AXL-erating towards new opportunities

Outlook | 29 June 2020

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BerGenBio is focused on developing bemcentinib in oncology, but an unexpected fast route-to-market has presented. Bemcentinib was selected for the UK Government-funded Phase II ACCORD-2 trial for the treatment of COVID-19. Data from the study is expected in Q3/Q4 20 and bemcentinib could advance rapidly into a Phase III study by end-2020. BerGenBio is planning a pivotal Phase IIb/III study in NSCLC with bemcentinib combined with pembrolizumab, and randomised studies in AML. The cash position of c NOK850m is strong, after raising NOK500m (gross) in May, so it now has the financial resources to advance bemcentinib and the rest of its pipeline appropriately. We raise our valuation of BerGenBio to NOK4.43bn (NOK50.3/share).

Year-end: December 31201820192020E2021E
Sales (NOKm) 0.0
Adj. PBT (NOKm)(191.7)(199.3)(238.0) (282.3)
Net Income (NOKm)(191.7)(199.3)(238.0) (282.3)
Adj. EPS (NOK)(3.6)(3.4)(3.4) (3.3)
Cash (NOKm)360.4253.6712.7 441.5
EBITDA (NOKm)(194.3)(203.6)(244.2) (286.4)
Source: Trinity Delta; Note: Adjusted numbers exclude exceptionals.
  • New opportunity for bemcentinib in COVID-19 An intriguing opportunity has opened for bemcentinib in COVID-19 after it was chosen for the UK Government-funded flagship ACCORD-2 study. If it shows promise, first data is expected in H220, bemcentinib could advance seamlessly into a Phase III stage by end-20. Pre-clinical data suggests bemcentinib reduces viral infectivity and stimulates immune response, which coupled with oral administration and a clean side-effect profile, means it is ideally suited for use in the community setting (pre-hospitalisation).
  • Oncology remains the core focus BerGenBio has reported very impressive data in Phase II trials with bemcentinib in both NSCLC and AML, with new key studies being planned. In NSCLC a Phase IIb/III trial will treat 2L patients who failed an immuno-oncology therapy in combination with pembrolizumab. In AML, various options are being explored with bemcentinib as monotherapy and/or with LDAC. The emerging Phase II data will guide the final design of these pivotal trials.
  • Well capitalised to execute ambitious plans BerGenBio raised NOK720m in H120 in two capital raises, giving it a cash position of c NOK850m. Management now has ample resources to advance bemcentinib in its oncology indications and can also pay any milestones that could become due to Rigel if bemcentinib were to enter Phase III development in FY20.
  • Valuation raised to NOK50.3/share (NOK4.43bn or $521m) Updating our model to reflect the NOK500m fund raise and opportunity in COVID-19 increases our valuation to NOK4.43bn ($521m) or NOK50.3 per share from NOK3.54bn or NOK48.3 per share. BerGenBio shares have performed strongly, but still appear to be underappreciated. The likely share catalysts in FY20 include additional data from the trials in oncology and COVID-19, and potential partnering of bemcentinib.


29 June 2020

Market CapNOK3.44bn
Enterprise ValueNOK2.59bn
Shares in issue86.7m
12-month rangeNOK11.4-54.0
Free float66.3%
Primary exchangeOslo
Other exchangesN/A
Company CodeBGBIO
Corporate clientYes

Company description

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.


Lala Gregorek
+44 (0) 20 3637 5043

Franc Gregori
+44 (0) 20 3637 5041

Investment case

BerGenBio is a clinical stage biopharmaceutical company focussed on exploiting its knowledge of the AXL signalling pathway as a drug target. It was founded in 2007 by Professor James Lorens of the University of Bergen, Norway. His pioneering work in understanding the role and biology of AXL has led to BerGenBio becoming a leader in the field, with a first-in-class selective AXL inhibitor, bemcentinib, and a collaboration with Merck & Co. Bemcentinib is being evaluated in a broad “proof-of-concept” clinical programme in oncology as both a single agent and as combination therapy, and now for the treatment of COVID-19 infection. The company is also assessing two other approaches to AXL therapies: a monoclonal antibody (tilvestamab, BGB149), and an antibody-drug conjugate (ADCT-601). In April 2017, BerGenBio listed on the Oslo Exchange, raising NOK400m gross, and has since raised a further NOK980m. The company has research facilities in Bergen and clinical development functions in Oxford, UK.


BerGenBio is a classic biotechnology company and is well suited to valuation using an rNPV model. We have reviewed our model, including adjustments for the recent NOK500m capital raise, and the opportunity for bemcentinib in COVID-19. This sees our valuation increasing to NOK4.43bn or NOK50.3 per share from NOK3.54bn or NOK48.3 per share. BerGenBio’s shares have performed well of late, driven by the opportunity in COVID-19, but there still appears to be upside. There are important share catalysts expected in FY20, notably results from the Phase II trial in COVID-19 in Q3/4 2020, more data from the Phase II NSCLC trial with bemcentinib/pembrolizumab in November, potential partnering of bemcentinib, and disclosure of plans for tilvestamab.


BerGenBio has a strong cash position of c NOK850m, after raising NOK500m (gross) in May 2020. We forecast that operating expenses will continue to rise with bemcentinib due to advance into larger pivotal studies and as tilvestamab enters Phase II development. Taking this into account, we estimate that the cash runway could extend into mid-2023, if the company does not need to pay up to $40m in milestones to Rigel.


Typical industry risks associated with clinical trials, regulatory hurdles, financing, possible partnering discussions, and eventually pricing and commercialisation apply. Promising data from various clinical trials has reduced the development risk associated with bemcentinib; however, results to date are so far from a limited number of patients and AXL is a novel therapeutic target. Successful clinical development of bemcentinib, tilvestamab, and ADCT-601 would clearly position BerGenBio at the forefront of an exciting, and attractive, area. Inevitably such innovation carries higher risk. The key near-term sensitivities relate to the results of the ACCORD-2 COVID-19 study, the various oncology trials currently underway, and whether BerGenBio opts to out-license bemcentinib; at this stage, we expect they will seek a partner.



