SymBio Pharmaceuticals — New formulations extend Treakisym patent life

SymBio Pharmaceuticals (TYO: 4582)

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Research: Healthcare

SymBio Pharmaceuticals — New formulations extend Treakisym patent life

SymBio has substantially increased the value of its Treakisym franchise through in-licensing novel bendamustine formulations from Eagle Pharmaceuticals for $12.5m. The new formulations bring a lower cost of goods and 10 years of additional patent protection to help in life cycle management of the Treakisym franchise. Sales of Treakisym following the approval of two new indications in 2016 have exceeded the company’s expectations, leading it to upgrade FY17 sales guidance. Interim data from the global Phase III rigosertib trial could become available during Q417. We value SymBio at $174m, with the enhanced Treakisym portfolio offsetting the suspension of IONSYS development.

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Written by

Healthcare

SymBio Pharmaceuticals

New formulations extend Treakisym patent life

Business update

Pharma & biotech

2 November 2017

ADR research

Price

US$2.45

Market cap

US$120m

*underlying ¥ price converted at ¥113/US$

ADR/Ord conversion ratio 1:1

Net cash ($m) at June 2017

43

ADRs in issue

49.0m

ADR Code

SYMQY

ADR exchange

OTC

Underlying exchange

Tokyo

Depository

BNY

Business description

SymBio Pharmaceuticals is a Japanese specialty pharma company with a focus on oncology and hematology. The Treakisym powder formulation was in-licensed from Astellas in 2005; liquid Treakisym was in-licensed from Eagle Pharmaceuticals in 2017. Rigosertib was in-licensed from Onconova.

Next events

Rigosertib iv Phase III interim data

H217

In-licensing activities

TBD

Treakisym sales update

Q417

Analysts

Dennis Hulme

+61 (0)2 9258 1161

Maxim Jacobs

+1 646 653 7027

SymBio Pharmaceuticals is a research client of Edison Investment Research Limited

SymBio has substantially increased the value of its Treakisym franchise through in-licensing novel bendamustine formulations from Eagle Pharmaceuticals for $12.5m. The new formulations bring a lower cost of goods and 10 years of additional patent protection to help in life cycle management of the Treakisym franchise. Sales of Treakisym following the approval of two new indications in 2016 have exceeded the company’s expectations, leading it to upgrade FY17 sales guidance. Interim data from the global Phase III rigosertib trial could become available during Q417. We value SymBio at $174m, with the enhanced Treakisym portfolio offsetting the suspension of IONSYS development.


Year end

Revenue
($m)

PTP
($m)

EPADR
($)

DPADR
($)

P/E
(x)

Gross Yield
(%)

12/15

17.1

(23.3)

(0.72)

0.0

N/A

N/A

12/16

21.0

(20.5)

(0.52)

0.0

N/A

N/A

12/17e

31.9

(35.4)

(0.75)

0.0

N/A

N/A

12/18e

37.6

(17.7)

(0.37)

0.0

N/A

N/A

Note: Converted at ¥113/US$. Dividend yield excludes withholding tax. Investors should consult their tax advisor regarding the application of any domestic and foreign tax laws.

Replicating Teva’s strategy to maintain market share

SymBio has in-licensed two liquid formulations of bendamustine hydrochloride (Treakisym) to complement its marketed lyophilized/dry powder product: a ready-to-dilute (RTD) formulation and a rapid infusion (RI) formulation that will cut drug infusion time from 60 minutes to 10 minutes. Patents on the RTD and RI formulations extend to 2031, whereas orphan exclusivity on Treakisym powder expires in October 2020. SymBio is aiming to replicate the strategy that has seen Teva transfer 97% of bendamustine HCl sales in the US to the RI formulation.

Initiated Treakisym Phase III in r/r DLBCL

In August SymBio initiated a Phase III trial of Treakisym relapsed/refractory (r/r) diffuse large B-cell lymphoma (DLBCL), an intermediate or high-risk form of non-Hodgkin’s lymphoma (NHL), which represents a market of around 11,000 patients in Japan. We model a potential launch in H220.

