| goetzpartners securities Limited Epigenomics (ECX-DE): Strong tailwinds expected from Epi proLiver 10-Oct-2018 / 11:11 GMT/BST Free to access research and investor meetings in a post-MiFID2 world. This research report is intended for use only by persons who qualify as professional investors or eligible counterparties (institutional investors) in the applicable jurisdiction, and not by any private individuals or other persons who qualify as retail clients. Published to the market and investors on 10th October 2018 @ 10.19am (London time).
Epigenomics (ECX-DE): Strong tailwinds expected from Epi proLiver Recommendation: OUTPERFORM Target Price: EUR4.01 (reduced from EUR6.82) Current Price: EUR2.24 (COB on 9th October 2018) KEY TAKEAWAY Epigenomic's growing portfolio of liquid biopsy tests represents strong commercial potential. The company recently announced plans for a new test in their portfolio, to CE mark its mSEPT9 blood test for liver cancer. We expect this to happen by year-end 2018E, allowing for commercialisation in Europe. We are convinced about the positive commercial outlook of Epigenomic's liquid biopsy tests due to a differentiated profile, fast readouts, a large target markets and significant health-economic impact. We have built a proprietary costing and economic analysis to illustrate direct diagnostic cost savings with Epi proLiver and a health economic benefit of catching liver cancer patients earlier than with standard of care. We reiterate our OUTPERFORM recommendation and adjust our DCF-derived target price to EUR4.01 (from EUR6.82). Liver cancer - a large commercial opportunity A c.EUR3bn global market together with the growing trend towards minimally invasive liquid biomarkers, makes liver cirrhosis surveillance for HCC a promising market for Epigenomics. The company intends to initiate a prospective clinical trial in the U.S. for submission to the FDA, and potentially CFDA for approval in China. We forecast strong growth in the liquid biopsy market and see strong strategic and commercial potential for Epigenomics by capitalising on this opportunity. Proprietary cost analysis indicates strong health-economic savings potential We conducted a cost-analysis in order to estimate the direct and indirect savings associated with implementation of an effective blood-based screen such as Epi proLiver. Our analysis shows a significant reduction in the frequency of false positives due to inaccurate ultrasound testing, thus decreasing the number of redundant MRI/CT scans, the costs associated with avoidable complications, as well as premature mortality and morbidity. U.S. Congress supports coverage of blood-based colorectal cancer screening tests In early October, Epigenomics announced that the U.S. Congress urges the Centers of Medicare & Medicaid Services ("CMS") to provide coverage for blood-based screening tests for colorectal cancer. This positive step towards legislative approval generates a strong tailwind for Epi proColon, paving the way for widespread adoption and utilisation across the U.S., increasing screening participation rates and decreasing the frequency of late-stage colon cancer diagnoses. Valuation suggests ample upside In our view, the key uncertainty remains reimbursement and inclusion into medical guidelines for Epi proColon, and CE mark for Epi proLiver, but with the new product candidate de-risking the commercial outlook, Epigenomics offers a highly attractive investment opportunity. We reiterate our OUTPERFORM recommendation and adjust our target price to EUR4.01 (from EUR6.82) to reflect delays in the development of Epi proLung. Kind regards, Martin Brunninger | Analyst goetzpartners Healthcare Research Team | Research Team goetzpartners securities Limited The Stanley Building, 7 Pancras Square, London, N1C 4AG, England, UK. T +44 (0) 203 859 7725 | martin.brunninger@goetzpartners.com / healthcareresearch@goetzpartners.com www.goetzpartnerssecurities.com Registered in England No. 04684144. Managing Directors: Dr Stephan Goetz, Martin Brunninger and Ulrich Kinzel. Click here to see our privacy policy.
GPSL has a formal client relationship with Epigenomics AG. GPSL publishes and distributes "Investment" Research and "Corporate Sponsored" Research. Our Corporate Sponsored Research and investor meetings (e.g. NDRs, 1 to 1 meetings) are free to access and attend and is not classified as an inducement in a post-MiFID2 world, this is because the issuer is paying GPSL. GPSL does not offer any execution or market making services. This is a marketing communication as defined by the Financial Conduct Authority ("FCA"). The information herein is considered to be an acceptable minor non-monetary benefit as defined under FCA COBS 2.3A19(5). In accordance with the General Data Protection Regulation ("GDPR") - if you would like to be removed / unsubscribed from our CRM (also please note that you are free to contact GPSL at any time in the future to have your e-mail subscription amended), please e-mail: researchproduction@goetzpartners.com About GPSL: goetzpartners securities Limited is a member of the goetzpartners group, and a leading pan European investment bank and research company. We bring together a wide range of expertise, insights and innovations to advance the interests of our clients around the world. The fast-changing environment brings challenges for businesses and investors. Research innovation, digital transformation and disruptive business ideas reshuffle the corporate world at a relentless pace. Our sector knowledge and our global footprint bring together corporate intelligence and a deep understanding of the industry with a wide network of top decision makers. These collective insights help our clients to stay at the leading edge of change. This research report is intended for use only by persons who qualify as professional investors or eligible counterparties (institutional investors) in the applicable jurisdiction, and not by any private individuals or other persons who qualify as retail clients. This communication (including any attachments) from goetzpartners securities Limited ("GPSL") is confidential and may contain information which is proprietary, privileged or otherwise legally protected against unauthorised use or disclosure. If you receive this communication in error or are not the intended recipient of this communication, please delete and destroy all copies in your possession, notify the sender that you have received this communication, and note that any review or dissemination of, or the taking of any action in reliance on this communication is expressly prohibited. GPSL shall not be liable for the improper or incomplete transmission of the information contained in this communication nor for any delay in its receipt or damage to your system. GPSL does not guarantee that the integrity of this communication has been maintained nor that this communication is free of viruses, interceptions or interference and makes no warranties in relation to these matters. This is not an offer or a solicitation to buy or sell securities or investment products, or an official confirmation. GPSL record electronic and phone communications in accordance with FCA and MiFID2 regulations, they will be monitored for regulatory and training purposes. GPSL is authorised and regulated by the Financial Conduct Authority of the United Kingdom (Firm Reference Number: 225563). Click on the following link for the GPSL MiFID2 Investor Guidance Notice GPSL Equity Research publications are available on the following aggregators and via news distribution circuits (For Institutional Use Only): AlphaMetry, AlphaSense, Bloomberg (GOET), Capital IQ, EQS, FACTSET, Research Tree, RNS Reach, Sentieo and Thomson Reuters. Please copy the below link and paste it into your browser for the full pdf version of the equity research report: Free to access research and investor meetings in a post-MiFID2 world. This research report is intended for use only by persons who qualify as professional investors or eligible counterparties (institutional investors) in the applicable jurisdiction, and not by any private individuals or other persons who qualify as retail clients.
Dissemination of a CORPORATE NEWS, transmitted by EQS Group. The issuer is solely responsible for the content of this announcement. |
732073 10-Oct-2018
