On 21 September 2020, OSE presented additional data from step one of the Phase III Atalante 1 trial at the virtual ESMO conference. This followed the first announcement in April 2020. The totality of data now points to a favourable benefit/risk ratio of Tedopi treatment in patients with locally advanced or metastatic non-small cell lung cancer (NSCLC) after failed checkpoint inhibitor treatment. Due to the COVID-19 pandemic, OSE has decided to terminate enrolment into step two of the trial, as NSCLC patients are vulnerable to coronavirus infections and there was therefore a substantial risk of data loss. OSE will focus on regulatory interactions and partnering discussions, given the availability of new data. Our valuation is marginally higher at €240m or €16.0/share (from €15.3).
Companies: OSE Immunotherapeutics SA
OSE has a well-balanced R&D pipeline in terms of technology and asset stage (from discovery to Phase III). At the American Association of Cancer Research (AACR) Virtual Annual Meeting II in late June, OSE announced new data from its two more interesting preclinical programmes. C-type lectin receptor (CLEC-1) is a newly disclosed myeloid checkpoint target that tumour cells use to inhibit myeloid cells phagocytosis, a ‘don’t eat me’ signal. Anti-CLEC-1 antibodies restored the phagocytosis function of macrophages and dendritic cells (a similar effect to SIRPα/CD47 axis inhibition). New data from OSE’s bispecifics platform BiCKI were also presented, including with its first drug candidate BiCKI IL-7, an anti-PD-1 antibody fused with IL-7 interleukin. Our valuation is €230m or €15.3/share
On 1 April 2020, OSE announced that the primary endpoint was met in the predefined step 1 analysis of the Phase III Atalante 1 trial with OSE’s cancer vaccine Tedopi in HLA-A2 positive, non-small cell lung cancer (NSCLC) patients after they failed checkpoint inhibitors (CPIs, anti-PD-1 or anti-PD-L1). The patients (n=99) were randomised and received treatment at least 12 months before step1 analysis. The 12-month survival rate in the Tedopi arm was 46% (29 out of 63; CI 33–59%), well above the predefined futility threshold of 25%, so a statistically strong result. In the chemotherapy control arm, the 12-month survival rate was 36% (13 out of 36). Due to the COVID-19 pandemic, OSE has decided to terminate enrolment into the step 2 part of the trial, as NSCLC patients are vulnerable to coronavirus infections, and there was therefore a substantial risk of data loss. OSE will focus on regulatory interactions and partnering discussions given the availability of new data. Our valuation is virtually unchanged at €230m or €15.3/share.
OSE has a well-balanced R&D pipeline in terms of asset stage and technology. In the near term, much of the focus is on Tedopi, an off-the-shelf cancer vaccine, as it is the most advanced asset in development, and the Phase III Atalante 1 trial in NSCLC, which is ongoing, with a pre-defined step 1 patient survival assessment expected by end-Q120. Other recent news includes successful completion of the Phase I study with OSE-127 (anti-IL-7R) and the Tedopi out-licensing deal in South Korea. Our valuation is higher at €227m or €15.2/share (previously €198m) due to the increase in OSE-127’s success probability after the positive Phase I study.
OSE Immunotherapeutics now has four clinical trials running. Interim results from its Phase III Atalante 1 trial with cancer vaccine Tedopi are a key catalyst and due in Q120. Another three trials were initiated over the last 12 months, which brought OSE a total of €27m in payments from partners (plus another €5.4m from Bpifrance). These trials include a Phase I study with OSE-127 (partnered with Servier), a Phase I study with BI 765063 (previously OSE-172; with Boehringer Ingelheim, BI) and a Phase II study with Tedopi in pancreatic cancer (GERCOR). We raise our valuation of OSE to €198m or €13.2/share (previously €190m).
OSE has seen several positive developments in its pipeline over the past few months including the initiation of three new partnered clinical trials: a Phase I study with OSE-127 (Servier), a Phase I study with BI 765063 (previously OSE-172, Boehringer Ingelheim) and a Phase II study with Tedopi in pancreatic cancer (GERCOR). Two milestones were triggered totalling €19.5m, and an extra €7.5m is expected in H119 from BI. OSE also announced a new bispecific platform (pre-clinical), which it plans to feed with novel targets identified from a new collaboration with Léon Bérard Cancer Center. Our valuation is slightly higher at €190m or €12.8/share.
OSE Immunotherapeutics (OSE) is a drug developer that focuses on both oncology and immune disorders, with an R&D pipeline diversified across different indications and mechanisms of action. Long-term collaborations with top research institutions enable the company to identify novel targets in a cost-effective and time-efficient manner, and develop products for R&D and out-licensing. The success of this model is demonstrated by several commercial partnerships, including a deal with Boehringer Ingelheim (BI) in April 2018 for a total value of €1.1bn plus royalties. OSE’s most advanced internal programme is Tedopi for NSCLC (Phase III), with results expected in 2021. We value OSE at €171m or €11.7/share.
