Provaris Energy — Project de-risked by class approval

Provaris Energy (ASX: PV1)

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0.05

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Research: Industrials

Provaris Energy — Project de-risked by class approval

The class ‘Design Approval’ for Provaris’ H2Neo compressed green hydrogen carrier has been issued by the American Bureau of Shipping (ABS). This is a key step for Provaris, as discussed in our recent Q3 activity update note. The approval opens the way for Provaris, assisted by shipping expert Clarksons, to seek a shipyard to quote for and construct the carrier. The novel vessel design gives Provaris first-mover advantage in large-scale hydrogen transport solutions and paves the way for the much more cost-effective H2Max vessel, which has five-times the capacity.

Andy Murphy

Written by

Andy Murphy

Director, Financials & Industrials

Industrials

Provaris Energy

Project de-risked by class approval

ABS ‘Design Approval’ award

Industrial support services

15 December 2022

Price

A$0.05

Market cap

A$28m

A$1.48/US$

Net cash (A$m) at 30 June 2022

11.6

Shares in issue

548.3m

Free float

83%

Code

PV1

Primary exchange

ASX

Secondary exchange

FRA

Share price performance

%

1m

3m

12m

Abs

(6.7)

(11.1)

(46.7)

Rel (local)

(7.8)

(15.5)

(44.8)

52-week high/low

A$0.12

A$0.04

Business description

Provaris Energy is becoming a vertically integrated green hydrogen producer and supplier, combining production and compressed hydrogen shipping solutions for transporting energy from Australia to regional markets in South-East Asia and Europe.

Next events

Interim results

February 2023

Analyst

Andy Murphy

+44 (0)20 3077 5700

Provaris Energy is a research client of Edison Investment Research Limited

The class ‘Design Approval’ for Provaris’ H2Neo compressed green hydrogen carrier has been issued by the American Bureau of Shipping (ABS). This is a key step for Provaris, as discussed in our recent Q3 activity update note. The approval opens the way for Provaris, assisted by shipping expert Clarksons, to seek a shipyard to quote for and construct the carrier. The novel vessel design gives Provaris first-mover advantage in large-scale hydrogen transport solutions and paves the way for the much more cost-effective H2Max vessel, which has five-times the capacity.

Year

end

Revenue
(A$m)

PBT*
(A$m)

EPS*
(c)

DPS
(c)

P/E
(x)

Yield
(%)

06/21

0.2

(3.1)

(0.7)

0.0

N/A

N/A

06/22

0.4

(6.8)

(1.3)

0.0

N/A

N/A

06/23e

0.3

(9.7)

(1.7)

0.0

N/A

N/A

06/24e

0.3

(10.2)

(1.6)

0.0

N/A

N/A

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

H2Neo approval opens door for commercialisation

Class approval of Provaris Energy’s novel H2Neo green hydrogen (GH2) carrier is a significant milestone for the company, which will now proceed to the selection of a shipyard for construction and to accurate budgeting. It provides a much clearer time scale for delivery, expected to coincide with the first available cargo at the end of 2026. The novel design points to Provaris having significant first-mover advantage in the compressed hydrogen-at-scale space. It will also highlight the advantages of compression over more costly and less carbon efficient transportation solutions. Finally, the H2Neo, if successful, paves the way for the H2Max vessel, which is five-times larger and has true scalability.

Development of Tiwi H2 Project and Total Eren MoU

In addition to the class approval, Provaris Energy continues to make progress at the Tiwi H2 Project, its clean energy and H2 production development on the Tiwi Islands off the Northern Territory in Australia, which may ultimately provide upstream volume for the H2Neo carriers. In addition, Provaris previously (in 2022) entered into a memorandum of understanding (MoU) with Total Eren to co-operate on the development of its compressed H2 supply chain in both Asia and Europe, with initial projects identified for investigation.

Valuation: ABS approval adds to confidence

The ABS ‘Design Approval’ sets a clear course for development of the H2Neo vessel. The next key milestone would be the signing of an offtake agreement, which would add even greater confidence to the commercial viability of Provaris’ ambitious projects. Our modelling, which produces internal rates of return of 9.7–18.7% from a range of scenarios and vessel sizes, remains robust. We would revisit this in the event of an offtake agreement being announced. We consider this as being likely, given the exponential growth in demand for GH2 forecast by the International Energy Agency.

