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8/12/2019 Immunepharmaceuticals Analys 140314 Eng
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Immune PharmaceuticalsInitiation of coverage
Report
Important Event
Multiple Clinical and Business Milestones in 2014
An emerging leader in personalized antibody therapeutics
Immune Pharmaceuticals is a US based biotech company, with R&D in
Israel, specialising in the development and commercialisation of
targeted drugs, including monoclonal antibodies (mAbs),
nanomedicines, drugs for the treatment of inflammatory diseases and
cancer. Immune Pharmaceuticals has an attractive pipeline, and its most
interesting drug candidates are Bertilimumab (b-mAb) for the treatment
of inflammatory bowel diseases, (Crohns Disease and UlcerativeColitis), Severe Asthma and other indications, which is undergoing
phase II studies, and NanomAbs (second generation Antibody Drug
Conjugates) with greater payload capacity and better pharmacokinetic
properties). Although NanomAbs is in the pre-clinical stage, the field of
cancer treatment using antibody drug conjugates (ADCs) is interesting.
According to Datamonitor, worldwide Antibody Therapeutic sales
exceed USD 50 billion and continue to grow double digit. Leading
Antibodies include Humira and Remicade used for Rheumatoid
Arthritis and Inflammatory Bowel Diseases (IBD).
Epicept AcquisitionImmune acquired Epicept (EPCT) in August 2013 in order to become a
public company. Immune is preparing the phase III clinical trials for
Amiket, which received Fast Track designation from the FDA for
Chemotherapy Induced Neuropathic Pain, and seeking a development
and commercialization partner. Given Immunes management track
record in drug development and corporate partnering we expect
initiation of phase III and a revenue generating transaction for Amiket
during 2014.
Will need money from the market
According to our estimates, the b-mAb for treatment of ulcerative
colitis (UC) can reach, at the earliest, the market in 2017, meaning that
the company will have to find funds of SEKm 70 to 100 annually to
fund the project portfolio.
Valuation Potential
Given the current rise of the share on the stock exchange, we believe
more investors have begun to see the potential of the company's
attractive product pipeline with short term clinical and business
milestones as well as expected institutional financing and up listing to
ASDAQ in the US, we see significant share-price appreciation
potential through 2014. Our sum of the part valuation indicates a net
present value of SEKm 1235 for Immune Pharmaceuticals.
Risk and Return Potential
Return Potential High
Risk High Risk
Current Price 28.00
High/Low (12M) 35.90/10.55
Number of Shares (m) 13.3
Market Capitalisation (SEKm) 353
Net Debt (SEKm) 29Enterprise Value (SEKm) 382
Reuters/Bloomberg IMNP.ST/IMNP SS
Listing First North Premier
Estimates and Valuation (SEK)
FY (Dec) 2012 2013E 2014E 2015E
Sales 4 0 65 65
EBITDA -17 -17 -19 -34
EBIT -17 -18 -20 -35
Pre-tax Result -17 -22 -23 -38
EPS Adjusted -1.37 -1.74 -1.54 -2.11
BVPS -7.44 -8.48 0.87 3.95
Dividend 0.00 0.00 0.00 0.00EPS Growth - NM NM NM
EBIT Margin -441.0 -9,034.0 -30.0 -53.5
ROE 36.8 21.6 47.2 -85.6
ROCE 77.4 30.8 44.3 -193.2
Net Debt/Equity -0.52 -0.34 -2.01 -0.34
EV/Sales 60.47 1,909.00 6.96 8.26
EV/EBITDA NM NM NM NM
EV/EBIT NM NM NM NM
P/E Adjusted NM NM NM NM
P/BV NM NM 32.16 7.09
Dividend Yield 0.0 0.0 0.0 0.0 Source: Company Reports, Erik Penser Bankaktiebolag
Price trend, 12 months
10
15
20
25
30
35
40
M A M J J A S O N D J F M
Immune Pharma OMXS
Source: FactSet
Date Event Place
31/03/2014 Q4 report
See last page for the disclaimer.
EPaccess
Health Care | United States
14 March 2014
Equity Research | +46 8 463 80 00
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Immune Pharma Full-year EBIT Performance Immune PharmaQuarterly EBIT Performance
-10,000
-9,000
-8,000
-7,000
-6,000
-5,000
-4,000
-3,000
-2,000
-1,000
0
-40
-35
-30
-25
-20
-15
-10
-5
006 07 08 09 10 11 12 13E 14E 15E
EBIT EBIT Margin
EBIT,
SEKm
EBITMargin,
Percentages
-7,000
-6,000
-5,000
-4,000
-3,000
-2,000
-1,000
0
-14
-12
-10
-8
-6
-4
-2
010 10 10 10 11 11 11 11 12 12 12 12 13 13
EBIT EBIT Margin
EBIT,
SEKm
EBITMargin,
Percentages
Source: Company Reports, Erik Penser Bankaktiebolag Source: Company Reports, Erik Penser Bankaktiebolag
Immune Pharma Financial Position Immune PharmaShare Structure, Management
-250
-200
-150
-100
-50
0
-40
-30
-20
-10
0
10
20
30
40
50
60
06 07 08 09 10 11 12 13E 14E 15E
N et De bt N et De bt / Equ it y
N
etDebt,SEKm
N
etDebt/Equity
Market Cap (SEKm) 353
No of Outstanding Shares (m) 13.3
Avg No of Daily Traded Shares (000s) 13
Free Float (Shares) 74.9%
Main Shareholders Votes Shares
Daniel Teper 25.0% 25.0%
Business Asset 4.9% 4.9%
Melini Capital 9.2% 9.2%Jean Kadouche 3.8% 3.8%
vriga 57.2% 57.2%
Chairman Daniel Teper
CEO Daniel Teper
CFO Robert W. Cook
IR Anna Baran
Phone Number / Internet - / www.immunepharmaceuticals.com
Next Report 31 March 2014
Note: Negative numbers indicate a net cash position
Source: Company Reports, Erik Penser Bankaktiebolag Source: Company Reports, Erik Penser Bankaktiebolag
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Investment case
We are initiating coverage of Immune Pharmaceuticals. We estimate that the
company's main candidate, Bertilimumab, has the potential to become an
alternative in the market for inflammatory bowel diseases (IBD). Bertilimumabs
mechanism of action is unique and differs from its competitors as it is aimed
directly at the onset of the disease.
Attractive potential for Bertilimumab
Bertilimumab (b-mab) is a first-class therapeutic monoclonal antibody (mAb)
with high specificity for eotaxin-1, a well-studied inflammatory disease (ID)
biomarker. With a differentiated mechanism of action, we believe that b-mab has
the potential to match the market leader, Remicade (global sales USDbn 8 in
2012), and we see a potential trigger in the stock price if b-mab manages to
obtain Orphan Drug status (OD) from the FDA for the treatment of bullous
pemphigoid (BP), a chronic inflammatory skin disease that affects an estimated
30,000 patients worldwide and that currently has no permanent treatment. Wealso need to see positive results from the phase II clinical study for the treatment
of BP, which is expected to be completed in 1H14.
Big upside for those who can wait
In our forecasts, we expect that the company will manage itself to launch b-mab
for the treatment of BP, provided that OD status is achieved and that the revenue
amounts to SEKm 532 in 2023. We expect that the company will licence-out b-
mab for the treatment of IBD. We estimate the global market for IBD to
approximately USD 15bn in 2019, when b-mab could be launched on the market
for IBD. Furthermore, we estimate that b-mab could achieve sales of SEKbn 2,9
in 2025, with an estimated market penetration of 28%, and a pricing of USDk 25per year (compared with Remicades USDk 24 per year) . If Phase II studies on b-
mab are positive, the project will be attractive to a potential partner with expertise
in the IBD market. Hence, it is likely that Immune Pharmaceuticals will sign a
partnership agreement in early 2015. We model an advance payment of SEKm 65
in 2015, plus another SEKm 300 in milestone payments from 2023, SEKm 365 in
total plus royalties of 15% - 20%.
