Oryzon Genomics — ORY-2001 and ORY-3001 next in focus

Oryzon Genomics (BME: ORY)

Last close As at 28/12/2024

EUR1.52

−0.02 (−1.04%)

Market capitalisation

EUR100m

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Research: Healthcare

Oryzon Genomics — ORY-2001 and ORY-3001 next in focus

Oryzon’s Q117 financial results were broadly in line with our expectations. The company’s partner, Roche is now solely responsible for ORY-1001’s development; it is conducting a Phase I trial in small cell lung cancer (SCLC) and can expand into other indications. Meanwhile, Oryzon is now focusing its internal R&D efforts on ORY-2001 for neurodegenerative diseases and ORY-3001 for as yet undisclosed non-cancer indications. Our valuation is slightly higher at €312m.

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Healthcare

Oryzon Genomics

ORY-2001 and ORY-3001 next in focus

Q117 business update

Pharma & biotech

22 May 2017

Price

€3.08

Market cap

€105m

Estimated net cash (€m) at end Q117 (including term deposits) + fundraise of €18.2m in April 2017

19.2

Shares in issue

34.2m

Free float

50%

Code

ORY

Primary exchange

Madrid Stock Exchange

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(9.7)

(19.2)

6.2

Rel (local)

(13.6)

(29.2)

(15.0)

52-week high/low

€5.1

€2.6

Business description

Oryzon Genomics is a Spanish biotechnology company focused on developing novel epigenetic compounds. Lead compound ORY-1001 is partnered with Roche, which is responsible for further development and is currently conducting a clinical trial in SCLC, but could expand it into other indications. ORY-2001, which has potential for several neurodegenerative diseases, is finishing Phase I. ORY-3001 is a new preclinical asset.

Next events

Initiation of Phase II trials with ORY-2001 in selected indications

H217

News from Roche on ORY-1001 in AML

2017

ORY-3001 regulatory tox package

2017

Analysts

Jonas Peciulis

+44 (0)20 3077 5728

Juan Pedro Serrate

+44 (0)20 3681 2534

Oryzon Genomics is a research client of Edison Investment Research Limited

Oryzon’s Q117 financial results were broadly in line with our expectations. The company’s partner, Roche is now solely responsible for ORY-1001’s development; it is conducting a Phase I trial in small cell lung cancer (SCLC) and can expand into other indications. Meanwhile, Oryzon is now focusing its internal R&D efforts on ORY-2001 for neurodegenerative diseases and ORY-3001 for as yet undisclosed non-cancer indications. Our valuation is slightly higher at €312m.

Year end

Revenue (€m)

PBT*
(€m)

EPS*
(€)

DPS
(€)

P/E
(x)

Yield
(%)

12/15

7.2

(0.1)

(0.01)

0.0

N/A

N/A

12/16

5.0

(4.7)

(0.17)

0.0

N/A

N/A

12/17e

4.2

(6.1)

(0.20)

0.0

N/A

N/A

12/18e

4.5

(6.8)

(0.20)

0.0

N/A

N/A

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

Financials: Q117 results broadly in line

With its Q117 business update Oryzon reported minimal revenues of €17k from Roche as a reimbursement for the R&D collaboration on LSD1 inhibition. In addition, the company recorded €1.2m income to account for the capitalisation of development costs (Oryzon follows Spanish GAAP), while the remaining €0.2m came from grants. Oryzon reported Q117 R&D costs of €1.5m and personnel expenses of €777k. The Q117 operating loss of €939k largely met our expectations. We make no changes to our forecasts and we have already included the recent €18m fundraise in our model. We continue to forecast a cash reach to H219/early 2020 (€27.9m end-Q117 cash plus €18.2m fundraise in April; €19.2m net cash).

ORY-2001 and ORY-3001 in focus next

Oryzon is now focusing its internal R&D efforts on ORY-2001 (a dual LSD1/MAO B inhibitor) and ORY-3001 (a selective LSD1 inhibitor), while ORY-1001 (the most advanced LSD1 inhibitor) is now in Roche’s hands following a positive Phase I/IIa trial in acute leukaemia in December 2016, according to the licensing deal terms in April 2014. ORY-2001 is being developed for neurodegenerative diseases and, having obtained a supportive safety profile in the Phase I study, Oryzon now aims to ramp up the clinical programme and initiate trials in multiple sclerosis, Alzheimer’s disease and Huntington’s disease. ORY-3001 is in advanced preclinical studies in as yet undisclosed non-cancer indications. The catalysts over the next 12 to 24 months include the progress in the SCLC trial run by Roche and potential expansion in other indications; initiation of Phase II trials in neurodegenerative disorders with ORY-2001, which could deliver proof-of-concept in 2019; and new preclinical candidates entering the clinic and delivering first human data (ORY-3001 is the most advanced).

Valuation: Slightly increased to €312m or €9.1/share

We value Oryzon at €312m or €9.1/share compared to our previous valuation of €308m or €9.0/share due to rolling our model forward, offset slightly by lower net cash. We make no changes to our valuation assumptions, as detailed in our recent outlook report.