The latest development opens voyage of discovery

Class approval of Provaris Energy’s novel H2Neo GH2 carrier is a significant milestone for the company as it opens the way for the selection of a shipyard for construction, to accurate budgeting and to a much clearer time scale for delivery. This is expected by management to coincide with the first available cargo at the end of 2026. Being novel, there is also expected to be a significant first-mover advantage in the compressed hydrogen-at-scale space, which is not only an edge for Provaris, but will also highlight the advantages of compression over more costly and less carbon efficient transportation solutions. Finally, the H2Neo, if successful, paves the way for the H2Max vessel, which is five-times larger and has true scalability.

Class approval by the ABS significantly de-risks project

Provaris Energy has been awarded (in December 2022) ‘Design Approval’ for its 26,000m3 H2Neo compressed hydrogen carrier from the ABS. This award significantly de-risks the entire investment process because it allows Provaris to push ahead with the next stage of the project, which is shipyard selection, and to undertake capex and opex analysis. The award follows 12 months of detailed work preparing the extensive front-end engineering design (FEED), which was completed on time and under budget.

The world’s first ‘Design Approval’ for a compressed H2 carrier from the ABS follows its awarding of an ‘Approval in Principle’ (AiP) for two classes of compressed GH2 carriers, namely the H2Neo (capacity: 26,000m3) and the much larger H2Max (120,000m3). The former will be taken through to construction-ready status in 2023, with the H2Max to follow in 2026.

The ‘Design Approval’ confirms a number of crucial outcomes, including that:

the vessel design is verified as capable of transporting compressed H2 at bulk scale at 250 bar pressure, ie c 3,600psi;

the FEED package is sufficiently detailed for shipbuilders to quote (price and schedule with confidence); and

critical safety studies, process and risk analyses have been carried out, which allowed the ABS to verify relevant safety aspects of the ship’s design and operation.

Exhibit 1: H2Neo development schedule

Source: Provaris Energy

ABS Consulting, a separate entity to ABS, has completed risk and safety workshops (hazard identification, HAZID) and specialist studies concerning gas dispersion, explosion and fire analysis to assess and mitigate the risks associated with the storage and transportation of H2 at such high pressure. This is the first time that an extensive HAZID and FEED level design has been concluded for a novel compressed hydrogen carrier.

As can be seen in Exhibit 1, Provaris expects to select a shipyard for construction of the final design and a prototype for testing in 2023. In order to seek and select a suitable shipyard, Provaris has engaged Clarksons’ newbuild team in London to assist.

Proprietary design provides first-mover advantage

Exhibit 2 clearly shows the starboard tank in the hold of the N2Neo, one of two tanks that sit beside each other. Each tank is designed to have a maximum allowable operating pressure of 250 bar, which implies that the H2 will remain at an ambient temperature and therefore in a gaseous state. This has two important advantages:

It avoids the need to use energy-intensive cooling to maintain H2 in a liquid state (H2 liquifies at -253°C).

It avoids the requirement to transport H2 in an alternative state, such as ammonia, which requires costly conversion and then reconversion.

The patented tank design and Provaris’ intellectual property mean that the tanks will be made of relatively thick steel layers ‘nested’ together and will then be lined with a special stainless steel material to avoid embrittlement, which occurs when H2 is exposed to steel, especially under pressure. The design of the tanks avoids the risk of sudden rupture, which would release a catastrophic amount of energy.

The tanks will be incorporated into a relatively conventional hull with shallow operating drafts, which reduces design and construction costs while allowing for access to most ports in the world. Numerous safety measures are to be applied to monitor the tanks’ integrity and Provaris will additionally monitor the outermost layer of the tanks using components and software that are proven and readily available.

Exhibit 2: H2Neo showing Provaris’ proprietary compressed H2 cargo tank

Source: Provaris Energy

The loading of compressed H2 directly on to the GH2 carriers is relatively straightforward using existing and proven technology (compressors), which eliminates costly storage and conversion facilities, while unloading is equally straightforward using simple decompression. This simple compression model should give Provaris first-mover advantage in the regional trade in H2.

