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Deinove — Cash conservation and operational progress

Deinove (EG: ALDEI)

Last close As at 04/11/2024

0.64

— 0.00 (0.00%)

Market capitalisation

14m

More on this equity

Research: Healthcare

Deinove — Cash conservation and operational progress

A refocused business, a strengthened management team and progress with its underlying research programmes suggest Deinove is on course to generate commercial revenues in 2018. Delivery in line with our long-term forecasts would indicate a potential valuation of €4.3/share.

Analyst avatar placeholder

Written by

Healthcare

Deinove

Cash conservation and operational progress

H117 results

Alternative energy

23 October 2017

Price

€1.72

Market cap

€18m

Net cash* (€m) at H117
*Company definition

6.6

Shares in issue

10.6m

Free float

72%

Code

ALDEI

Primary exchange

Euronext Growth

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(9.9)

(20.0)

(20.7)

Rel (local)

(12.0)

(22.5)

(33.5)

52-week high/low

€2.4

€1.7

Business description

Deinove is a biotechnology company that discovers, develops and produces high value-added compounds from rare bacteria, including Deinococcus bacteria.

Next events

FY17 results

March 2018

Analyst

Graeme Moyse

+44 (0)20 3077 5700

Deinove is a research client of Edison Investment Research Limited

A refocused business, a strengthened management team and progress with its underlying research programmes suggest Deinove is on course to generate commercial revenues in 2018. Delivery in line with our long-term forecasts would indicate a potential valuation of €4.3/share.

Year end

Revenue (€m)

PBT*
(€m)

EPS*
(c)

DPS
(c)

P/E
(x)

Yield
(%)

12/15

0.5

(7.3)

(66.8)

0.0

N/A

N/A

12/16

0.8

(6.9)

(64.6)

0.0

N/A

N/A

12/17e

0.8

(8.6)

(65.7)

0.0

N/A

N/A

12/18e

2.9

(6.8)

(44.1)

0.0

N/A

N/A

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

Net loss stable and healthy cash position

The results for H117 were broadly in line with our FY17 projections at the net profit level. Lower revenue and higher costs (the result of the consolidation of Deinobiotics from 1 January 2017) contributed to a bigger operating loss (€4.8m) than we might have expected (Edison FY17e: -€8.0m). However an exceptional gain on the sale of shares in Carbios (€0.4m) and an R&D tax credit of €1.3m (€0.7m H116) left the net loss at €3.3m for the year (€3.4m loss in H116). Net cash was €6.6m at H117, vs €9.3m at FY16 (Edison previous FY17e: €5.4m).

Progress in H117 and post period end

Deinove continued to make progress in H117. The management team was strengthened to reflect the new corporate focus, Deinove acquired the minority shareholding of Deinobiotics and issued two patent applications for an antibiotic molecule (January). A partnership in cosmetics was signed with Greentech (March) and the COLOR2B project passed the second phase (April). The animal feed project with Flint Hills Resources continues and Deinove believes that one or two strains of bacteria may be selected in 2018 for industrialisation. Since the period end the carotenoids programme has entered the industrialisation phase, which is expected to lead to the production of the first batches of carotenoids in 2018. Deinove also announced (September) that its AGIR project, carried out jointly with the Charles Viollette Institute, had been selected by the Investments for the Future programme, entitling the project to funding of €14.6m in 2017-22.

Valuation: Potential upside

We have adjusted our forecasts to reflect the H117 results and the recent news of the AGIR funding. We now expect higher revenue, higher cash balances associated with additional grant funding, and a rise in long-term debt to reflect additional repayable advances from the Investments for the Future programme. We have also increased our projections for costs to reflect the additional expenses associated with the consolidation of Deinobiotics. Following the adjustments to forecasts, our DCF valuation indicates that Deinove could be worth €4.3/share (€4.4/share previously). At current levels (c €2/share), we believe the market appears to be applying a c. 50% probability of Deinove meeting our long-term projections.

H1 results show a steady performance

In our view, for a company such as a Deinove, the short term-financials are less important than the long-term outlook for the company. However, reassuringly, the results for H117 were broadly in line with our full year projections at the net profit level. Although lower revenue and higher costs (the result of the consolidation of Deinobiotics from 1 January) contributed to a bigger operating loss (-€4.8m) than we might have expected (Edison FY17 forecast: -€8.0m), an exceptional gain on the sale of shares in Carbios (€0.4m) and an R&D tax credit of €1.3m (vs €0.7m in H116) left the net loss at €3.3m for the half-year. The net loss for H117 was of a similar magnitude to the net loss in H116 of €3.4m, and in line with our last published estimate for a FY17 net loss of €6.8m.

