Immunepharmaceuticals Analys 140314 Eng

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Immune PharmaceuticalsInitiation of coverage

Report

Important Event

Multiple Clinical and Business Milestones in 2014

An emerging leader in personalized antibody therapeutics

Immune Pharmaceuticals is a US based biotech company, with R&D in

Israel, specialising in the development and commercialisation of

targeted drugs, including monoclonal antibodies (mAbs),

nanomedicines, drugs for the treatment of inflammatory diseases and

cancer. Immune Pharmaceuticals has an attractive pipeline, and its most

interesting drug candidates are Bertilimumab (b-mAb) for the treatment

of inflammatory bowel diseases, (Crohns Disease and UlcerativeColitis), Severe Asthma and other indications, which is undergoing

phase II studies, and NanomAbs (second generation Antibody Drug

Conjugates) with greater payload capacity and better pharmacokinetic

properties). Although NanomAbs is in the pre-clinical stage, the field of

cancer treatment using antibody drug conjugates (ADCs) is interesting.

According to Datamonitor, worldwide Antibody Therapeutic sales

exceed USD 50 billion and continue to grow double digit. Leading

Antibodies include Humira and Remicade used for Rheumatoid

Arthritis and Inflammatory Bowel Diseases (IBD).

Epicept AcquisitionImmune acquired Epicept (EPCT) in August 2013 in order to become a

public company. Immune is preparing the phase III clinical trials for

Amiket, which received Fast Track designation from the FDA for

Chemotherapy Induced Neuropathic Pain, and seeking a development

and commercialization partner. Given Immunes management track

record in drug development and corporate partnering we expect

initiation of phase III and a revenue generating transaction for Amiket

during 2014.

Will need money from the market

According to our estimates, the b-mAb for treatment of ulcerative

colitis (UC) can reach, at the earliest, the market in 2017, meaning that

the company will have to find funds of SEKm 70 to 100 annually to

fund the project portfolio.

Valuation Potential

Given the current rise of the share on the stock exchange, we believe

more investors have begun to see the potential of the company's

attractive product pipeline with short term clinical and business

milestones as well as expected institutional financing and up listing to

ASDAQ in the US, we see significant share-price appreciation

potential through 2014. Our sum of the part valuation indicates a net

present value of SEKm 1235 for Immune Pharmaceuticals.

Risk and Return Potential

Return Potential High

Risk High Risk

Current Price 28.00

High/Low (12M) 35.90/10.55

Number of Shares (m) 13.3

Market Capitalisation (SEKm) 353

Net Debt (SEKm) 29Enterprise Value (SEKm) 382

Reuters/Bloomberg IMNP.ST/IMNP SS

Listing First North Premier

Estimates and Valuation (SEK)

FY (Dec) 2012 2013E 2014E 2015E

Sales 4 0 65 65

EBITDA -17 -17 -19 -34

EBIT -17 -18 -20 -35

Pre-tax Result -17 -22 -23 -38

EPS Adjusted -1.37 -1.74 -1.54 -2.11

BVPS -7.44 -8.48 0.87 3.95

Dividend 0.00 0.00 0.00 0.00EPS Growth - NM NM NM

EBIT Margin -441.0 -9,034.0 -30.0 -53.5

ROE 36.8 21.6 47.2 -85.6

ROCE 77.4 30.8 44.3 -193.2

Net Debt/Equity -0.52 -0.34 -2.01 -0.34

EV/Sales 60.47 1,909.00 6.96 8.26

EV/EBITDA NM NM NM NM

EV/EBIT NM NM NM NM

P/E Adjusted NM NM NM NM

P/BV NM NM 32.16 7.09

Dividend Yield 0.0 0.0 0.0 0.0 Source: Company Reports, Erik Penser Bankaktiebolag

Price trend, 12 months

10

15

20

25

30

35

40

M A M J J A S O N D J F M

Immune Pharma OMXS

Source: FactSet

Date Event Place

31/03/2014 Q4 report

See last page for the disclaimer.