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Immune PharmaceuticalsSum of The Parts
Source: Erik Penser Bankaktiebolag,
Other projects
NanomAbs has the potential to attract investors
Monoclonal antibodies (mAb) are used in biochemical and medical research as
reagents for proteins. Since they only bind to one type of protein, they are more
specific than polyclonal antibodies, which can bind to many different types of
protein. Monoclonal antibodies are often used to detect cancer, but many are not
strong enough to kill tumours on their own. For this reason, conjugated mAbs
have been developed. In simple terms, a conjugated mAb is a mAb that carries a
cytotoxic load (i.e. toxins or radionuclides), also known as antibody-drug
conjugates (ADC). According to Roots Analys, market research indicates that the
ADC market is expected to grow to USDbn 9 in 2023. Immune Pharmaceuticals
NanomAbs platform is an ADC technology discovered by Professor Shimon
Benita at the Hebrew University of Jerusalem (HUoJ) in collaboration with one
of the company's founder, Jean Kadouche, PhD. NanomAbs has unique
characteristics, such as controlled drug release, not found in other ADCs. The
company's objective with NanomAbs is to create various attractive drug
candidates, one of which is AMB8LK (potential to detect/kill cancer cells in thepancreas and lungs). Since the candidates are still at the preclinical stage, we
estimate that a NanomAbs partnership could yield about SEKm 250 in advance
payments and that the entire project could be worth up to SEKm 300900 in total.
AmiKet is a joker
The acquisition of EpiCept in 2013 means that Immune Pharmaceuticals has
control of AmiKet, which is in phase III studies for chemotherapy-induced
peripheral neuropathy (CIPN), a condition experienced by 30-40% of cancer
patients receiving chemotherapy. However, the study has been paused to await
a partnership, which we expect will happen in H2 2014. We believe that AmiKet
has the potential to reach the market with the help of a partner, and we estimate
the market to about USDbn 2.7. However, we believe licensing out of AmiKet
could take place as early as in 2014 and could raise about SEKm 50 to 250 in
total milestone payments to the company.
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Crolibulin and Azixa
Immune Pharmaceuticals also gained two other projects from the acquisition of
EpiCept, Crolibulin and Azixa, each of which have completed phase II studies.
Both products are small molecules that use vascular disturbances to stimulate
signals of cell death (apoptosis). However, the company indicates that it will not
drive these projects forward without a partner, so in this analysis we choose toprimarily focus on the other projects.
Immune PharmaceuticalsProduct Portfolio
Source: Erik Penser Bankaktiebolag,
Immune PharmaceuticalsOur estimated calendar
Anticipates Milestones
Potential uplisting from the OTC BB to the NASDAQ Q1 2014
Bertilimumab in Bullous Pemphigoid
Initiation of Phase II study with bertilimumab in bullous pemphigoid H1 2014
Orphan Disease designation by FDA for bertilimumab in bullous pemphigoid H2 2014
Potential announcement of topline Phase I I results with bertilimumab in bullous pemphigoid H2 2014
Cond uct end- of- Phase II meet ing wit h FDA for ber tilimu mab in bullous pemphigoid H2 2014
Initiation of Phase III study with bertilimumab in bullous pemphigoid 2015
Projected FDA approval of bertilimumab in bullous pemphigoid 2017
Bertilimumab in Inflammatory Bowel Diseases and Asthma
Expansion of ongoing Phase I I study with bertilimumab in ulcerative colitis into EU and US H2 2014
Potential announcement of topline Phase I I results with bertilimumab in ulcerative colitis 2015
Pot ential annou ncement of ber tilimumab d evelopment par tnership agreement in IB D 2015
Potential advancement of bertilimumab into Phase II study in Crohn's disease 2015
Potential advancement of bertilimumab into Phase II study in severe asthma 2015
Init iat ion of Phase I I I study with berti limumab in moderate to severe u lcerat ive coli tis 2016
Projected FDA approval of bertilimumab in ulcerative colitis 2019
AmiKetPotential announcement of AmiKet out-licensing agreement H2 2014
Initiation of Phase III study with AmiKet in chemotherapy-induced peripheral neuropathy (CIPN) H2 2014
Projected FDA approval of AmiKet for CIPN 2016
NanomAbs
File IND application for Phase I clinical evaluation of NanomAbs candidate H1 2015
Potential announcement of NanomAbs out-licensing agreement 2015 Source: Erik Penser Bankaktiebolag.
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History ofImmune Pharmaceuticals
Immune Pharmaceuticals is a biotechnology company, headquartered in New
York and with research/development facilities in Herzliya Pituach and Rehovot,
Israel. The present form of the company focuses on developing nanotherapeutic
drug candidates (mAb and ADC) for inflammatory diseases and cancer.
History
Prior to the merger, Immune Pharmaceuticals was a privately held biotechnology
company specialising in the development of nanotherapeutic drugs (mAbs and
ADC) for inflammatory diseases and cancer. Its focus was mainly on the
development of one leading drug candidate, Bertilimumab. This is a mAb
purchased from ICO Therapeutics in June 2011 for USDk 500 cash up-front,
USDm 32 in potential milestone payments and royalties, 600k in Immune
Pharmaceuticals stock at a closing price of USD 2 per share, 200k Immune
Pharmaceuticals warrants and 6.14% ownership (fully diluted).
ICO retains certain rights to Bertilimumab but focuses on developing
Bertilimumab for ophthalmic indications.
EpiCept before the merger
Parts of the Immune Pharmaceuticals product portfolio came with the acquisition
of EpiCept. EpiCept was a specialty-pharma, a pharmaceutical company
working on the development of drugs for the treatment of cancer and pain, with a
focus on the latter. The company's lead drug candidate, AmiKet, is a patented
prescription cream formulation containing amitriptyline 4% and ketamine 2%.
Other new drug candidates Azixa and Crolibulin were acquired by EpiCept in a
previous merger with Maxim Pharmaceuticals (January 2006). In January 2012,
Suntrust Robinson Humphrey evaluated strategic alternatives to maximise the
commercial opportunity of AmiKet, which they estimate to about USDm 175250 in upfront payments and milestone payments from partners.
Acquisition of EpiCept
In November 2012, EpiCept and Immune Pharmaceuticals signed an agreement
to merge. Technically, Immune Pharmaceuticals acquired EpiCept, and as a result
the new company is called Immune Pharmaceuticals. In connection with the
merger, which was completed in August 2013, EpiCept issued ordinary shares to
Immune Pharmaceuticals shareholders. EpiCepts shareholders retained
approximately 19% ownership and Immunes shareholders received
approximately 81%, on a fully diluted basis. EpiCept previously traded on
Nasdaq OMX Stockholm, but the new company moved after the merger to First
North Premier. The new group has a broad portfolio of product candidates.
Immune Pharmaceuticals has expertise in therapeutic mAbs, which remains an
area of great interest for product development and market potential, and holds
ADC technology, which is a hot research field in the industry. One result of the
merger is that more resources are allocated to EpiCepts drug candidate AmiKet.
The company is currently working to find a project partner that can fund the last
part of the Phase III studies.
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Diseases
Inflammatory bowel diseases (IBD)
The term inflammatory bowel disease (IBD) is normally used as a generic term
for Crohn's disease (CD) and ulcerative colitis (UC), which are inflammatory
diseases of the intestine.
IBD is characterised by chronic inflammation of the intestinal lining (mucosa).
The cause of the disease is unknown, but both genetics and the environment play
a role. The disease is chronic, often starts at 15-40 years of age and usually goes
in spells with long periods of low or no disease activity. Population-based studies
show that approximately 20% of patients with CD develop chronic continuous
disease activity. For UC the figure is much lower. The prevalence of IBD is
estimated to be >200 cases per 100,000, or about 1.01.5 million people in the
United States, approximately 200,000 people in Canada, and 2.02.2 million
people in Europe. CD can affect any part of the gastrointestinal tract (GI), from
the mouth to the anus, but most commonly it affects the lower part of the small
intestine, while UC is limited to the colon and rectum. The symptoms of both CD
and UC include diarrhoea, abdominal pain, fever and weight loss.