BerGenBio: Expanding opportunities

BerGenBio is increasingly recognised as the global leader in understanding and developing AXL as an oncology target; emerging preclinical data also highlights AXL’s potential role in viral infection. Bemcentinib’s selection as the lead compound in the UK’s flagship COVID-19 ACCORD trial provides international validation of BerGenBio’s expertise. If successful, bemcentinib’s mode of action and oral administration suggests it has an ideal profile for use in the community setting (pre-hospitalisation). BerGenBio’s focus remains on taking bemcentinib through “proof of concept” Phase IIb trials in non-small cell lung cancer (NSCLC) and acute myeloid leukaemia (AML). It is the oncology indications that provide the attractive long-term commercial returns. May 2020’s NOK500m equity raise means BerGenBio is well funded to progress its key corporate goals. Our updated valuation is NOK4.43bn ($521m) or NOK50.3/share.

BerGenBio is acknowledged as the leader in understanding the intricacies of the AXL receptor and its potential clinical roles. AXL is increasingly recognised as an attractive drug target, with a growing interest in these pathways. The biology is complex; the AXL receptor is now known to stimulate cell proliferation, mediate migration and invasion, promote epithelial-to-mesenchymal transition (EMT), support tumour angiogenesis, and suppress immune responses. These functions help tumours to escape immune surveillance, to develop resistance to various oncology therapies, and metastasise to other organs. But AXL also plays a role in other aggressive pathologies, such as fibrosis, and one of its pathways is “hijacked” by several enveloped viruses (such as Ebola and Zika) to infect cells.

Bemcentinib is the most advanced oral selective AXL inhibitor in development. Previously the focus was solely on exploring a variety of oncology indications, but the new opportunity for the treatment of COVID-19 could result in bemcentinib being launched as early as FY21. Promising preclinical study data indicate bemcentinib can both reduce the ability of the COVID-19 virus to infect cells and increase the anti-viral cellular response. The clinical value of bemcentinib is being assessed in the Phase II ACCORD-2 study (funded by the UK Government), with first data expected late in Q320 (or possibly Q4), which could lead to bemcentinib advancing seamlessly into a related Phase III study by 2020 year-end

In NSCLC, the ongoing Phase II study of bemcentinib with Merck & Co’s PD-1 antibody pembrolizumab (Keytruda) suggests that bemcentinib does significantly increase the proportion of NSCLC patients who could benefit from immuno-oncology (IO) therapy. The mPFS in patients positive for an AXL biomarker is 8.4 months, vs less than four months for those who received pembrolizumab alone. BerGenBio is planning a pivotal Phase IIb/III study with the bemcentinib and pembrolizumab combination, which is expected to start in FY21. Similarly, promising data was also seen in a Phase II AML study with bemcentinib as monotherapy or in combination with LDAC. Management is weighing up options for the further development of bemcentinib in AML and will use the forthcoming data to finalise its plans.

BerGenBio is now fully funded to several interesting value inflection points.


BerGenBio and AXL

BerGenBio is solely focussed on developing drugs that target AXL and has three assets in clinical development (Exhibit 1). Its lead product bemcentinib is the most advanced selective oral inhibitor of AXL in development and is delivering impressive Phase II results in acute myeloid leukaemia (AML) and non-small cell lung cancer (NSCLC). However, there is now a possibly faster route to market for bemcentinib (detailed later in this note), as a Phase II trial in hospitalised COVID-19 patients in the UK has recently begun and, should this data be promising, a Phase III study could start as soon as the end of 2020.

Exhibit 1: BerGenBio’s pipeline
Source: BerGenBio;  Note: BerGenBio is collaborating with Merck for the Phase II trial with three cohorts in NSCLC with bemcentinib in combination with pembrolizumab (Merck has no rights to bemcentinib). BGB601 (ADCT-601) is partnered with ADC Therapeutics, which is solely responsible for BGB601’s development. (1) American Society of Hematology, ASH, December 5-8;  (2) Next Gen Immuno Oncology, June 25; (3) Society of Immunotherapy of Cancer, SITC, November 10-15; (4) World Congress of Lung Cancer, WCLC, January 26-29, 2021.

AXL is a member of the TAM (TYRO3, AXL, MER) receptor tyrosine kinase family. It is closely associated with inflammation and prevalence in malignancy, and particularly with aggressive tumours, while having a limited presence in normal tissues. In oncology, AXL activation can result in immuno-suppression (via STAT1 signalling), promotion of cell survival (via mTOR signalling) and EMT[1], (via Twist and Snail activation). Bemcentinib has a 250x and >1,000 greater binding affinity for the AXL receptor than for the MER and TYRO receptors. It is this highly selective binding to AXL that differentiates bemcentinib and means that it is very well tolerated, even in very poorly patients or in combination with other therapies.


Bemcentinib: oncology focus in NSCLC and AML

BerGenBio was one of the first companies to recognise the potential of AXL as a target for drug development, thanks to the research of Professor James Lorens at the University of Bergen, Norway. The biology of AXL is complex: it is able to activate many different signalling pathways, depending on the tissue context in which it is activated. The AXL receptor is now known to be involved with enabling tumours to escape immune surveillance and to develop resistance to various oncology therapies, but it also plays a role in other pathologies.

BerGenBio’s primary focus for bemcentinib is in oncology, where AXL is associated with aggressive cancers. AXL is a key regulator of EMT, which is a major factor in the creation of strongly invasive tumour characteristics. EMT also causes tumour cell secretion of anti-inflammatory cytokines that suppress anti-tumour immunity, a characteristic of “cold” tumours with limited invasion of cytotoxic T cells. Patients with AXL-driven tumours have been shown to have a worse prognosis than those without (Exhibit 2). The growing appreciation of AXL’s potential as an oncology target is in part fuelled by the impressive Phase II results with bemcentinib in AML and NSCLC.

Exhibit 2: Prognosis of breast, lung and AML patients with high and low levels of AXL expression
Source: BerGenBio

NSCLC: Enhancing immuno-oncology

Immuno-oncology (IO) therapies have become the backbone for most NSCLC treatments, however, they only tend to work well in approximately a third of patients. To increase the proportion who benefit, BerGenBio and its collaborator Merck & Co are investigating the potential of combining bemcentinib with the PD-1 inhibitor, pembrolizumab (Keytruda) in a Phase II study in the second line (2L) setting. The rationale for the combination is that AXL is often upregulated within tumours to help them escape immune surveillance and can dampen an immune response. Data from the trial to date is impressive, and there is already a strong indication that bemcentinib works synergistically with pembrolizumab.