SymBio could market Treakisym alone after 2020

The current marketing agreement with Eisai for Treakisym runs until late 2020. Although SymBio has not announced definitive plans for the marketing arrangements for Treakisym post 2021, SymBio may elect to market Treakisym alone, with its own sales infrastructure. We estimate that self-commercialization of Treakisym would add ~$68m to our base-case valuation.

Valuation: rNPV of $174m or $3.6/ADR

Our risk-adjusted valuation is $174m or $3.6/ADR (unchanged). We have revised our forecasts to account for: greater market share and improved profit margins for Treakisym liquid formulations from 2021 onwards, offset by anticipated $13m development costs; risk-adjusted revenues and $18m development costs for the new DLBCL indication; the 23% increase in 2017 Treakisym sales guidance; and suspension of development of the IONSYS pain product.

Liquid formulations enhance Treakisym franchise

SymBio has in-licensed two liquid formulations from Eagle Pharmaceuticals (Eagle) to strengthen its Treakisym (bendamustine HCl) franchise. Terms included $12.5m upfront, undisclosed potential future milestones (we model $10m) and a royalty on sales. The new formulations are more convenient for healthcare workers and patients, and are protected by patents that extend to 2031, whereas orphan exclusivity on the company’s currently marketed lyophilized (freeze-dried) dry powder Treakisym product expires in October 2020.

The Treakisym lyophilized powder has to be reconstituted before administration, which is time consuming and carries the risk of exposing healthcare workers to cytotoxic powders and vapors.

The first in-licensed product is an RTD liquid formulation that will make dose preparation easier and safer for health professionals. The drug is administered to the patient as a 60-minute infusion in the same way as the current Treakisym product.

The second in-licensed product is an RI formulation that will cut drug infusion time to 10 minutes from 60 minutes for the current Treakisym product.

Strategy designed to maintain SymBio’s market share

SymBio is in discussions with the regulators about the data that would be required to achieve registration for the two liquid formulations.

The RTD product is expected to be the first of the two products approved. Depending on the outcome of ongoing discussions with regulators, SymBio expects a reduced development period before filing for approval given that the same drug compound is being administered to patients in the same manner – the only difference is the way that the iv infusion is prepared.

The RI product represents a greater change to the current treatment protocols, so approval of this product is expected to take longer. It is reasonable to expect that a small clinical study of perhaps 40-60 patients would be required in order to confirm that the pharmacokinetics and safety of the 10-minute infusion are comparable to the currently approved 60-minute infusion of Treakisym.

SymBio is aiming to launch the RTD product in January 2021. It is targeting approval of the RI formulation later in H121, which could potentially allow a launch in Q321 or January 2022. Orphan exclusivity for Treakisym expires in October 2020, which means that the first generic copies of the Treakisym powder could be launched as early as the start of 2022.

SymBio is pursuing a similar strategy to that adopted by Teva in the US, where it markets bendamustine HCl under the brand names Treanda and Bendeka. Teva developed its own RTD Treanda formulation, and in-licensed the RI bendamustine HCl formulation from Eagle that it now markets as Bendeka.

Teva launched an RTD liquid formulation of Treanda in November 2014; it launched the Bendeka RI product in January 2016, and subsequently withdrew the RTD liquid Treanda from the market in March 2016. Lyophilized Treanda powder for injection is still available, but its use has substantially declined in favor of Bendeka. Teva said in August 2017 that Bendeka is the most-used bendamustine product in the US market. Eagle disclosed in a corporate presentation in September that Bendeka has achieved a 97% market share in the US, which is testament to the appeal of the short infusion time.

The first generic copies of Treanda powder are expected to be launched in the US in 2019. The market share that Bendeka can maintain in the face of competition from powder generics will be a useful guide to how successful the strategy could be for SymBio.