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Although 2020 will probably go down in history as one of the most challenging years experienced during our lifetime, it will also likely be chronicled as one of the best years for the recognition and appreciation of science. As we entered 2020, the COVID-19 pandemic was in its infancy. However, it rapidly evolved through the exponential rise in infections and mortality globally. Much has been achieved during the past 12 months in the fight against COVID-19, but, as we enter 2021, there are considerable concerns about the emergence of a mutant version of the virus and the second wave that we are now facing.
Companies: AVO ARBB ARIX BBGI CLIG DNL FLTA ICGT OCI PCA PIN PHP RECI STX SCE TRX SHED VTA YEW
Q4 trading has led sales to guidance being raised 8%. This has been driven by better than expected UK sales, incl. success with new customers like Wilko/Tesco. Some of the benefit is offset by a non-cash FX debit, but it still leads to an upgrade and higher net cash. As a result of successful trials in Tesco Express, W7 is also being rolled out to 469 more stores. This, and previously announced distribution gains, bodes well for incremental sales/PBT in 2021, and underlines the appeal of its value-for-money brands. On 11x 2019 cash-adjusted EV/EBITDA, valuation is undemanding, particularly with the added attraction of dividends/income.
Companies: Warpaint London PLC
Ongoing strength in the key China market has prompted a positive trading update, indicating FY21 revenues and EBITDA will be significantly ahead of (already upgraded) expectations. Demand for Aivlosin in China in particular has remained strong throughout Q3 and is expected to remain so in Q4. We upgrade our FY21 revenue forecasts by 12% to £91.9m, which flows through to a 30% PBT upgrade to £10.1m. Whilst there is some caution expressed over the sustainability of this demand, we now forecast a flat performance YoY in FY22, but this is still 10% ahead of our previous estimates at the PBT level. The shares remain suspended pending the publication of the delayed FY20 results, which will be released as soon as possible alongside the H1’21 interims.
Companies: ECO Animal Health Group plc
Synairgen (SNG.L): Completion of recruitment for at home trial | Sensyne Health (SENS.L): Research agreement with The Royal Wolverhampton NHS Trust
Companies: Synairgen plc (SNG:LON)Sensyne Health Plc (SENS:LON)
Foresight Group , the award-winning infrastructure and private equity investment manager to IPO on the Main Market (premium). The Offer will primarily comprise a sale of shares by existing shareholders (c.80% of the Offer) with a smaller offering of new shares (c.20% of the Offer) to be issued by the Company. Details TBA. Cornish Metals (TSX-V: CUSN) intends to list on AIM. The Company is proposing to raise £5 million by way of private placement of new Common Shares (the "Fundraising") to advance the United Downs copper-tin project. The Company expects that Admission will become effective in February 2021. The Company's Common Shares will continue to be listed and trade on the TSX-V in Canada. VH Global Sustainable Energy Opportunities plc, a closed-ended investment Company focused on making sustainable energy infrastructure investments, today announces intends to launch an initial public offering of shares on the Official List (Premium) of the Main Market of the London Stock Exchange. Due by Early Feb.
Companies: TYM W7L BEG CRPR EUZ IRR CMCL FARN KETL AUG
ANGLE raised £19.6m (gross) to capitalise on the first-mover advantage that the FDA clearance for Parsortix will create, catalysing ANGLE’s ability to exploit the emerging multi-billion dollar liquid biopsy market. It will enable ANGLE to pursue multiple parallel revenue streams: (i) as a service provider to the pharma industry particularly looking to improve on immunotherapy patient outcomes (companion diagnostics) and (ii) to develop a number of specific clinical applications. Not only does it strengthen the balance sheet ahead of partner discussions but it provides the resources to develop in parallel relevant laboratory developed tests and fund the necessary clinical utility studies that will accelerate clinical adoption. We re-introduce forecasts and raise our target price to 150p (c.£310m EV), which is supported by risk-adjusted DCF and peer group analyses.
Companies: ANGLE plc
Robust FY21 performance forecast, despite pandemic
Companies: SDI Group plc
Cambridge Cognition provided a positive FY 2020 trading update, with revenues (+34%), net losses and cash all ahead of expectations, and delivering an EBITDA-positive Q4. After a year of record order intake (£12.7m) and with a year-end order book of £11.2m (+96% on the prior year), the company is positioned to deliver another year of strong growth. This update provides further evidence of (i) the commercial focus that the CEO has instigated, (ii) the cross-selling opportunities for its newer digital solutions, and (iii) the prospect of a period of sustained strong growth in what are large (c.£1.2bn) and high growth (c.20%) addressable markets for digital solutions for clinical trials. We increase FY 2021 revenues by 18% to £8.5m, implying 26% growth and raise our target price 31% to 105p.
