Edison Issues Initiation on TxCell

LONDON, May 31, 2016 /PRNewswire/ --

TxCell offers a rare investment opportunity in the regulatory T-cell (Treg) area with major potential in inflammatory and autoimmune disorders. TxCell is restarting the Ovasave Phase IIb study in refractory Crohn's disease; data is due by early 2018. A flexible CAR Treg platform is being actively developed with a leading academic partner to address possible markets like lupus nephritis and perhaps multiple sclerosis. The indicative value is €7.08/share before further funding of an expected €27m over 2016-17. By 2018 a scenario value, given good Phase IIb Ovasave data and partnering plus CAR progression, could be over €300m.

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The valuation of TxCell depends on Ovasave as the sole clinical-stage project. The overall probability is set at 28%, which is a combination of 33% clinical and 85% manufacturing probabilities. A core assumption is that a partner to fund Phase III is found in 2018 in a €175m deal plus 16.5% royalties. A niche orphan product for uveitis (eye inflammation) is in preclinical with a 7.5% probability but with direct sales potential. The CAR Treg platform could become the main value driver due to its versatility and deal potential and is assigned a nominal value of €20m; lupus nephritis in the initial, research-stage indication. This gives a prefunding value of €7.08/share with funding of €27m (net of current cash) until late 2017 needed. If CAR progresses and Ovasave enters Phase III with a partner in a deal worth at least €175m in 2018, the indicative market value could rise to over €300m.

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About Edison: Edison is an international equity research firm with a team of over 110 analysts, investment and roadshow professionals and works with both large and smaller capitalised companies, blue chip institutional investors, wealth managers, private equity and corporate finance houses to support their capital markets activity. Edison provides services to more than 420 retained corporate and investor clients from offices in London, New York, Frankfurt, Sydney and Wellington. Edison is authorised and regulated by the Financial Conduct Authority.

Edison is not an adviser or broker-dealer and does not provide investment advice. Edison's reports are not solicitations to buy or sell any securities.

For more information please contact:
Dr John Savin MBA
Edison Investment Research    
+44(0)20-3077 5735
[email protected]

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SOURCE Edison Investment Research

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