In contrast to the situation for Teva, SymBio may have only 12 months to convert clinicians to using the liquid Treakisym formulations before the launch of the first Treakisym powder generics. This shorter time period creates additional uncertainty as to how large a market share the RTD and RI products will be able to gain before they potentially face competition from powder generics in 2022.

In our forecasts we model SymBio’s strategy being quite successful at maintaining market share, with dry powder Treakisym generics slowly growing market share from 2022 onwards to reach a 25% market share by 2031. We model the growth in Treakisym generics’ market share accelerating in 2032 after the patents on the liquid formulations expire.

In our scenario analysis on page 7, we note that if Treakisym generics were to gain a 50% market share by 2031 (vs 25%), this would remove around $13m ($0.3/ADR) from our valuation.

Improved commercial terms and opportunity to self-commercialise

We believe that the cost of goods under the Eagle licence agreement will be lower than under the current arrangements with Astellas for the Treakisym powder formulation, which would lift profit margins for SymBio once the liquid formulations are launched.

Furthermore, SymBio has previously announced its intention to eventually develop its own salesforce to commercialize drug products in Japan. Given that the current licence agreement with Eisai for commercializing Treakisym runs until 2020, SymBio would have the opportunity to self-commercialize Treakisym after 2020, including the new liquid formulations, should it choose to do so.

SymBio has not announced any definitive plans for the commercialization strategy for Treakisym after 2020. In our view, the four main options are:

self-commercialization;

license to Eisai under renegotiated terms;

license to a third party; or

a combination of self-commercialization and a licensing arrangement.

We would expect each of these four options to generate higher profit margins for SymBio than the current commercialization arrangements with Eisai. Combining this with the lower cost of goods under the Eagle licence agreement, we model a significant lift in profit margins on Treakisym sales after 2020.

DLBCL Phase III trial initiated

Treakisym is currently approved in Japan for chronic lymphocytic leukemia (CLL) and for first-line and r/r patients with low-grade non-Hodgkin’s lymphoma (NHL) and mantle cell lymphoma (MCL).

SymBio is seeking to add an additional indication for the treatment of r/r DLBCL, an intermediate or high-risk form of NHL. After consultation with the Pharmaceuticals and Medical Devices Agency, SymBio commenced a Phase III trial in August to confirm the safety and efficacy of Treakisym (bendamustine HCl) plus rituximab in DLBCL. Our model assumes continued development with a potential launch in H220.

SymBio completed a Phase II study for Treakisym plus rituximab in r/r DLBCL in 2012. An analysis of 59 cases in the Phase II study showed an encouraging ORR of 62.7% and CR of 37.3%.

The higher market share expected for branded Treakisym liquid formulations post 2020 has increased the potential value of the DLBCL indication to SymBio, and has made the expense of the DLBCL Phase III trial worthwhile (we model Phase III costs of $18m).

Overview of DLBCL

DLBCL is a rapidly-growing, intermediate or high-risk form of NHL, in contrast to the slower-growing indolent or low-risk lymphomas that are included in the current approval for Treakisym. There is currently no standard chemotherapy for the treatment of DLBCL. Patients are typically treated with multiple drug therapies including:

CHOP – Cyclophosphamide, doxorubicin (hydroxydaunorubicin), vincristine, and prednisone;

R-CHOP – CHOP plus rituximab; and

Dose-adjusted EPOCH-R – etoposide, prednisone, vincristine [Oncovin], cyclophosphamide, doxorubicin, plus rituximab.

Although DLBCL is an aggressive lymphoma, the rapidly growing cells are often susceptible to chemotherapy and a significant proportion of patients can be cured by first-line chemotherapy treatments. Unfortunately, a majority of patients relapse, typically within two years of the initial treatment. Patients who relapse or are refractory to first-line treatment have an extremely poor prognosis. A range of salvage chemotherapy regimens are used in relapse therapy.

DLBCL indication could almost double Treakisym peak sales potential.

DLBCL is the most common form of NHL, so it represents a large addressable market for Treakisym.