The design of the Phase II NSCLC trial in patients with different exposures to IO therapies previously (BGBC008) is shown in Exhibit 3. An important part of the clinical trial is biomarker analysis to identify those patients that are most likely to benefit from the bemcentinib/pembrolizumab therapy combination.

Exhibit 3: Clinical trial design of Phase II study in NSCLC with bemcentinib in combination with pembrolizumab
Source: BerGenBio

Cohort A: 2L NSCLC IO naïve patients

Cohort A of the NSCLC trial consisted of 2L patients who had not been treated previously with IO therapy. The median overall survival (OS) was 12.6 months, and the overall response rate (ORR) and PFS data are detailed in Exhibits 4 and 5.

Exhibit 4: Waterfall plot of best change in sum of target lesions (from baseline) of patients and response rates with different biomarkers from Cohort A of Phase II NSCLC trial
Source: Next Gen Immuno Oncology, June 2020. Note: data cut off 17 April 2020
Exhibit 5: Kaplan-Meier curve of PFS for patients with AXL +ve/-ve composite scores from Cohort A
Source: Next Gen Immuno Oncology, June 2020. Note: data cut off 17 April 2020

All of the data compare very favourably to historic trials with pembrolizumab monotherapy, KEYNOTE 001 and KEYNOTE 010 (Exhibit 6), taking into account the usual caveats associated with meta-analyses and the number of patients in the current trial. It appears that bemcentinib enhances the activity of pembrolizumab in NSCLC patients with PD-L1 positive or negative (PD-L1 TPS <49%) tumours.

Exhibit 6: Summary of KEYNOTE-001 and KEYNOTE-010 trials with pembrolizumab monotherapy in NSCLC
Source: Trinity Delta  Note: 1. The data from the Phase I KEYNOTE 001 trial is for previously treated NSCLC patients (82% of had already received at least two lines of systemic treatment, ≥4 lines in 21% of patients). 2. The data from the Phase III KEYNOTE 010 trial is from the 2mg/kg pembrolizumab dose arm (200mg doses of pembrolizumab are used in BerGenBio’s Phase II study in NSCLC); N/D – not disclosed

The data are particularly impressive in those patients classed as having AXL positive tumours using a new composite AXL (cAXL) score. In this group of  patients from Cohort A, the mPFS was 8.4 months, which is longer than that seen in either KEYNOTE 001 or 010 in patients with strong PD-L1 positive tumours. The data from Cohort A to date shows a clinically and statistically significant PFS advantage for cAXL-positive (cAXL+) patients receiving bemcentinib and pembrolizumab. An update of the Overall Survival data, which is still maturing, was presented at the Next Gen Immuno Oncology Congress (25 June 2020). This showed 12-month OS of 79% and mOS of 17.3 months in cAXL+ patients, which compares with cAXL-negative (cAXL-) data of 60% and 12.4 months.

BerGenBio developed the cAXL score from a detailed analysis of gene expression of tumour tissue (including immune cells) that showed AXL expression in tumour and immune cells, genes associated with the epithelial-mesenchymal transition (EMT) of tumour cells, and activation of myeloid immune cells (eg macrophages) were linked to a clinical benefit. Interestingly, Merck has found that many of these genes are associated with resistance to pembrolizumab treatment (eg analysis of tumour samples from urothelial cancer patients in the KEYNOTE-052 study), and PD-L1 status was not found to be predictive of clinical response.

Consistent with other trials, bemcentinib with pembrolizumab was well-tolerated in Cohort A. The safety profile of the drug combination is very similar to that seen with pembrolizumab monotherapy.

Cohort B: 2/3L patients previously treated with IO

Cohort B of the NSCLC trial includes 2L and 3L patients who had been treated previously with IO therapy (IO refractory). Interim analysis of the first 13 patients recruited in the trial arm showed that the efficacy endpoint for Stage 1 had been met, ie one or more patients had achieved a clinical response. This triggered the recruitment of another 16 patients for Stage 2, which is ongoing. Stage 2 is focused on recruiting 2L patients who received 1L checkpoint inhibitor  monotherapy.

Data from the interim analysis of Stage 1 (Exhibit 7) presented at the Next Gen Immuno Oncology Congress saw six of the seven checkpoint inhibitor-refractory (cAXL+) patients show a clinical benefit. One patient showed a confirmed PR and one showed an unconfirmed PR, with a 2.5-fold improvement in mPFS (mPFS of 4.7 months in cAXL+ patients vs 1.9 months for cAXL- patients).

Exhibit 7: Anti-tumour activity of bemcentinib in combination with pembrolizumab in Cohort B
Source: Next Gen Immuno Oncology, June 2020. Note: data cut off 17 April 2020

Data analysis of Cohort B included the prospective assessment of patients according to their composite AXL score, with the aim of validating the utility of the composite biomarker. This cAXL score data for Stage 1 of Cohort B has so far indicated a predictive clinical benefit for bemcentinib and pembrolizumab in IO-refractory NSCLC, as shown in Exhibit 8.

Exhibit 8: cAXL score is predictive of clinical benefit for bemcentinib + pembrolizumab in cohort B1
Source: Next Gen Immuno Oncology, June 2020. Note: data cut off 17 April 2020, PD-L1 strong positive (TPS >50%), positive (TPS 1-49%), negative (TPS <1%)

Cohort C: 2L patients previously treated with IO and chemo

In Cohort C, the potential of bemcentinib with pembrolizumab is being assessed in 2L patients who have been treated previously with IO therapy in combination with chemotherapy. Recruitment to Stage 1 of the trial is ongoing, and initial data is expected to be reported at the Society of Immunotherapy for Cancer (SITC) 2020 meeting (November 10-15), with further data anticipated at the World Congress of Lung Cancer (WCLC) in January 2021.

Phase IIb/III NSCLC trial in planning

The impressive data published to date clearly justifies the further development of bemcentinib in combination with pembrolizumab in NSCLC. BerGenBio is planning a randomised Phase IIb/III trial in IO (+ chemo) refractory 2L patients in which bemcentinib in combination with a checkpoint inhibitor (probably a PD-1 inhibitor) will be compared with docetaxel. The primary endpoints will be interim mPFS, OS at six and 12 months, and mature OS. The final trial design will depend on the data from Cohorts B and C from the ongoing Phase II trial and scientific advice from regulatory authorities.

