRS) (€) |
|
|
(3.38) |
(2.54) |
(3.81) |
(2.73) |
Dividend per share (c) |
0.0 |
0.0 |
0.0 |
0.0 |
||
Gross Margin (%) |
N/A |
N/A |
N/A |
N/A |
||
EBITDA Margin (%) |
N/A |
N/A |
N/A |
N/A |
||
Operating Margin (before GW and except) (%) |
N/A |
N/A |
N/A |
N/A |
||
BALANCE SHEET |
||||||
Fixed Assets |
|
|
50,105 |
53,440 |
52,074 |
50,708 |
Intangible Assets |
48,789 |
49,566 |
48,810 |
48,054 |
||
Tangible Assets |
1,136 |
3,563 |
2,953 |
2,343 |
||
Investments |
180 |
311 |
311 |
311 |
||
Current Assets |
|
|
109,420 |
85,366 |
49,356 |
23,643 |
Stocks |
0 |
0 |
0 |
0 |
||
Debtors |
549 |
1,359 |
1,359 |
1,359 |
||
Cash (cash plus deposits) |
107,513 |
82,587 |
46,577 |
20,864 |
||
Other |
1,358 |
1,420 |
1,420 |
1,420 |
||
Current Liabilities |
|
|
(11,490) |
(11,275) |
(11,017) |
(10,487) |
Creditors |
(10,592) |
(9,960) |
(9,960) |
(9,960) |
||
Deferred revenue |
0 |
0 |
0 |
0 |
||
Walloon loans and bank loan |
(898) |
(1,315) |
(1,057) |
(527) |
||
Long Term Liabilities |
|
|
(36,561) |
(36,646) |
(35,796) |
(34,946) |
Loans (non-current) Bank and Walloon |
(10,484) |
(7,866) |
(7,016) |
(6,166) |
||
Other long term liabilities |
(26,077) |
(28,780) |
(28,780) |
(28,780) |
||
Net Assets |
|
|
111,474 |
90,885 |
54,617 |
28,918 |
CASH FLOW |
||||||
Operating Cash Flow |
|
|
(27,862) |
(26,689) |
(35,472) |
(24,578) |
Net Interest |
558 |
1,997 |
861 |
264 |
||
Tax |
0 |
0 |
0 |
0 |
||
Capex |
(838) |
(1,782) |
(150) |
(150) |
||
Acquisitions/disposals |
(5,186) |
(1,561) |
0 |
0 |
||
Financing |
109,155 |
0 |
0 |
0 |
||
Dividends |
0 |
0 |
0 |
0 |
||
Other |
(3,287) |
3,109 |
(1,249) |
(1,249) |
||
Net Cash Flow |
72,540 |
(24,926) |
(36,010) |
(25,713) |
||
Opening net debt/(cash) |
|
|
(16,078) |
(96,131) |
(73,406) |
(38,504) |
HP finance leases initiated |
0 |
0 |
0 |
0 |
||
Loan and finance movements |
7,513 |
2,201 |
1,108 |
1,380 |
||
Closing net debt/(cash) |
|
|
(96,131) |
(73,406) |
(38,504) |
(14,171) |
Source: Edison Investment Research estimates, Celyad reports and announcements
|
|
Oceania Natural (ONL) is an early-stage New Zealand company involved in producing and distributing natural food and diet supplements sourced from New Zealand and the Pacific Islands, and sold both domestically and in the People’s Republic of China. The company has announced that the board has approved a “one off” sale of manuka honey to a distributor at a reduced margin. As a result, operational performance is likely to vary by more than 10% from the targeted key operating milestones (KOMs) for the year to March 2017.