SymBio Pharmaceuticals — Treakisym has positive DLBCL results

SymBio Pharmaceuticals (TYO: 4582)

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SymBio Pharmaceuticals — Treakisym has positive DLBCL results

On 5 November 2019, SymBio announced it obtained positive results in its pivotal Phase III clinical trial of Treakisym (bendamustine) in patients with relapsed and refractory diffuse large B-cell lymphoma (DLBCL). The study met its primary endpoint of improvement in response rates, although the company did not give detailed data in its announcement. SymBio guided toward submission of the data to the PMDA in H120 and we expect initial sales in 2021, driving sustained profitability.

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Healthcare

SymBio Pharmaceuticals

Treakisym has positive DLBCL results

Business update

Pharma & biotech

13 May 2020

Price

¥640

Market cap

¥15,616m

¥109/US$

Net cash (¥m) at 30 September 2019

4,625

Shares in issue

24.4m

Free float

91.3%

Code

4582

Primary exchange

TYO

Secondary exchange

OTC US

Share price performance

%

1m

3m

12m

Abs

(7.4)

12.7

(35.7)

Rel (local)

(9.4)

(0.3)

(37.8)

52-week high/low

¥1088

¥542

Business description

SymBio Pharmaceuticals is a Japanese specialty pharma company with a focus on oncology and hematology. The Treakisym powder formulation was in-licensed from Astellas in 2005; liquid Treakisym was in-licensed from Eagle Pharmaceuticals in 2017. Rigosertib was in-licensed from Onconova. And brincidofovir was licensed from Chimerix in 2019.

Next events

DLBCL NDA filing

H120

Analyst

Nathaniel Calloway

+1 646 653 7036

SymBio Pharmaceuticals is a research client of Edison Investment Research Limited

On 5 November 2019, SymBio announced it obtained positive results in its pivotal Phase III clinical trial of Treakisym (bendamustine) in patients with relapsed and refractory diffuse large B-cell lymphoma (DLBCL). The study met its primary endpoint of improvement in response rates, although the company did not give detailed data in its announcement. SymBio guided toward submission of the data to the PMDA in H120 and we expect initial sales in 2021, driving sustained profitability.

Year end

Revenue (¥m)

PBT*
(¥m)

EPS*
(¥)

DPS
(¥)

P/E
(x)

Yield
(%)

12/17

3,444

(3,977)

(319)

0.0

N/A

N/A

12/18

3,836

(2,749)

(166)

0.0

N/A

N/A

12/19e

3,009

(4,182)

(186)

0.0

N/A

N/A

12/20e

4,043

(5,154)

(212)

0.0

N/A

N/A

Note: *PBT and EPS are normalized, excluding amortization of acquired intangibles, exceptional items and share-based payments.

Brincidofovir: Transformational licensing agreement

SymBio has entered into a global licensing agreement for brincidofovir from Chimerix for $5m upfront, $180m in milestones and double-digit royalties. The drug is an antiviral for DNA viruses that has been investigated to treat opportunistic infections. The company intends to pursue the drug for viral hemorrhagic cystitis (vHC) and HHV-6 encephalitis, starting in Japan then in the rest of the world, potentially transforming SymBio into a multinational specialty pharma company.

RTD formulation extends the product lifecycle

SymBio also announced that it has submitted an NDA for the approval of the RTD formulation of Treakisym, which is a difficult molecule to dissolve in water, necessitating extended prep times. The development of the RTD formulation is meant to enhance the convenience of the product for practitioners. The goal with the new formulations is to convert doctors over to the more convenient forms before the entry of generic bendamustine into the market in 2022. The company is targeting a launch of the RTD formulation in Q121.