The trial will also be used to validate the cAXL score as a companion diagnostic tool, assuming that data from Cohorts B and C supports the use of the new score. The cAXL score will not be used as a selection criterion for the trial; however, there will be a prespecified analysis of patients stratified using the score.

The cAXL data gleaned so far from Cohort A (checkpoint-inhibitor naïve) and Cohort B (checkpoint inhibitor refractory) NSCLC patients indicates that clinical benefit from treatment with the combination of bemcentinib and pembrolizumab is enriched in cAXL+ patients, while there is low probability of clinical benefit in patients with cAXL- status in terms of both clinical response (Exhibit 9) and PFS (Exhibit 10).

Exhibit 9: Composite AXL score (cAXL) as a companion diagnostic predictive biomarker in NSCLC
Source: BerGenBio
Exhibit 10: AXL expression defines a poor prognosis subgroup of NSCLC
Source: BerGenBio   Note: 1 – Ishikawa 2012

AML: well-tolerated therapy with promising activity

The US FDA has approved eight new therapies for AML since 2017, but there remains considerable unmet medical need. There are now treatments suitable for elderly patients and for those patients with FLT-3 mutations; however, there is still significant scope for more effective therapies. AXL expression is linked to a poor prognosis in AML, and the initial data from the current Phase II study suggests that bemcentinib could become a valuable treatment option for those AML patients with active AXL signalling.

The Phase II trial in AML/MDS (BGBC003) is assessing the bemcentinib’s potential as a monotherapy and in combination with chemotherapy (Exhibit 11). The data from the monotherapy arm already warrants further development of bemcentinib in AML, but the company is awaiting further data from the low dose cytarabine (LDAC) arm before finalising the design of a randomised Phase IIb study.

Exhibit 11: Design of ongoing Phase II study in AML/MDS with bemcentinib
Source: BerGenBio  Note: LDAC – low-dose cytarabine

Cohorts B1 and B4: AML/MDS with bemcentinib monotherapy

The last reported data from the Phase II trial in patients receiving bemcentinib monotherapy was at the 2018 American Society of Haematology (ASH) meeting, detailed in Exhibits 12 and 13. They indicated that there was promising activity with bemcentinib monotherapy, in particular in those patients with low levels of soluble AXL (sAXL, patients with higher levels of AXL signalling have lower sAXL) biomarker. Six of the 27 AML/MDS patients achieved a clinical response with bemcentinib monotherapy, and all those patients were classed as having low sAXL in their blood.

Exhibit 12: Subgroup analysis of best response by biomarker expression in Phase II AML/MDS trial
Source: BerGenBio; Note CR – complete response, CRi – complete response with incomplete haematologic recovery, CRp – complete response with incomplete platelet recovery
Exhibit 13: Responses and duration of treatment of sAXL low patients (top), sAXL high patients (bottom) in months
Source: BerGenBio

As in NSCLC, it appears that the beneficial effect of bemcentinib in AML is due to a direct impact on tumour cells and also an indirect effect via the immune system. An analysis of 11 patients showed that there was a diversification in the T-cell response in seven patients following treatment. This suggests that combining bemcentinib treatment with a checkpoint inhibitor, such as pembrolizumab, could lead to a more effective treatment.

Cohort B2 and B5: AML with bemcentinib + LDAC in combination

Data from patients treated with bemcentinib and LDAC is still immature, but the data so far is promising. Results from 14 evaluable patients were published at ASH 2019 which indicated an ORR of 36% (five of 14 patients), compared to an expected ORR with LDAC alone of <20%. Four of the responders were among the six newly diagnosed AML patients (ORR=66%, Exhibit 14). The median duration of response for the CR/CRi (complete response/CR with incomplete haematologic recovery) patients was >9.9 months.

Notably, one of the responders was a 76-year-old man with newly diagnosed AML. He was initially classed as having PD (progressive disease) at around three months but continued to receive bemcentinib/LDAC therapy and achieved a partial response (PR) by month six, with disease control maintained beyond month ten. This further suggests that part of bemcentinib’s anti-tumour activity in some cases in AML is via the immune system, as immune responses take time to develop.

Exhibit 14: Responses and duration of treatment of AML patients treated with bemcentinib + LDAC
Source: BerGenBio

Low levels of sAXL, found to be a predictive biomarker during the bemcentinib monotherapy arm of the trial, were also found to be predictive of responses in this cohort as well, with six of the seven responders having low sAXL prior to treatment. BerGenBio has recently identified an undisclosed serum biomarker, named BGBM033, which appears to be predictive of responders in AML to bemcentinib (monotherapy or with LDAC). Interestingly, BGBM033 was also reported as being predictive of responders in the current Phase II trial of bemcentinib and pembrolizumab in combination in NSCLC, potentially negating the need for a difficult tumour biopsy.

More data from the Phase II trial of AML with bemcentinib in combination with LDAC should be presented at the ASH 2020 meeting (5-8 December).

Cohort B3: AML with bemcentinib in combination with decitabine

Immature data from the bemcentinib/decitabine arm was published at the 2019 American Society of Clinical Oncology (ASCO) meeting, which showed a 25% response rate (three of 12 patients, Exhibit 15). At this stage, there only appears to be a modest benefit of adding bemcentinib to decitabine therapy, with patients likely to respond better to bemcentinib and LDAC; therefore we do not expect BerGenBio to continue with the development of the bemcentinib/decitabine combination in AML.

Exhibit 15: Responses and duration of response to bemcentinib with decitabine in Phase II trial in AML
Source: BerGenBio

Further development in AML

BerGenBio is yet to decide on the best route to market for bemcentinib in AML, and is currently considering three possible registration routes:

  • 2L AML: bemcentinib + LDAC in c 200 patients over 60;
  • ≥2L AML: bemcentinib monotherapy in c 100 patients over 75 and with low sAXL; and/or
  • 1L AML: bemcentinib + LDAC in c 200 patients over 60.

If BerGenBio elects to develop bemcentinib in a 2L AML setting, it should benefit from the grant of Fast Track Designation from the FDA, which allows greater interaction with the agency and a faster potential route through the approval process. The final decision will be based on the data from the ongoing Phase II study and scientific advice.

