Wilex
Written by
Wilex |
Seeking partners for novel ADC technology |
Q315 results |
Pharma & biotech |
5 November 2015 |
Share price performance
Business description
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Analysts
Wilex is a research client of Edison Investment Research Limited |
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Wilex’s subsidiary, Heidelberg Pharma, is developing antibody-targeted amanitin conjugates (ATACs), which are differentiated from first-in-class, and developing antibody drug conjugates by potential efficacy against dormant and proliferating tumours. The investment case rests on the new partnerships for the ATAC pipeline and on clinical partnering progress for renal cancer programmes. Our DCF valuation is €41m.
Year end |
Revenue (€m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
11/13 |
19.1 |
(5.0) |
(64.3) |
0.0 |
N/A |
N/A |
11/14 |
5.0 |
(5.6) |
(72.9) |
0.0 |
N/A |
N/A |
11/15e |
4.1 |
(4.5) |
(54.0) |
0.0 |
N/A |
N/A |
11/16e |
4.2 |
(4.2) |
(44.7) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding intangible amortisation, exceptional items and share-based payments.
The power of ATACs
Wilex’s ATACs use the toxin α-Amanitin from the green death cap mushroom. The principle of anti-cancer antibody drug conjugates (ADCs) is to use the very high specificity of antibodies and link them to toxic small molecules. ATACs could prevent tumour relapse and resistance in slower-growing tumours, while many ADC technologies block only proliferating tumour cells. Wilex has a proprietary preclinical pipeline of undisclosed ATACs. Separately, it is developing ATACs against prostate-specific membrane antigen (PSMA) in prostate tumours.
Seeking out new ventures
In August, Roche communicated its strategic decision to discontinue its ATAC collaboration with Heidelberg Pharma. The decision was chiefly based on Roche’s immunotherapy focus, despite very good progress made in the ATAC collaboration. Wilex continues to seek new alliances for its proprietary pipeline based on its pioneering approach in ADC cancer therapy. Preclinical results published in Nature this year are likely to assist Wilex in its discussions with future licence partners. The clinical pipeline includes uPA inhibitor Mesupron out-licensed in oncology. Wilex seeks separate partners to progress its Phase III clear cell renal cancer products.
Q3 financials indicate Q116 cash reach
Q315 revenue was €2.9m including revenues and milestones. We have lowered our FY16 sales forecast in line with management’s Q3 guidance from €5.1m to €4.1m, based on cessation of the Roche alliance. End-Q315 cash of €3.1m gives an estimated runway to the end of Q116 following the April €4.2m rights issue.
Valuation: DCF of €41m
Our DCF valuation is €41m, down from €57m, removing €52m of risked Roche milestones, revising our forecasts and adding end-Q315 cash. We value CRO revenue streams at Heidelberg Pharma at €2.1m. If Wilex secures partners for Redectane and Rencarex, our valuation would increase to €115m.
