BGBIO 19.08.2020 kl 09:40 7435

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Q2 earnings were broadly in line with our forecast. There was no news on the planned Covid-19 trial, but BerGenBio is planning to run a similar trial on its own after UK Research and Innovation halted funding and recruitment for the ACCORD-2 trial in late July, and again said it would inform the market as soon as everything was in place to start it. We reiterate our BUY and NOK68 target price, but highlight that this includes cNOK13/share for the Covid-19 opportunity.

The cNOK65m operating loss in Q2 was loss more or less in line with our estimate of a loss of cNOK60m, although it included cNOK7.5m costs related to employee share options (due to the strong share price performance in the quarter). Overall, we see no concern about the operating loss. At the end of the quarter BerGenBio had cash of cNOK828m on its balance sheet. In July it also concluded a repair issue, raising another cNOK20m.

No news on new Covid-19 trial. Following the announcement by UK Research and Innovation in late July that it was terminating the ACCORD-2 trial with bemcentinib for Covid-19 patients, BerGenBio said it was planning a proprietary trial in the same indication. Unfortunately, there was no news on this with the Q2 results. Our NOK68 target price includes cNOK13/share for the Covid-19 opportunity, but clearly this is dependent on timing, and that the trial was originally sponsored by the UK government. Hence, there is some risk here if the timeline is extended and/or is far more expensive.

Potential near-term pipeline-related share price catalysts. BerGenBio is due to report data from the ongoing trials in NSCLC at SITC and WCLC in November and January, as well as data from the investigator-sponsored BERGAMO trial at ASH in December (in HR-MDS and AML patients).

BUY and NOK68 target price reiterated. We now expect some delays in Covid-19 related opportunities compared with our previous expectations. The company said it now expects recruitment of the first patient in its proprietary trial in September.

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