The next trial might also be used to validate sAXL and BGBM033 as biomarkers that are predictive of responders to bemcentinib therapy. This could be useful in providing bemcentinib with a significant competitive advantage over gilteritinib (Astella’s Xospata). Nevertheless, it is already apparent that bemcentinib has a much cleaner safety profile than gilteritinib, which has a black box warning on its label for differentiation syndrome as it inhibits FLT3, and not just AXL.

Other oncology trials with bemcentinib

In addition to the bemcentinib studies being conducted by BerGenBio, there are also several investigator-initiated trials (IIT) ongoing, in various oncology indications and in combination with different therapies. The IIT are in:

These studies demonstrate the level of academic and clinical interest in bemcentinib and could help to broaden its potential into other indications. The data from the MDS/AML trial will be particularly valuable to BerGenBio as it plans a pivotal study in these indications; this trial is fully recruited and data is expected to be presented at the ASH 2020 conference in December.


Bemcentinib: evaluation in COVID-19 infections

The role of AXL during cell entry by enveloped viruses, such as Ebola and Zika, has been known for many years, and studies indicate that AXL inhibitors could reduce the severity of infections. Recent preclinical insights from a collaboration with Professor Wendy Maury of the University of Iowa, suggest that bemcentinib could be effective in early COVID-19 (SARS-CoV-2 coronavirus) infection. Her work, combined with the studies by Professor Lorens and the clean safety profile in clinical trials to date, has led to bemcentinib being included in the UK Government-funded flagship ACCORD-2 trial.

Bemcentinib has the potential to reduce the severity of COVID-19 infection in two ways. Firstly, Professor Maury has shown that the compound can profoundly inhibit viral cell entry into many different types of cell. The virus normally binds to the AXL ligand, GAS6, which mediates viral entry via apoptopic mimicry, a process that requires AXL to be activated by GAS6 (Exhibit 16). Secondly, the activation of the AXL receptor in infected cells leads to inhibition of the anti-viral Type I interferon response. This results in greater viral replication occurring within the infected cell, without causing neighbouring cells to generate strong anti-viral defences. Overall, treatment with bemcentinib should result in fewer cells being infected with the coronavirus and cells generating a stronger anti-viral response.

Exhibit 16: Targeting of AXL by enveloped viruses for cell entry and dampening of anti-viral immune responses
Source: BerGenBio

Currently there is only anecdotal evidence suggesting that bemcentinib might have a beneficial impact on COVID-19. A NSCLC patient, who was taking part in a NSCLC clinical trial and been taking bemcentinib for c 18 months, contracted COVID-19 but only had mild case with no chest symptoms. This was remarkable as the woman had many co-morbidities (including hypertension, diabetes, asthma, and COPD) and was taking multiple medications; normally a person with her characteristics would be expected to have had a severe case of COVID‑19.

The ACCORD-2 (ACcelerating COVID-19 Research & Development) study is a collaborative platform that has been assembled rapidly in response to the pandemic. It is funded by the UK’s Department of Health and Social Care (DHSC) and UK Research and Innovation (UKRI) and is run within the UK’s NHS by the clinical research company IQVIA. During the trial, the potential of six experimental therapies (including AstraZeneca’s acalabrutinib and MEDI3506) to improve recovery times of hospitalised COVID-19 patients with mild or non-ventilated severe disease will be assessed.

Bemcentinib was the first of the six experimental compounds to be disclosed. Trial recruitment began in May and a total of 120 patients will be recruited during Stage 1 of the study. 60 patients will receive standard of care (SoC) only, with the other half receiving SoC with bemcentinib as an add-on therapy. Dosing of the compound is the same as used during the oncology trials (400mg per day for three days, then 200mg per day thereafter). Recruitment has been slower than originally anticipated due to reduced infection rates, but the initial results from this stage of the study are still expected late in Q320 (we have conservatively forecast Q4).

If the data from Stage 1 indicates that bemcentinib can improve recovery times of COVID-19 patients, the compound could advance seamlessly into Stage 2 (Phase III) during Q420. This could potentially lead to bemcentinib receiving conditional approval in the UK, if there is compelling data, in H121. We caution that the study is driven by the UK Government and these timelines are indicative at best. Nevertheless, given its mechanism of action, clean side-effect profile, and oral administration, bemcentinib could have an ideal profile for use in the earlier stages of infection, notably in the community setting (pre-hospitalisation).

BerGenBio currently has no plans for clinical trials in COVID-19 outside the UK, but promising data from the ACCORD-2 trial would probably result in an expansion of the development programme into other countries. As in the UK, it is possible that BerGenBio could receive grants to cover clinical development and have a fast route-to-market elsewhere, given the still pressing need for an effective treatment for COVID-19 infections.

It is very difficult to estimate the potential sales of bemcentinib in COVID‑19, but clearly, they could be material. This is particularly the case as bemcentinib’s mechanism of action means it could be used widely to treat less severe patients, who have not been hospitalised. The disease to date has affected countries very differently, and it is difficult to estimate when or if there will be a second (or even third) spike of infections. Conversely, the need for a COVID-19 treatment might become limited if a vaccine is developed successfully. That said, bemcentinib could be stockpiled in preparation for future potential outbreaks and epidemics (much like Roche’s Tamiflu) as data so far suggests that it should be used to treat people infected with various enveloped viruses.

We currently estimate that bemcentinib could achieve peak sales in COVID-19 of $1.2bn in 2022, but recognise the limitations of our forecast. A key reference point is Roche’s Tamiflu, being the sole approved drug, achieving sales of $3.0bn in FY09 for the treatment of the H5N1 bird flu during that particular epidemic.


Tilvestamab (BGB149): The AXL antibody

BerGenBio’s second clinical asset is tilvestamab (BGB149), a monoclonal antibody that inhibits the AXL receptor (Exhibit 17), which is currently in a Phase I study in healthy volunteers. Management has not yet disclosed its development plans for Phase II, such as which indications it plans to target. BerGenBio could develop tilvestamab in oncology, targeting different cancers to bemcentinib, or in a different disease area such as fibrosis as AXL inhibitors have the potential to block the fibrotic disease process at various stages.