Financial resources (cash position) were €6.6m at H117, versus €9.3m at FY16 (last published Edison FY17 forecast €5.4m). The net reduction of c €2.7m over the first six months of the year reflected opex (excluding depreciation) of €4.1m and capex of €0.9m, offset by proceeds from the sale of the Carbios stake (€0.5m), the absorption of the liquid resources of Deinobiotics following its consolidation (€0.6m), and the issue of equity (€1.2m) from the Kepler Cheuvreux line.

Exhibit 1: Interim profitability – comparison of key figures

€000s

H116

H117

H117 vs H116
change (%)

Total operating revenue

208

140

(33)

Total operating costs

(4,363)

(4,898)

12

Operating profit/(loss)

(4,155)

(4,758)

15

Net profit/(loss)

(3,382)

(3,345)

(1)

Net cash

10,359

6,584

(36)

Source: Deinove, Edison Investment Research

Operational and organisational progress in H1

Following its strategic refocus (suspension of the biofuels programme) announced last autumn, Deinove has continued to make significant operational progress. The management team was strengthened in January 2017 to reflect the new corporate focus, with the appointment of four directors with expertise in the pharmaceutical industry. In January Deinove also acquired the minority shareholding of Deinobiotics and issued two patent applications for an antibiotic molecule. A partnership in cosmetics was signed with Greentech in March 2017 and Deinove is aiming to bring its first ingredient to market in 2018. The COLOR2B project, developed in partnership with Avril, continues to advance, and passed the second phase in April. The project is now progressing to the final phase (targeted for conclusion in 2018), with the ultimate goal of beginning to market the ingredients. The animal feed project with Flint Hills Resources also continues and Deinove believes that one or two strains of bacteria may be selected in 2018 for industrialisation.

Post-period progress and funding

Since the period end, the carotenoids programme, conducted with Processium, has entered the industrialisation phase. Phase 2 is expected to continue for the remainder of 2017 and lead to the production of the first batches of the carotenoid for sale in 2018.

In addition, on 12 September, Deinove announced that its AGIR project (Antibiotics against Resistant Infectious Germs), carried out jointly by its subsidiary Deinobiotics and the Charles Viollette Institute, had been selected by the Investments for the Future programme, entitling it to funding of €14.6m. The funding package takes the form of grants (recognised as revenue in the P&L) and repayable advances (treated as equity by Deinove). We expect Deinove’s share of the revenue (c €10.4m) to be received in five tranches spread over the period 2017-22, with the first tranche payable in FY17. We expect only minimal rises in the costs associated with the programme.

The funding not only recognises the significant progress the antibiotics project has made, but the additional revenue will also constitute a valuable source of funding and help Deinove finance its ongoing AMR research programme (preclinical/Phase 1). Ultimately, development may be acquired by a big pharma company and our DCF model assumes a one-off payment by a large pharmaceutical company in 2020 ($12m) to acquire development rights.

Forecast changes

We have adjusted our forecasts to reflect the H117 results and the recent news of the AGIR funding. Despite the fall in revenue in H117 we now expect slightly higher revenue in FY17 and FY18, associated with additional grant funding and a rise in long-term debt to reflect additional repayable advances from the Investments for the Future programme. Cash balances are also projected to be higher thanks to the additional revenue from the AGIR funding. However we have also increased our projections for costs to reflect the additional expenses associated with the consolidation of Deinobiotics and a small amount of additional expenditure related to the antibiotics programme.

Exhibit 2: Changes to key forecasts

Revenue (€m)

EBITDA (€m)

Net cash (€m)

Old

New

% change

Old

New

% change

Old

New

% change

2017e

0.5

0.8

64

(7.2)

(7.9)

-10

5.4

6.2

15

2018e

2.6

2.9

11

(5.1)

(5.8)

-14

3.5

5.4

54

Source: Edison Investment Research. Note: Cash balances shown are the company’s definition.

Valuation

We continue to use DCF as our principal valuation tool and our long-term assumptions remain broadly unchanged from those set out in our outlook note, Implementing the new strategy, published on 1 September 2017. Based on our long-term assumptions (using a discount rate of 12.5% and a terminal growth rate of 0%) and reflecting adjustments made to our forecasts post the H117 results, we calculate that Deinove could be worth €4.3/share (versus €4.4/share previously). At current levels (c €2/share), we believe the market appears to be applying a 50% probability of Deinove meeting our projections. Reducing the discount rate to 10%, but maintaining assumptions for the terminal growth rate, would indicate a value of €6.5/share.

Exhibit 3: Probability-adjusted valuation

Antibiotics

100%

75%

75%

75%

50%

50%

Cosmetics

100%

100%

75%

75%

75%

50%

Nutrition

100%

100%

100%

75%

75%

50%

Valuation (€/s)

4.3

3.8

3.6

3.1

2.6

1.9

Source: Edison Investment Research

Exhibit 4: Financial summary

€'000s

2015

2016

2017e

2018e

Year end 31 December

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

492

793

819

2,884

Cost of sales

0

0

0

0

Gross profit

492

793

819

2,884

EBITDA

 

 

(7,309)

(6,983)

(7,911)

(5,800)

Operating profit (before amort. and except.)