People suffering from IBD are severely debilitated and the disease has a
significant impact on an individual's daily wellbeing and function. These effects
impact more negatively on the individual's quality of life than, say, chronic back
pain, rheumatic heart disease and intellectual disability.
Treatment and management
People are most commonly affected by IBD between the ages of 16 and 30, and if
the disease becomes chronic intestinal inflammation (colitis) it can last for 8-10
years. In conjunction with this, there is also an increased risk of colorectal cancer(CRC), which is difficult to detect. Due to the high risk of cancer developing, the
practice of doctors (gastroenterologists) is to conduct regular endoscopic
screening of patients. However, there is no evidence to suggest that screening
patients with UC improves survival. Today's treatment initially consists of
corticosteroids and anti-inflammatory agents. In moderate to severe cases of IBD,
when medical treatment in some cases does not work, surgery to remove part, or
all, of the colon (colectomy) may help. This is considered in 25-40% of patients
afflicted with IBD.
Recent evidence supports the correlation of eotaxin-1 with disease severity
Eotaxin-1 is a potential biomarker and therapeutic target for UC and CD.
Eotaxin-1, also known as CC-motif chemokine 11 (CCL11) or eosinophil
chemotactic protein, is a chemokine, which is one of the key regulators of a
number of pathological reactions such as inflammation, angiogenesis, and certain
infections. Since eosinophils are an important part of innate immunity, the
accumulation of eosinophils in tissues can be harmful as they are known to
release cytokines to enhance inflammatory signalling. This inflammation may be
pathological in CD and UC. Therefore, drug-absorbing eosinophil accumulation
may have a role in the treatment of these indications.
Clinical data supports the suggestion that eotaxin-1 is a biomarker for UC and
CD. This biomarker has been identified not only as a potential indicator of the
disease but also as a target for therapeutic intervention. An antibody such as
Bertilimumab, which binds to eotaxin-1, therefore has a solid scientific basis to
be able to treat UC and CD. A clinical study has screened a large number of
cytokines and chemokines to search for correlations between various diseases.
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The study examined 40 healthy controls against 137 UC patients. The chart
below shows tissue taxin-1 levels for several groups of patients in the study. The
first column contains healthy subjects (Ctrl). Qui refers to patients who are
categorised as quiescent, meaning that their disease is not active. The remaining
categories represent patients with mild (Mild), moderate (Mod) and severe (Sev)
UC. Eotaxin-1 levels in the tissue exhibit a clear increasing trend in patients with
increased severity of the disease. The difference between groups was statisticallysignificant. The researchers reported similar differences in tissue eotaxin-1 gene
expression.
Immune PharmaceuticalsEeotaxin-1 levels in different states of UC
Source: Erik Penser Bankaktiebolag, Coburn et al. (2013, PLoS One, 8 (12): e82300)
The researchers in this study concluded that eotaxin-1 is a strong potential
candidate for a biomarker in UC patients. An antibody targeting eotaxin-1 may be
a good therapeutic candidate for the treatment of UC. Immune Pharmaceuticals is
acting on this proposal by requiring that patients enrolled in the ongoing phase II
study have a minimum of 100 pg/mg eotaxin-1 in a biopsied tissue sample. Since
Bertilimumab specifically targets eotaxin-1, these patients may also be the most
likely to respond to this treatment.
Bullous pemphigoid
Bullous pemphigoid (BP) is a chronic autoimmune skin disease that primarily
affects skin cells, especially in the areas around the lower abdomen, groin, and
extremities. The disease tends to persist for months or years, with periods of
deterioration. The range of how the disease is expressed is extremely wide, but
usually there is an itchy rash with widespread blistering (bullae). Blisters may
vary in size from a few millimetres to several centimetres. BP may be difficult to
diagnose before blistering starts since the symptoms are usually only itchy red
patches. BP is characterised by spontaneous outbreaks. Even without treatment,
BP symptoms are often self-limiting and the symptoms may disappear after a
period of several months to years, but can become very extensive during the
outbreak. The disease is rare, affecting approximately 14 in one million
worldwide, but the risk increases with age. In total there are an estimated 30,000
cases worldwide.
Treatment and management
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The goals for treatment of BP are currently focused on symptom relief and
prevention of infections, primarily to help the skin to heal as quickly as possible.
Antibiotics (tetracycline and minocycline) have been used primarily for mild to
moderate symptoms of the disease and are used in combination with various skin
creams containing steroids for more effective treatment. Once blisters have
stopped forming, the number decreases over a long period (months or years).
Because steroids have some unwanted side effects, dermatologists try to reducethe dose as quickly as possible. If this happens too quickly, outbreaks of blisters
occur again. Knowledge of the disease is still very limited. High mortality is
observed in BP patients previously suffering from severe heart disease (25-40%).
The highest mortality rate of BP is observed in patients undergoing a different
treatment. For example, patients at risk of BP also have heightened risk of, for
example, hypertension, diabetes and heart disease. Treatments for these disorders
may exacerbate the progression of BP.
Role of eotaxin-1 in bullous pemphigoid
Onset of BP is partly driven by eosinophils, which secrete pro-inflammatory
cytokines and proteases. Eotaxin-1 (CCL11) and related eotaxin CCL24 are also
involved in the onset of BP. The chart below illustrates the levels of eotaxin-1 in
the serum of BP patients compared with healthy donors (HD) and patients with
pemphigus vulgaris (PV), a related condition. Patients with BP had a statistically
significant difference in concentration of eotaxin-1 as compared to both healthy
donors and PV patients. The chart to the right shows the same data for individual
patients, according to severity of the patients' condition (mild, moderate and
severe).
Severe asthma
Asthma is a common chronic disease associated with episodic inflammation of
the airways. According to the Global Initiative for Asthma (GINA), more than
300 million people worldwide now have asthma, a number that is expected to rise
to 400 million by 2025. It is the most common chronic disease among childrenand is a global concern; over 80% of deaths due to asthma occur in low and lower
middle income individuals. The disease is under-diagnosed and under-treated,
and creates a substantial burden on individuals and families and can limit
Immune PharmaceuticalsEotaxin-1 levels in BP Immune PharmaceuticalsEotaxin-1 in BP
Source: Company reports, Erik Penser Bankaktiebolag, nther, C. et al., 2011. Source: Company reports, Erik Penser Bankaktiebolag, nther, C. et al., 2011.
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individuals' activities for a lifetime. Severe asthma affects up to 15% of patients
diagnosed with asthma and who respond poorly to current treatments.
The Immune Pharmaceuticals Bertilimumab project
Bertilimumab (formerly CAT-213)
Immune Pharmaceuticals leading drug candidate is Bertilimumab (b-mab), ahuman monoclonal antibody (mAb) designed to neutralise chemokine (a
signalling protein), eotaxin-1 (also known as CC-motif chemokine 11 or CCL11)
originally developed as CAT-213 by Cambridge Antibody Technology (CAT), a
company acquired by AstraZeneca in 2006.
In 2007, CAT-213 was licensed to ICO Therapeutics (a Canadian biotech
company that also develops b-mab under the name iCo-008 for ophthalmic
indications). In June 2011, ICO granted Immune Pharmaceuticals an exclusive
license to develop and commercialise b-mab for systemic applications, which
were initially moderate to severe ulcerative colitis (UC) and inflammatory bowel
disease (IBD), as well as for asthma and Crohn's disease (CD) as the next targets.
Immune Pharmaceuticals intends to develop b-mab for the treatment of UC and
CD, severe asthma and bullous pemphigoid (BP). Recently, the company
received permission from the Israeli health authorities to initiate a phase II
randomised, double blind, placebo-controlled, parallel group study on b-mab in
patients with moderate to severe UC. The study, which began in Q3 2013 and
will be expanded in 2014, is being conducted in parallel in both the EU and US.
The company anticipates that patient enrolment will be completed in 2014 and
that the first results will be published in 2015.