While DLBCL is estimated to represent 30-40% of all cases of NHL worldwide, an epidemiology study by Chihara et al1 found that DLBCL comprised a much higher proportion of NHL cases in Japan than it does in the US (45% vs 28%). The study also found that the incidence of NHL was much higher in the US than it was in Japan (2.8x higher in the US in 2008), but that the incidence in Japan was rising rapidly, growing by 6.8% per year.

  Chihara et al; British Journal of Haematology, 2014, 164, 536–545; doi: 10.1111/bjh.12659

Globocan estimates that there were ~21,000 new cases of NHL Japan in 2012. Applying the 6.8% annual growth rate to the 2012 Globocan estimate, we project that there will be 35,500 new cases of NHL and 16,000 new cases of DLBCL in Japan in 2020. Assuming that 70% of DLBCL patients progress to receive second line therapy, we forecast a target market of 11,200 second-line DLBCL patients per year in Japan by 2020.

The patient market of 11,200 r/r DLBCL patients in Japan is almost as large as the combined market of ~12,500 patients for the currently approved indications for Treakisym in CLL and first-line and r/r low-grade NHL and MCL patients. We model peak sales of ~$100m for the DLBCL vs ~$120m for the currently approved indications.

Rigosertib iv interim Phase III analysis expected Q417

SymBio in-licensed rigosertib (iv and oral formulations, Japan and Korean rights) from Onconova in 2011 for MDS (myelodysplastic syndromes), a rare blood cancer. SymBio is contributing patients from Japan to the 225-patient global Phase III INSPIRE trial of iv rigosertib for the treatment of second-line HR-MDS (higher-risk MDS).

According to Onconova, an interim analysis is expected during Q417. The interim analysis will be performed after 88 events (deaths) have occurred, and will examine overall survival in the intent to treat population (ITT). For a trial to be stopped for efficacy at an interim analysis would usually require a much higher statistical hurdle than at the full analysis (ie generally p<0.05). Top-line data from the full analysis after 176 events is expected in H118; however, Onconova commented in August that enrolment for the trial has slowed recently, which it said could be related to seasonality. If enrolment does not return to desired levels, then full enrolment could be delayed by several months.

The INSPIRE trial has been designed following analysis of the failed Phase III ONTIME trial of iv rigosertib in HR-MDS. In the ONTIME trial, iv rigosertib failed to meet the primary endpoint, although it did show benefits in certain subgroups.

Patient recruitment in INSPIRE has been refined to HR-MDS patients who: have failed HMA2 (hypomethylating agent) treatment within nine months of HMA initiation; are younger than 82 years of age; and received their last HMA dose within the six months prior to entering the INSPIRE trial. In the ONTIME trial, iv rigosertib was able to improve survival in this particular patient group (data summarized in Exhibit 1). Hence, the trial design and recruitment criteria have been selected to try to improve the likelihood of INSPIRE trial success.

  HMA failures are defined as patients who have progressed, failed or relapsed following treatment with either Vidaza (azacitidine) or Dacogen (decitabine), the US approved HMAs. Only Vidaza is approved in Japan.

Exhibit 1: Median overall survival (OS) in the ONTIME trial

Median OS

N

Hazard ratio

p value

ONTIME trial

Rigosertib

8.2 months

199

0.87

(95% CI: 0.67-1.14)

0.33

BSC

5.9 months

100

ONTIME subset (as per INSPIRE inclusion criteria)

Rigosertib

7.9 months

77

0.48

(95% CI: 0.31-0.74)

0.0008

BSC

4.1 months

39

Source: Onconova, The Lancet Oncology 2016 (17): 496–508

If the interim analysis is positive, then partner Onconova may need to seek additional financing to complete the INSPIRE trial; this follows partner Baxter, which was funding half the trial costs, returning all rigosertib rights in March 2016.

IONSYS development suspended

In October 2015 SymBio acquired an exclusive licence in Japan to develop and market IONSYS (SyB P-1501) for the short-term management of acute post-operative pain from The Medicines Company. SymBio initiated a Phase III trial in Japan in June 2016, with the first patient recruited in November of that year; top-line data had been expected in Q317.

