Celyad — Allogeneic trial first dose given

Celyad — Allogeneic trial first dose given

The allogeneic version of NRK CAR T-cell therapy, CYAD-101, is underway with the first patient dosed. The study mirrors the current colorectal SHRINK trial in combining NKR CAR cell therapy with FOLFOX chemotherapy. This gives Celyad the lead in a potential high-value mass-market solid cancer where allogeneic therapy is likely to be essential. The indicative value is €1,090m (€89 per share) pending further data.

Analyst avatar placeholder

Written by

Celyad

Allogeneic trial first dose given

AlloSHRINK underway

Pharma & biotech

3 December 2018

Price

€24.30

Market cap

€290m

$1.18/€

Cash (€m) at 30 September 2018

55.9

Shares in issue

11.94m

Free float (Edison estimate)

67%

Code

CYAD

Primary exchange

Euronext Brussels

Secondary exchange

NASDAQ

Share price performance

%

1m

3m

12m

Abs

10.4

(6.2)

(30.4)

Rel (local)

9.1

(0.6)

(20.5)

52-week high/low

€38.7

€20.5

Business description

Celyad is developing an innovative natural killer receptor (NKR) CAR T-cell immune-oncology platform. Celyad has a leading position in CAR for AML and solid tumours and is exploring the use of NKR CAR with chemotherapy. It holds a key granted patent in allogeneic CAR technology.

Next events

ASH data

3 December 2018

FY18 results

Q119

Analysts

Dr John Savin MBA

+44 (0)20 3077 5735

Dr Daniel Wilkinson

+44 (0)20 3077 5734

Celyad is a research client of Edison Investment Research Limited

The allogeneic version of NRK CAR T-cell therapy, CYAD-101, is underway with the first patient dosed. The study mirrors the current colorectal SHRINK trial in combining NKR CAR cell therapy with FOLFOX chemotherapy. This gives Celyad the lead in a potential high-value mass-market solid cancer where allogeneic therapy is likely to be essential. The indicative value is €1,090m (€89 per share) pending further data.

Year
end

Revenue (€m)

PBT*
(€m)

EPS*
(€)

DPS
(€)

P/E
(x)

Yield
(%)

12/16

8.52

(20.00)

(2.09)

0.0

N/A

N/A

12/17

3.54

(26.80)

(2.79)

0.0

N/A

N/A

12/18e

0.00

(27.25)

(2.43)

0.0

N/A

N/A

12/19e

0.00

(28.50)

(2.38)

0.0

N/A

N/A

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

Leading position in solid cancers and allogeneic cells

Celyad has a dominant position in CAR therapy for solid cancers (see T-cell cancer therapies). Its NKR CAR T-cell therapy targets ‘stressed’ cancer cells, for example, after chemotherapy like FOLFOX. As an allogenic approach, CYAD-101 is a more affordable, rapid-response potential therapy for many thousands of patients. Of allogeneic competitors in the US, only Cellectis (UCART123 in AML) and Precision Biosciences (PBCAR0191) are in trials but for haematological cancers. Allogene in solid cancers is in preclinical development; UCART19 targets ALL. However, there are many allogeneic trials in China. Celyad has regained its allogeneic therapy rights in key Asian counties from ONO as ONO failed to exercise its option.

AlloSHRINK

Celyad is already evaluating autologous (customised) CYAD-01 with FOLFOX in the open-label SHRINK trial. The alloSHRINK (NCT03692429) study mirrors the SHRINK design. Initial results from three SHRINK patients were disclosed in November 2018. Of these, one had a pathological complete response (CR) and the other two had partial pathological responses. However, cell numbers after infusion were low and no Cy-Flu preconditioning was used. AlloSHRINK is starting its dose escalation phase to test safety and is focusing on any signs of graft vs host disease. A later expansion phase will test the objective response rate. One important secondary endpoint is host vs graft (HvG) response especially after the second and third doses, as HvG could eliminate CYAD-101 cells or block any cell expansion, stopping any therapeutic benefit. The 36-patient trial could compete in late 2021. Celyad holds key patents in allogeneic therapy (licensed by Novartis).

Valuation: Unchanged at €1,090m pending more data

We assign a nominal value of €100m to the allogenic opportunity; this will be revised as response and safety data emerge. AlloSHRINK open-label data is likely to be reported as the trial progresses. Allogeneic products may come to dominate the valuation. The overall indicative value remains €1,090m, €89 per share. More CYAD-01 data is due on 3 December at ASH.

Exhibit 1: Financial summary

€000s

2016

2017

2018e

2019e

Year end 31 December

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

8,523

3,540

0

0

Cost of Sales

(53)

(515)

(500)

(500)

Gross Profit

8,470

3,025

(500)

(500)

EBITDA

 

 

(21,246)

(22,317)

(26,500)

(27,750)

Operating Profit (before amort. and except).