Pending a favourable outcome, the company plans to submit an application for
Orphan Drug status for b-mab for the treatment of BP to both the FDA and the
European Medicines Agency (EMA). If approval is granted, the company wouldhave market exclusivity as well as financial incentives for b-mab. The company
intends to initiate a pilot study of b-mab in patients with BP in mid-2014. Finally,
Immune Pharmaceuticals also plans to conduct a pilot phase II study on b-mab
for the treatment of severe asthma in patients with high concentrations of
eosinophil and eotaxin-1 in their sputum. The study is scheduled for 2015,
followed by an exploratory phase II study on CD, also in 2015.
Current treatments of IBD
Tumoricidal drugs (TNF inhibitors) such as Johnson & Johnsons Remicade
(infliximab) are the primary drugs used for the treatment of CD and UC today.
However, there is minimal product differentiation among these TNF inhibitors.Around 30% of patients for each disease (CD and UC) suffer from moderate to
severe disease states, and one third of these patients (who suffer from moderate to
severe conditions) are deemed as suitable candidates for advanced therapies.
Approximately 25-40% of anti-TNF treatments fail. We believe that b-mab could
be positioned as a first-line treatment in IBD, especially considering that b-mabs
mechanism impacts higher up in the signal path compared to anti-TNFs, where
the potential for premium pricing can occur.
Potential for Bertilimumab
In the US, the market for inflammatory bowel disease is over 1.4 million patients.
The US IBD market was worth USDbn 4.3 in 2011 and is expected to reach
USDbn 7.7 in 2017. The global IBD market could reach almost USDbn 10 in
2017. B-mab has the potential to take a significant part of the IBD market if it is
eventually approved for the treatment of both CD and UC. The ability to use b-
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mab in patients who have high levels of eotaxin-1 may provide an advantage for
b-mab over TNF inhibitor drugs, on the grounds that b-mab may inhibit
inflammation by binding of eotaxin-1.
Bertilimumab undergoing more clinical phase II studies
Three clinical studies of b-mab have been conducted in Europe: CAT-213-0101,
CAT-213-0103 and CAT-213 to 0203. These studies investigated thepharmacodynamic properties of b-mab to provide evidence of the tolerability of
b-mab in intravenous administration, both intranasally as intraocularly. These
trials included initial studies of the drug's efficacy in the treatment of allergic
rhinitis and allergen-induced conjunctivitis. B-mab was shown to be effective in
these indications. The problem in these trials was that the wrong patient groups
were selected, and the patients were chosen without regard to eotaxin-1 status.
The strategy of Immune Pharmaceuticals, to target indications such as IBD where
eotaxin-1 is a biomarker for the disease, has much more potential to be effective.
The Immune Pharmaceuticals AmiKet project
AmiKet: analgesic cream for pain relief
AmiKet is a topical analgesic consisting of amitriptyline 4% and ketamine 2%.
This patented combination has received FDA Fast Track as a treatment for
chemotherapy-induced peripheral neuropathy (CIPN) in cancer patients
previously treated with chemotherapy. AmiKet has been tested extensively in
phase II studies. In these studies, AmiKet demonstrated analgesic efficacy, good
tolerance and an attractive side-effect profile compared with oral therapies.
AmiKet can be placed as a primary therapy and used in combination with other
analgesics, which enhances the value of the product. AmiKet has received Fast
Track status from the FDA for a phase III study in chemotherapy-induced
peripheral neuropathy, a condition for which no treatments are approved. This
represents a significant market opportunity for a highly prevalent medical need.The company expects to license AmiKet in 2H 2014 to another unknown partner.
CIPN creates a significant market opportunity
Neuropathy is caused by nerve damage to the peripheral or central nervous
system, which may result from traumatic injuries, infections, metabolic problems,
or exposure to toxins. Many chemotherapeutic agents have severe neurotoxic
effects, and are directly linked to the development of CIPN in patients receiving
systemic treatment for their cancer, particularly treatment with platinum
compounds (taxanes). Taxanes are approved and recommended for the treatment
of the most common cancers, including breast, prostate, lung and ovarian cancers.
Patients treated with taxane-class chemotherapy have a 50-70% risk ofdeveloping CIPN. For some people, transient pain can be relieved by lowering
the dose of chemotherapy or temporarily halting it, which reduces the pain within
a few weeks. However, for other patients, symptoms can become persistent.
Using survey data from the National Cancer Institute 2011 on physician-stated
cytostatic treatment rates for cancer, we estimate that approximately 90% of
cancer patients are treated with chemotherapy, and around 60% are treated with a
taxane-based regimen. With an estimated 577,190 people in the US living with
advanced cancer, around 55-67% of patients are treated for neuropathic pain. We
believe that AmiKet is a potential candidate for these patients and we estimate a
potential value for the project of SEKm 130.
Competition is open in CIPN
According to Datamonitor, the overall market for neuropathic pain in the US is
expected to grow by 2.7% per year from 2010 until 2019, peaking in 2018. The
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total projected market is forecasted to be USDbn 2.7. Antidepressants and local
anaesthetic drugs represent the largest market share for the treatment of
neuropathic pain. However, there are products currently in clinical development
that are expected to gain significant market share if they reach the market.
Existing patents for approved products will also expire, with the exception of
Lyrica (pregabalin), the leading drug marketed by Pfizer. Most drugs currently
used for the treatment of peripheral neuropathic pain will go off-patent over thenext five years. Over the past 12 years, seven drugs have been approved for the
treatment of neuropathic pain. However, there are no drugs approved for the
treatment of CIPN, and only five compounds are being developed specifically for
CIPN, leaving the field open for AmiKet.
AmiKet opportunities
We believe that AmiKet has the potential to become a substitute for, or
complement to, oral therapies for pain. We believe that AmiKets advantages and
disadvantages, above all its safety and efficacy, will play a crucial role in the
market share it can take. However, these parameters are still uncertain but we
expect that the completion of the phase III study will shed light on how attractive
AmiKet is. We do not wish to make detailed forecasts of AmiKets market
opportunities. Our forecast is that a partnership agreement may be finalised in
mid-2014. Furthermore, we estimate with a probability of 35% that AmiKet will
receive FDA approval in 2016 and that pricing will be comparable with Lyrica
(USD 150 for a 30-day treatment). Our sum-of-the-parts indicate a present value
of SEKm 130.
The Immune Pharmaceuticals NanomAbs project
NanomAbs
Monoclonal antibodies (mAb) are used in biochemical and medical research as
reagents for proteins. Since they only bind to one type of protein they are morespecific than polyclonal antibodies, which can bind many different types of
protein. Many monoclonal antibodies have started to be used clinically in recent
years, in patients with rheumatoid arthritis and cancer. But many are not strong
enough to eliminate tumours on their own, and are used more for detection of, for
example, cancer. For this reason, conjugated mAbs have been developed. In
simple terms, a conjugated mAb is a mAb that carries a cytotoxic load (i.e. toxins
or radionuclides), also known as antibody-drug conjugates (ADC).
NanomAbs basically consists of PEGylated polymeric nanoparticles (PPNs),
proprietary linker molecules embedded within the PPN, an anti-cancer drug
incorporated within the PPN and a therapeutic monoclonal antibody (mAb) thatbinds to a specific tumour antigen. The goal of Immune Pharmaceuticals with
NanomAbs is to create various attractive drug candidates.
AMB8LK is Immune Pharmaceuticals initial drug candidate, developed using
NanomAbs. AMB8LK is an anti-H ferritin formed with NanomAbs to deliver
paclitaxel and gemcitabine in the same nanoparticle. The idea behind the
selection of H ferritin is based on its overexpression on the surface of tumour
cells in certain cancers, such as pancreatic and lung cancers.
Only two ADCs, Adcetris (brentuximab vedotin, developed by Seattle Genetics)
and Kadcyla (ado-trastuzumab emtansine, developed by Roche and Immuno
Gen), have been launched on the market, in 2011 and 2012, respectively.
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Others, such as CDX-011 from Celldex, use SGEN ADC technology, and are in
late-stage clinical development. Combined sales of Adcetris and Kadcyla reached
USDm 160 in H1 2013. But according to market assessment by Roots, the market
is expected to grow to USDbn 9 by 2023. This is supported by increased
investment in the biotechnology sector. For example, Roche expects to spend
over USDm 200 to build an ADC production facility to support Kadcyla, and
eight other ADCs are in development. Other companies making similarinvestments in the segment include MedImmune (a subsidiary of AstraZeneca),
Bayer Healthcare and BristolMyers Squibb. At the beginning of the year,
MedImmune paid USDm 240 to acquire privately owned Spirogen, which has
new ADC technology that includes pyrrolobenzodiazepine-binding mAbs.