The design of the H2Neo incorporates modern hull optimisation characteristics and new technologies that will result in reduced fuel consumption relative to traditional vessel designs. The H2Neo’s propulsion system is electric, including batteries for a hybrid configuration, which allows for further fuel savings. It also incorporates a scalable battery platform that will allow for both existing and new technologies that will ultimately facilitate a zero-carbon propulsion system.

N2Neo de-risks path to large-scale hydrogen supply

The production and shipping of compressed GH2 at scale is a novel development. The H2Neo development programme is designed to align with Provaris Energy’s initial GH2 cargo from 2026, and a small fleet of vessels would have the capacity to handle the GH2 output from a single project of up to 200,000 tonnes per year, depending on distance to market. It is designed to carry 26,000m3 of H2 at 250 bar. Success with this programme would de-risk the path to the development and construction of the much larger H2Max vessel.

The H2Max design is designed to carry 120,000m3 of H2, also at 250 bar, which is nearly five-times the capacity of the H2Neo, with a modest fleet being able to handle the output of a facility of up to 950,000 tonnes of H2 per year. The design of the vessel will now also lead to the development of floating barge solutions for storage.

The H2Max received class AiP in 2021 and will leverage the FEED design, HAZID and other approvals of the H2Neo. Given the larger scale of the H2Max, it is expected to benefit from a much reduced H2 delivery cost and the availability of modern low-emission propulsion solutions.

The two differing vessel sizes will ultimately allow users to tailor shipping solutions depending on output, distance to market and demand.

Exhibit 3: Data and statistics of the H2Neo and H2Max vessels

Source: Provaris Energy

Financials and future funding

Provaris Energy had net cash on the balance sheet of A$11.6m at the end of June 2022, which included c A$10m of equity funds raised in the year. It is likely, in our view, to need additional funding over the next three years to bring the project forward. In our model below, we have assumed equity funding totalling A$18m is raised at a notional 8c/share, roughly the average price over the last 12 months. The underlying assumptions were originally published in our initiation note in July 2021. Clearly, this implies potential dilution. Provaris will need to examine other funding sources to fully develop its plans, most likely inviting equity partners to fund various aspects of the project.


Exhibit 4: Financial summary

A$m

2020

2021

2022

2023e

2024e

June year end

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

1.5

0.2

0.4

0.3

0.3

Profit Before Tax (norm)

 

 

(2.9)

(3.1)

(6.8)

(9.7)

(10.2)

Profit Before Tax (reported)

 

 

(2.9)

(3.1)

(6.8)

(9.7)

(10.2)

Reported tax

0.0

0.0

0.0

0.0

0.0

Profit After Tax (norm)

(2.9)

(3.1)

(6.8)

(9.7)

(10.2)

Profit After Tax (reported)

(2.9)

(3.1)

(6.8)

(9.7)

(10.2)

Minority interests

0.0

0.0

0.0

0.0

0.0

Net income (normalised)

(2.9)

(3.1)

(6.8)

(9.7)

(10.2)

Net income (reported)

(2.9)

(3.1)

(6.8)

(9.7)

(10.2)

Basic average number of shares outstanding (m)

393.5

417.3

512.9

579.5

648

EPS - normalised (c)

 

 

(0.7)

(0.7)

(1.3)

(1.7)

(1.57)

Revenue growth (%)

34.9

(84.0)

53.4

(29.2)

0.0

BALANCE SHEET

Fixed Assets

 

 

6.3

5.8

5.4

5.0

4.6

Intangible Assets

6.2

5.8

5.4

5.0

4.6

Tangible Assets

0.1

0.0

0.0

0.0

0.0

Investments & other

0.0

0.0

0.0

0.0

0.0

Current Assets

 

 

3.2

6.7

12.0

8.1

5.6

Stocks

0.0

0.0

0.0

0.0

0.0

Debtors

0.1

0.1

0.3

0.3

0.3

Cash & cash equivalents

3.1

6.6

11.6

7.7

5.3

Other

0.0

0.0

0.0

0.0

0.0

Current Liabilities

 

