It should not be taken negatively if we say that Abivax is mostly
about one single asset: ABX464. Unlike others, this drug
candidate is actually a pipeline in a drug, as it is often the case
when we talk about inflammation. When a drug works for a given
inflammatory disease, it usually works in several others, making
some anti-inflammatory medications widely used products which
then fall into the list of the largest blockbusters by sales in the
world together with antibodies for cancer.
ABX464 is a first-in-class molecule, derived from the Institut
Curie chemical library, which up-regulate the micro-RNA miR-124
which is itself a key mediator for the cholinergic anti-
inflammatory process, involved in particular in the production of
two well-known pro-inflammatory agents: IL-6 and TNF-alpha.
The lead indication is ulcerative colitis (UC) where ABX464
recently achieved a phase IIA study, showing strong and
promising efficacity in the induction and maintenance phase, in
treatment-naïve and refractory patients. The drug showed a
quick onset of action and compared very well with existing
therapies on all parameters, while offering a convenient once-
daily oral formulation and a very clean safety profile. The phase
IIB study with moderate-to-severe UC patients has now started
recruiting and first data is expected towards the end of 2020.
Rheumatoid arthritis (RA) and Crohn’s disease (CD) are following
closely with phase IIA trials just starting and about to start,
respectively.
In order to leverage such a big opportunity, Abivax now needs to
find a partner which will help design and finance the late-stage
development of ABX464 in all indications, which might go well
beyond the ones mentioned and include MS or PH for instance.
Of course, this partner will have an even more instrumental role
when it comes to approach commercialization of the product in
the different geographies.
We do believe that the deals signed by Galapagos about
filgotinib, first with Abbott and then with Gilead are very
representative of and inspiring about what can be expected with
ABX464.
Such an agreement is therefore the central case going
forward and the one that should drive the valuation of the asset
but also of the company. We have made various assumptions that
are presented in details in this report in terms of market shares,
prices but also milestones and royalties. We have assumed
different PoS across the range of indications and a WACC of 15%
and it results in a value of ABX464 of EUR440m (adjusted).
Actually, even UC alone represents more than the current value
attributed to the whole Abivax.
We would not completely rule out the possibility to see Abivax
acquired since ABX464 is a large part of the company and in this
case, we would see CVRs as a good way to play with longer-term
triggers of value like phase III data for ABX464 in RA or first
efficacy data with ABX196 in HCC.
Therefore, we do consider that Abivax today represents a
tremendous opportunity of investment in the field of biotech in
France and in Europe. The discount is too heavy in our view, all
the more that the catalysts which are able to crystalize the
value are on a short-term agenda, including very significant ones
in 2020. As a consequence, with a FV of EUR37.5, we recommend
to buy Abivax.
Uit het rapport van Bryan, Garnier & Co. Koersdoel 37,50
Groet, poil