Valuation: Increased to ¥32.7bn ($300m)

We have increased our valuation to ¥32.7bn ($300m) or ¥1,342 ($12.31) per share from ¥28.9bn ($255m) or ¥1,185 ($10.49) per share. This is driven primarily by an increase in the probability of success for Treakisym in DLBCL to 90% from 60%. Additionally, the valuation is increased by the inclusion of brincidofovir in our model and offset by the upfront payment to Chimerix. At this time, we only include revenues for vHC in Japan, but we expect to update this in the future if the program progresses into other indications and geographies.

Treakisym meets primary endpoint in DLBCL

SymBio announced it had met is primary endpoint in its Phase III study of Treakisym (bendamustine) in relapsed and refractory DLBCL when combined with Rituxan (rituximab). The primary endpoint was overall response rate, with progression free survival and overall survival as secondary endpoints. The study was designed to enroll approximately 60 patients, although the planned enrolment was revised down to 40 patients. The study was open label and single arm, but this may be able to support a label expansion for the drug to this indication considering the well-demonstrated activity in other studies. Although bendamustine is not approved explicitly for DLBCL in the US (although it is approved for indolent NHL), it has been demonstrated to have activity when combined with Rituxan,1 similar to the current study.

  Arcari A. et al. (2014) Safety and Efficacy of Rituximab Plus Bendamustine in Relapsed or Refractory Diffuse Large B-Cell Lymphoma Patients. Blood 124, 3074.

We estimate a target market of 11,200 second-line DLBCL patients, which would approximately double the current addressable market. SymBio did not release detailed data in the announcement of positive results, although we expect them to be presented shortly and we do not expect any surprises based on the historical data in this indication. It intends to have an NDA submission ready in H120. The DLBCL program is central to the company’s stated objective of becoming profitable in 2021 and to date, everything appears to be going to plan.

SymBio licenses brincidofovir in transformational deal

The company announced at the end of September 2019 that it has licensed worldwide rights to the antiviral brincidofovir from Chimerix Pharmaceuticals. The deal includes a $5m upfront payment, double-digit royalties and $180m in downstream milestones payable to Chimerix. Chimerix will retain the rights to develop the drug for smallpox, but SymBio will be able to develop the drug worldwide for all other indications. The company has stated that it intends to develop the drug for viral hemorrhagic cystitis (vHC) and HHV-6 encephalitis (HHV-6), two viral diseases that typically only cause symptoms in immunocompromised individuals after hematopoietic stem cell transplant (HSCT) or kidney transplant.

Background and clinical history of brincidofovir

Brincidofovir is a derivative of the antiviral cidofovir, formed by conjugating a lipid tail to the drug. This improves the drug’s properties by increasing cell permeability, and importantly, it reduces the dose-limiting renal toxicity that is characteristic of cidofovir. Both molecules are broad-spectrum inhibitors of DNA viruses that work by inhibiting DNA synthesis. The lipid tail also improves oral bioavailability and the oral formulation of the drug was the major development focus for Chimerix. However, the oral form of the drug has been implicated in some of the severe GI side effects that have been reported in clinical studies. The IV formulation has been explored and Chimerix previously published data from a Phase I study showing improved tolerability of this form of the drug. Some GI toxicity was seen with 20mg given once a week, but 10mg twice a week only had one patient with nausea (out of nine). Exposure at this dose was similar to the 100mg twice a week oral dosing used in the Phase III clinical study (more details below), which had 61% diarrhea, 34% abdominal plain, 31% nausea and 24% vomiting. Future studies will focus on the IV formulation.