Contract manufacturers, such as Sigma Aldrich and Lonza, have also recently
expanded their commercial ADC capability. Immune Pharmaceuticals
NanomAbs platform is an ADC technology discovered by Professor Shimon
Benita at the Hebrew University of Jerusalem (HUoJ) in collaboration with the
company's founder, Jean Kadouche, PhD. In April 2011, Immune
Pharmaceuticals was granted an exclusive license for NanomAbs technology for
intravenous and intramuscular targeted delivery of active agents. This gives
Immune Pharmaceuticals the right to develop NanomAbs with clinical studies in-
house to develop drug candidates for cancer and other diseases.
Compared with independent mAbs and ADC, the therapeutic profile of
NanomAb is more effective. For example, Immune Pharmaceuticals research
shows that NanomAbs binds very strongly with target tissue and has a minimal
off-target effect, which could lead to fewer/less severe side effects. When
NanomAbs binds to tumour tissue it enters the tumour with the help of the mAb
component. Once inside the cancer cell, the nanoparticle is released in a
controlled manner, stimulating the tumour to eliminate itself. This is a unique
feature of NanomAbs not found in other ADCs (according to companymanagement). We expect the company to enter the clinical phase with AMB8LK
in 2019, and we value NanomAb at a total of approximately SEKm 30.
Immune PharmaceuticalsNanomAb
Source: Erik Penser Bankaktiebolag,.
Forecasts for Immune Pharmaceuticals
We used a sum-of-the-parts (SOTP ) methodology to arrive at a value of SEKm
1235. We believe that SOTP is the best method to value Immune
Pharmaceuticals, as the company has several proprietary assets with potential in
multiple indications. We have used the following assumptions in ourmethodology:
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Bertilimumab is approved in 2017 for bullous pemphigoid (BP) and in
2019 for ulcerative colitis (UC) with a 35% chance.
Introductory pricing for Bertilimumab of USDk 25 on an annual basis
per treatment (3% annual price increase). If Bertilimumab receives OD
indication for BP the price may be increased further, since Remicade
costs up to USDk 24 for an annual course.
Bertilimumab achieves 12% maximum penetration in severe BP in themajor markets (USA/EU/CA/JP).
Bertilimumab achieves 28% maximum penetration in moderate/severe
UC in the world by 2027.
Contribution of SEKm 130 from AmiKet (in phase III but uncertain
potential).
Sales
We calculate that Immune Pharmaceuticals will not be able to generate revenue
from Bertilimumab until 2017. Then we believe that the drug candidate will
receive approval as an Orphan Drug for BP in the USA and EU. We also expect
that the company will license out the rights for Bertilimumab in the treatment of
IBD during 2015-2016 up to SEKbn 1,2 plus a royalty percentage of sales of
12%. In total this corresponds to an income of approximately SEKm 611 in 2020.
COGS/gross margin
It is difficult to currently state the manufacturing costs for Bertilimumab. But if
we compare with previous data from CAT-213 (the predecessor of
Bertilimumab), we estimate that Immune Pharmaceuticals could achieve a gross
margin of 55-60%, which is in line with the production of therapeutic antibodies
and vaccines.
Operating costs
Driven by the costs associated with the development of Bertilimumab for BP andNanomAbs, we expect operating expenses totalling SEKm 769 from 2014 to
2020. We anticipate that research and development (R&D) will increase by 15%
annually, from SEKm 52 in 2014 to SEKm 115 in 2019, when we expect that the
first royalties on sales of Bertilimumab for UC will be realised. We also expect
the company to receive funding from the Israeli government's Science and
Technology Office.
We believe that Immune Pharmaceuticals is powered by an efficient
organisational structure, as there are fewer than 10 employees in the US, and the
remainder, including research and development, are in Herzliya Pituach, Israel.
Upon commercialisation and launch of Bertilimumab for BP, we expect that
administration costs will grow modestly by 12% annually, from SEKm 33 in2014 to SEKm 62 in 2019. We expect Immune Pharmaceuticals to continue its
strategy of licensing out potential drugs to different partners, which means that
opex as a percentage of revenues is less predictable from 2019, when we expect
NanomAbs product candidates to have reached midpoint of clinical development.
Profits
Until significant revenues from a successful launch of Bertilimumab are realised,
Immune Pharmaceuticals will not generate positive earnings and will show
significant net losses. We expect that the company will generate net losses until
early 2019, when hopefully Bertilimumab can be launched.
Liquidity and capital requirements
We expect Immune Pharmaceuticals to have a capital requirement of SEKm 70 -
100 annually until 2018, representing a total of about SEKm 592.
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Appendix
Immune PharmceuticalsBertilimumab for Bullous Pemphigoid (BP) market modelUSA 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Antal patienter med BP 30,013 30,016 30,019 30,022 30,025 30,028 30,031 30,034 30,037 30,040 30,043 30,046 30,049 30,049Andel (%) som har svr BP 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50%
Antal patienter med svr BP 15,007 15,008 15,010 15,011 15,013 15,014 15,016 15,017 15,019 15,020 15,022 15,023 15,025 15,025
Bertilimumab marknadsandel 0% 0% 0% 0.49% 2.40% 5.08% 6.47% 8.04% 8.68% 9.21% 9.58% 10% 11% 12%Antal patienter som behandlas med Bertilimumab 0 0 0 74 360 763 971 1,208 1,304 1,384 1,439 1,502 1,653 1,803rlig kostnad fr behandling 25,000$ 25,000$ 25,000$ 25,000$ 25,750$ 26,523$ 27,318$ 28,138$ 28,982$ 29,851$ 30,747$ 31,669$ 32,619$ 33,598$Prisfrndring 0% 0% 0% 0% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3%
Total frsljning av Bertilimumab SEKm (USA) 0 0 0 12 60 132 172 221 246 269 288 309 350 394
vriga vrldenAntal patienter med BP 90,030 90,038 90,046 90,054 90,062 90,070 90,078 90,086 90,094 90,102 90,110 90,118 90,126 90,134Andel (%) som har svr BP 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50%
Antal patienter med svr BP 45,015 45,019 45,023 45,027 45,031 45,035 45,039 45,043 45,047 45,051 45,055 45,059 45,063 45,067Bertilimumab mark nadsandel 0.00% 0.00% 0.00% 0.05% 1.00% 2.00% 3.00% 5.00% 6.00% 6.00% 6.00% 6.50% 6.50% 6.50%
Antal patienter som behandlas med Bertilimumab 0 0 0 23 450 901 1,351 2,252 2,703 2,703 2,703 2,929 2,929 2,929rlig kostnad fr behandling 20$ 15,001$ 15,002$ 15,003$ 15,004$ 15,005$ 15,006$ 15,007$ 15,008$ 15,009$ 15,010$ 15,011$ 15,012$ 15,013$Prisfrndring 0% 0% 0% 0% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2%
Total frsljning av Bertilimumab SEKm (vriga vrlden) 0 0 0 2 44 88 132 220 264 264 264 286 286 286
Total frsljning av Bertilimumab SEKm (USA + vriga vrlden) 0 0 0 14 104 219 304 441 509 532 551 595 636 680NPV 0 0 0 10 68 131 166 221 235 225 214 212 208 203Chans fr att lyckas 35%Sum NPV 662 Klla: Bolagsrapporter, Erik Penser Bankaktiebolag