Exhibit 17: Characteristics of monoclonal antibody tilvestamab (BGB149)
Source: BerGenBio

Fibrosis and AXL

Fibrosis occurs when the normal healing process goes awry, with the formation of excessive scarring. It can occur in most tissues, and severely impairs the function of the affected organ. The initial causes of fibrosis are manifold, and while the precise disease process is not fully understood, it typically involves a common series of events, including secretion of cytokines which provoke a pro-fibrotic, chronic inflammatory immune response that leads to production of excessive extracellular matrix (ECM) proteins (eg collagen) and the tissue becoming fibrous in nature. Inhibition of the AXL receptor can block the initial stage of the fibrotic process. However, the progression of fibrosis varies between different tissues and so the role of AXL might vary; nevertheless, targeting the AXL receptor could be an effective treatment for fibrosis in many if not all tissues.

The immune response in both aggressive tumours and fibrotic tissues is similar, with development of Th2-mediated chronic inflammation (Exhibit 18). Conversely, inhibition of AXL signalling results in the triggering of a Th1 response. AXL inhibition also appears to prevent the production of ECM by fibroblasts. Espindola et al (AJRCCM 2018) proved that bemcentinib could inhibit the production of ECM, migration and proliferation of fibroblasts in an IPF model, and importantly, also discovered that high AXL expression was associated with patients with rapidly progressing IPF.

Exhibit 18: The role of the immune system in fibrosis
Source: G. Wick et al Annu. Rev. Immunol. 2013. 31:107-35

BerGerBio could develop either bemcentinib or tilvestamab in fibrosis. In one way, tilvestamab could be better suited as a chronic fibrosis therapy as biologics tend to be associated with better medication adherence than oral drugs for chronic indications. Additionally, there could be greater pricing flexibility with tilvestamab if it is only developed in fibrosis; but a hybrid strategy is possible. For example, BerGenBio might develop bemcentinib in idiopathic pulmonary fibrosis or IPF (where pricing would be comparable to that in oncology), with tilvestamab being developed for more common fibrotic conditions, eg liver and renal fibrosis.


ADCT-601: an antibody-drug conjugate

ADCT-601 (BGB601) is an anti-AXL antibody drug conjugate (ADC), which is being developed by ADC Therapeutics. In July 2014, BerGenBio outlicensed two of its proprietary anti-AXL monoclonal antibodies for the development of ADC(s) to ADC Therapeutics, which is fully responsible for funding and developing this asset. A Phase I trial in advanced solid tumours was terminated in December 2019, due to a disappointing efficacy signal. However, ADC Therapeutics remains committed to ADCT-601 development and is creating a new clinical plan.

The 2014 agreement granted ADC Therapeutics an exclusive global license to BerGenBio IPR to develop and commercialise therapeutic AXL ADC products and companion diagnostics, in exchange for milestones and sales royalties. In total, BerGenBio could receive up to £34.25m in milestones per AXL ADC product, split $13.25m on achievement of development and regulatory milestones, and up to $21m in sales-based milestones. BerGenBio is also eligible for two-tiered mid-range single digit royalties on global net sales of AXL ADC products and related companion diagnostics, payable for a minimum of 10 years from first sales in each country. Additionally, should worldwide net sales exceed $1bn in aggregate for the first time in a given calendar year ADC Therapeutics is required to pay a one-time low eight-figure $ sales milestone.

ADCT-601 is an ADC composed of a humanised IgG1 antibody against human AXL linked to a cytotoxin (Exhibit 19). The antibody portion binds to cells expressing AXL on their surface, ADCT-601 is then internalised. Intracellular enzymes cleave the linker, releasing the cytotoxic payload, which interferes with cell division, ultimately causing tumour cell death.

Exhibit 19: ADCT-601 construct
Source: ADC Therapeutics. Note: ADCT-601 is an ADC composed of a humanised IgG1 antibody against human AXL, site-specifically conjugated using GlycoConnect technology to PL1601, which contains Hydraspace, a valine-alanine cleavable linker and the (pyrrolobenzodiazepine (PBD) dimer cytotoxin SG3199

In preclinical studies ADCT-601 demonstrated dose-dependent potent in vitro and in vivo anti-tumour activity in various cancer models. Preclinical data were presented in a poster at AACR 2018 and indicated that ADCT-601 has:

  • Potent and highly targeted in vitro cytotoxicity in a panel of AXL-expressing solid cancer cell lines;
  • Potent and durable anti-tumour efficacy of single, low doses, in breast and renal cancer-derived xenografts, while not showing similar activity in an AXL-negative xenograft model; and
  • Favourable therapeutics index with excellent stability in vivo, with a half-life of about 9.5 days at 3 mg/kg and of about 6 days at the maximum tolerated dose of 6 mg/kg (from PK analysis in non-tumour bearing rats).

Unfortunately, the data from the single arm Phase I study of ADCT-601 in advanced solid tumours was not as impressive, and ADC Therapeutics terminated the trial after analysing the results from 17 patients at the end of the dose escalation phase. The ADC had an acceptable safety profile with only two dose-limiting toxicities detected, one of which was assessed as probably being caused by the treatment, although 10 of the 17 patients did experience one or more ≥Grade 3 TEAE (treatment emergent adverse events). However, of the 13 patients evaluable for a response, only one achieved a partial response and seven displayed stable disease. ADC Therapeutics is refining its clinical plan and is now considering combining ADCT-601 with other therapies and focusing on high AXL-expressing tumours that are possibly more susceptible to treatment.


Leading an increasingly competitive field

BerGenBio is the leader in the field of AXL, having been founded in 2007 to develop AXL-targeting drugs based on its deep scientific knowledge in this area of biology. The potential of the AXL receptor as an oncology target is increasingly recognised, as well as its role during infections with enveloped viruses, such as COVID-19. Consequently, BerGenBio is facing more competition from other companies developing drugs against AXL; however, it still has the most advanced portfolio of AXL-targeting therapies in development (Exhibit 20).

Exhibit 20: Competitive landscape of therapies targeting AXL
Source: BerGenBio

It appears that the greatest competition to bemcentinib is likely to come from Mirati’s sitravatinib in solid tumours (Phase III in 2L NSCLC in immunotherapy-experienced patients started in Q219) and Astellas’ gilteritinib (Xospata) in AML (approved for FLT3 mutation-positive relapsed or refractory AML, with a Phase I ongoing in newly diagnosed AML, regardless of FLT3 status). Neither of these products have associated companion diagnostic programmes nor have as clean a safety profile as bemcentinib.

