Trinity Delta Equity Research & Stock Reports

Scancell

Scancell reported FY19 results in line with expectations. The cash balance at April 19 was £4.6m, with an initial inflow of £3.9m (gross) from Vulpes Life Sciences postperiod. However, the main news is that SCIB1 is back in the clinic, with the Phase II trial in combination with the checkpoint inhibitor pembrolizumab (Keytruda) now underway in the UK. This 25-patient open-label study should produce its first data in H120. The delay in initiating the US study has been frustrating for both the medical community and investors. Other development programmes are progressing as expected and the management team continues to be strengthened. We continue to value the company, using a risk-adjusted NPV model, at £82.0m, or 17.6p a share.

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NEXSTIM OYJ

Nexstim’s revenues grew by 13% to €1.2m on the back of sales of NBT systems increasing by 170% to €0.6m. The company has only been focused on this marketing NBT in major depressive disorder (MDD) since September 2019. Nexstim increased its installed base of NBT systems by eight to 18 during H119, and appears to be gaining momentum with repeat orders, and progress should be boosted by the White Paper from Island Psychiatry. Sales from NBS systems for pre-surgical mapping were slightly disappointing as sales were pushed back into H219, but careful cost control means that cash burn was as expected. The company had cash of €6.4m on 30 June, and continues to look to strengthen its balance sheet. We value Nexstim at €0.41/share diluted.

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BerGenBio continued to strengthen the data package for bemcentinib with the results presented at various conferences during Q219, including AACR and ASCO. Importantly, the data continues to support the hypotheses that bemcentinib has promising activity MDS/AML and NSCLC, and can work synergistically with pembrolizumab (Keytruda) in NSCLC.

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Hutchison China Meditech

Hutchison China MediTech (Chi-Med) H119 results highlight ongoing financial and operational progress. First China NDA filings for surufatinib and savolitinib are on track for H219 and H120 respectively, following in the footsteps of Elunate’s November 2018 launch. Global registration studies of surufatinib and fruquintinib will also initiate in H120. Investment into the maturing China Oncology and Global Innovation pipelines means future R&D spend will continue to grow, but Chi-Med is well-funded with flexibility surrounding future funding options. These are not limited to a future Hong Kong IPO, but include prospects of enhanced revenues from Elunate (post potential NRDL inclusion in Q4) and near-term China approvals/launches, plus possible non-dilutive finance from non-core asset divestment (eg OTC). Our valuation remains $38.55/ADS ($5.14bn) or £5.93/share (£3.95bn).

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e-Therapeutics

e-therapeutics has announced an agreement to work on a neurodegeneration project with a top 5 global pharmaceutical company. We believe the agreement is with MSD, the ex-US businesses of Merck & Co Inc, but this has not been confirmed. The 12-month agreement employs the NDD platform to target the discovery of novel biological mechanisms and therapeutic approaches for neurodegenerative diseases, such as Alzheimer’s and Huntington’s.

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Bonesupport delivered its best quarterly net sales (SEK37.3m) in Q219, with this third successive quarter of CERAMENT sales growth providing early confirmation that the commercially focused strategy is starting to deliver. The next two quarters will be key for the company in setting the trajectory for future sales potential. Q319, the first full quarter of exclusive US sales, should see first sales under major US GPO contracts, publication of full CERTiFy data driving adoption in trauma, and the expanded global commercial footprint being closer to full operation. With the growth trajectory yet to be established, we conservatively rebase our 2019 and 2020 revenue expectations to reflect a more gradual ramp in sales. We continue to view management’s target of 40%+ revenue growth from 2020 onwards as achievable and anticipate more detailed guidance at the Capital Markets Day planned for H219. Our revised Bonesupport valuation is SEK37/share (or SEK 1.92bn), down from SEK39/share (or SEK 2.03bn).

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