(7,331)

(6,956)

(8,611)

(6,686)

Intangible Amortisation

(634)

(736)

(370)

(426)

Exceptionals

(10)

283

348

0

Other

0

0

0

0

Operating profit

(7,975)

(7,409)

(8,633)

(7,112)

Net Interest

(14)

15

(38)

(65)

Profit before tax (norm)

 

 

(7,345)

(6,941)

(8,649)

(6,751)

Profit before tax (FRS 3)

 

 

(7,989)

(7,394)

(8,671)

(7,177)

Tax

1,633

1,115

1,707

2,099

Profit after tax (norm.)

(5,712)

(5,826)

(6,942)

(4,652)

Profit after tax (FRS 3)

(6,356)

(6,279)

(6,964)

(5,078)

Average number of shares outstanding (m)

8.6

9.0

10.6

10.6

EPS - normalised (c)

 

 

(66.8)

(64.6)

(65.7)

(44.1)

EPS - (IFRS) (c)

 

 

(74.3)

(69.6)

(66.0)

(48.1)

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

 

 

1,968

2,366

5,940

5,228

Intangible assets

117

201

3,474

3,048

Tangible assets

1,055

853

1,154

869

Investments

796

1,312

1,312

1,312

Current assets

 

 

15,359

11,537

9,162

8,313

Stocks

0

0

0

0

Debtors

2,393

1,792

2,503

2,503

Cash

11,932

9,316

6,231

5,381

Other

1,034

429

429

429

Current liabilities

 

 

(2,719)

(2,142)

(3,590)

(5,907)

Creditors

(2,719)

(2,142)

(3,590)

(5,907)

Short-term borrowings

0

(0)

0

0

Long-term liabilities

 

 

(6,512)

(9,193)

(11,325)

(12,525)

Long-term borrowings

(6,497)

(9,178)

(11,310)

(12,510)

Other long-term liabilities

(15)

(15)

(15)

(15)

Net Assets

 

 

8,096

2,568

187

(4,891)

CASH FLOW

Operating cash flow

 

 

(7,324)

(6,079)

(7,304)

(3,800)

Net Interest

(14)

15

(38)

(65)

Tax

1,633

1,115

2,185

2,416

Capex

(289)

(620)

(1,001)

(600)

Acquisitions/disposals

756

(479)

(3,642)

0

Financing

14,257

752

4,582

0

Dividends

0

0

0

0

Net cash flow

9,019

(5,297)

(5,217)

(2,050)

Opening net debt/(cash)

 

 

3,584

(5,435)

(138)

5,079

HP finance leases initiated

0

0

0

0

Other

0

0

0

0

Closing net debt/(cash)

 

 

(5,435)

(138)

5,079

7,129

Closing net debt/(cash) (Company Definition)

(12,432)

(9,316)

(6,231)

(5,381)

Source: Company accounts, Edison Investment Research. Note: The FY16 figures have not been restated to reflect the consolidation of Deinbiotics.

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison and is not regulated by the Australian Securities and Investment Commission. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2017 Edison Investment Research Limited. All rights reserved. This report has been commissioned by Deinove and prepared and issued by Edison for publication globally. 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. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Aus and any access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and 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 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. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research. Edison has a restrictive policy relating to personal dealing. 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. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. 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. 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 (ie 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. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2017. “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.

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

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison and is not regulated by the Australian Securities and Investment Commission. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2017 Edison Investment Research Limited. All rights reserved. This report has been commissioned by Deinove and prepared and issued by Edison for publication globally. 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. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Aus and any access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and 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 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. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research. Edison has a restrictive policy relating to personal dealing. 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. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. 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. 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 (ie 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. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2017. “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.

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

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Research: Healthcare

Hutchison China MediTech — WCLC highlights savolitinib combination potential

At ASCO, Hutchison China MediTech (HCM) presented detailed Phase III trial results for one of its leading assets, fruquintinib (third-line colorectal cancer). Full data from the China-based FRESCO study demonstrated statistically meaningful improvements in both overall and progression-free survival while reinforcing the safety profile of the drug (no liver toxicity). This is the first full Phase III data readout from HCM and further validates its strategy of creating next-generation selective tyrosine kinase inhibitors (TKIs). HCM’s (together with partner Lilly) NDA to the China FDA has been accepted (Lilly will pay HCM a $4.5m milestone payment) with a launch potentially now in 2018. We maintain our valuation of $2.7bn.

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