 

(0.3)

(0.2)

(0.8)

(0.8)

(0.8)

Creditors

(0.2)

(0.2)

(0.8)

(0.8)

(0.8)

Other

(0.1)

(0.0)

(0.1)

(0.1)

(0.1)

Long Term Liabilities

 

 

0.0

0.0

0.0

0.0

0.0

Long term borrowings

0.0

0.0

0.0

0.0

0.0

Other long term liabilities

0.0

0.0

0.0

0.0

0.0

Net Assets

 

 

9.2

12.3

16.5

12.2

9.4

Minority interests

0.0

0.0

0.0

0.0

0.0

Shareholders' equity

 

 

9.2

12.3

16.5

12.2

9.4

CASH FLOW

Op Cash Flow before WC and tax

0.0

0.0

0.0

0.0

0.0

Receipts from the ATO (Covid-19 cash boost)

0.1

0.1

0.0

0.0

0.0

Payments to suppliers and employees

(2.9)

(2.3)

(3.1)

(3.5)

(3.8)

Research and development

(0.1)

(0.0)

0.0

(3.0)

(3.0)

Project development

(1.0)

(0.5)

(1.9)

(2.5)

(2.8)

Interest received

0.0

0.0

0.0

0.0

0.0

Interest paid for lease liabilities

(0.0)

(0.0)

0.0

(0.0)

1.0

Research and development tax concession rebate

1.4

0.2

0.0

0.0

0.0

WA Renewable Hydrogen Fund grant

0.0

0.0

0.1

0.3

0.3

Working capital

0.0

0.0

0.0

0.0

0.0

Tax

0.0

0.0

0.0

0.0

0.0

Net operating cash flow

 

 

(2.5)

(2.6)

(4.8)

(8.8)

(8.3)

Capex

0.0

0.0

0.0

0.0

0.0

Acquisitions/disposals

0.0

0.0

0.0

0.0

0.0

Equity financing

3.5

6.3

10.5

5.0

6.0

Dividends

0.0

0.0

0.0

0.0

0.0

Other

(0.3)

(0.3)

(0.7)

(0.2)

(0.2)

Net Cash Flow

0.7

3.4

5.1

(3.9)

(2.4)

Opening net debt/(cash)

 

 

(2.4)

(3.1)

(6.6)

(11.6)

(7.7)

FX

0.0

0.0

0.0

0.0

0.0

Other non-cash movements

0.0

0.0

0.0

0.0

0.0

Closing net debt/(cash)

 

 

(3.1)

(6.6)

(11.6)

(7.7)

(5.3)

Source: Company accounts, Edison Investment Research


General disclaimer and copyright

This report has been commissioned by Provaris Energy and prepared and issued by Edison, in consideration of a fee payable by Provaris Energy. Edison Investment Research standard fees are £60,000 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 research department of Edison 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 2022 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). 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

This document is prepared and provided by Edison 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.

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.

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

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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

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New York +1 646 653 7026

1185 Avenue of the Americas

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United States of America

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Level 4, Office 1205

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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

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by Provaris Energy and prepared and issued by Edison, in consideration of a fee payable by Provaris Energy. Edison Investment Research standard fees are £60,000 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 research department of Edison 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 2022 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). 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

This document is prepared and provided by Edison 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.

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.

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

Edison 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. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

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

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, 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

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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Research: Healthcare

Ultimovacs — Prostate cancer trial patient enrolment complete

Ultimovacs has announced the completion of patient enrollment in the Phase I TENDU study in prostate cancer. This trial will use the company’s proprietary Tetanus-Epitope Targeting (TET) adjuvant platform, which is a technology with a new mechanism of action. In total 12 patients have now been treated with Ultimovacs’ vaccine in the trial, which will provide information on the platform’s safety and ability to activate patient immune systems towards tumours at different doses. We see this as positive news for Ultimovacs, as it continues to leverage its immunology expertise to develop novel oncology treatments. Following several enrollment and data milestones from its UV1 development programme in 2022, we anticipate that Ultimovacs will have a period of enriched newsflow in 2023–24. We value the company at NOK7.9bn or NOK231 per share.

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