Exhibit 1: Financial summary

EUR'000s

2013

2014

2015

2016

2017e

2018e

December

Local GAAP

Local GAAP

Local GAAP

Local GAAP

Local GAAP

Local GAAP

PROFIT & LOSS

Revenue

 

 

2,360

15,536

7,185

5,009

4,156

4,515

Cost of Sales

0

0

0

0

0

0

Gross Profit

2,360

15,536

7,185

5,009

4,156

4,515

Research and development

(873)

(1,108)

(3,191)

(5,210)

(5,274)

(6,041)

EBITDA

 

 

(94)

11,659

688

(3,721)

(4,749)

(5,537)

Operating Profit (before amort. and except.)

(370)

11,398

448

(3,879)

(4,845)

(5,633)

Intangible Amortisation

(657)

(657)

(657)

(695)

(938)

(1,049)

Exceptionals

(186)

(4,617)

(24)

(4)

0

0

Other

0

0

0

0

0

0

Operating Profit

(1,213)

6,124

(233)

(4,578)

(5,783)

(6,682)

Exceptionals

0

667

(169)

(58)

0

0

Net Interest

(672)

(52)

(553)

(844)

(1,269)

(1,214)

Profit Before Tax (norm)

 

 

(1,042)

11,346

(105)

(4,724)

(6,115)

(6,847)

Profit Before Tax (reported)

 

 

(1,885)

6,739

(955)

(5,480)

(7,052)

(7,896)

Tax

89

(88)

(37)

32

0

0

Profit After Tax (norm)

(953)

11,258

(142)

(4,692)

(6,115)

(6,847)

Profit After Tax (reported)

(1,796)

6,651

(992)

(5,448)

(7,052)

(7,896)

Average Number of Shares Outstanding (m)

23.0

23.3

24.7

27.6

31.3

34.2

EPS - normalised (EUR)

 

 

(0.04)

0.48

(0.01)

(0.17)

(0.20)

(0.20)

EPS - (reported) (EUR)

 

 

(0.08)

0.29

(0.04)

(0.20)

(0.23)

(0.23)

Dividend per share (EUR)

0.0

0.0

0.0

0.0

0.0

0.0

Gross Margin (%)

100.0

100.0

100.0

100.0

100.0

100.0

EBITDA Margin (%)

N/A

75.0

9.6

N/A

N/A

N/A

Operating Margin (before GW and except.) (%)

N/A

73.4

6.2

N/A

N/A

N/A

BALANCE SHEET

Fixed Assets

 

 

20,128

16,059

18,050

21,269

24,390

27,760

Intangible Assets

15,825

12,928

15,188

18,810

22,028

25,494

Tangible Assets

1,159

981

854

696

600

503

Investments

3,145

2,150

2,008

1,763

1,763

1,763

Current Assets

 

 

2,851

9,999

22,681

28,475

40,212

27,751

Stocks

2

9

4

8

6

7

Debtors

663

704

940

978

959

969

Cash

2,033

3,633

19,467

22,028

33,786

26,776

Other*

153

5,654

2,270

5,461

5,461

0

Current Liabilities

 

 

(2,724)

(3,969)

(5,296)

(7,597)

(12,557)

(13,277)

Creditors

(1,005)

(1,299)

(2,401)

(2,119)

(2,080)

(2,100)

Short term borrowings

(1,719)

(2,670)

(2,895)

(5,477)

(10,477)

(11,177)

Long Term Liabilities

 

 

(11,251)

(8,196)

(7,841)

(19,419)

(19,419)

(18,719)

Long term borrowings

(9,117)

(6,420)

(6,177)

(17,723)

(17,723)

(17,023)

Other long term liabilities

(2,134)

(1,776)

(1,664)

(1,696)

(1,696)

(1,696)

Net Assets

 

 

9,004

13,893

27,594

22,729

32,625

23,515

CASH FLOW

Operating Cash Flow

 

 

(113)

12,178

1,076

(4,536)

(6,036)

(6,742)

Net Interest

(672)

(52)

(553)

(471)

(1,269)

(1,214)

Tax

0

0

0

0

0

0

Capex

0

0

0

(28)

0

0

Acquisitions/disposals

(677)

798

0

0

0

0

Financing

0

0

14,725

287

18,219

0

Other**

(161)

(9,579)

605

(6,819)

(4,156)

946

Dividends

0

0

0

0

0

0

Net Cash Flow

(1,623)

3,345

15,853

(11,567)

6,758

(7,010)

Opening net debt/(cash)

 

 

7,180

8,803

5,458

(10,395)

1,172

(5,585)

HP finance leases initiated

0

0

0

0

0

0

Other

0

0

0

0

0

0

Closing net debt/(cash)

 

 

8,803

5,458

(10,395)

1,172

(5,585)

1,425

Source: Edison Investment Research, Oryzon Genomics accounts. Note: Oryzon reports in Spanish GAAP. *Term deposits classed as other current assets. **Includes cash outflows related to development costs that were capitalised.

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 Oryzon Genomics 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

245 Park Avenue, 39th Floor

10167, 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

245 Park Avenue, 39th Floor

10167, 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 Oryzon Genomics 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

245 Park Avenue, 39th Floor

10167, 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

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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