 

 

(22,006)

(23,283)

(27,500)

(28,750)

Intangible Amortisation

(756)

(748)

(750)

(750)

Other income and charges

0

(26,273)

0

0

Share-based payments

(2,847)

(2,569)

(2,600)

(2,600)

Operating Profit

(25,609)

(52,873)

(30,850)

(32,100)

Net Interest

1,997

(3,521)

250

250

Profit Before Tax (norm)

 

 

(20,009)

(26,804)

(27,250)

(28,500)

Profit Before Tax (FRS 3)

 

 

(23,612)

(56,394)

(30,600)

(31,850)

Tax

6

1

0

0

Profit After Tax (norm)

(20,003)

(26,803)

(27,250)

(28,500)

Profit After Tax (FRS 3)

(23,606)

(56,393)

(30,600)

(31,850)

Average Number of Shares Outstanding (m)

9.3

9.6

11.2

12.0

EPS - normalised (c)

 

 

(209)

(279)

(243)

(238)

EPS - (IFRS) (c)

 

 

(253)

(586)

(273)

(267)

Dividend per share (c)

0.0

0.0

0.0

0.0

Gross Margin (%)

N/A

N/A

N/A

N/A

EBITDA Margin (%)

N/A

N/A

N/A

N/A

Operating Margin (before GW and except) (%)

N/A

N/A

N/A

N/A

BALANCE SHEET

Fixed Assets

 

 

53,440

41,232

40,492

39,752

Intangible Assets

49,566

36,508

35,768

35,028

Tangible Assets

3,563

3,290

3,290

3,290

Investments

311

1,434

1,434

1,434

Current Assets

 

 

85,366

36,393

50,659

22,149

Stocks

0

0

0

0

Debtors

1,359

233

233

233

Cash (cash plus deposits)

82,587

33,905

48,171

19,661

Other

1,420

2,255

2,255

2,255

Current Liabilities

 

 

(11,275)

(7,944)

(7,944)

(7,944)

Creditors

(9,960)

(7,509)

(7,509)

(7,509)

Deferred revenue

0

0

0

0

Walloon loans and bank loan

(1,315)

(435)

(435)

(435)

Long Term Liabilities

 

 

(36,646)

(22,146)

(22,146)

(22,146)

Loans (non-current) Bank and Walloon

(7,866)

(1,870)

(1,870)

(1,870)

Other long term liabilities

(28,780)

(20,276)

(20,276)

(20,276)

Net Assets

 

 

90,885

47,535

61,061

31,811

CASH FLOW

Operating Cash Flow

 

 

(26,695)

(46,027)

(26,514)

(27,471)

Net Interest

1,997

(3,521)

264

(29)

Tax

0

0

0

0

Capex

(1,782)

(858)

(1,010)

(1,010)

Acquisitions/disposals

(1,561)

0

0

0

Financing

0

625

46,140

0

Dividends

0

0

0

0

Other

3,109

1,099

(4,614)

0

Net Cash Flow

(24,932)

(48,682)

14,266

(28,510)

Opening net debt/(cash)

 

 

(96,131)

(73,406)

(31,600)

(45,866)

HP finance leases initiated

0

0

0

0

Loan and finance movements

2,207

6,876

(0)

0

Closing net debt/(cash)

 

 

(73,406)

(31,600)

(45,866)

(17,356)

Source: Edison Investment Research estimates, Celyad reports and announcements

General disclaimer and copyright

This report has been commissioned by Celyad and prepared and issued by Edison, in consideration of a fee payable by Celyad. 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 Edison analyst 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 2018 Edison Investment Research Limited (Edison). All rights reserved FTSE International Limited (“FTSE”) © FTSE 2018. “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.

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd who holds an Australian Financial Services Licence (Number: 427484). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

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

Neither this document and associated email (together, the "Communication") constitutes or form part of any offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any securities, nor shall it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. Any decision to purchase shares in the Company in the proposed placing should be made solely on the basis of the information to be contained in the admission document to be published in connection therewith.

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 (nor will such persons be able to purchase shares in the placing).

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

Neither this Communication nor any copy (physical or electronic) of it may be (i) taken or transmitted into the United States of America, (ii) distributed, directly or indirectly, in the United States of America or to any US person (within the meaning of regulations Regulation S made under the US Securities Act 1933, as amended), (iii) taken or transmitted into or distributed in Canada, Australia, the Republic of Ireland or the Republic of South Africa or to any resident thereof, except in compliance with applicable securities laws, (iv) taken or transmitted into or distributed in Japan or to any resident thereof for the purpose of solicitation or subscription or offer for sale of any securities or in the context where the distribution thereof may be construed as such solicitation or offer, or (v) or taken or transmitted into any EEA state other than the United Kingdom. Any failure to comply with these restrictions may constitute a violation of the securities laws or the laws of any such jurisdiction. The distribution of this Communication in or into other jurisdictions may be restricted by law and the persons into whose possession this document comes should inform themselves about, and observe, any such restrictions.

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

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Research: Metals & Mining

Endeavour Mining — Materially ahead of expectations

Endeavour’s Q318 results were materially ahead of our expectations, driven by better than expected operational performances at Karma and Ity and lower operating expenses and depreciation relative to Q2, notwithstanding the usual rains during the quarter. These were partially counteracted by a higher tax charge. However, we have still materially increased our forecasts for FY18 in light of the Q318 results and in expectation of a further improvement in Q4. Higher than expected net debt reflected merely the acceleration of Ity CIL capex from H119 into H218.

Continue Reading

Subscribe to Edison

Get access to the very latest content matched to your personal investment style.

Sign up for free