Immune PharmceuticalsBertilimumab fr Ulcerative Colitis (UC) market modelUSA 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027IBD patienter 1,171,902 1,171,914 1,171,925 1,171,937 1,171,949 1,171,961 1,171,972 1,171,984 1,171,996 1,172,007 1,172,019 1,172,031 1,172,043 1,172,054
Andelen patienter med Ulcers kolit (UC) 50.5% 50.5% 50.5% 50.5% 50.5% 50.5% 50.5% 50.5% 50.5% 50.5% 50.5% 50.5% 50.5% 50.5%
Antal patienter med UC 591,811 591,816 591,822 591,828 591,834 591,840 591,846 591,852 591,858 591,864 591,870 591,876 591,882 591,887Andelen patienter med mttligt Ulcers kolit (UC) 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15%
Andelen patienter med svr Ulcers kolit (UC) 28% 28% 28% 28% 28% 28% 28% 28% 28% 28% 28% 28% 28% 28%
Antal patienter med mttlig och svr UC 254,479 254,481 254,484 254,486 254,489 254,491 254,494 254,496 254,499 254,501 254,504 254,507 254,509 254,512Andelen patienter med mttligt UC med hg andel Eotaxin-1 20% 20% 20% 21% 22% 23% 24% 24% 24% 25% 26% 27% 28% 29%
Andelen patienter med svr UC med hg andel Eotaxin-1 20% 20% 20% 21% 22% 23% 24% 24% 24% 25% 26% 27% 28% 29%
Antal patienter som kan behandlas med Bertilimumab 101,791 101,792 101,793 106,884 111,975 117,066 122,157 122,158 122,159 127,251 132,342 137,434 142,525 147,617Bertilimumab mark nadsandel 0.0% 0.0% 0.0% 0.0% 0.0% 3.0% 10.0% 15.0% 23.0% 25.0% 28.0% 28.0% 28.0% 28.0%
Antal patienter som behandlas med Bertilimumab 0 0 0 0 0 3,512 12,216 18,324 28,097 31,813 37,056 38,481 39,907 41,333rlig kostnad fr behandling 25,000$ 25,000$ 25,000$ 25,000$ 25,000$ 25,000$ 25,500$ 26,010$ 26,530$ 27,061$ 27,602$ 28,154$ 28,717$ 29,291$Prisfrndring 0% 0% 0% 0% 0% 0% 2% 2% 2% 2% 2% 2% 2% 2%
Total frsljning av Bertilimumab SEKm (USA) 0 0 0 0 0 571 2,025 3,098 4,845 5,596 6,648 7,042 7,449 7,870
vriga vrlden 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027IBD patienter 3,515,200 3,515,201 3,515,202 3,515,203 3,515,204 3,515,205 3,515,206 3,515,207 3,515,208 3,515,209 3,515,210 3,515,211 3,515,212 3,515,213
Andelen patienter med Ulcers kolit (UC) 50.5% 50.5% 50.5% 50.5% 50.5% 50.5% 50.5% 50.5% 50.5% 50.5% 50.5% 50.5% 50.5% 50.5%
Antal patienter med UC 1,775,176 1,775,177 1,775,177 1,775,178 1,775,178 1,775,179 1,775,179 1,775,180 1,775,180 1,775,181 1,775,181 1,775,182 1,775,182 1,775,183Andelen patienter med mttligt Ulcers kolit (UC) 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15%
Andelen patienter med svr Ulcers kolit (UC) 28% 28% 28% 28% 28% 28% 28% 28% 28% 28% 28% 28% 28% 28%
Antal patienter med mttlig och svr UC 763,326 763,326 763,326 763,326 763,327 763,327 763,327 763,327 763,327 763,328 763,328 763,328 763,328 763,329Andelen patienter med mttligt UC med hg andel Eotaxin-1 20% 20% 20% 21% 22% 23% 24% 24% 24% 25% 26% 27% 28% 29%Andelen patienter med svr UC med hg andel Eotaxin-1 20% 20% 20% 21% 22% 23% 24% 24% 24% 25% 26% 27% 28% 29%
Antal patienter som kan behandlas med Bertilimumab 305,330 305,330 305,330 320,597 335,864 351,130 366,397 366,397 366,397 381,664 396,930 412,197 427,464 442,731Bertilimumab marknadsandel 0.0% 0.0% 0.0% 0.0% 0.0% 0.1% 1.1% 4.0% 8.0% 15.0% 25.0% 28.0% 28.0% 28.0%
Antal patienter som behandlas med Bertilimumab 0 0 0 0 0 351 4,030 14,656 29,312 57,250 99,233 115,415 119,690 123,965rlig kostnad fr behandling 20,000$ 20,000$ 20,000$ 20,000$ 20,000$ 20,000$ 20,400$ 20,808$ 21,224$ 21,649$ 22,082$ 22,523$ 22,974$ 23,433$Prisfrndring 0% 0% 0% 0% 0% 0% 2% 2% 2% 2% 2% 2% 2% 2%Total frsljning av Bertilimumab SEKm (vriga vrlden) 0 0 0 0 0 46 534 1,982 4,044 8,056 14,243 16,897 17,873 18,882
Total frsljning av Bertilimumab SEKm (USA + vriga vrlden) 0 0 0 0 0 616 2,559 5,080 8,889 13,652 20,891 23,939 25,322 26,751Immune Pharmaceuticals royalty 12% 12% 12% 12% 12% 12% 12% 12% 12% 12% 12% 12% 12% 12%
Intkter fr Immune Pharmaceuticals 0 0 0 0 0 74 307 610 1,067 1,638 2,507 2,873 3,039 3,210NPV 0 0 0 0 0 44 168 306 491 692 972 1,021 991 961Chans fr att lyckas 35%Sum NPV 1,976 Klla: Bolagsrapporter, Erik Penser Bankaktiebolag
Immune PharmceuticalsCost2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
R&D -52 -62 -74 -87 -100 -115 -132 -152 -175 -201 -231 -266 -306 -352rligkning 20% 18% 18% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15%
SG&A -33 -37 -43 -49 -55 -62 -69 -78 -87 -98 -109 -122 -137 -154rligkning 15% 15% 15% 12% 12% 12% 12% 12% 12% 12% 12% 12% 12%Total kostnadsbas -85 -100 -117 -136 -155 -177 -202 -230 -262 -299 -340 -388 -443 -505NVP -78 -84 -90 -97 -101 -105 -110 -115 -121 -126 -132 -138 -144 -151Sum NPV -1,592 Klla: Bolagsrapporter, Erik Penser Bankaktiebolag
Intellectual property
AmiKet
Immune Pharmaceuticals holds a US patent for a formulation containing a
combination of amitriptyline and ketamine used for treatment of pain, including
neuropathic pain. The patent expires in August 2021. The company also has a
license for additional patents for topical use of tricyclic antidepressants
(including amitriptyline) and NMDA antagonists (including ketamine).
NanomAbs
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Immune Pharmaceuticals has licensed the technology for NanomAb from
Yissum, Technology Transfer Company of the Hebrew University of Jerusalem.
The platform, which was discovered by Dr Shimon Benita, allows binding of
monoclonal antibodies to nanoparticles loaded with chemotherapeutic agents.
Management teamDr Daniel Teper
CEO and Chairman
Dr Teper is the founder and CEO of Immune Pharmaceuticals. Dr Teper was
formerly CEO of Bionest Partners, a global strategy consulting firm in
pharmaceuticals. Dr Teper started his career at Sandoz (now Novartis), where he
was responsible for sales, marketing and new product development. He held
senior executive positions in Europe, first at GSK as head of commercial
operations for Glaxo France and then as president and chief operating officer of
Laboratoires Delagrange through the acquisition by Synthelabo (now part of
Sanofi). Dr Teper holds a doctor of pharmacy degree from Paris XI University
and an MBA from INSEAD.
Mr Robert Cook
Senior Vice President and CFO
Mr Cook was appointed as the CFO in August 2013. Mr Cook previously served
as the companys CEO and director since August 2012 and CFO and senior vice
president since April 2004. Prior to joining Immune Pharmaceuticals, Mr Cook
was vice president and CFO at Pharmos Corporation since January 1998, and
became executive vice president of Pharmos in February 2001.
Ms Suzy Jones
Chief Business Development Officer
Ms Jones is the founder and managing partner of DNA- Ink LLC, a life sciencesfirm in San Francisco, California. Prior to starting her own firm, Ms Jones spent
20 years at Genentech in research and product development. In 2010, Ms Jones
was named by Black Health Magazine as Top 25 Most Influential African
Americans in Healthcare, Medicine, Pharmaceutical and Food Industries.
