Immunovia — Preparing to tackle big markets

Immunovia — Preparing to tackle big markets

Immunovia continues to leverage the IMMray technology to additional opportunities with prospective trials in the group of early pancreatic cancer symptoms (PANSYM-1) due to start in the next few weeks. In diabetes patients (PANDIA-1) trials should start after the readout of a retrospective study in this population expected in Q118. Immunovia is preparing for the launch of a PanCan-d test for the early detection of pancreatic cancer in high-risk patients in 2018. Our valuation is SEK156/share.

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Immunovia

Preparing to tackle big markets

Business update

Healthcare equipment & services

7 December 2017

Price

SEK90.00

Market cap

SEK1.5bn

US$0.12/SEK

Net cash (SEKm) at end Q317

215.3

Shares in issue

17.3m

Free float

66.5%

Code

IMMUNOV

Primary exchange

NASDAQ FN Stockholm

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(10.0)

(7.2)

10.1

Rel (local)

(5.7)

(10.2)

0.6

52-week high/low

SEK116.2

SEK78.0

Business description

Immunovia is a Swedish diagnostics company specialised in diagnostics for oncology and autoimmune diseases. Its main product is IMMray PanCan-d, an antibody microarray based on its proprietary IMMray platform. A prospective trial in patients at high risk of pancreatic cancer is ongoing. The company expects to generate initial out-of-pocket sales in 2018.

Next events

Data from retrospective trial in diabetes patients

Q118

First revenues

2018

Complete prospective trial, registration

2019

Analysts

Juan Pedro Serrate

+44 (0)20 3681 2534

Jonas Peciulis

+44 (0)20 3077 5728

Immunovia is a research client of Edison Investment Research Limited

Immunovia continues to leverage the IMMray technology to additional opportunities with prospective trials in the group of early pancreatic cancer symptoms (PANSYM-1) due to start in the next few weeks. In diabetes patients (PANDIA-1) trials should start after the readout of a retrospective study in this population expected in Q118. Immunovia is preparing for the launch of a PanCan-d test for the early detection of pancreatic cancer in high-risk patients in 2018. Our valuation is SEK156/share.

Year
end

Revenue (SEKm)

PBT*
(SEKm)

EPS*
(SEK)

DPS
(SEK)

P/E
(x)

Yield
(%)

12/15

17.0

(7.38)

(0.65)

0.0

N/A

N/A

12/16

24.5

(14.72)

(0.98)

0.0

N/A

N/A

12/17e

27.8

(17.55)

(1.04)

0.0

N/A

N/A

12/18e

43.6

(30.80)

(1.83)

0.0

N/A

N/A

Note: *Normalised, excluding amortisation of acquired intangibles and exceptionals.

Early symptoms PANSYM-1 study due to start

Immunovia’s’s academic collaborator, the University College London (UCL) has started collecting samples from patients with early vague symptoms which is the initial part of the prospective PANSYM-1 study that will begin in the coming weeks. Immunovia’s research suggests patients with early symptoms undergo up to 18 visits and a six- to nine-month delay until pancreatic cancer is diagnosed. Hence, identifying patients with pancreatic cancer and initial vague symptoms could lead to improved diagnosis and earlier treatment. Immunovia believes the potential opportunity could be over 1m tests in the US/EU.

Preparing to address the large diabetes opportunity

Immunovia is conducting a retrospective study to compare samples from diabetes patients that developed pancreatic cancer with those who did not using the biobank of Lund University Diabetes Centre (LUDC). The results of this study, due in Q118, will support the start of the prospective PANDIA-1 study in patients over 50 years old with new onset diabetes. We believe this could be a SEK34bn opportunity per year. The collaboration with a consortium led by the NCI to validate biomarkers for early diagnosis in this population continues despite the announced budget cuts.

PanCan-d to market in 2018; new collaboration for AI

Immunovia plans to start out-of-pocket sales next year in the US and the EU once it receives the ISO 13485 and ISO 17025 certifications, obtains the CE mark and scales up production, expected later in 2018. The PANFAM-1 study for reimbursement remains on track for an interim readout after an undisclosed number of events with final results expected in 2019. We estimate US and EU sales could represent a SEK2bn opportunity. On the autoimmune (AI) front, after the results presented in H117, the company started collaborating with Linköping University to discover biomarkers to explore IMMray’s potential in AI diseases.

