Q2 2019 was a landmark quarter for Prometic with a recapitalisation comprising the conversion of $228.9m of debt and $114.4m in new equity issuance. Over H1 total cash has gone from $7.4m to $81m, off set by total debt of just $9.2m. The net loss of $133.7m resulted largely from the non cash element of the loss on extinguishment of a loan of $87.4m.
Companies: ProMetic Life Sciences
The circular pertaining to the anticipated rights offer has recently been published and the shares are now trading ex-rights. The key terms are in line with previous guidance in that shareholders have the right to subscribe for up to twenty shares per each share held as at the 18 May 2019 record date, at a subscription price of 1.52 Canadian cents with the issue being capped at 4.93bn shares, equivalent to gross proceeds of C$75m.
Prometic’s Q1s showed a continued trend in reduced losses and cash burn following on from the 33% reduction in operational cash burn achieved in FY2018 (vs. a target of 10 to 15%). Speciality plasma sales and increased bioseparations volumes drove revenue growth of over 100% to $8.2m. Net losses were down 16.8% largely as a function of the increase in revenue from sales of goods of $4.0m, the decrease in R&D of $3.2m and the increase in the gain of foreign exchange of $2.9m. This was partially offset by the increase in finance costs expense of $3.1m to $7.4m.
The Corporation focussed on the biology of healing has this week completed a C$75m equity offering and conversion of some C$229m of debt leaving a balance of just C$10m. The Company has also proposed a Rights Offering subject to TSX approval. Shareholders will have the right to subscribe is up to 20 shares for every 1 held at the same transaction price of the recently closed deals, namely 1.52 Canadian cents, a discount of 76% to the current share price and 72% to our estimated theoretical ex rights price of 5.9 cents. The offer is capped at a maximum of C$75m which will result in a proportional scale back to all applicants, should demand exceed this threshold. The forthcoming AGM will seek shareholder approval for a share consolidation which we see as one of the stepping stones towards a potential NASDAQ listing later this year.
The Corporation focussed on the biology of healing yesterday announced that it had confirmed its decision to formally pursue Alström syndrome (AS) as a clinical indication for PBI-4050 following positive feedback from its recent meetings with regulatory authorities. These meetings have provided Prometic with clear clinical and regulatory guidance, which will enable the finalisation of the design of a pivotal placebo-controlled Phase 3 clinical trial, including agreement on multiple endpoints including liver and cardiac fibrosis.
The Corporation focussed on the biology of healing has had a busy November not only reporting Q3 results and highlights, and issuing improved financial guidance, but critically also agreeing amended terms with its long-term backers, thereby pushing out the maturity of its debt facilities (estimated at close to C$200m) to September 2024. The loans, ultimately controlled by Peter J. Thomson’s investment firm, Thomvest Asset Management include a C$100m facility that previously was due to expire in November 2019. This is a tremendously supportive move and Prometic’s focus on prudent cash management and prioritisation of core clinical objectives is alleviating balance sheet pressure whilst priming its relatively late stage potential blockbuster therapies to crystallise value in the near term.
The Corporation focussed on the biology of healing this week announced positive feedback from the FDA type-c meeting on the Ryplazim™ (plasminogen) BLA (biologics license application). We are reassured by the FDA’s agreement with the Company’s proposed action plan for the implementation of additional analytical assays and in-process controls related to the Ryplazim™ (plasminogen) manufacturing process.
This week’s Q2 update and conference call by Prometic highlighted just how important a part one of the Company’s smallest investigational indications (Alström Syndrome) is playing in driving its partnering and clinical strategy. Why is this?
The Corporation focussed on the Biology of healing has recently announced further data from the ongoing PBI-4050 study in Alström syndrome patients as well as 2017 results and an update on its other programs. The average treatment duration of PBI-4050, for the 12 Alström patients, has reached 52 weeks and further clinical activity in the heart and liver was observed with longer treatment exposure. We had already seen promising data on the liver and this has been corroborated by additional data with 9 out of 10 patients experiencing a reduction in liver fibrosis evidenced by a FibroScan® (liver stiffness) score that was reduced or stabilised. The subjects who received at least 36 weeks of treatment showed a statistically significant improvement in the measure of liver stiffness, from a mean of 10.2 kPa (kilopascals) at baseline to a mean of 8.1 kPa. Positive Liver MRI data supported this.
The Corporation focussed on the biology of healing recently hosted a Key Opinion Leader (KOL) event for Novel treatments of Idiopathic Pulmonary Fibrosis (IPF). Prometic is running two IPF research programs with the most advanced being the planned Phase 3 Pivotal study whose trial design was agreed with the FDA last month.
The Corporation, with its ever-growing body of IP concerning the biology of healing, has entered 2018 considerably closer to significant commercial landmarks than at the same point last year.