EPaccess

Health Care | United States

14 March 2014

Equity Research | +46 8 463 80 00

[email protected]


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Immune Pharma14 March 2014 Eri k Penser Bankaktiebola

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Immune Pharma Full-year EBIT Performance Immune PharmaQuarterly EBIT Performance

-10,000

-9,000

-8,000

-7,000

-6,000

-5,000

-4,000

-3,000

-2,000

-1,000

0

-40

-35

-30

-25

-20

-15

-10

-5

006 07 08 09 10 11 12 13E 14E 15E

EBIT EBIT Margin

EBIT,

SEKm

EBITMargin,

Percentages

-7,000

-6,000

-5,000

-4,000

-3,000

-2,000

-1,000

0

-14

-12

-10

-8

-6

-4

-2

010 10 10 10 11 11 11 11 12 12 12 12 13 13

EBIT EBIT Margin

EBIT,

SEKm

EBITMargin,

Percentages

Source: Company Reports, Erik Penser Bankaktiebolag Source: Company Reports, Erik Penser Bankaktiebolag

Immune Pharma Financial Position Immune PharmaShare Structure, Management

-250

-200

-150

-100

-50

0

-40

-30

-20

-10

0

10

20

30

40

50

60

06 07 08 09 10 11 12 13E 14E 15E

N et De bt N et De bt / Equ it y

N

etDebt,SEKm

N

etDebt/Equity

Market Cap (SEKm) 353

No of Outstanding Shares (m) 13.3

Avg No of Daily Traded Shares (000s) 13

Free Float (Shares) 74.9%

Main Shareholders Votes Shares

Daniel Teper 25.0% 25.0%

Business Asset 4.9% 4.9%

Melini Capital 9.2% 9.2%Jean Kadouche 3.8% 3.8%

vriga 57.2% 57.2%

Chairman Daniel Teper

CEO Daniel Teper

CFO Robert W. Cook

IR Anna Baran

Phone Number / Internet - / www.immunepharmaceuticals.com

Next Report 31 March 2014

Note: Negative numbers indicate a net cash position



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Er ik Penser Bankakti ebolag Immune Pharma14 March 2014

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Investment case

We are initiating coverage of Immune Pharmaceuticals. We estimate that the

company's main candidate, Bertilimumab, has the potential to become an

alternative in the market for inflammatory bowel diseases (IBD). Bertilimumabs

mechanism of action is unique and differs from its competitors as it is aimed

directly at the onset of the disease.

Attractive potential for Bertilimumab

Bertilimumab (b-mab) is a first-class therapeutic monoclonal antibody (mAb)

with high specificity for eotaxin-1, a well-studied inflammatory disease (ID)

biomarker. With a differentiated mechanism of action, we believe that b-mab has

the potential to match the market leader, Remicade (global sales USDbn 8 in

2012), and we see a potential trigger in the stock price if b-mab manages to

obtain Orphan Drug status (OD) from the FDA for the treatment of bullous

pemphigoid (BP), a chronic inflammatory skin disease that affects an estimated

30,000 patients worldwide and that currently has no permanent treatment. Wealso need to see positive results from the phase II clinical study for the treatment

of BP, which is expected to be completed in 1H14.

Big upside for those who can wait

In our forecasts, we expect that the company will manage itself to launch b-mab

for the treatment of BP, provided that OD status is achieved and that the revenue

amounts to SEKm 532 in 2023. We expect that the company will licence-out b-

mab for the treatment of IBD. We estimate the global market for IBD to

approximately USD 15bn in 2019, when b-mab could be launched on the market

for IBD. Furthermore, we estimate that b-mab could achieve sales of SEKbn 2,9

in 2025, with an estimated market penetration of 28%, and a pricing of USDk 25per year (compared with Remicades USDk 24 per year) . If Phase II studies on b-

mab are positive, the project will be attractive to a potential partner with expertise

in the IBD market. Hence, it is likely that Immune Pharmaceuticals will sign a

partnership agreement in early 2015. We model an advance payment of SEKm 65

in 2015, plus another SEKm 300 in milestone payments from 2023, SEKm 365 in

total plus royalties of 15% - 20%.


