09.05.2018 kl 20:22 256


BUY recommendation and NOK31 target price.

Targovax’s Q1 report was a non-event. The operating loss for the quarter was in line with our expectations. During Q1 (and after the quarter as well), the company has reported some interesting data from its ongoing clinical trials. We have only made marginal adjustments to our forecasts and reiterate our BUY recommendation and NOK31 target price.

Operating loss in line with our expectations. Targovax reported an operating loss in Q1 of cNOK34m, compared to our estimate of a loss of cNOK38m. The loss increased from cNOK27m YOY. We had forecast a loss of cNOK38m for Q1. The main deviation in the P&L was in the “Other operating expenses” line and “External R&D expenses”. These lines tend to fluctuate somewhat before quarters depending on the activities in the ongoing and planned clinical trials. At the end of the quarter the company had cash at hand amounting to cNOK229m, compared to our estimate of cNOK226m.

Clinical data during (and after) the quarter. During the quarter, the company reported immune activation data from the first four patients in the ONCOS-102 trial in refractory melanoma patients. The company saw both systemic and lesional immune activation in CPI refractory patients. Targovax also announced that the safety lead-in part of the MPM trial with ONCOS-102 was completed without any safety concerns. Later (after the end of the quarter), the company also announced that it has seen promising signs of efficacy in the initial phase of the MPM trial. It stated that three out of 6 patients responded. However, only one patient had a PR while two patients had SD. As one normally does not classify SD as a clinical response, one could argue about the terminology. As these patients normally have a rather bleak prognosis and usually die within 12 months, we would argue that SD is clinically meaningful for these patients and the CBR – Clinical Benefit Ratio (i.e. CR+PR+SD) of 50% is a very interesting signal in the MPM trial.

Reiterate BUY recommendation and NOK31 target price. We have only made marginal changes to our operating loss forecast for this year and kept our forecasts for the coming year constant. We reiterate our BUY recommendation for the shares and reiterate our NOK31 target price.