The high selectivity of bemcentinib could be key to the success of the compound in both oncology and the treatment of COVID-19 patients. In oncology, different therapies are increasingly used in combination, and the data from various Phase II studies indicates that bemcentinib can be safely combined with various IO and targeted therapies, and chemotherapy. For COVID-19 patients, any therapy will need to have a very clean safety profile to be used widely, as many patients are very poorly with co-morbidities and on a number of medications.

BerGenBio is well positioned to remain the leading AXL company due to the quality of its assets and the continued research by its founder Professor James Lorens and collaborators. This research might also result in new opportunities for BerGenBio, as has occurred with COVID-19.


Bemcentinib in-licensing deal with Rigel

BerGenBio was initially focused on developing a monoclonal antibody against AXL, but on becoming aware of Rigel’s AXL inhibitor assets, it opportunistically in-licensed various selective AXL inhibitors from the company in June 2011 in a back-end weighted deal. Subsequently, BerGenBio prioritised the development of the small molecule bemcentinib (formerly known as R324 and BGB324).

Under the terms of the Rigel deal, BerGenBio obtained the worldwide exclusive rights to bemcentinib and eight back-up compounds, with the right to sub-license the assets. It exercised its option to in-license nine other AXL inhibitors from Rigel for $2m in June 2016. In exchange, BerGenBio agreed to make various payments to Rigel, and has so far paid: time-based payments of $0.5m in 2011 and 2012, a similar payment of $1.7m in 2016, and $3.3m in February 2017 relating to the first Phase II initiation for the first product. Future payments are dependent on whether the product is developed/commercialised in-house or by a partner.

If BerGenBio continues to develop and commercialises bemcentinib itself, the company will have the following milestone payment obligations:

  • $8m on initiation of first Phase III study for the first product;
  • $12m on NDA submission (or equivalent) for the first product; and
  • $15m milestone for approval of first drug.

Additionally, Rigel is eligible for tiered royalties of 5%, 7% or 9% of net sales, if sales are under $500m, between $500m and $1bn, or over $1bn.

If BerGenBio out-licenses bemcentinib, payments based on a revenue sharing model will need to be made to Rigel according to the schedule below:

  • 60% of revenues, if partnered prior to completion of Phase Ia;
  • 50% after completion of the first Phase Ia study;
  • 45% after completion of the first Phase Ib study;
  • 40% after completion of first Phase II trial;
  • 35% after completion of first Phase II trial with 60 or more patients; or
  • 30% after completion of a Phase III study.

It is possible that BerGenBio will have to pay all the remaining development and regulatory milestones to Rigel within the next 12 months, due to the accelerated route to market as a COVID-19 therapy in the UK and potentially elsewhere.

Alternatively, promising data from the Phase II trial in COVID-19 patients, combined with the impressive data from the NSCLC study with pembrolizumab, could result in a licensing deal. At present, 35% of revenues from any agreement would be payable to Rigel, but it would decrease to 30% if the potential Phase III study in COVID-19 patients was completed first.



The main risk with BerGenBio currently relates to clinical trial outcomes. Initial results are very promising, but the true potential of bemcentinib will only become apparent with the complete data from the Phase IIb/III studies, and these results in turn will largely determine the commercial success of the product, should it reach the market. The broad programme, combined with the biomarker analysis, partially de-risks the company, but it should be recognised that BerGenBio is developing a first-in-class product, and the biology of AXL is particularly complex and still not fully understood.

BerGenBio has yet to decide whether to take bemcentinib to market itself or with a partial/full out-licensing of the product. The novelty of the compound, while making the development process more challenging, means that it is likely to be commercially attractive to prospective partners, especially as it has such broad potential as an oncology therapy. Should BerGenBio look to partner bemcentinib, it is important to appreciate that the best deal might not be the one with the greatest bio-dollars, but the one with the most committed partner that will devote sufficient resources to optimise its development.

Although bemcentinib is currently the most advanced selective AXL inhibitor in development, there will probably be others that enter the clinic now the important role that AXL plays in EMT, chemotherapy resistance, and immuno-oncology is better understood. Clearly, the rate at which BerGenBio can advance bemcentinib will determine the first-mover advantage, should it reach the market.

The COVID-19 pandemic has created an unexpected opportunity for BerGenBio, because of bemcentinib’s potential as a treatment for COVID-19 patients. It is difficult to estimate the size of the opportunity currently because there is no clinical data yet, there are many other products (including vaccines) in development against the disease, and it is unclear how the pandemic will progress.

However, the pandemic is also having negative impacts on the company. BerGenBio has implemented a number of measures to keep employees safe and minimise the consequences. To date, the company has succeeded in keeping patients in clinical trials and monitoring their progress, but recruitment of patients to clinical trials has slowed, and it is uncertain when it will return to normal levels.

On top of these specific risks, there are also other typical risks associated with drug development, including patent litigation, financing, and regulatory uncertainties. Regarding its patent position, the composition of matter patent (PCT/US07/089177) is due to lapse in 2027 without an extension, and there is a patent pending covering the use of bemcentinib (PCT/GB2014/053548), which should protect the compound from competition through to 2034. There are also various other patents (awarded and pending), which could provide a degree of protection through to 2036.



As BerGenBio is a classic drug development company it is well-suited to valuation using a rNPV methodology. Typically, the rNPV of the individual clinical projects (adjusted for the success probabilities) are summed and netted against the costs of running the operation. In the case of BerGenBio, we value bemcentinib in each indication in which it is currently in development, with the success probabilities based on standard industry criteria for each stage of the clinical development process but flexed to reflect the data in each indication.

Using this approach, we value BerGenBio at NOK4.43bn ($521m), equivalent to NOK50.3/share; the details of our valuation are shown in Exhibit 21. This  increase reflects the NOK500m capital raise, our assessment of the potential of bemcentinib in COVID-19, and development progress. Throughout the valuation we continue to use conservative assumptions, and in line with this policy, we have not included tilvestamab in our valuation yet as development plans for the asset have not been articulated.

Being prudent, we assume the average cost of treatment per patient across all oncology indications will be $80,000 in the US and two thirds the price in Europe. This compares to an estimated average cost of treating a patient with AstraZeneca’s osimertinib (Tagrisso) of $200,000 and Merck’s pembrolizumab (Keytruda) of $150,000. We believe this is sensible given the limited clinical data. In addition, bemcentinib has the potential to be used to treat most solid tumours, either in combination with chemotherapy or immunotherapies, and has very low cost of goods, so a relatively low price might be settled upon to ensure reimbursement issues do not hinder adoption.