Although there is little doubt that brincidofovir is an active molecule, its clinical development history has been complex. The lead indication of the drug for a long time under Chimerix was for the treatment of cytomegalovirus (CMV) following stem cell transplant, which it investigated in a Phase III study that reported in 2015.2 The study failed to reach its primary endpoint: no improvement in clinically significant CMV infection rates was seen at 24 weeks (51.2% for brincidofovir vs 52.3% for placebo), although the reasons behind this appear to be complex. The drug showed antiviral activity during the 14 weeks that patients were on the drug, but this benefit deteriorated during the follow-up period. Moreover, patients on the drug arm had higher reported rates of graft-vs-host disease (GVHD) and other infections following the treatment period. There was a numerically higher rate of all-cause mortality on the brincidofovir arm (HR=1.6), although it failed to reach statistical significance (p=0.11). When investigating the cause of these surprising results, the study coordinators found that patients on the drug arm had over eight times the level of exposure to corticosteroids than the placebo arm. Moreover, the excess diagnoses of GVHD were attributable to acute GI GVHD. The rate of GI toxicity was very high in the drug arm (60.7% vs 36.2% for placebo), and one plausible explanation advanced by the study authors is that this toxicity was misdiagnosed as GVHD, leading to higher rates of steroid use in the drug arm and subsequently higher rates of infection. However, the authors mention that they were unable to differentiate GI GVHD from toxicity via histopathology.

  Marty FM, et al. (2019) A Randomized, Double-Blind, Placebo-Controlled Phase 3 Trial of Oral Brincidofovir for Cytomegalovirus Prophylaxis in Allogeneic Hematopoietic Cell Transplantation. Biol Blood Marrow Transpl 25, 369-381.

The company subsequently investigated the drug for a range of viral infections and announced positive results in Phase II for the treatment of adenovirus in pediatric stem cell transplant patients.3 However the negative outcome for the CMV study appears to have had a lasting impact on the ability of the company to enroll patients in these new studies and in May 2019, it announced that it would be discontinuing all of its clinical programs for the drug due to enrolment difficulties across all of its trials. Chimerix continues to develop the drug for smallpox under the animal rule. The company also transitioned to a new management team during this period, signaling a major shift in its strategy going forward.

  Hiwarkar P, et al. (2017) Brincidofovir is highly efficacious in controlling adenoviremia in pediatric recipients of hematopoietic cell transplant. Blood 129, 2033-2037.

The future under SymBio

We view SymBio’s decision to license brincidofovir as highly strategic. The limitations of the drug that have overshadowed its development appear to be largely related to the GI toxicity related with the oral formulation. The hope is that the IV formulation can substantially reduce these risks, which appears to be the case with the 10mg dose (although some toxicity was seen at higher doses). This leaves the company with the worldwide rights to a molecule with well understood antiviral activity across a range of indications. Moreover, the original drug cidofovir has never been approved in Japan, so brincidofovir approval could be the first of its kind in that country. We expect SymBio to initially seek approval in Japan and then expand to the US and other markets, potentially transforming itself into a multinational pharmaceutical company.

Similar to the previous development programs for the drug, the company will initially be developing it for two indications, vHC and HHV-6, which are complications of allogeneic HSCT. Both are caused by viruses that infect a wide swath of healthy individuals without any symptoms, but can cause major complications in immunocompromised patients. vHC is typically caused by a virus called BK virus, and is characterized by irritation in the bladder and blood in the urine. One study found that 16.6% of HSCT patients developed hemorrhagic cystitis, of which 90% could be linked to this virus.4 HHV-6 more commonly causes symptoms in cord blood recipients (10% incidence) compared to HSCT (1%) for poorly understood reasons, and is characterized by cognitive disfunction and encephalitis.5 HHV-6 is also associated with solid organ transplantation and is estimated to cause clinical disease in approximately 1% of patients. The disease manifestation in solid organ transplant patients is different and is characterized by fever, liver dysfunction, colitis and graft dysfunction. Chimerix previously performed a post hoc analysis of its CMV trial, investigating whether it could identify activity against HHV-6 in this population and found that the drug reduced the incidence and severity of the infection.

  Lunde LE, et al. (2015) Hemorrhagic Cystitis After Allogeneic Hematopoietic Cell Transplantation: Risk Factors, Graft Source, and Survival. Bone Marrow Transpl 50, 1432-1437.