Alongside her work with Immune, Ms Jones is currently on the board of Patrys,
an Australian biotech company, and on the advisory board of CentRx.
Dr Jean Eli Kadouche
Vice President, Biologics R&D
Dr Kadouche is vice president, innovation & research, focusing on research. He
helped develop the NanomAbs technology, and is a co-author of several paperswith Professor Benita. Dr Kadouche has 25 years of experience in the
development of monoclonal antibodies in both academia and in industry. Dr
Kadouche has been an advisor to Sangstat, Roche and J&J. He holds a PhD in
immunology from the Pasteur Institute and was an assistant professor at St Louis
Hospital in Paris, France.
Dr Michal Ayalon
Vice President, R&D Operations
Dr Ayalon is the VP new product development. Dr Ayalon previously served as
senior biopharmaceutical development manager at BioLineRx.
Dr Adam Foley-ComerIs the VP of Medical Affairs of IMMUNE Pharmaceuticals.
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Before joining Immune Pharmaceuticals Adam served as Medical Director at
BioLineRx, providing medical expertise in the design, conduct, oversight and
reporting of clinical programs in gastrointestinal, oncology, dermatology,
neurology and infectious disease indications. Prior to that he served at Roche UK
as Clinical Pharmacologist with global responsibility for the Avastin franchise
and medical lead in their internal clinical pharmacology unit.
Board of Directors
Dr. Sidransky, Vice Chairman
Dr. Sidransky is a renowned oncologist and research scientist named and profiled
by TIME magazine in 2001 as one of the top physicians and scientists in
America, recognized for his work with early detection of cancer. Since 1994, Dr.
Sidransky has been the Director of the Head and Neck Cancer Research Division
at Johns Hopkins University School of Medicine and Professor of Oncology,
Otolaryngology, Cellular & Molecular Medicine, Urology, Genetics, and
Pathology at John Hopkins University and Hospital.
Dr. Isaac Korbin, R&D
Dr. Isaac Korbin led worldwide clinical programs from Phase I development
through to regulatory approval, marketing and launch for several major drugs. He
spent 10 years at Roche Global Headquarters in Basel, Switzerland and in Nutley,
New Jersey, USA. He then joined Actelion Pharmaceuticals (SIX: ATLN) in
September 1999 to build and lead its clinical development department. Dr.
Korbin held the position of Head of Clinical Development till 2009, when he was
appointed to Chief Medical Officer and Chairman of the Strategic and Portfolio
Board.
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Immune PharmaIncome Statement, Cash Flow and Balance Sheet (SEKm)
Income Statement2006 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E
Net Sales 0 0 0 0 0 0 4 0 65 65
Other Operating Income 0 0 0 0 0 0 47 0 0 0
Personnel Costs 0 0 0 0 0 0 0 0 -51 -60
Other Operating Costs 0 0 0 0 0 0 -67 -18 -34 -40
EBITDA 0 0 0 0 0 0 -17 -17 -19 -34
Depreciation 0 0 0 0 0 -1 -1 -1 -1 -1Amortisation of Goodwill 0 0 0 0 0 0 0 0 0 0
EBIT 0 0 0 0 0 0 -17 -18 -20 -35
Non-recurring Items 0 0 0 0 0 0 0 0 0 0
Associated Companies 0 0 0 0 0 0 0 0 0 0
Net Financial Items 0 0 0 0 0 0 0 -4 -4 -4
Pre-tax Result 0 0 0 0 0 0 -17 -22 -23 -38
Tax 0 0 0 0 0 0 0 0 0 0
Minority Interest 0 0 0 0 0 0 0 0 0 0
Net Result 0 0 0 0 0 0 -17 -22 -23 -38
Cash Flow
2006 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E
EBITDA 0 0 0 0 0 0 -17 -17 -19 -34
Change in Working Capital 0 0 0 0 0 0 -15 36 -55 -59
Other Operating Cash Items 0 0 0 0 0 0 1 0 0 0
Operating Cash Flow 0 0 0 0 0 1 -30 19 -73 -91
Net Financial Costs 0 0 0 0 0 0 0 -4 -4 -4
Taxes Paid 0 0 0 0 0 0 0 0 0 0
Capital Expenditure 0 0 0 0 0 0 -5 -6 -7 -7Free Cash Flow 0 0 0 0 0 1 -35 9 -83 -101
Dividends 0 0 0 0 0 0 0 0 0 0
Acquisitions 0 0 0 0 0 0 0 0 0 0
Disposals 0 0 0 0 0 0 1 0 0 0
Equity Issue/Share Buybacks 0 0 0 0 0 0 0 0 150 0
Other Adjustments 0 0 0 0 0 1 2 0 0 0
Total Cash Flow 0 0 0 0 0 2 -32 9 67 2
Other Non-cash Adjustments 0 0 0 0 0 0 1 0 0 0
Net Debt 0 0 0 0 0 0 48 39 -28 -26
Balance Sheet
2006 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E
ASSETS
Goodwill 0 0 0 0 0 0 0 0 0 0
Other Intangible Assets 0 0 0 0 0 0 0 0 0 0
Tangible Assets 0 0 0 0 0 0 0 5 11 16
Shares in Participations 0 0 0 0 0 0 0 0 0 0
Other Fixed Assets 0 0 0 0 0 0 0 0 0 0
Total Fixed Assets 0 0 0 0 0 0 1 6 11 17Inventories 0 0 0 0 0 0 0 0 7 65
Accounts Receivable 0 0 0 0 0 0 0 0 0 0
Other Current Assets 0 0 0 0 0 0 7 0 14 14
Cash and Cash Equivalents 0 0 0 0 0 0 1 10 77 74
Total Current Assets 0 0 0 0 0 0 8 10 97 153
TOTAL ASSETS 0 0 0 0 0 0 9 16 108 170
EQUITY AND LIABILITIES
Shareholder Equity 0 0 0 0 0 0 -91 -113 14 76
Minority Interest 0 0 0 0 0 0 0 0 0 0
Total Equity 0 0 0 0 0 0 -91 -113 14 76
Long-term Financial Liabilities 0 0 0 0 0 0 49 49 49 49
Pension Provisions 0 0 0 0 0 0 0 0 0 0
Deferred Tax Liabilities 0 0 0 0 0 0 0 0 0 0
Other Long-term Liabilities 0 0 0 0 0 0 0 0 0 0
Total Long-term Liabilities 0 0 0 0 0 0 49 49 49 49
Current Financial Liabilities 0 0 0 0 0 0 0 0 0 0
Accounts Payable 0 0 0 0 0 0 0 0 0 0
Tax Liabilities 0 0 0 0 0 0 0 0 0 0
Other Current Liabilities 0 0 0 0 0 0 51 80 46 46
Total Current Liabilities 0 0 0 0 0 0 51 80 46 46
TOTAL EQUITY AND LIABILITIES 0 0 0 0 0 0 9 16 108 170 Source: Company Reports, Erik Penser Bankaktiebolag
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Immune PharmaValuation and Key Ratios (SEK)
Per Share Data
2006 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E
EPS Reported 0.00 0.00 0.00 0.00 0.00 0.00 -1.37 -1.74 -1.54 -2.11
EPS Adjusted 0.00 0.00 0.00 0.00 0.00 0.00 -1.37 -1.74 -1.54 -2.11
CEPS 0.00 0.00 0.00 0.00 0.00 0.00 -3.13 1.19 -5.09 -5.28
Free Cash Flow 0.00 0.00 0.00 0.00 0.00 0.08 -2.88 0.71 -5.52 -5.58
Dividend 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Book Value 0.00 0.00 0.00 0.00 0.00 0.00 -7.44 -8.48 0.87 3.95
