Japan Approval of HGF Gene Therapy to Initiate Re-Rating of The Stock

Asia Healthcare Analyst, Pathology Associates Limited

Dion Stéfan Büchner M.D., FCAP

Asia Healthcare Analyst

Pathology Associates Limited

Equity Bottom-Up

<ul>
<li>AnGes secures ~24+ months cash burn runway even under a conservative assumption of the company being able to raise only ~$70m or 75% of the anticipated proceeds (due to stock price volatility).</li>
<li>As a result, AnGes would remain adequately funded to: <ul>
<li>Undertake post-marketing surveillance of HGF gene therapy (“real-world” data critical to apply for un-conditional approval in Japan)</li>
<li>progress ongoing/upcoming clinical trials</li>
</ul>
</li>
<li># Share issuance capped at 16m implies maximum potential dilution of ~17.6% over the next two years</li>
<li>We retain our OW rating and maintain our “base case” DCF derived fair value of ¥ 400 / share.</li>
<li>However, we reiterate that AnGes’ fair value is highly sensitive to its HGF gene therapy’s probability of success in the US (Ph III, PoS 40%) and as such any guidance on execution of its development strategy for the US (aimed at timely launch) could result in an increased probability of success.</li>
<li><div class="content-highlight">Consequently, we arrive at a DCF based fair value range between ¥ 400 / share (base case, PoS 40%) to ¥ 1,100 / share (PoS 55%).</div></li>
</ul>


AnGes secures ~24+ months cash burn runway even under a conservative assumption of the company being able to raise only ~$70m or 75% of the anticipated proceeds (due to stock price volatility).
As a result, AnGes would remain adequately funded to: 
Undertake post-marketing surveillance of HGF gene therapy (“real-world” data critical to apply for un-conditional approval in Japan)
progress ongoing/upcoming clinical trials


# Share issuance capped at 16m implies maximum potential dilution of ~17.6% over the next two years
We retain our OW rating and maintain our “base case” DCF derived fair value of ¥ 400 / share.
However, we reiterate that AnGes’ fair value is highly sensitive to its HGF gene therapy’s probability of success in the US (Ph III, PoS 40%) and as such any guidance on execution of its development strategy for the US (aimed at timely launch) could result in an increased probability of success.
Consequently, we arrive at a DCF based fair value range between ¥ 400 / share (base case, PoS 40%) to ¥ 1,100 / share (PoS 55%).


Announces Stock Issuance; Maintain OW - Potential Dilution Only Slightly Higher Than Anticipated

Anges Mg Inc

Announces Stock Issuance; Maintain OW - Potential Dilution Only Slightly Higher Than Anticipated