SECTOR: HEALTHCARE; MINING; TECHNOLOGY
MOTIF BIO
(MTFB.L)
SECTOR – HEALTHCARE
RATING – BUY*
MARKET CAP – £94.4m
CURRENT PRICE – 35.9p#
TARGET PRICE – 115p
ANALYST: BARRY GIBB
Year-end December
2016A
2017A
2018E
2019E
Revenue (risk adjusted, US$m)
-
-
-
9.3
EBITDA (US$m)
(39.71)
(38.02)
(22.00)
(25.7)
Adj. pre-tax Profit (US$m)
(40.32)
(44.79)
(28.8)
(32.4)
Adj. EPS (US$cents)
(34.60)
(19.35)
(12.43)
(11.04)
DPS (US$cents)
-
-
-
-
Net Cash/(Debt) (US$m)
15.53
(4.53)
(25.73)
(47.34)
P/E (x)
-
-
-
-
Dividend yield (%)
-
-
-
-
EV/EBITDA (x)
-
-
-
-
SOURCE: Northland Capital Partners Limited estimates. #Priced at prior trading day close. *Northland Capital Partners Limited acts as Joint Broker to Motif Bio and therefore this information should be viewed as a Marketing Communication.
Major milestone reached with successful Phase 3 trials – Note attached
NORTHLAND VIEW
- Completion of second and final Phase 3 trial: Motif’s lead antibiotic candidate, iclaprim, met the trial’s endpoint: non-inferiority to vancomycin, the current standard-of-care antibiotic for patients with acute bacterial skin and skin structure infection (‘ABSSSI’).
- US$20 million debt financing: Motif (‘the Company’) received a US$20m facility from Hercules Capital, Inc. a venture debt provider in Nov 2017. This capital is expected to fund pre-commercialisation efforts for iclaprim, prior to FDA approval.
- The Company has initiated a rolling submission of a new drug application (‘NDA’) to the FDA for iclaprim. The rolling NDA submission is expected to complete in Q2 2018E. Qualified Infectious Disease Product (‘QIDP’) designation includes FDA Priority Review status, which typically results in a review period of up to six months. We expect approval to be followed by commercial launch in Q1/Q2 2019E
- Large addressable market: Given that vancomycin demonstrates nephrotoxicity, iclaprim is ideally positioned to become a preferred alternative treatment for ABSSSI with impaired renal function, an addressable market of c.US$2.8bn globally.
- Valuation: Similar-stage, US-quoted comparators presently achieve market capitalisations in excess of £200m. In this respect, Motif Bio is considered to be significantly undervalued and Northland reconfirms its recommendation of Buy with a raised price target of 115p (up from 90p set in December 2016).
Motif Bio made strong progress during 2017. It delivered positive results from both its REVIVE-1 and REVIVE-2 Phase 3 trials, while also securing a US$20 million debt financing facility. This significantly de-risks the commercialisation pathway for iclaprim.
COMPANY DESCRIPTION
Clinical stage biopharmaceutical company specialising in the development of novel antibiotics.
SAVANNAH RESOURCES (SAV.L)
SECTOR – MINING
RATING – CORP*
MARKET CAP – £39m
CURRENT PRICE – 5.6p#
ANALYST – DR RYAN LONG
Year-end Dec
2016A
2017A
Revenue (£m)
-
-
No forecasts provided
EBITDA (£m)
(1.8)
(2.8)
Adj. pre-tax Profit (£m)
(1.8)
(2.8)
Adj. EPS (p)
(0.46)
(0.53)
DPS (p)
-
-
Net Cash/(Debt) (£m)
0.7
1.2
P/E (x)
-
-
Dividend yield (%)
-
-
EV/EBITDA (x)
-
-
SOURCE: Northland Capital Partners Limited estimates. #Priced at prior trading day close. *Northland Capital Partners Limited acts as Nomad and provides commissioned research coverage to Savannah Resources and therefore this information should be viewed as a Marketing Communication.
Mina do Barroso Mineral Resource Upgrade
NORTHLAND VIEW
- Savannah Resources has completed an upgraded Mineral Resource Estimate for the Mina do Barroso Lithium Project, located in Portugal. The total Mineral Resource Estimate now stands at 14mt at a grade of 1.1% Li2O.
- Further updates to the Mineral Resource Estimate are expected in 2018 with drilling currently underway. This drilling is targeting both down-dip and along-strike extensions to the current Mineral Resource Estimate. The potential for additional discoveries also remains with additional exploratory drilling.
- The Scoping Study remains on track for completion in Q2’18.
Savannah Resources has increased the Total Mineral Resource Estimate at the Mina do Barroso Lithium Project by 52%, without reducing the grade. Mina do Barroso is now believed to have the largest spodumene Mineral Resource Estimate in Western Europe, making it a strategic asset. Compared to its global peer group (Chart 1), it is not currently one of the largest spodumene deposits or one of the higher-grade spodumene deposits, but its jurisdiction combined with its existing mining license, the near-surface position of the mineralisation, the extensive supporting infrastructure, and relatively short development timeframe make it an attractive asset, when compared to its global peer group. The Scoping Study is due to be completed this quarter and this will give us a clearer idea of how the Project’s expected metrics compare to its peer group.
CHART 1: COMPARABLE HARD ROCK DEPOSITS
Source: Compiled by Northland Capital Partners from various technical reports. Bubble size is proportional to contained Li2O equivalent.
COMPANY DESCRIPTION
Savannah Resources is an energy metals group with copper-gold projects located in Oman, lithium projects in Portugal, and a operates a mineral sands project in Mozambique that is a JV with Rio Tinto
Evgen Pharma (EVG.L)
SECTOR – HEALTHCARE
RATING – BUY*
MARKET CAP – £16.8m
CURRENT PRICE – 18p#
TARGET PRICE – 113p
ANALYST – BARRY GIBB
Year-end Dec
2017A
2018E
2019E
2020E†
Revenue (£m)
-
-
-
7.50
EBITDA (£m)
(3.64)
(3.49)
(4.49)
3.92
Adj. pre-tax Profit (£m)
(3.64)
(3.49)
(4.42)
3.90
Adj. EPS (p)
(4.19)