  HHV-6 foundation

The clinical development plan for brincidofovir has not been finalized yet. We understand that the previous Phase I IV brincidofovir study included Japanese patients and could potentially be used for the same purpose in Japan. Based on company guidance, the finalized development should be announced by January. If the PMDA approves the use of the existing Phase I study data, the company has guided us towards initiation of a Phase II study in vHC starting in Q320.

RTD Treakisym up for approval now

One hurdle to the company’s future operational plans is that Treakisym is slated to have generic competition in Japan starting in 2022. SymBio has therefore endeavored to protect its market share with the introduction of new formulations of the product, which provide a benefit to physicians using the product. As part of this the company in-licensed rights to patent-protected liquid formulations of Treakisym from Eagle in September 2017: the RTD (ready-to-dilute) formulation and the rapid infusion (RI) formulation. These formulations are protected by patents that extend to 2031. Both of these formulations improve the convenience factor for physicians by making the product easier to dilute and easier to infuse, respectively, and the company believes these factors can convert and retain physicians. The company reported in September 2019 that it has submitted the NDA for approval of the RTD formulation, which it expects to commercialize in Q121. The RI formulation is currently being investigated in a Phase III pivotal study that was initiated in April 2019. This product is expected to launch in 2022.

The RTD product is approved in the US under the name Bendeka and is marketed by Teva. Eagle reported revenue from the product of $25m in 2018, which based on the reported royalty rate of 25% suggests sales of approximately $100m during that period.

Valuation

We have increased our valuation to ¥32.7bn ($300m) or ¥1,342 ($12.31) per share from ¥28.9bn ($255m) or ¥1,185 ($10.49) per share. This is driven by an increase in the probability of success for Treakisym in DLBCL to 90% from 60%, which increased its valuation to ¥9.2bn from ¥5.3bn.

Additionally, our valuation is lifted by the inclusion of brincidofovir in our model (¥838m). We only include the initial indication of vHC in our model and only in Japan at this time, but we may revise at a later date as the company progresses its clinical development plans. At this time we also conservatively assume for the purposes of this model that the company will be required to perform a Phase I study by the PMDA. If the agency does not require this study, this would increase our valuation by approximately ¥250m. Regardless of the PMDA decision, we assign a 30% probability of success, which is average for drugs entering Phase II, because we find the Phase I IV study sufficient. We assume that the drug will be able to command both a high price (¥10m at launch) because it will be the only available medication to treat this rare disorder. Additionally, because the targeted patient audience is already under close medical supervision and the drug will be administered in conjunction with an ongoing medical procedure (allogeneic HSCT), we estimate very high penetration, up to 75% at peak. We assume a 15% royalty to Chimerix. We include $10m in clinical and regulatory milestones, but do not include commercial milestones given our low revenue expectations for this indication (¥4,200m at peak). Based on current rates of allogeneic HSCT in Japan (approximately 3,700 per year),6 we estimate an addressable market of only 630 individuals per year in the country. We believe that the majority of the value of this asset will be in downstream label expansions and entrance into new geographies, but we want to see traction with the initial clinical program before including these in our estimates.

  The Japanese Data Center for Hematopoietic Cell Transplantation

Exhibit 1: Valuation of SymBio

Valuation by NPV sum-of-the-parts

Indication

 Launch

 Peak sales (JPYm)

 NPV (JPYm)

Probability

rNPV (JPYm)

rNPV/share (JPY/share)

Product

Treakisym

Low grade NHL/MCL (r/r and 1st line); CLL

2010

8,600

17,559

100–95%

16,814

690.2

Treakisym (DLCBL)

r/r DLBCL

2021

9,600

10,373

90%

9,150

375.6

Rigosertib (IV)

r/r HR-MDS

2023

3,800

2,422

50%

978

40.1

Rigosertib (oral)

LR-MDS (mono) or First-line HR-MDS (combo)

2025

7,500

3,943

15%

277

11.4

Brincidofovir

vHC

2025

4,200

3,212

30%

838

34.4

Net cash (September 2019)

4,625

100%

4,625

189.8

Valuation

 

 

 

42,133

 

32,682

1,341.5

Source: SymBio Reports, Edison Investment Research

Financials

We have adjusted our expected financing requirement to ¥1.7bn from ¥1.8bn (included as illustrative debt in 2020) before profitability in 2021. This is driven by slightly lower than expected operational spending for Q319 (¥1.6bn), which includes the $5m upfront payment for brincidofovir.