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Immune PharmaceuticalsSum of The Parts

Source: Erik Penser Bankaktiebolag,

Other projects

NanomAbs has the potential to attract investors

Monoclonal antibodies (mAb) are used in biochemical and medical research as

reagents for proteins. Since they only bind to one type of protein, they are more

specific than polyclonal antibodies, which can bind to many different types of

protein. Monoclonal antibodies are often used to detect cancer, but many are not

strong enough to kill tumours on their own. For this reason, conjugated mAbs

have been developed. In simple terms, a conjugated mAb is a mAb that carries a

cytotoxic load (i.e. toxins or radionuclides), also known as antibody-drug

conjugates (ADC). According to Roots Analys, market research indicates that the

ADC market is expected to grow to USDbn 9 in 2023. Immune Pharmaceuticals

NanomAbs platform is an ADC technology discovered by Professor Shimon

Benita at the Hebrew University of Jerusalem (HUoJ) in collaboration with one

of the company's founder, Jean Kadouche, PhD. NanomAbs has unique

characteristics, such as controlled drug release, not found in other ADCs. The

company's objective with NanomAbs is to create various attractive drug

candidates, one of which is AMB8LK (potential to detect/kill cancer cells in thepancreas and lungs). Since the candidates are still at the preclinical stage, we

estimate that a NanomAbs partnership could yield about SEKm 250 in advance

payments and that the entire project could be worth up to SEKm 300900 in total.

AmiKet is a joker

The acquisition of EpiCept in 2013 means that Immune Pharmaceuticals has

control of AmiKet, which is in phase III studies for chemotherapy-induced

peripheral neuropathy (CIPN), a condition experienced by 30-40% of cancer

patients receiving chemotherapy. However, the study has been paused to await

a partnership, which we expect will happen in H2 2014. We believe that AmiKet

has the potential to reach the market with the help of a partner, and we estimate

the market to about USDbn 2.7. However, we believe licensing out of AmiKet

could take place as early as in 2014 and could raise about SEKm 50 to 250 in

total milestone payments to the company.


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Crolibulin and Azixa

Immune Pharmaceuticals also gained two other projects from the acquisition of

EpiCept, Crolibulin and Azixa, each of which have completed phase II studies.

Both products are small molecules that use vascular disturbances to stimulate

signals of cell death (apoptosis). However, the company indicates that it will not

drive these projects forward without a partner, so in this analysis we choose toprimarily focus on the other projects.

Immune PharmaceuticalsProduct Portfolio

Source: Erik Penser Bankaktiebolag,

Immune PharmaceuticalsOur estimated calendar

Anticipates Milestones

Potential uplisting from the OTC BB to the NASDAQ Q1 2014

Bertilimumab in Bullous Pemphigoid

Initiation of Phase II study with bertilimumab in bullous pemphigoid H1 2014

Orphan Disease designation by FDA for bertilimumab in bullous pemphigoid H2 2014

Potential announcement of topline Phase I I results with bertilimumab in bullous pemphigoid H2 2014

Cond uct end- of- Phase II meet ing wit h FDA for ber tilimu mab in bullous pemphigoid H2 2014

Initiation of Phase III study with bertilimumab in bullous pemphigoid 2015

Projected FDA approval of bertilimumab in bullous pemphigoid 2017

Bertilimumab in Inflammatory Bowel Diseases and Asthma

Expansion of ongoing Phase I I study with bertilimumab in ulcerative colitis into EU and US H2 2014

Potential announcement of topline Phase I I results with bertilimumab in ulcerative colitis 2015

Pot ential annou ncement of ber tilimumab d evelopment par tnership agreement in IB D 2015

Potential advancement of bertilimumab into Phase II study in Crohn's disease 2015

Potential advancement of bertilimumab into Phase II study in severe asthma 2015

Init iat ion of Phase I I I study with berti limumab in moderate to severe u lcerat ive coli tis 2016

