Scancell
Oxford, United Kingdom

Scancell is a clinical-stage immuno-oncology specialist that is developing two innovative and flexible therapeutic vaccine platforms. ImmunoBody and Moditope induce high avidity cytotoxic CD8 and CD4 responses, respectively, with the potential to treat various cancers.

www.scancell.co.uk

Investment Perspective

Scancell has reported H119 results in line with expectations. The cash position was £7.6m, with the net loss of £3.24m compensated for by the two equity raises, totalling £14.9m, over the past year. Development appears to be progressing well, with important clinical programmes expected to start patient recruitment during the next two quarters. Additionally, in January 2019 the management team has been strengthened by two important new hires. As detailed in our Initiation note, we value the company, using a risk-adjusted DCF model, at £82.0m, or 21.1p a share.

Market information

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Research

Vulpes investment brings £3.88m in new funds
Lighthouse | 13 Jun 2019
SCIB2 to use new nanoparticle formulation
Lighthouse | 20 May 2019
Phase II melanoma study with SCIB1 to start in Q219
Lighthouse | 25 Apr 2019

Recent News

Share subscription and issue of equity to Vulpes Life Sciences Fund
13 Jun 2019
Update on SC1B2 development
20 May 2019
Establishment of Clinical Advisory Board and update on Modi1 progress
10 May 2019
UK regulatory approval to start SCIB1 Phase II advanced melanoma trial
25 Apr 2019
Hutchison China MediTech
Hong Kong, China

Hutchison China MediTech, a Hong Kong-based biopharmaceutical company, is on track to become a global leader in the discovery, development, and commercialisation of innovative, highly selective oral tyrosine kinase inhibitor therapies for oncology and immunological indications.

www.chi-med.com

Investment Perspective

Approval of EGM resolutions paves the way for the IPO of Hutchison China MediTech (Chi-Med) on the Hong Kong Stock Exchange (SEHK) in the coming months. This IPO should enhance Chi-Med’s access to capital, broaden its shareholder base, further raise its profile in its home market, and, importantly, improve liquidity. Liquidity will be further boosted by an associated global offering (size and structure are not yet disclosed), the secondary placement of shares by majority shareholder CK Hutchison Holdings Ltd, and a share split effective May 30th. Each ordinary AIM share is being divided into 10 new shares; an adjustment to the ADS ratio ensures there is no effect on the NASDAQ trading price. Accounting for this share split, our valuation remains $35.57/ADS ($4.74bn) but is now £5.47/share (£3.65bn) vs £54.72/share previously.

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Research

Impressive data means SANET-ep trial stopped early
Lighthouse | 14 Jun 2019
Timing is right for a Hong Kong debut
Update | 30 May 2019
Proposed listing in Hong Kong and global offering
Lighthouse | 15 Apr 2019

Recent News

Surufatinib Phase III SANET-ep study meets primary endpoint at interim analysis and will stop early
14 Jun 2019
Results of EGM
29 May 2019
Application to list in Hong Kong and proposed global offering
15 Apr 2019
Initiation of Surufatinib China Phase IIb/III in Unresectable or Metastatic BTC
29 Mar 2019
Mereo BioPharma
London, United Kingdom

Mereo BioPharma develops and commercialises innovative therapeutics addressing rare diseases. It also has specialty pharmaceutical products that it will partner. The assets are acquired or licensed in at clinical stages from large pharmaceutical companies. The portfolio consists of six compounds that are in clinical development.

www.mereobiopharma.com

Investment Perspective

Mereo BioPharma has reported encouraging interim results from BPS-804’s Phase IIb trial in osteogenesis imperfecta (OI). Interim data from the open label arm of the 112-patient ASTEROID study showed a 1.4% improvement over baseline in the primary endpoint at three months and a 3.2% improvement at six months. The secondary endpoint showed a 3.5% improvement at six months. Clearly the sample size in this study arm is small (11 and 12 patients), but these data suggest the 12 month results (expected in Q419) should show further improvement. Importantly, no cardiac safety signals were noted. We value Mereo BioPharma at 506p/share or $25.59/ADS.

