Gaining the milestones on the road to recovery
Revenues for FY13 were SEK81.7m with a Q4 profit due to a milestone from Bayer. The loss was SEK18m with December net cash of SEK65m before the announced March capital-raising of SEK64m. BioInvent International AB, (BINV) now appears well placed to grow its revenues and the pipeline is being rebuilt. BI-505 should produce Phase IIa data in Q314 and BI 1206 may enter trials in late 2014. Good preclinical data on both candidates may gain partnering deals and upfront fees. The pipeline of collaborations based on the n-CoDeR library and F.I.R.S.T technology looks strong.
Pipeline progress, progressing projects
BioInvent has one clinical-stage product, BI-505, an antibody for multiple myeloma. Preclinical data has shown significantly enhanced antitumor activity when combining BI- 505 with Velcade or Revlimid. Data from the current, open-label 10-patient Phase II study is due by Q314. BI-1206, for non-Hodgkin’s Lymphoma may enter Phase I by late 2014. The data on both BI-505 and BI-1206 is stated by management to be strong enough for deals to be done. ADC-1013 (shared equally with Alligator Bioscience), is in preclinical and aims to stimulate an anti-cancer immune response. BioInvent also has two research programmes, both in oncology, and eight partner projects. One of these is now in Phase I, and one, with Bayer, is presumably in or approaching Phase I; there are a further 10 collaborations. The partner portfolio generated SEK82m revenues in FY13. BioInvent is investing in business development to secure new customers for its technology.
FY13: SEK65m cash into 2014 plus SEK64m raise
BioInvent aims to cover its core costs through revenues from its technology platforms n-CoDeR and F.I.R.S.T. The FY13 cash operational cost (ex-depreciation) was SEK98.5m offset by SEK81.7m of revenues. Q4 saw 62% of these revenues, SEK50m, mainly due to a large, undisclosed milestone payment from Bayer. The operating cash outflow was SEK15.3m; working capital changes increased this to a SEK54.7m outflow. BioInvent raised SEK19.4m gross in equity, leaving SEK64.7m of year-end cash. A rights issue of SEK49m and a placement of SEK15m should complete in March 2014, adding SEK64m and c 20m shares.
Valuation: Value creation from 2014
Edson’s modelling assumes that revenues from the technology platform cover core costs. BI-505 is assumed to be partnered at 50% risk adjustment. This indicates a current risk-adjusted value of SEK3.87 per share (formerly SEK3.20), but dilution of 25% is possible. BI-505 partnering increases this to SEK5.53/share pre-dilution.
To Read the Entire Report Please Click on the pdf File Below