Analytiker Klas Palin ser en forbedret investeringscase i Targovax
Targovax: A breath of optimism in the Q2 reporting
The share price headed south yesterday (-4.5%) following the Q2 report, yet we rather see that the Targovax investment case is improving. The mesothelioma study is fully recruited, top-line data expected at the end of the year, and the recruitment of patients into the melanoma trial seem to be running smoothly with top-line data in H1 2020. Biotech investments are risky, but at current share price levels, we believe the risk-reward is attractive.
New to us in the Q2 earnings report was the decision of downsizing the organization, though the news that Oncos-102 advanced into the phase II part in the peritoneal study was the important message.
Operating expenses in Q2 2019 increased to NOK -44.6m (-36.7), and cash burn from operations amounted to NOK -36m (29). At the end of June cash and cash equivalents were at NOK 135m, which we expect supports operations into H2 2020.
Targovax is on track to announce several clinical results in its key clinical trials next six to twelve months, results from the on-going mesothelioma and melanoma trials. Yesterday’s Q2 earnings report presentation was mainly focused on the melanoma trial were results so far looks have been encouraging. The second part of this study is underway, with now half of the patients (six) swiftly has been recruited. In part 2, more frequent dosing of Oncos-102 is being used, which has the potential to improve outcomes further (read our previous comment here).
The interim number does not change our view on Targovax and we reiterate our base case fair value of NOK 13.