Projected FDA approval of bertilimumab in ulcerative colitis 2019

AmiKetPotential announcement of AmiKet out-licensing agreement H2 2014

Initiation of Phase III study with AmiKet in chemotherapy-induced peripheral neuropathy (CIPN) H2 2014

Projected FDA approval of AmiKet for CIPN 2016

NanomAbs

File IND application for Phase I clinical evaluation of NanomAbs candidate H1 2015

Potential announcement of NanomAbs out-licensing agreement 2015 Source: Erik Penser Bankaktiebolag.


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History ofImmune Pharmaceuticals

Immune Pharmaceuticals is a biotechnology company, headquartered in New

York and with research/development facilities in Herzliya Pituach and Rehovot,

Israel. The present form of the company focuses on developing nanotherapeutic

drug candidates (mAb and ADC) for inflammatory diseases and cancer.

History

Prior to the merger, Immune Pharmaceuticals was a privately held biotechnology

company specialising in the development of nanotherapeutic drugs (mAbs and

ADC) for inflammatory diseases and cancer. Its focus was mainly on the

development of one leading drug candidate, Bertilimumab. This is a mAb

purchased from ICO Therapeutics in June 2011 for USDk 500 cash up-front,

USDm 32 in potential milestone payments and royalties, 600k in Immune

Pharmaceuticals stock at a closing price of USD 2 per share, 200k Immune

Pharmaceuticals warrants and 6.14% ownership (fully diluted).

ICO retains certain rights to Bertilimumab but focuses on developing

Bertilimumab for ophthalmic indications.

EpiCept before the merger

Parts of the Immune Pharmaceuticals product portfolio came with the acquisition

of EpiCept. EpiCept was a specialty-pharma, a pharmaceutical company

working on the development of drugs for the treatment of cancer and pain, with a

focus on the latter. The company's lead drug candidate, AmiKet, is a patented

prescription cream formulation containing amitriptyline 4% and ketamine 2%.

Other new drug candidates Azixa and Crolibulin were acquired by EpiCept in a

previous merger with Maxim Pharmaceuticals (January 2006). In January 2012,

Suntrust Robinson Humphrey evaluated strategic alternatives to maximise the

commercial opportunity of AmiKet, which they estimate to about USDm 175250 in upfront payments and milestone payments from partners.

Acquisition of EpiCept

In November 2012, EpiCept and Immune Pharmaceuticals signed an agreement

to merge. Technically, Immune Pharmaceuticals acquired EpiCept, and as a result

the new company is called Immune Pharmaceuticals. In connection with the

merger, which was completed in August 2013, EpiCept issued ordinary shares to

Immune Pharmaceuticals shareholders. EpiCepts shareholders retained

approximately 19% ownership and Immunes shareholders received

approximately 81%, on a fully diluted basis. EpiCept previously traded on

Nasdaq OMX Stockholm, but the new company moved after the merger to First

North Premier. The new group has a broad portfolio of product candidates.

Immune Pharmaceuticals has expertise in therapeutic mAbs, which remains an

area of great interest for product development and market potential, and holds

ADC technology, which is a hot research field in the industry. One result of the

merger is that more resources are allocated to EpiCepts drug candidate AmiKet.

The company is currently working to find a project partner that can fund the last

part of the Phase III studies.


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Diseases

Inflammatory bowel diseases (IBD)

The term inflammatory bowel disease (IBD) is normally used as a generic term

for Crohn's disease (CD) and ulcerative colitis (UC), which are inflammatory

diseases of the intestine.

IBD is characterised by chronic inflammation of the intestinal lining (mucosa).