In May SymBio announced that it had temporarily suspended enrolment in the IONSYS Phase III trial. In June 2017 The Medicines Company announced that it was voluntarily withdrawing IONSYS from sale in the US market. Given that The Medicines Company was to supply the patches to SymBio, it will be challenging for SymBio to continue development of IONSYS.

SymBio is continuing to discuss with The Medicines Company the effects of its decision to withdraw IONSYS from the US market and we would expect SymBio may seek to recover damages. No announcement has been made.

We have removed the IONSYS program from our valuation model. We had previously valued the program at $52m.

Sensitivities

SymBio is subject to the usual drug development risks, including clinical development delays or failures, regulatory risks, competitor successes, partnering setbacks, financing and commercial risks. The main sensitivities include rigosertib and DLBCL clinical trial success or failure, and the ability to execute future in-licensing deals.

For Treakisym, key risks relate to the outcome of the DLBCL Phase III trial, obtaining regulatory approval for the liquid Treakisym formulations, and success in migrating patients to the liquid formulation to stave off competition from generic copies of Treakisym powder after 2021. The commercialization arrangements for Treakisym after 2020 (licence vs self-commercialize) will influence profit margins on the product.

With a recent focus on oncology drug prices in Japan, Treakisym pricing could come under scrutiny. Our current forecasts assume stable pricing; any price cuts could therefore adversely affect our sales projections.

SymBio is in discussions with The Medicines Company about the impact of its decision to voluntarily withdraw IONSYS from the US market. We do not currently model any compensation payments in regards to IONSYS, so if SymBio was to receive any compensation, this would represent potential to recover some of the value now written off by Edison.

The main sensitivity for rigosertib in 2017 will be the outcome of the pre-planned interim analysis of the Phase III INSPIRE trial of iv rigosertib in second-line HR-MDS, which partner Onconova expects during Q417. If the outcome is positive and the trial proceeds as planned, Onconova may need additional cash to continue funding the trial beyond the end of 2017; top-line data are expected in H118, although enrolment has slowed recently, which could potentially delay top-line data. If Onconova is unable to secure additional funds, this could also delay trial completion and therefore timelines. If the outcome of the interim analysis is negative, then not only would this have an impact on iv rigosertib development, but there could also be read-across to oral rigosertib.

SymBio is reliant on in-licensing further assets to fill its pipeline. We believe the CEO’s network is crucial to securing future deals, although we have limited visibility on the potential terms and timing of any such agreements.

Valuation

Our valuation of SymBio is virtually unchanged at $174m, or $3.6/ADR, based on a risk-adjusted NPV analysis, which includes $47m net cash at end December 2016. We use a 10% discount rate for approved products and 12.5% elsewhere. Our valuation includes Treakisym approved indications and the new DLBCL indication, plus rigosertib. We have rolled our valuation model forward in time and have made a number of adjustments to our main assumptions, which are summarized in Exhibit 2 below.

Exhibit 2: SymBio rNPV valuation

Product

Indication

Launch

Peak Sales ($m)

Value ($m)

Probability

rNPV ($m)

NPV/ADR ($/ADR)

Treakisym

LG NHL/MCL (r/r and 1st line); CLL

2010*

119

103.8

100-95%

99.8

2.1

Treakisym (DLBCL)

r/r DLBCL

2021

97

36.2

60%

15.6

0.3

Rigosertib (IV)

r/r HR-MDS

2020

30

18.8

50%

7.3

0.2

Rigosertib (oral)

LR-MDS (mono) or First-line HR-MDS (combo)

2022

66

33.1

25%

4.7

0.1

Net cash at 30 December 2016

46.6

100%

46.6

1.0

Valuation

238.5

174.1

3.6

Source: Edison Investment Research. Note: *Treakisym was launched in 2010 in r/r low-grade NHL/MCL; it received approvals in Japan in CLL in August 2016 and in first-line, low-grade NHL/MCL in December 2016.

