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 tumors 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 tumors. The move into solid tumors puts Celyad in a leading position. Our interim indicative value remains at $50 per share. Cash remains strong at $91.7m.
Written by
Celyad |
THINK, SHRINK and LINK |
FY16 results and trial plans |
Pharma & biotech |
03 April 2017 |
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Celyad is a research client of Edison Investment Research Limited |
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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 tumors 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 tumors. The move into solid tumors puts Celyad in a leading position. Our interim indicative value remains at $50 per share. Cash remains strong at $91.7m.
Year end |
Revenue ($m) |
PTP* |
EPADR |
DPADR |
P/E |
Yield |
12/15 |
0.0 |
(30.9) |
(3.55) |
0.0 |
N/A |
N/A |
12/16 |
9.5 |
(25.3) |
(2.32) |
0.0 |
N/A |
N/A |
12/17e |
0.0 |
(39.4) |
(4.14) |
0.0 |
N/A |
N/A |
12/18e |
10.0 |
(28.0) |
(2.94) |
0.0 |
N/A |
N/A |
Note: Converted at €0.89/US$1.*PBT and EPS are normalized, excluding amortization 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 hematological cancers: AML and MM. The other has five solid tumors: colorectal, triple negative breast, pancreatic, bladder and ovarian. At the highest dose, each tumor type then moves into a 14-patient efficacy phase. Data (six-month) are possible from H218. Tumor 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 tumors.
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 tumor 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 tumors. 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 tumor sites.
Valuation: Unchanged at $50 per share
Our valuation focuses on NKR-2 indications and includes five solid tumors plus the AML and multiple myeloma (MM). Celyad is planning to spend between $39m and $44m in 2017 and 2018, which gives cash into 2019. We assume a possible ONO allogeneic deal milestone of $13m (less 25% royalty) in 2018. The indicative value is unchanged at $50 per share. The C-Cure cardiac project is being outsourced to a partner; this process is ongoing.
Exhibit 1: Financial summary
US$'000s |
2015 |
2016 |
2017e |
2018e |
||
Year end 31 December |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
||||||
Revenue |
|
|
0 |
9,461 |
0 |
9,990 |
Cost of Sales |
(1) |
(59) |
0 |
0 |
||
Gross Profit |
(1) |
9,402 |
0 |
9,990 |
||
EBITDA |
|
|
(31,179) |
(26,712) |
(38,850) |
(27,417) |
Operating Profit (before amort and except) |
|
|
(31,482) |
(27,556) |
(39,694) |
(28,261) |
Intangible Amortisation |
(844) |
(839) |
(839) |
(839) |
||
Other income and charges |
0 |
(578) |
0 |
0 |
||
Share-based payments |
(882) |
547 |
0 |
0 |
||
Operating Profit |
(33,208) |
(28,426) |
(40,533) |
(29,100) |
||
Net Interest |
619 |
2,217 |
278 |
278 |
||
PTP (norm) |
|
|
(30,863) |
(25,339) |
(39,416) |
(27,983) |
PTP (FRS 3) |
|
|
(32,589) |
(26,209) |
(40,255) |
(28,822) |
Tax |
0 |
7 |
0 |
0 |
||
PAT (norm) |
(30,863) |
(21,625) |
(39,416) |
(27,983) |
||
PAT (FRS 3) |
(32,589) |
(26,203) |
(40,255) |
(28,822) |
||
Average number of ADRs outstanding (m) |
8.7 |
9.3 |
9.5 |
9.5 |
||
EPADR - normalised ($) |
|
|
(3.55) |
(2.32) |
(4.14) |
(2.94) |
EPADR - (IFRS) ($) |
|
|
(3.75) |
(2.82) |
(4.23) |
(3.03) |
Dividend per ADR ($) |
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 |
|
|
55,617 |
59,318 |
57,802 |
56,286 |
Intangible Assets |
54,156 |
55,018 |
54,179 |
53,340 |
||
Tangible Assets |
1,261 |
3,955 |
3,278 |
2,601 |
||
Investments |
200 |
345 |
345 |
345 |
||
Current Assets |
|
|
121,456 |
94,756 |
54,785 |
26,243 |
Stocks |
0 |
0 |
0 |
0 |
||
Debtors |
609 |
1,508 |
1,508 |
1,508 |
||
Cash |
119,339 |
91,672 |
51,700 |
23,159 |
||
Other |
1,507 |
1,576 |
1,576 |
1,576 |
||
Current Liabilities |
|
|
(12,754) |
(12,515) |
(12,229) |
(11,640) |
Creditors |
(11,757) |
(11,056) |
(11,056) |
(11,056) |
||
Deferred revenue |
0 |
0 |
0 |
0 |
||
Walloon loans for cash payment |
(997) |
(1,460) |
(1,173) |
(585) |
||
Long Term Liabilities |
|
|
(40,583) |
(40,677) |
(39,734) |
(38,790) |
Walloon loans (non-current) |
(11,637) |
(8,731) |
(7,788) |
(6,844) |
||
Other long term liabilities |
(28,945) |
(31,946) |
(31,946) |
(31,946) |
||
Net Assets |
|
|
123,736 |
100,882 |
60,625 |
32,099 |
CASH FLOW |
||||||
Operating Cash Flow |
|
|
(30,927) |
(29,625) |
(39,374) |
(27,282) |
Net Interest |
619 |
2,217 |
956 |
293 |
||
Tax |
0 |
0 |
0 |
0 |
||
Capex |
(930) |
(1,978) |
(167) |
(167) |
||
Acquisitions/disposals |
(5,756) |
(1,733) |
0 |
0 |
||
Financing |
121,162 |
0 |
0 |
0 |
||
Dividends |
0 |
0 |
0 |
0 |
||
Other |
(3,649) |
3,451 |
(1,386) |
(1,386) |
||
Net Cash Flow |
80,519 |
(27,668) |
(39,971) |
(28,541) |
||
Opening net debt/(cash) |
|
|
(17,847) |
(106,705) |
(81,481) |
(42,739) |
HP finance leases initiated |
0 |
0 |
0 |
0 |
||
Walloon loan recognition (non-cash) |
8,339 |
2,443 |
1,230 |
1,532 |
||
Closing net debt/(cash) |
|
|
(106,705) |
(81,481) |
(42,739) |
(15,730) |
Source: Edison Investment Research estimates, Celyad reports and announcements
|
|
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