The Corporation focussed on the biology of healing this week released Q3 numbers which reflected the benefits of the first deal for its small molecule division recognising $19.7m of funding due from Shenzen Royal Asset Management. We had previously expected a similar quantum as a balance sheet item. We have therefore increased our FY2017 revenue expectation from $20m to $35.5m and have reduced our forecast net loss from $130.9m to $115.9m. Despite the expansion of the clinical program R&D/admin costs have remained remarkably stable, at between $30.9m (Q3) and $32.5m for the last 3 quarters vs $41.5m in Q4 2016. Of the $72m of R&D expenses recognised ytd some $24.6m relates to manufacturing and inventories are up at $32.6m vs $13.7m as at 31 December, with most of the increase represented by Plasminogen and blood plasma stocks. In yesterday’s conference call it was noted that the potential sale value of this inventory (subject to Ryplazim™ regulatory approval) is likely to be significantly higher than book value
In a month that has already seen a large step towards marketing approval for its first therapeutic, Ryplazim™, the Corporation focussed on the biology of healing has made two further important announcements this week. On Monday, Prometic revealed that it had entered into a binding letter of intent to secure a CAD $100m line of credit from an affiliate of one of its staunchest backers, Thomvest Asset Management.
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The Corporation focused on the biology of healing announced that Health Canada has granted priority review status for the New Drug Submission (NDS) the company plans to file for its plasminogen replacement therapy Ryplazim™ for the treatment of patients with plasminogen deficiency. This is another priority review status for Ryplazim™, thus showing further validation by a regulatory authority of the potential value of this life-changing drug in the treatment of plasminogen deficiency. Last week, the U.S. FDA accepted Prometic’s Biologics License Application for Ryplazim™ having granted a priority review status.
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EKF has secured its first order in the UK for the Primestore MTM sample collection device, worth £3m over the next 7 weeks. The purchaser is a partner from the private sector, with the device being used in a Covid-19 testing programme for UK staff. With these increasing orders, EKF has expanded its production line in Cardiff and now has capacity for 25,000 sample collection tubes per day. In addition, the production line in Germany is now up and running. We increase our FY20 revenue estimates by a further £3m and EBITDA by £2m. Given the nature of the device, which is agnostic over which molecular test is used, we expect demand to continue at elevated levels for the duration of the pandemic and continue to see further upside potential to our already materially upgraded estimates. EKF remains one of our best Ideas for 2020.
Companies: EKF Diagnostics Holdings Plc
For this Monthly, we are delighted that Rooney Nimmo and 24Haymarket have allowed us to reproduce a recent report they jointly published, entitled An analysis of UK exits (2015-2019), which provides a granular analysis by sector of the activity in our dynamic private companies world. We hope you find the insights of interest.
Companies: AVO AGY ARBB ARIX CLIG ICGT NSF PCA PIN PXC PHP RECI SCE TRX SHED VTA
Redx Pharma (REDX.L): Out licensing agreement with AstraZeneca | Genedrive (GDR.L): Collaboration with Beckman Coulter to automate SARS-CoV-2 PCR testing
Companies: Redx Pharma Plc Genedrive Plc
GSK’s Q2 top-line growth came under pressure due to COVID-19-related disruptions, particularly in Vaccine, and destocking in the Pharmaceuticals and Consumer Healthcare segments. Rising investments in oncology and COVID-19-related treatments further impacted the bottom-line. Although recovery could be slow, as people avoid visits to physicians, the newer class of drugs in the Pharmaceutical segment could fuel growth in the near to mid-term. Pre-booking of COVID-19 vaccines has been encouraging.
Companies: GlaxoSmithKline Plc
Yourgene has raised £15m (net) via an equity placing to enhance its growth trajectory through the acquisition of Coastal Genomics and investment in commercial infrastructure. Our 3yr revenue CAGR increases to 31% and we expect both the acquisition and investment to be significantly earnings enhancing in FY23. We see fair value for the shares at 24p and view Yourgene as a strategic asset in a rapidly growing market segment.
Companies: Yourgene Health Plc
Re-analysis of the AEGIS H2H study showed that Ferracru/Accrufer is a credible alternative to IV therapy for iron deficiency anaemia and that it corrects anaemia and maintains haemoglobin (Hb) levels over the long term. Although Feraccru did not technically achieve non-inferiority versus IV iron at 12 weeks, the long-term benefits and health economic arguments for using Feraccru remain as strong as ever. The regulatory status of Feraccru is unaffected by this result and is unlikely, in our view, to affect the outcome of the anticipated US licensing deal. If anything, it should re-enforce Shield’s position. We reiterate our 350p target price, and look forward to the prospect of the company completing a US licence deal.