Our valuation also assumes that 35% of any revenues from a bemcentinib outlicensing deal will be payable to Rigel Pharmaceuticals under the licensing agreement. However, if BerGenBio completes a Phase III study with bemcentinib before partnering the asset, which is realistic given the accelerated clinical trial programme for COVID-19 drugs in the UK, the pay-away to Rigel falls to 30%. This would increase our valuation to NOK54.0/share, with additional upside potential as positive Phase III data could enable BerGenBio to partner bemcentinib on more advantageous terms that we currently assume.

Additional valuation upside could come from tilvestamab (BGB149), which is in a Phase I trial in healthy volunteers. BerGenBio is yet to disclose its development plans for the antibody, which has potential in oncology and fibrotic indications.

BerGenBio’s shares have more than doubled in value following the announcement of bemcentinib’s inclusion in the UK’s Phase II ACCORD-2 study in COVID-19, but our valuation suggests there is still material upside. There are significant catalysts this year with results from the ACCORD-2 study before end-2020, SITC 2020 in November, and AML data at ASH 2020 in December.

Exhibit 21: rNPV-based valuation of BerGenBio
Source: Trinity Delta.  Note: Valuation assumes bemcentinib is outlicensed in 2020. The value of each indication includes the current R&D expenses associated with the current clinical trials. HNSCC: Head & neck squamous cell carcinoma; cHL: classical Hodgkin lymphoma; MSI-H: microsatellite instability-high cancers (primarily colorectal cancer). *Clinical trials in these indications are investigator-initiated-trials. **In COVID-19 we only forecast five years of sales.



BerGenBio is in a strong financial position to execute its clinical plans and pay any milestones that might become due to Rigel should development in COVID-19 progress well. We estimate a current cash position of c NOK850m ($85m) following BerGenBio raising NOK220m at NOK18.00/share ($24.0m, gross) in January and NOK500m at NOK37.50/share ($45.4m, gross) in May. In the absence of milestone payments to Rigel, this should provide a runway into FY23.

Should bemcentinib be approved for COVID-19 without being partnered, however, Rigel will be eligible to receive milestones totalling $40m. Under these circumstances BerGenBio would have the potential to earn significant revenue from bemcentinib sales but might need to raise additional capital to support its commercialisation.

BerGenBio is expected to use most of its cash reserves in bemcentinib development, particularly in the planned pivotal clinical trials. R&D investment routinely accounts for c 80% of total expenses. We forecast that BerGenBio will increase operating expenses from NOK203m in FY19 to NOK245m in FY20 and NOK287m in FY21. This increase reflects plans to advance bemcentinib into larger pivotal studies, and tilvestamab into Phase II development.

Our estimates are largely unchanged following the Q120 results. As indicated in Exhibit 22, significant newsflow is expected during 2020.

Exhibit 22: BerGenBio upcoming newsflow
Source: Trinity Delta, BerGenBio


Exhibit 23: Summary of financials
Source: Company, Trinity Delta

[1] EMT is the process by which a cell changes from being a polarised epithelial cell, tightly joined to neighbouring cells, to become a mesenchymal cell, which is more amorphous in shape and more likely to migrate. During EMT, the expression of hundreds of genes change enabling the acquisition of new cellular characteristics.



Company information

Contact details

Jonas Lies vei 91,
5009 Bergen,
Tel: +47 559 61 159

Top institutional shareholdings

% holding
Meteva AS25.32
Investinor AS8.38
Fjarde AP-Fonden4.03
Verdipapirfondet Alfred Berg Gamba 3.47
Sarsia Seed AS2.44
Verdipapirfondet KLP Aksjenorge2.10
MP Pensjon PK2.00
Bera AS1.97
Verdipapirfondet Nordea Kapital1.76
Verdipapirfondet Nordea Avkastning1.74
Top 10 institutional investors 53.21
Other shareholders46.79
Total shareholders100.00
Source: BerGenBio

Key personnel

Stein Holst AnnexstadNon-Executive ChairmanJoined in February 2016. He has senior industry experience at executive and Board levels. A former executive of Dyno Industrier AS (fine chemicals) and CEO of Nycomed AS (pharmaceuticals, subsequently merged with Amersham Plc and thereafter with GE). Former head of AS Isco Group, Executive Search and Corporate Advisory. In 1996, co-founded NorgesInvestor AS (Oslo-based Private Equity firm) and was in 2008 the first Chairman of Investinor AS (the VC of the Norwegian State). Also former Chairman of Algeta ASA (acquired by Bayer in 2014), with other Chairman positions including commercial banking, business school, public R&D and industrial enterprises.
Richard GodfreyCEOJoined as CEO in 2008. Over 25 years’ industry experience in drug development and commercialisation. Previously CEO of Aenova Inc, a specialist biopharmaceutical company, and Managing Director of DCC Healthcare Ltd. Also held positions at Catalent, Eli Lilly and Reckitt Benckiser in R&D and commercial roles. Qualified as a Pharmacist from Liverpool University and received his MBA from Bath University.
Rune SkeieCFOJoined in 2018 as CFO. Over 20 years of financial management, corporate development, corporate governance and advisory experience with public and private companies across multiple sectors. Prior roles include CFO of REMA Franchise Norge, and various roles at EY, most recently as Executive Director. He is a Registered Accountant and a State Authorised Public Accountant.
Professor Hani GabraCMOJoined in September 2019 as CMO, based in Oxford, UK. Previously VP, Early Clinical Development at AstraZeneca, and Professor of Medical Oncology at Imperial College London. Also, since 2003, Honorary Consultant in Medical Oncology, Imperial College Healthcare NHS Trust and, since 2016, Adjunct Professor at the Centre for Cancer Biomarkers, University of Bergen. Also previously Head of Medical Oncology, Director of the Ovarian Cancer Action Research Centre, and Head of Imperial College Cancer Clinical Trials Unit. Author of more than 200 peer reviewed publications (with >15,000 citations) and patents.
Professor James LorensCSOCo-founder and Professor at the Department of Biomedicine at the University of Bergen. He leads a large internationally active academic research laboratory comprising 22 researchers focused on cancer research. Author of more than 70 peer-reviewed articles and numerous patents. He worked at Rigel after completing his postdoctoral studies at Stanford University and has managed many large collaborations with major pharmaceutical and biotechnology companies.


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