We model a 95% likelihood that the RI Treakisym formulation will be launched by the start of 2023, thereby minimizing the penetration of generic copies of the Treakisym powder formulation. We model Treakisym market share slowly declining to 75% in 2031, followed by a more rapid decline from 2032 after the liquid formulation patents expire. We previously modelled Treakisym sales to decline by 30% in 2021 and 15% per year in subsequent years.

Our Treakisym valuation continues to assume that SymBio earns an average net margin of 10-12% on top-line reported Treakisym sales until 2020. However, we now assume that after 2020 the net operating margin gradually increases to reach 25% in 2023 and subsequent years as liquid formulations in-licensed from Eagle gain market share. We believe that this higher margin is achievable through a combination of a lower COGS and/or higher revenue share for SymBio.

We now model $13m of development costs to achieve approval for the RTD and RI liquid formulations of Treakisym.

We have added sales in r/r DLBCL (aggressive NHL) to our forecasts, as described earlier in this report. We now include potential peak sales of $97m in this indication, with a 60% probability and a 12.5% discount rate. We also model development costs of $18m for DLBCL.

We have maintained our peak sales assumptions and probabilities of success for rigosertib (iv and oral). However, we now model a higher COGS for rigosertib, which we believe better reflects the costs that SymBio would be likely to incur under the agreement with Onconova.

Following the suspension of development of IONSYS, we have removed all future costs and revenues from the product from our model. Any compensation payments from The Medicines Company would represent upside to our forecasts and valuation.

Our base-case forecasts assume that SymBio earns a net operating margin of 25% on Treakisym net sales from 2023 onwards. Should SymBio choose to establish its own salesforce to self-commercialize Treakisym after 2020, we estimate that it could achieve an operating margin of 50% on Treakisym sales by 2025. Under this scenario our valuation would increase by around $68m ($1.4/ADR) to around $242m ($5.0/ADR).

On the other hand, in a scenario where the Treakisym market share declines to 50% by 2031 (vs 75% for the base case), our valuation would fall by around $14m ($0.3/ADR) to around $160m ($3.4/ADR).

We currently assume stable Treakisym pricing. However, should Treakisym be subject to a price cut in the future, this could represent downside to our forecasts; a 10% price cut in 2018 would remove around $14m from our Treakisym rNPV, or $0.3/ADR.

Financials

Our financial forecasts have been updated to reflect Q217 reported financials and SymBio’s updated financial guidance for 2017, including the 23% increase in 2017 Treakisym sales guidance. Our Treakisym forecasts have also increased in 2018 given the higher base in 2017. The main changes to our forecasts are summarized in Exhibit 3.

We have increased SG&A expenses to reflect the 28% growth in H117. We have included the $12.5m (¥1.4bn) Eagle Pharmaceuticals upfront payment and forecast R&D spending on RTD and RI formulations of Treakisym. We have removed all future revenue and costs associated with the IONSYS program from our forecasts.

We estimate current cash should be sufficient to fund operations into H218, by which point the Phase III clinical trial for rigosertib iv should be complete. We model ¥950m/$8m of indicative debt in FY18.

Exhibit 3: Main changes to our financial forecasts; ¥-based future financial forecasts

¥m

2017

2017

 

2018

2018

 

Old

New

% change

Old

New

% change

Revenue

2,902

3,599

+24%

3,820

4,248

+11%

Research and development

(2,300)

(3,145)

+37%

(1,600)

(1,350)

-16%

Selling, general and administration

(1,750)

(1,850)

+6%

(1,837)

(1,924)

+5%

Operating profit (reported)

(3,191)

(3,930)

+23%

(2,306)

(2,017)

-13%

Profit before tax (reported)

(3,261)

(4,000)

+23%

(2,284)

(2,003)

-12%

Profit after tax (reported)

(3,264)

(4,003)

+23%

(2,288)

(2,006)

-12%

Source: Edison Investment Research

Exhibit 4: SymBio’s original and revised 2017 outlook versus our estimates; ¥-based future financial forecasts