Companies: Shield Therapeutics Plc
Tiziana (TILS), also listed on NASDAQ (Symbol TLSA), is driving forwards the clinical development plan for its fully-human mAb TZLS-501 for treating COVID-19 respiratory symptoms and has set out the detail of its clinical plan being executed by a group of specialist contract research organisations
Companies: Tiziana Life Sciences Plc
Futura Medical (FUT.L): Regulatory update | EKF Diagnostics Holdings plc (EKF.L): Trading update
Companies: Futura Medical Plc EKF Diagnostics Holdings Plc
SDI reported full-year results to 30 April that were slightly ahead (+2%) of the trading update issued by the company on 23 April with net debt of £4.0m comparing favourably to our forecast of £4.3m. Underlying organic growth of 3.7% organic growth, despite the COVID-19 disruption in Q4, was supplemented by growth from acquisitions in FY 2019 and FY 2020. Adjusted pre-tax profit rose 44% to £4.3m with adjusted EPS up 21% to 3.4p. Net debt at 30 April was £4.0m. With evidence of trading activity normalising and the positive outlook statement, indicating adjusted pre-tax profit to be at least as good as FY 2019, we reinstate forecasts. We re-introduce a target price of 100p, which implies the stock trading on FY 2021 P/E of 27.5x falling to 24.6x in FY 2022 – in line with its peer group (e.g. Judges Scientific which trades on 33.8x, falling to 27.5x for slightly lower growth) and underpinned by a FY 2020 free cashflow yield of 3.2%.
Companies: SDI Group Plc
SkinBioTherapeutics has provided a development update for its two lead commercial programmes, demonstrating strong progress towards accessing two significant market opportunities, cosmetic ingredients and psoriasis. Sederma, the division of Croda which is developing SkinBiotix, has completed initial manufacturing development and has progressed to scale up validation. Following completion of the AxisBiotix formulation development ahead of schedule, SBTX has established a protocol for a self-managed food supplement trial, designed to mitigate the restriction associated with the COVID-19 pandemic. The trial is anticipated to commence in early 2021. We maintain our Buy recommendation.
Companies: SkinBioTherapeutics Plc
AstraZeneca reported a healthy Q2 growth, outperforming closer peers like Novartis and Roche. This healthy performance was largely driven by oncology (c.45% of group sales). Moreover, the group is a front-runner in the COVID-19 vaccine race. While there were some profitability improvements as well, there’s more ground to cover vis-à-vis both peers and the group’s own historic highs. Also, apart from oncology and New CVRM, the group lacks (growth) catalysts for other areas, accounting for >40% of sales.
Companies: AstraZeneca Plc
EKF has delivered another positive trading update, with outperformance in H1 and further orders for the Primestore MTM sample collection device prompting further material upgrades to our FY20 estimates. Despite a lot of noise around potential Covid-19 diagnostics and therapeutics. EKF remains one of very few UK-listed companies actually generating material revenues. Given the nature of its offering, which is agnostic over which molecular test is used, we expect demand to continue at elevated levels for the duration of the pandemic and continue to see further upside potential to our already materially upgraded estimates. EKF remains one of our best Ideas for 2020.
Sales momentum accelerated in Q2 20, benefiting from robust demand for COVID-19 solutions. Q3 is expected to be strong and, given the improved business dynamics, Thermo Fisher increased the takeover price by c.10% in July – the US firm says that this is its best and final offer. However, some shareholders still consider the ungraded offer as inadequate and will not tender their shares. If the 66.7% minimum threshold limit is not achieved, Thermo Fisher’s offer will terminate automatically.
Companies: QIAGEN NV
Shield Therapeutics (STX) has announced a technical update to findings from the AEGIS-H2H post-marketing study. The re-analysis demonstrates that Feraccru/Accrufer is a credible alternative to IV iron therapy for iron deficiency anaemia (IDA) in the long term. We note the product did not meet the primary endpoint of non-inferiority at 12 weeks vs IV iron, but did correct anaemia and maintain Hb levels over the long term phase (as defined by the 40-week extension phase of the trial). While we note AEGIS H2H was not required as a registration study (thus the regulatory status of the product is unaffected by the study), the headline results of long-term Hb correction is comparable to IV iron for chronic conditions of anaemia. We believe this will have positive implications for health economic outcomes, pricing strategies and partnering opportunities. The next key inflection point is a US partnering deal; we expect Accrufer launch later this year once a partner has been found. Our valuation of STX is unchanged at £381.7m or 326p/share.
Following the recent announcement that Avion Pharmaceuticals has entered into a licence to pay up to $25m to develop (through the second phase III trial) and commercialise its major drug Lupuzor ™, ImmuPharma presents a very different opportunity compared to even a few weeks ago.
Companies: ImmuPharma Plc