Exhibit 1: Financial summary
€'000s |
2013 |
2014 |
2015e |
2016e |
||
Year end 30 November |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
||||||
Revenue |
|
|
19,106 |
5,010 |
4,075 |
4,204 |
Cost of Sales |
(3,678) |
(1,355) |
(1,169) |
(1,029) |
||
Gross Profit |
15,428 |
3,655 |
2,906 |
3,175 |
||
EBITDA |
|
|
(3,248) |
(5,093) |
(4,213) |
(3,974) |
Operating Profit (before GW and except.) |
(4,964) |
(5,576) |
(4,466) |
(4,183) |
||
Intangible Amortisation |
0 |
0 |
0 |
(161) |
||
Other |
0 |
0 |
0 |
0 |
||
Exceptionals |
0 |
0 |
0 |
0 |
||
Operating Profit |
(4,964) |
(5,576) |
(4,466) |
(4,344) |
||
Net Interest |
(77) |
(31) |
15 |
24 |
||
Other |
0 |
0 |
0 |
0 |
||
Profit Before Tax (norm) |
|
|
(5,040) |
(5,607) |
(4,451) |
(4,159) |
Profit Before Tax (FRS 3) |
|
|
(5,040) |
(5,607) |
(4,451) |
(4,321) |
Tax |
(0.12) |
(93.2) |
(0.09) |
(0.21) |
||
Deferred tax |
0 |
0 |
0 |
0 |
||
Profit After Tax (norm) |
(5,040) |
(5,701) |
(4,451) |
(4,160) |
||
Profit After Tax (FRS 3) |
(5,040) |
(5,701) |
(4,451) |
(4,321) |
||
Average Number of Shares Outstanding (m) |
7.8 |
7.8 |
8.2 |
9.3 |
||
EPS - normalised (c) |
|
|
(64.3) |
(72.9) |
(54.0) |
(44.7) |
EPS - FRS 3 (c) |
|
|
(64.3) |
(72.9) |
(54.0) |
(46.4) |
Dividend per share (c) |
0.0 |
0.0 |
0.0 |
0.0 |
||
Gross Margin (%) |
80.7 |
73.0 |
71.3 |
75.5 |
||
EBITDA Margin (%) |
-17.0 |
-101.7 |
-103.4 |
-94.5 |
||
Operating Margin (before GW and except.) (%) |
-26.0 |
-111.3 |
-109.6 |
-99.5 |
||
BALANCE SHEET |
||||||
Fixed Assets |
|
|
12,805 |
12,120 |
11,948 |
11,665 |
Intangible Assets |
9,182 |
9,059 |
8,941 |
8,780 |
||
Tangible Assets |
1,324 |
1,053 |
870 |
748 |
||
Other |
2,298 |
2,007 |
2,136 |
2,136 |
||
Current Assets |
|
|
9,507 |
2,910 |
2,762 |
2,873 |
Stocks |
78 |
190 |
201 |
201 |
||
Debtors |
402 |
449 |
718 |
718 |
||
Cash |
8,920 |
2,197 |
1,821 |
1,932 |
||
Other |
106 |
74 |
22 |
22 |
||
Current Liabilities |
|
|
(7,285) |
(3,151) |
(2,991) |
(6,991) |
Creditors |
(4,647) |
(3,151) |
(2,991) |
(2,991) |
||
Short term borrowings |
(2,638) |
0 |
0 |
(4,000) |
||
Long Term Liabilities |
|
|
(77) |
(3) |
0 |
0 |
Long term borrowings |
0 |
0 |
0 |
0 |
||
Other long term liabilities |
(77) |
(3) |
0 |
0 |
||
Net Assets |
|
|
14,950 |
11,876 |
11,719 |
7,546 |
CASH FLOW |
||||||
Operating Cash Flow |
|
|
(14,359) |
(6,559) |
(5,010) |
(3,826) |
Net Interest |
(94) |
(155) |
630 |
24 |
||
Tax |
0 |
93 |
0 |
(0) |
||
Capex |
(172) |
(196) |
(79) |
(87) |
||
Acquisitions/disposals |
0 |
0 |
0 |
0 |
||
Financing |
0 |
0 |
3,961 |
0 |
||
Dividends |
0 |
0 |
0 |
0 |
||
Other |
(224) |
(38) |
(17) |
0 |
||
Net Cash Flow |
(14,849) |
(6,855) |
(515) |
(3,889) |
||
Opening net debt/(cash) |
|
|
(20,726) |
(6,283) |
(2,197) |
(1,821) |
HP finance leases initiated |
0 |
0 |
0 |
0 |
||
Exchange rate movements |
(406) |
(131) |
26 |
0 |
||
Other |
811 |
2900 |
113 |
0 |
||
Closing net debt/(cash) |
|
|
(6,283) |
(2,197) |
(1,821) |
2,068 |
Source: Company accounts, Edison Investment Research
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