 

Previous 2017 guidance

Revised 2017 guidance

2017 estimates

Difference

Revenue

¥2,903m

¥3,583m

¥3,599m

-¥16m

Operating loss

¥3,238m

¥3,932m

¥3,930m

¥2m

Ordinary loss

¥3,303m

¥4,009m

¥4,000m

¥9m

Net loss

¥3,306m

¥4,009m

¥4,003m

¥6m

Source: SymBio Pharmaceuticals and Edison Investment Research


Exhibit 5: Financial summary

Accounts: JPN GAAP, year-end: December, $’000s

 

2013

2014

2015

2016

2017e

2018e

Total revenues

 

 

13,558

17,301

17,108

20,957

31,850

37,593

Cost of sales

 

 

(10,744)

(12,641)

(11,949)

(12,955)

(22,423)

(26,465)

Gross profit

 

 

2,814

4,661

5,159

8,002

9,428

11,127

SG&A (expenses)

 

 

(8,369)

(9,343)

(9,734)

(12,072)

(16,372)

(17,027)

R&D costs

 

 

(9,317)

(6,850)

(18,006)

(14,753)

(27,832)

(11,947)

Other income/(expense) included in adjusted

 

 

0

0

0

0

0

0

Other income/(expense) excluded from adjusted

 

 

0

0

0

0

0

0

Reported EBIT

 

 

(14,872)

(11,533)

(22,581)

(18,823)

(34,776)

(17,846)

Finance income/ (expense)

 

 

89

219

144

48

(619)

124

Other income/(expense) included in adjusted

 

 

0

(16)

19

65

0

0

Other income/(expense) excluded from adjusted

 

 

612

1,488

(841)

(1,728)

0

0

Reported PBT

 

 

(14,172)

(9,841)

(23,259)

(20,437)

(35,395)

(17,722)

Income tax expense

 

 

(34)

(34)

(34)

(34)

(34)

(34)

Reported net income

 

 

(14,206)

(9,875)

(23,293)

(20,471)

(35,429)

(17,755)

Average number of ADRs - basic (m)

 

 

23.2

30.8

32.4

39.3

47.2

48.0

Basic Earnings per ADR

USD

 

(0.61)

(0.32)

(0.72)

(0.52)

(0.75)

(0.37)

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

 

(14,800)

(11,421)

(22,367)

(18,596)

(34,537)

(17,580)

Adjusted EBIT

 

 

(14,872)

(11,533)

(22,581)

(18,823)

(34,776)

(17,846)

Adjusted PBT

 

 

(14,172)

(9,826)

(23,278)

(20,503)

(35,395)

(17,722)

Adjusted Earnings per ADR

USD

 

(0.61)

(0.32)

(0.72)

(0.52)

(0.75)

(0.37)

Adjusted diluted Earnings per ADR

USD

 

(0.61)

(0.32)

(0.72)

(0.52)

(0.75)

(0.37)

 

 

 

 

 

 

 

 

 

Balance sheet

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

76

434

469

660

839

1,033

Goodwill

 

 

0

0

0

0

0

0

Intangible assets

 

 

69

585

460

372

307

260

Other non-current assets

 

 

324

430

465

680

680

680

Total non-current assets

 

 

469

1,449

1,394

1,711

1,826

1,973

Cash and equivalents

 

 

46,851

45,063

37,712

50,613

12,376

3,540

Inventories

 

 

1,107

2,164

1,177

2,413

3,072

2,900

Trade and other receivables

 

 

0

2,413

2,661

4,314

5,672

5,150

Other current assets

 

 

19,600

14,874

1,164

1,818

1,818

1,818

Total current assets

 

 

67,557

64,514

42,715

59,159

22,938

13,408

Non-current loans and borrowings

 

 

0

0

0

3,982

1,327

8,413

Trade and other payables

 

 

0

0

0

0

0

0

Other non-current liabilities

 

 

27

20

14

12

12

12

Total non-current liabilities

 

 