Market information

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MPHAIM LondonGBP
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Research

Encouraging interim BPS-804 data in OI
Update | 31 May 2019
Focus shifts back to imminent data
Update | 08 May 2019
Path cleared for partnering of acumapimod (BCT-197)
Lighthouse | 16 Apr 2019

Recent News

Update on etigilimab TIGIT partnership
13 Jun 2019
Positive early 6-month data for BPS-804 (setrusumab) in OI
30 May 2019
Publication of FY18 report and accounts
30 Apr 2019
Preliminary FY18 results
29 Apr 2019
Nexstim
Helsinki, Finland

Nexstim is a targeted neuro-modulation company that has developed a proprietary navigated rTMS platform for use in diagnostics (NBS) and therapeutics (NBT). NBS is used in planning brain surgery while NBT is focused on depression and chronic pain. FDA approval for depression was given in 2017, and the focus is on commercial roll out in the US, Europe and Asia.

www.nexstim.com

Investment Perspective

Nexstim has successfully secured funding to enable the commercialisation of its proprietary Navigated Brain Therapy (NBT) platform in MDD (major depressive disorder). The near-term challenges now shift to maximising the uptake of NBT in specialist centres in North America and Europe. Initial indications are encouraging, with notable support from major centres and key opinion leaders. Our valuation and financial models have been updated to reflect the capital raise. We value Nexstim at €18.8m or €0.53 per share (€0.40 diluted), against €35.5m, or €1.00/share (€0.73/share diluted) were the remaining financial risks removed.

Market information

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Research

Getting back on the front foot
Update | 21 May 2019
Terms of the rights issue announced
Lighthouse | 28 Mar 2019
Securing the commercial future of NBT in depression
Update | 18 Mar 2019

Recent News

NBS system sold to Jewish General Hospital in Canada
28 May 2019
Amendment of terms of warrants
23 May 2019
First NBT system sold in Germany for depression therapy and research
22 May 2019
Final outcome of the subscription rights issue
21 May 2019
Bonesupport
Lund, Sweden

Bonesupport is an orthobiologics company focused on developing and commercialising a pipeline of unique injectable drug-eluting, bioceramic bone graft substitutes based on its proprietary CERAMENT technology.

www.bonesupport.com

Investment Perspective

Q119 results provide evidence that the strategic initiatives put in place during 2018 are beginning to deliver results. Bonesupport posted a second successive quarter of CERAMENT sales growth and, with various growth drivers gaining traction, this momentum is set to continue during 2019 and beyond. Management are targeting 40%+ revenue growth from 2020 onwards. Key drivers include the expanded global commercial footprint becoming fully operational, leverage of key clinical and health economics data, new product launches (including potentially CERAMENT G in the US in 2021), and continued improvement in market access/reimbursement. We maintain our Bonesupport valuation of SEK39/share (or SEK 2.034bn).

Market information

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Research

Building momentum
Update | 07 May 2019
Gearing up for growth
Update | 01 Mar 2019
Key CERTiFy study confirms CERAMENT’s properties
Update | 19 Nov 2018

Recent News

Bulletin from the annual shareholders meeting
14 May 2019
Q119 Report
02 May 2019
Change in management team
24 Apr 2019
UK study confirms active remodelling of CERAMENT into human bone
10 Apr 2019
e­-therapeutics
Oxford, United Kingdom

e­-therapeutics is a drug discovery company with a proprietary network­ driven drug discovery platform, which uses using artificial intelligence (AI), machine learning and other computational techniques.

www.etherapeutics.co.uk

Investment Perspective

e-therapeutics ended its FY19 (year-ending 31 January 2019) on a high, securing its first commercial collaboration with Novo Nordisk in December (see Update note). Business development and cost control were the focus areas for FY19. The Novo deal in Type 2 diabetes marked a first success on the former, providing important validation for e-therapeutics’ proprietary Network-Driven Drug Discovery (NDD) platform. Prudent cost management means end-FY19 cash of £5.9m, coupled with an anticipated £1.1m tax credit, provides a two-year runway on our estimates. The goal is to now capitalise on ongoing, and new, business development discussions covering the full range of e-therapeutics’ assets and capabilities, to help progress NDD-derived projects and further exploit the NDD platform. Our valuation is £57.8m (21.9p/share).