Exhibit 2: Financial summary

Accounts: JPN GAAP, Yr end: 31 December; ¥m

 

 

2016

2017

2018

2019e

2020e

2021e

2022e

2023e

2024e

2025e

Total revenues

 

 

2,368

3,444

3,836

3,009

4,043

9,159

11,418

12,705

13,988

15,336

Cost of sales

 

 

(1,464)

(2,413)

(2,663)

(2,106)

(2,830)

(2,052)

(2,254)

(1,897)

(2,090)

(2,292)

Gross profit

 

 

904

1,031

1,173

903

1,213

7,107

9,164

10,808

11,898

13,044

SG&A (expenses)

 

 

(1,364)

(1,961)

(1,996)

(2,556)

(3,806)

(5,406)

(6,226)

(7,252)

(7,707)

(8,318)

R&D costs

 

 

(1,667)

(3,018)

(1,833)

(2,453)

(2,603)

(765)

(1,585)

(1,597)

(1,765)

(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)

(4,106)

(5,196)

936

1,354

1,960

2,426

3,860

Finance income/ (expense)

 

 

5

3

1

(76)

41

12

26

65

137

217

Other income/(expense) included in adjusted

 

 

7

3

(0)

0

0

0

0

0

0

0

Other income/(expense) excluded from adjusted

 

 

(195)

(33)

(93)

0

0

0

0

0

0

0

Reported PBT

 

 

(2,309)

(3,974)

(2,749)

(4,182)

(5,154)

948

1,380

2,024

2,563

4,077

Income tax expense

 

 

(4)

(4)

(4)

(4)

(4)

(80)

(114)

(166)

(978)

(1,553)

Reported net income

 

 

(2,313)

(3,978)

(2,753)

(4,186)

(5,158)

868

1,266

1,858

1,585

2,524

Average number of shares - basic (m)

 

 

9.8

12.5

16.6

22.5

24.3

24.3

24.3

24.3

24.3

24.3

Basic EPS

 

 

(235.27)

(319.14)

(165.54)

(186.25)

(211.84)

35.66

51.98

76.32

65.11

103.66

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

 

(2,101)

(3,917)

(2,621)

(4,068)

(5,117)

1,010

1,432

2,047

2,526

3,976

Adjusted EBIT

 

 

(2,127)

(3,947)

(2,656)

(4,106)

(5,196)

936

1,354

1,960

2,426

3,860

Adjusted PBT

 

 

(2,317)

(3,977)

(2,749)

(4,182)

(5,154)

948

1,380

2,024

2,563

4,077

Adjusted EPS

 

 

(236.02)

(319.35)

(165.54)

(186.25)

(211.84)

35.66

51.98

76.32

65.11

103.66

Adjusted diluted EPS

 

 

(236.02)

(319.35)

(165.54)

(186.25)

(211.84)

29.90

43.58

64.00

54.60

86.93

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance sheet

 

 

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

75

47

57

54

65

110

160

205

242

271

Goodwill

 

 

0

0

0

0

0

0

0

0

0

0

Intangible assets

 

 

42

69

71

201

153

118

93

74

61

52

Other non-current assets

 

 

77

100

73

73

73

73

73

73

73

73

Total non-current assets

 

 

193

216

201

328

290

301

326

352

376

396

Cash and equivalents

 

 

5,719

2,947

4,821

4,087

800

1,290

2,548

4,501

6,103

8,566

Inventories

 

 

273

363

534

173

233

169

185

156

172

188

Trade and other receivables

 

 