Tangible Book Value (Excl Goodwill) NM NM NM NM NM 0.00 -7.47 -8.51 0.85 3.93
Net Asset Value 0.00 0.00 0.00 0.00 0.00 0.00 -7.47 -8.51 0.85 3.93
Net Debt 0.00 0.00 0.00 0.00 0.00 0.00 3.90 2.91 -1.75 -1.34
Enterprise Value - - NM NM NM 88.00 18.78 17.07 26.16 26.64
Diluted No of Shares, Weighted Average (m) - - - - - 12.2 12.2 12.6 15.1 18.1
Diluted No of Shares, Year-end (m) - - - - - 12.2 12.2 13.3 16.0 19.2
Valuation
2006 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E
P/E Reported - - NM NM NM NM NM NM NM NM
P/E Adjusted - - NM NM NM NM NM NM NM NM
P/CEPS - - NM NM NM NM NM 23.6 NM NM
P/FCFPS - - NM NM NM 1,073.6 NM 39.5 NM NM
FCF Yield - - 0.0 0.0 0.0 0.1 -19.4 2.5 -19.7 -19.9
Dividend Yield - - 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Dividend Payout Ratio Adjusted NM NM NM NM NM NM NM NM NM NM
P/BV - - NM NM NM NM NM NM 32.16 7.09
P/Tangible BV - - NM NM NM NM NM NM 33.03 7.13
P/NAV - - NM NM NM NM NM NM 33.03 7.13
EV/Sales NM NM NM NM NM NM 60.47 1,909.00 6.96 8.26
EV/EBITDA - - - - - high NM NM NM NM
EV/EBIT - - - - - high NM NM NM NM
Share Price, Year-end - - 573.60 522.00 232.00 88.00 14.80 14.00 28.00 28.00
Share Price, High - - 660.00 906.00 744.00 236.00 100.00 29.20 35.90 -
Share Price, Low - - 567.60 517.20 99.20 75.20 14.80 10.55 13.50 -
Share Price, Average - - 615.60 638.56 379.82 138.49 46.10 17.29 19.96 -
Market Cap, Year-end and Current (SEKm) - - - - - 1,074 181 353 423 508
Enterprise Value, Year-end and Current (SEKm) - - 0 0 0 1,074 229 382 452 537
Growth Rate and Margins
2006 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E
Sales Growth, YoY - NM NM NM NM NM NM -94.7 NM 0.0EBIT Growth, YoY - NM NM NM NM NM - NM NM NM
EPS Adjusted Growth, YoY - NM NM NM NM NM - NM NM NM
EBITDA Margin NM NM NM NM NM NM -441.0 -8,534.0 -28.5 -52.0
EBITA Margin NM NM NM NM NM NM -441.0 -9,034.0 -30.0 -53.5
EBIT Margin NM NM NM NM NM NM -441.0 -9,034.0 -30.0 -53.5
Pre-tax Margin Adjusted NM NM NM NM NM NM -441.0 -10,980.2 -35.9 -58.9
Net Margin Adjusted NM NM NM NM NM NM -441.0 -10,980.2 -35.9 -58.9
Tax Rate NM NM NM NM NM NM NM NM NM NM
Profitability
2006 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E
Return on Equity, ROE - NM NM NM NM NM 36.8 21.6 47.2 -85.6
Return on Equity 5-Year Average - - - - - NM NM NM NM NM
Return on Capital Employed, ROCE - NM NM NM NM NM 77.4 30.8 44.3 -193.2
Return on Capital Employed 5-Year Average - - - - - NM NM NM NM NM
Capital Expenditure and Efficiency2006 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E
Capital Expenditure 0 0 0 0 0 0 5 6 7 7
Capex/Sales NM NM NM NM NM NM 143.9 3,000.0 10.0 10.0
Capex/Depreciation NM NM NM NM NM 0.0 5.5 6.0 6.5 6.5
Inventory/Sales NM NM NM NM NM NM 0.0 10.0 10.0 100.0
Receivables/Sales NM NM NM NM NM NM 0.0 0.0 0.0 0.0
Payables/Sales NM NM NM NM NM NM 0.0 0.0 0.0 0.0
Net Working Capital/Sales NM NM NM NM NM NM 0.0 10.0 10.0 100.0
Asset Turnover - NM NM NM NM NM 0.88 0.02 1.05 0.47
Financial Position
2006 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E
Interest-bearing Net Debt (SEKm) 0 0 0 0 0 0 48 39 -28 -26
Equity Ratio NM NM NM NM NM NM -1,051.9 -706.3 12.9 44.5
Net Debt/Equity NM NM NM NM NM NM -0.52 -0.34 -2.01 -0.34
Net Debt/Market Cap - - NM NM NM 0.00 0.26 0.22 -0.07 -0.05Net Debt/EBITDA NM NM NM NM NM NM -2.8 -2.3 1.5 0.8 Note: Key ratios based on fully diluted number of shares. Historical key ratios are calculated using the year-end share price.Source: Company Reports, Erik Penser Bankaktiebolag
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Immune Pharma14 March 2014 Eri k Penser Bankaktiebola
20
Immune PharmaQuarterly Operating Performance (SEKm)
Income Statement
Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
Net Sales 0 0 0 0 0 0 0 0 0 0 0 0
Other Operating Income 0 0 0 0 0 0 0 0 0 0 0 0
Other Operating Costs 0 0 0 0 0 0 0 0 0 0 -10 -12
EBITDA 0 0 0 0 0 0 0 0 0 0 -10 -11
Depreciation and Amortisation -0 -1 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0EBIT 0 0 0 0 0 0 0 0 0 0 -10 -12
Non-recurring Items 0 0 0 0 0 0 0 0 0 0 0 0
Associated Companies 0 0 0 0 0 0 0 0 0 0 0 0
Net Financial Items 0 0 0 0 0 0 0 0 0 0 0 0
Pre-tax Result Reported 0 0 0 0 0 0 0 0 0 0 -10 -12
Pre-tax Result Adjusted 0 0 0 0 0 0 0 0 0 0 -10 -12
Tax 0 0 0 0 0 0 0 0 0 0 0 0
Minority Interest 0 0 0 0 0 0 0 0 0 0 0 0
Net Result Reported 0 0 0 0 0 0 0 0 0 0 -10 -12
Growth Rates and Margins
Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
Sales Growth, YoY - - - - - - - - - - - NM
EBIT Growth, YoY - - - - - - - - - - NM NM
EBITDA Margin NM NM NM NM NM NM NM NM NM NM NM -5,694.8
EBIT Margin NM NM NM NM NM NM NM NM NM NM NM -5,794.8
Pre-tax Margin Adjusted NM NM NM NM NM NM NM NM NM NM NM -5,794.8Tax Rate NM NM NM NM NM NM NM NM NM NM NM NM Source: Company Reports, Erik Penser Bankaktiebolag
Immune Pharma Sales, 12-month Moving Average Immune PharmaEBITDA, 12-month Moving Average
0
0
0
1
1
1
1
0
0
0
0
0
0
10 11 11 11 11 12 12 12 12 13 13Sales, 12-month Moving Average YoY Change
Sales,
SEKm
YoYChange,
Percentages
-12,000
-10,000
-8,000
-6,000
-4,000
-2,000
0
-25
-20
-15
-10
-5
010 11 11 11 11 12 12 12 12 13 13
EB ITD A E BITD A Margin
EBITDA,
SEKm
EBITD
AMargin,
Percentages
Source: Company Reports, Erik Penser Bankaktiebolag Source: Company Reports, Erik Penser Bankaktiebolag
Immune Pharma EBIT, 12-month Moving Average Immune PharmaPre-tax Result, 12-month Moving Average
-12,000
-10,000
-8,000
-6,000
-4,000
-2,000
0
-25
-20
-15
-10
-5
010 11 11 11 11 12 12 12 12 13 13
EBI T EBI T Margin
EBIT,
SEKm
EBITMargin,
Percentages
-12,000
-10,000
-8,000
-6,000
-4,000
-2,000
0
-25
-20
-15
-10
-5
010 11 11 11 11 12 12 12 12 13 13
Pre-tax Result Adjusted Pre-tax Margin Adjusted
Pre-taxResult,
SEKm
Pre-taxMargin,
Percentages
Source: Company Reports, Erik Penser Bankaktiebolag Source: Company Reports, Erik Penser Bankaktiebolag
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