Companies: Cambridge Cognition Holdings Plc
Cambridge Cognition ("COG") has provided a trading update for the year ended 31 December 2020 that is ahead of our expectations. Group Revenues grew +34% to £6.7m (2019: £5.0m) and were +7% ahead of DCe of £6.3m. COG delivered significant revenue growth from digital solutions for clinical trials as it increased its focus on commercialisation. The strong beat in Revenue is due to an improved commercial execution across a wider portfolio of products as the Group has placed a key emphasis on crossselling CANTAB with newer electronic Clinical Outcome Assessment (eCOA) and digital solutions for frequent, remote testing of patients outside of the clinic setting. The Group's order intake for the year closed at a record £12.7m, up +158% on the previous year's order intake of £4.9m and maintaining the growth trajectory reported in the interim results. The Group experienced a mixed effect due to Covid-19 as some orders and revenue recognition was delayed in the year. However, the pandemic has provided an impetus for an industry shift towards evaluating virtual clinical trials, which opened new opportunities for the Group. We move our target price to 89p (from 80p).
Interim results were in line with the 28 October trading update, reflecting the impact of the pandemic, with sales down 27% and LBITDA of £1.3m. However, c.10% LFL growth for Health & Nutrition (HN) in October and November is encouraging and points to long-term growth. Together with confirmation that first shipments against the initial 1m order for AbC-19 rapid antibody tests have taken place as well as first shipments of VISITECT CD4 Advanced Diseases tests to Africa, we expect a strong H2 (c.75% of FY sales), with potential upside driven by a currently poorly visible, yet anticipated long-term opportunity from its three key value drivers: Food Detective in China, VISITECT CD4 and COVID-19 lateral flow devices (LFDs). We leave our forecasts unchanged until we have further clarity on the unfolding COVID-19 opportunities. Whilst this implies c.£9.4m sales in H2, this is still eminently achievable given that supply has the ability to generate in excess of £9m of sales in Q4 FY 2021, should the demand materialise.
Companies: Omega Diagnostics Group PLC
On 30th December 2020, RUA reported that shareholders had approved resolutions regarding the placing along with a strongly oversubscribed Open Offer. RUA now start 2021 with the resources and mandate to accelerate the development of its products, where we anticipate reports of progress during the year. We have slightly increased our R&D and CapEx spend for FY 2022 to reflect this investment and the cash utilization. RUA’s issued share capital now comprises 22,184,797 shares and the increases in FY 2022 investment in its products, modestly change our valuation by about £2.0m to £113.2m for the Company, equating to 510p per share.
Companies: RUA Life Sciences Plc
After an eventful 2020, ReNeuron released updated 12-month Phase ll data in January on its lead human retinal progenitor cell (hRPC) project. This continues to show a consistent and robust, sustained average gain in visual acuity in retinitis pigmentosa (RP). A continuation study in nine patients using two million cells is underway with three- and six-month data due over H2 CY21 and the first three patients treated. This will facilitate partnering negotiations. A pivotal hRPC study may start in 2022. Deals are possible in CY21 on the exosome genetic drug delivery platform, which could be very valuable. The valuation remains at £190m with strong cash.
Companies: ReNeuron Group plc
STX is a commercial-stage company delivering specialty products that address patients’ unmet medical needs, with an initial focus on treating iron deficiency (ID). Feraccru®/Accrufer® has been approved by the regulators in both Europe and the US. For various reasons, STX has been unable to secure a commercial partner for Accrufer in the US. Consequently, the board is now considering an STX-led launch option, thereby retaining all the US profits. Financial modelling shows the logic of this option, but it would necessitate financing the working capital requirements covering the next two years in the region of £25m-£30m.
Companies: Shield Therapeutics Plc
IXICO has reported its financial results to the end of September 2020. Over the period, revenues grew 26% to £9.5m while EBITDA of £1.3m was more than double FY19A's £0.5m (October Trading update: revs £9.5m, EBITDA ‘at least' £1.1m). The order book closed at £21.7m, a record high, and we note subsequent confirmed orders post the year end, indicating strong business development. IXICO has invested through the year and maintains a strong balance sheet to continue investing through FY21E. We have made minor adjustments to our FY21E expectations and maintain our Buy recommendation.
Companies: IXICO Plc
Whilst the H1 outturn reflected the difficulties caused by the pandemic, investors should not lose sight of the substantial strategic progress made in recent months. This has not only built resilience and agility within the business, allowing it to react to the extraordinary market conditions, but strengthened the medium term growth prospects. We make no change to our headline forecasts at this stage, but mindful of the substantial H2 weighting, provide an illustration of the mix changes and a bridge to our FY21 estimates in this note.
Companies: Yourgene Health Plc