Valuation: rNPV of SEK156 per share

Our updated valuation is SEK156/share (previously SEK157), as a result of including end-Q317 net cash of SEK215.3m. We make no changes to our assumptions (penetration of 35% in patients at high risk of pancreatic cancer and 5% in newly diagnosed diabetic patients; total peak sales of c SEK2.1bn).

Exhibit 1: Financial summary

SEK '000s

2015

2016

2017e

2018e

Year end 31 December

GAAP

GAAP

GAAP

GAAP

PROFIT & LOSS

Revenue

 

 

17,007

24,503

27,803

43,609

Cost of Sales

0

0

0

(6,611)

Gross Profit

17,007

24,503

27,803

36,999

Operating expenses

(17,377)

(24,115)

(23,333)

(43,333)

Personnel

(6,749)

(14,815)

(22,223)

(24,005)

EBITDA

 

 

(7,136)

(14,429)

(17,753)

(30,340)

Operating Profit (before amort. and except.)

(7,424)

(14,978)

(18,202)

(31,332)

Intangible Amortisation

0

0

0

0

Exceptionals/Other

0

0

0

0

Operating Profit

(7,424)

(14,978)

(18,202)

(31,332)

Net Interest

40

255

648

529

Exceptionals/Other

0

0

0

0

Profit Before Tax (norm)

 

 

(7,384)

(14,723)

(17,554)

(30,803)

Profit Before Tax (IFRS)

 

 

(7,384)

(14,723)

(17,554)

(30,803)

Tax

0

0

0

0

Discontinued operations

0

0

0

0

Profit After Tax (norm)

(7,384)

(14,723)

(17,554)

(30,803)

Profit After Tax (IFRS)

(7,384)

(14,723)

(17,554)

(30,803)

Average Number of Shares Outstanding (m)

11.42

14.99

16.80

16.80

EPS - normalised (ore)

 

 

(65)

(98)

(104)

(183)

EPS - normalised (ore)

 

 

(65)

(98)

(104)

(183)

Dividend per share (ore)

0.00

0.00

0.00

0.00

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

 

 

14,556

22,485

49,639

82,811

Intangible Assets

13,885

19,483

46,637

79,809

Tangible Assets

671

3,002

3,002

3,002

Other

0

0

0

0

Current Assets

 

 

76,959

260,925

214,939

147,446

Stocks

0

0

1,050

1,322

Debtors

814

1,830

1,830

1,889

Cash

75,767

259,095

211,763

143,939

Other

378

0

296

296

Current Liabilities

 

 

(7,713)

(6,778)

(5,500)

(1,983)

Creditors

(1,252)

0

0

(1,983)

Short term borrowings

0

0

0

0

Deferred revenues

0

0

0

0

Other short term liabilities

(6,461)

(6,778)

(5,500)

0

Long Term Liabilities

 

 

0

0

0

0

Long term borrowings

0

0

0

0

Deferred revenues

0

0

0

0

Other long term liabilities

0

0

0

0

Net Assets

 

 

83,802

276,632

259,078

228,274

CASH FLOW

Operating Cash Flow

 

 

-2,844

(11,868)

(19,729)

(33,658)

Net Interest

0

0

0

0

Tax

0

0

0

0

Capex

-8,636

(30,809)

(27,603)

(34,166)

Acquisitions/disposals

0

0

0

0

Financing

55,441

207,233

0

0

Dividends

0

0

0

0

Other

0

18,772

0

0

Net Cash Flow

43,961

183,328

(47,332)

(67,824)

Opening net debt/(cash)

 

 

(31,804)

(75,767)

(259,095)

(211,763)

HP finance leases initiated

0

0

0

0

Exchange rate movements

0

0

0

0

Other

1

0

0

0

Closing net debt/(cash)

 

 

(75,767)

(259,095)

(211,763)

(143,939)

Source: Edison Investment Research, Immunovia accounts

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 (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 Pty Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison. 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 Immunovia 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 Investment Research Pty Ltd (Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd (AFSL: 427484)) and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. 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. 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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 (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 Pty Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison. 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 Immunovia 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 Investment Research Pty Ltd (Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd (AFSL: 427484)) and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. 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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