27

20

14

3,995

1,340

8,426

Trade and other payables

 

 

0

2,708

2,831

2,848

3,614

2,360

Current loans and borrowings

 

 

0

0

0

0

0

1,327

Other current liabilities

 

 

2,221

1,610

2,045

5,489

5,489

5,489

Total current liabilities

 

 

2,221

4,318

4,876

8,337

9,103

9,176

Equity attributable to company

 

 

65,779

61,625

39,220

48,539

14,322

(2,221)

Non-controlling interest

 

 

0

0

0

0

0

0

 

 

 

 

 

 

 

 

 

Cash flow statement

 

 

 

 

 

 

 

 

Profit before tax

 

 

(14,172)

(9,841)

(23,259)

(20,437)

(35,395)

(17,722)

Depreciation and Amortisation

 

 

72

112

215

227

239

266

Share based payments

 

 

589

838

911

1,212

1,212

1,212

Other adjustments

 

 

(236)

(1,830)

231

1,744

619

(124)

Movements in working capital

 

 

(1,123)

(688)

1,678

(111)

(1,251)

(560)

Net cash from operating activities (pre-tax)

 

 

(14,869)

(11,409)

(20,226)

(17,365)

(34,575)

(16,928)

Interest paid / received

 

 

59

238

156

53

(619)

124

Income taxes paid

 

 

(34)

(34)

(34)

(34)

(34)

(34)

Cash from operations (CFO)

 

 

(14,844)

(11,205)

(20,103)

(17,346)

(35,228)

(16,837)

Capex

 

 

0

(961)

(210)

(247)

(354)

(412)

Acquisitions & disposals net

 

 

0

0

0

0

0

0

Other investing activities

 

 

(11,790)

3,743

13,389

(141)

0

0

Cash used in investing activities (CFIA)

 

 

(11,790)

2,782

13,178

(388)

(354)

(412)

Net proceeds from issue of shares

 

 

35,907

4,818

(16)

28,550

0

0

Movements in debt

 

 

0

0

0

3,982

(2,655)

8,413

Other financing activities

 

 

(7)

(7)

(7)

(159)

0

0

Cash from financing activities (CFF)

 

 

35,900

4,812

(23)

32,373

(2,655)

8,413

Currency translation differences and other

 

 

62

1,823

(402)

(1,738)

0

0

Increase/(decrease) in cash and equivalents

 

 

9,328

(1,788)

(7,351)

12,902

(38,238)

(8,836)

Cash and equivalents at end of period

 

 

46,851

45,063

37,712

50,613

12,376

3,540

Net (debt) cash

 

 

46,851

45,063

37,712

46,631

11,048

(6,201)

Movement in net (debt) cash over period

 

 

9,328

(1,788)

(7,351)

8,919

(35,583)

(17,249)

Source: Edison Investment Research and SymBio Pharmaceuticals accounts. Note: Solely for the convenience of the reader the financial summary table has been converted at a rate of ¥113 to $1. SymBio reports statutory accounts in Japanese yen. These translations should not be considered representations that any such amounts have been or could be converted into US dollars at the assumed conversion rate

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Frankfurt +49 (0)69 78 8076 960

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60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

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United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison and is not regulated by the Australian Securities and Investment Commission. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2017 Edison Investment Research Limited. All rights reserved. This report has been commissioned by SymBio Pharmaceuticals and prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Aus and any access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.
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Frankfurt +49 (0)69 78 8076 960

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Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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INEOS has completed the acquisition of Total E&P’s interests in a number of Gainsborough Trough area UK licences operated by IGas in which Egdon has equity interests. Total’s partial exit from the UK shale sector and INEOS’s increasing dominance as the largest holder of UK shale acreage will raise questions over integrated oil sector appetite. Nevertheless, INEOS’s commitment to the sector should ensure that planning applications, seismic surveys and exploratory wells are expedited. With INEOS taking on Total’s cost-carry and 14th round obligations we estimate that the implied transaction values range from $600/acre to $2,000/acre.

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