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Research: Healthcare
Ultimovacs has announced top-line results for the Phase II INITIUM trial evaluating its cancer vaccine for the treatment of malignant melanoma. While UV1 maintained its desirable safety and tolerability profile, the study did not meet its primary endpoint of progression-free survival (PFS), or the secondary endpoints of overall survival (OS) and objective response rate (ORR). The UV1 arm showed similar performance to the control arm, ipilimumab and nivolumab (the current standard of care). Despite these top-line results, the company will continue to explore UV1 in the other four Phase II indications in combination with various checkpoint inhibitors. Upcoming milestones include top-line results for FOCUS in Q324 (in head and neck squamous cell carcinoma), an update on the OS data from NIPU in H224 (in malignant pleural mesothelioma) and top-line results for DOVACC in H125 (in ovarian cancer). Management’s cash preservation initiatives are intended to sustain the company into 2025.
Written by
Ultimovacs |
UV1 hits transitory roadblock with INITIUM top-line |
Clinical update |
Pharma and biotech |
7 March 2024 |
Share price performance
Business description
Analysts
Ultimovacs is a research client of Edison Investment Research Limited |
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Ultimovacs has announced top-line results for the Phase II INITIUM trial evaluating its cancer vaccine for the treatment of malignant melanoma. While UV1 maintained its desirable safety and tolerability profile, the study did not meet its primary endpoint of progression-free survival (PFS), or the secondary endpoints of overall survival (OS) and objective response rate (ORR). The UV1 arm showed similar performance to the control arm, ipilimumab and nivolumab (the current standard of care). Despite these top-line results, the company will continue to explore UV1 in the other four Phase II indications in combination with various checkpoint inhibitors. Upcoming milestones include top-line results for FOCUS in Q324 (in head and neck squamous cell carcinoma), an update on the OS data from NIPU in H224 (in malignant pleural mesothelioma) and top-line results for DOVACC in H125 (in ovarian cancer). Management’s cash preservation initiatives are intended to sustain the company into 2025.
Year |
Revenue (NOKm) |
PBT* |
EPS** |
DPS |
P/E |
Yield |
12/22 |
0.0 |
(167.8) |
(4.90) |
0.0 |
N/A |
N/A |
12/23 |
0.0 |
(189.2) |
(5.50) |
0.0 |
N/A |
N/A |
Note: *PBT is reported. **EPS is fully diluted.
As per the announcement, median PFS was not reached in either the UV1 arm or the control arm, and the combination of UV1 with ipilimumab and nivolumab had no added benefit to ipilimumab and nivolumab alone in terms of OS or ORR. While it is disappointing that the trial did not reach its primary or secondary endpoints, UV1 was found to be safe and well tolerated, consistent with prior data. Importantly, this means that Ultimovacs can continue working to establish the most appropriate patient population for UV1. As the cancer vaccine was designed to have universal potential, the Phase II programme included five clinical trials to assess UV1 in combination with various checkpoint inhibitors across five cancer indications. Accordingly, the opportunity remains for alternative cancer indications, in our view, with the next key milestone being top-line results from the FOCUS trial, assessing UV1 in combination with pembrolizumab as a potential first-line treatment for head and neck cancer, expected in Q324. We also note that UV1 has already demonstrated efficacy in mesothelioma in the NIPU trial, whereby UV1 showed a 27% reduced risk of death compared to the control; updated survival data are expected in H224.
Management plans to conduct a detailed analysis of the full INITIUM data set and work to determine the best path forward. For instance, UV1 could be found to be more efficacious with alternative combinations, as evidenced by the encouraging results seen for melanoma in Phase I studies (UV1 in combination with pembrolizumab). Until we have more clarity on the company’s next steps for UV1, we place our valuation and forecasts on hold, and will provide an update when more material information is available.
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Research: Industrials
Market trends in Q423 were like Q323, with Kendrion’s Industrial segment under pressure and Automotive in recovery due to higher pricing and new projects. On 7% y-o-y lower revenues, EBITDA was down 14%, slightly below our expectations. Kendrion is now more confident in realising its FY25 targets (revenue of around €636m and EBITDA margin of 15%) as it has more visibility on the ramp up of new projects, while being bullish about its pipeline, based on electrification and clean energy trends. We have rolled our valuation forward by one year, which, coupled with higher EBITDA margin estimates, points to a value of €18.6/share (from €15.5).