Trinity Delta Equity Research & Stock Reports

e-Therapeutics

The Type 2 diabetes research collaboration with Novo Nordisk provides important validation for e-therapeutics and its proprietary Network-Driven Drug Discovery (NDD) platform. It is the first commercial deal to arise from the extensive business development efforts, and its significance extends beyond the undisclosed deal economics. It marks the first exploitation of the NDD platform in metabolic disease, with the world leader in diabetes, providing valuable external endorsement and derisking of the platform. It may also catalyse further near-term deals with large pharma players; multiple discussions are known to be underway with various potential partners, across a spectrum of disease areas. Our valuation is £57.8m or 21.9p/share.

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Mereo Biopharma Group

Mereo BioPharma has announced that it will merge with OncoMed Pharmaceuticals through the issuance of new Mereo shares (in the form of ADRs). The deal is anticipated to close in H119, with a final ownership split of 75% Mereo/25% OncoMed.

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e-Therapeutics

Promising early results from the C4X Discovery (C4XD) collaboration, initiated in May 2018, highlight the flexibility of e-therapeutics’ network-driven drug discovery (NDD) approach, and its applicability to drug discovery for complex diseases. NDD analysis of Parkinson’s disease (PD) associated genes identified both known and potential new biological mechanisms. This is a first demonstration of the ability of the NDD platform to extract insights from genomic data and link them to potential new targets and pathways for drug discovery. While further work is necessary to explore this more fully in PD (and other diseases), it could provide another facet to e-therapeutics’ business development discussions. We continue to value e-therapeutics at £53.8m (20.4p/share) and anticipate one or more NDD-based deals in the next 12 months.

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MaxCyte

MaxCyte’s hybrid business model continues to advance strongly on all fronts. Two new commercial licenses for cell therapies have recently been announced, in addition to dosing of the first patient with a CARMA product. Initial data from the MCY-M11 Phase I study, expected in early 2019, will give the first indication of how CARMA therapies may be used to treat solid tumours. The product/service business continues to deliver sustained double-digit revenue growth, and this growth rate should accelerate as MaxCyte’s broad portfolio of clinical and commercial licenses expands. The number of clinical use licenses grew from >15 to >25 over the past year, which will increase near-term revenues and raises the likelihood of additional commercial licensing agreements. We value MaxCyte at £177m, or 347p/share.

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Scancell

Scancell has two promising technology platforms for therapeutic vaccines that have the potential to treat many cancers, either as monotherapy or in combination with checkpoint inhibitors. Many therapeutic vaccines have failed to fulfil their potential; but the strength of the cellular immune responses stimulated by both ImmunoBody and Moditope, and the resultant anti-tumour activity observed to date in clinical and preclinical studies augers well. The financial issues that have hindered development of these products are being overcome, so a Phase II study with ImmunoBody SCIB1 and a Phase I/II with the first Moditope product are expected to start during CY19. We value the company, using a risk-adjusted DCF model, at £82.0m, or 21.1p a share.

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BerGenBio continues to report promising data from the Phase II study in non-small cell lung cancer (NSCLC) with bemcentinib in combination with pembrolizumab, on this occasion progression free survival (PFS) data at SITC 2018. The final data from the current trials are due over the next six months. But, the results to date are sufficiently compelling that the company has already started to prepare a randomised Phase II trial programme with bemcentinib to begin in H219. No details of the Phase II studies have been disclosed; but we expect the company to run a series of trials in various NSCLC settings (including with pembrolizumab) and in AML. We have raised our valuation of BerGenBio from NOK52.65 to NOK54.21 per share.

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