Market information

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ETXAIM LondonGBP
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Research

Setting the stage
Update | 06 Mar 2019
First commercial deal secured with global diabetes leader
Update | 10 Dec 2018
New insights from Parkinson’s disease collaboration
Update | 06 Dec 2018

Recent News

Notice of AGM and annual report
08 Mar 2019
FY19 results
05 Mar 2019
Research Collaboration with Novo Nordisk
10 Dec 2018
Initial results of C4X Parkinson’s Disease Collaboration
06 Dec 2018
MaxCyte
Gaithersburg, United States

MaxCyte has a patented flow electroporation platform, which can transfect a wide array of cells. It generates revenues from the sale and lease of equipment, disposables and licence fees; with an impressive client list. Additionally, a novel mRNA mediated CAR technology, known as CARMA, is being explored in various cancers, including solid tumours.

www.maxcyte.com

Investment Perspective

MaxCyte’s sales rose by 19% in FY18, with a 24% CAGR over the past four years, and double-digit revenue growth should be sustained for the foreseeable future. In the short/mid-term, new products, extra investment in sales & marketing, and the increased number of licensed cell therapy programmes should underpin growth. The number of gene-modified cell therapies in development is also increasing rapidly, which, together with potential milestones from commercial licences, augurs well for the long-term prospects of MaxCyte. The first clinical trial with the lead CARMA therapy, MCY-M11, is proceeding as expected, and the initial data due this year could act as major share price catalysts. We value MaxCyte at £195m or 341p per share.

Market information

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Research

Dosing advances to second cohort in CARMA Phase I
Lighthouse | 08 May 2019
At the forefront of the cell therapy revolution
Update | 24 Apr 2019
Capital raised to advance CARMA primarily
Lighthouse | 06 Feb 2019

Recent News

CARMA Phase I trial progresses
08 May 2019
FY18 results
24 Apr 2019
Launch of ExPERT instrument family
08 Apr 2019
Clinical and commercial agreement with Kite
01 Mar 2019
Kind Consumer
London, United Kingdom

Kind Consumer has developed a novel nicotine delivery device that mimics the important aspects of cigarette smoking. Uniquely, the Voke device is registered as a medical product, yet it can still be sold easily (General Sales List). Management aims to market Voke directly in the UK, ahead of licensing out for other geographies.

www.kindconsumer.com

Investment Perspective

Kind Consumer is poised to introduce Voke, a novel nicotine delivery device, into the UK market. Voke closely mimics the key aspects of cigarette smoking, but without tobacco’s harmful effects. The notable recent shifts in consumer acceptance of such novel devices suggest market adoption will be positive. The development, regulatory, and production processes have now been completed. Management is seeking funds to execute its commercialisation plans. Our rDCF valuation, using modest assumptions for the UK only, yields a value of £154m.

Market information

SymbolPrimary exchangeCurrency
N/APrivateGBP

Research

No smoke but plenty of fire
Initiation | 11 Oct 2017

Recent News

Appointment of new CEO
01 Jan 2019
Further funding to support manufacturing facilities and commercial launch of Voke
15 Aug 2018
BAT and Kind Consumer announce new approach to commercialise Voke
05 Jan 2017
BerGenBio
Bergen, Norway

BerGenBio is a clinical-stage, biopharmaceutical company based in Bergen, Norway and Oxford, UK. It is developing innovative therapies for aggressive cancers by way of inhibiting the AXL signalling pathway. The lead oncology compound, bemcentinib, is in multiple Phase II trials.

www.bergenbio.com

Investment Perspective

BerGenBio has presented further early Phase II proof-of-concept data at ASCO, which support bemcentinib’s potential in NSCLC and AML as a part of a combination regimen. Data in NSCLC shows that bemcentinib enhances pembrolizumab activity in patients with AXL-expressing tumours, particularly in PD-L1-negative tumours which do not normally respond to PD-1/PD-L1 monotherapy. In AML, combination with low dose chemotherapy in poor prognosis patients improves treatment outcomes. Safety data indicate that bemcentinib in combination is well-tolerated. Larger randomised Phase II studies are in planning; detail on these and additional clinical data is expected in H219. Ahead of this, we value BerGenBio at NOK3.14bn (NOK57.45/share).

Market information

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Last PriceMarket Cap
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Research

ASCO: more supportive data for bemcentinib
Update | 05 Jun 2019
Efficacy endpoint met in Phase II AML study
Lighthouse | 02 Apr 2019
Further support for bemcentinib’s broad potential from preclinical data at AACR
Lighthouse | 01 Apr 2019

Recent News

Preliminary Phase II AML data for bemcentinib in combination with low dose chemotherapy at EHA 2019
14 Jun 2019
Completed private placement
14 Jun 2019
Phase II elderly AML data for bemcentinib in combination with low dose chemotherapy at ASCO 2019
03 Jun 2019
Preliminary clinical and biomarker data from Phase II advanced NSCLC trial with bemcentinib and Keytruda at ASCO 2019
02 Jun 2019