487

490

412

346

443

1,004

1,251

1,392

1,533

1,681

Other current assets

 

 

205

237

272

272

272

272

272

272

272

272

Total current assets

 

 

6,685

4,037

6,038

4,878

1,747

2,734

4,257

6,321

8,079

10,707

Non-current loans and borrowings

 

 

450

0

0

0

1,731

1,731

1,731

1,731

1,731

1,731

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

1,733

1,733

1,733

1,733

1,733

1,733

Trade and other payables

 

 

322

604

726

409

520

501

636

720

770

745

Current loans and borrowings

 

 

0

0

0

0

0

0

0

0

0

0

Other current liabilities

 

 

620

407

610

1,410

1,410

1,410

1,410

1,410

1,410

1,410

Total current liabilities

 

 

942

1,011

1,336

1,819

1,931

1,911

2,046

2,130

2,181

2,156

Equity attributable to company

 

 

5,485

3,239

4,902

3,386

(1,625)

(609)

804

2,810

4,543

7,214

Non-controlling interest

 

 

0

0

0

0

0

0

0

0

0

0

 

 

 

 

 

 

 

 

 

 

 

 

 

Cashflow statement

 

 

 

 

 

 

 

 

 

 

 

 

Profit before tax

 

 

(2,309)

(3,974)

(2,749)

(4,182)

(5,154)

948

1,380

2,024

2,563

4,077

Depreciation and Amortisation

 

 

26

30

35

38

79

74

78

87

100

116

Share based payments

 

 

137

121

148

148

148

148

148

148

148

148

Other adjustments

 

 

197

42

61

76

(41)

(12)

(26)

(65)

(137)

(217)

Movements in working capital

 

 

(13)

(35)

184

909

(45)

(516)

(130)

(27)

(106)

(189)

Interest paid / received

 

 

6

3

1

(76)

41

12

26

65

137

217

Income taxes paid

 

 

(4)

(4)

(4)

(4)

(4)

(80)

(114)

(166)

(978)

(1,553)

Cash from operations (CFO)

 

 

(1,960)

(3,817)

(2,325)

(3,091)

(4,977)

574

1,361

2,066

1,727

2,598

Capex

 

 

(28)

(57)

(40)

(165)

(41)

(84)

(103)

(114)

(124)

(136)

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)

(165)

(41)

(84)

(103)

(114)

(124)

(136)

Net proceeds from issue of shares

 

 

3,226

1,164

4,272

2,522

0

0

0

0

0

0

Movements in debt

 

 

450

0

0

0

1,731

0

0

0

0

0

Other financing activities

 

 

(18)

0

0

0

0

0

0

0

0

0

Cash from financing activities (CFF)

 

 

3,658

1,164

4,272

2,522

1,731

0

0

0

0

0

Currency translation differences and other

 

 

(196)

(42)

(47)

0

0

0

0

0

0

0

Increase/(decrease) in cash and equivalents

 

 

1,458

(2,772)

1,874

(734)

(3,287)

490

1,259

1,952

1,602

2,463

Opening Net (debt) cash

4,261

5,719

2,947

4,821

4,087

(931)

(441)

817

2,769

4,372

Cash and equivalents at end of period

 

 

5,719

2,947

4,821

4,087

800

1,290

2,548

4,501

6,103

8,566

Net (debt) cash

 

 

5,269

2,947

4,821

4,087

(931)

(441)

817

2,769

4,372

6,835

Movement in net (debt) cash over period

 

 

1,008

(2,322)

1,874

(734)

(5,018)

490

1,259

1,952

1,602

2,463

Source: SymBio reports, Edison Investment Research

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This report has been commissioned by SymBio Pharmaceuticals and prepared and issued by Edison, in consideration of a fee payable SymBio Pharmaceuticals. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2019 Edison Investment Research Limited (Edison). All rights reserved FTSE International Limited (“FTSE”) © FTSE 2019. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

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New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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