The cause of the disease is unknown, but both genetics and the environment play

a role. The disease is chronic, often starts at 15-40 years of age and usually goes

in spells with long periods of low or no disease activity. Population-based studies

show that approximately 20% of patients with CD develop chronic continuous

disease activity. For UC the figure is much lower. The prevalence of IBD is

estimated to be >200 cases per 100,000, or about 1.01.5 million people in the

United States, approximately 200,000 people in Canada, and 2.02.2 million

people in Europe. CD can affect any part of the gastrointestinal tract (GI), from

the mouth to the anus, but most commonly it affects the lower part of the small

intestine, while UC is limited to the colon and rectum. The symptoms of both CD

and UC include diarrhoea, abdominal pain, fever and weight loss.

People suffering from IBD are severely debilitated and the disease has a

significant impact on an individual's daily wellbeing and function. These effects

impact more negatively on the individual's quality of life than, say, chronic back

pain, rheumatic heart disease and intellectual disability.

Treatment and management

People are most commonly affected by IBD between the ages of 16 and 30, and if

the disease becomes chronic intestinal inflammation (colitis) it can last for 8-10

years. In conjunction with this, there is also an increased risk of colorectal cancer(CRC), which is difficult to detect. Due to the high risk of cancer developing, the

practice of doctors (gastroenterologists) is to conduct regular endoscopic

screening of patients. However, there is no evidence to suggest that screening

patients with UC improves survival. Today's treatment initially consists of

corticosteroids and anti-inflammatory agents. In moderate to severe cases of IBD,

when medical treatment in some cases does not work, surgery to remove part, or

all, of the colon (colectomy) may help. This is considered in 25-40% of patients

afflicted with IBD.

Recent evidence supports the correlation of eotaxin-1 with disease severity

Eotaxin-1 is a potential biomarker and therapeutic target for UC and CD.

Eotaxin-1, also known as CC-motif chemokine 11 (CCL11) or eosinophil

chemotactic protein, is a chemokine, which is one of the key regulators of a

number of pathological reactions such as inflammation, angiogenesis, and certain

infections. Since eosinophils are an important part of innate immunity, the

accumulation of eosinophils in tissues can be harmful as they are known to

release cytokines to enhance inflammatory signalling. This inflammation may be

pathological in CD and UC. Therefore, drug-absorbing eosinophil accumulation

may have a role in the treatment of these indications.

Clinical data supports the suggestion that eotaxin-1 is a biomarker for UC and

CD. This biomarker has been identified not only as a potential indicator of the

disease but also as a target for therapeutic intervention. An antibody such as

Bertilimumab, which binds to eotaxin-1, therefore has a solid scientific basis to

be able to treat UC and CD. A clinical study has screened a large number of

cytokines and chemokines to search for correlations between various diseases.


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The study examined 40 healthy controls against 137 UC patients. The chart

below shows tissue taxin-1 levels for several groups of patients in the study. The

first column contains healthy subjects (Ctrl). Qui refers to patients who are

categorised as quiescent, meaning that their disease is not active. The remaining

categories represent patients with mild (Mild), moderate (Mod) and severe (Sev)

UC. Eotaxin-1 levels in the tissue exhibit a clear increasing trend in patients with

increased severity of the disease. The difference between groups was statisticallysignificant. The researchers reported similar differences in tissue eotaxin-1 gene

expression.

Immune PharmaceuticalsEeotaxin-1 levels in different states of UC

Source: Erik Penser Bankaktiebolag, Coburn et al. (2013, PLoS One, 8 (12): e82300)

The researchers in this study concluded that eotaxin-1 is a strong potential

candidate for a biomarker in UC patients. An antibody targeting eotaxin-1 may be

a good therapeutic candidate for the treatment of UC. Immune Pharmaceuticals is

acting on this proposal by requiring that patients enrolled in the ongoing phase II

study have a minimum of 100 pg/mg eotaxin-1 in a biopsied tissue sample. Since

Bertilimumab specifically targets eotaxin-1, these patients may also be the most

likely to respond to this treatment.

Bullous pemphigoid

Bullous pemphigoid (BP) is a chronic autoimmune skin disease that primarily

affects skin cells, especially in the areas around the lower abdomen, groin, and

extremities. The disease tends to persist for months or years, with periods of

deterioration. The range of how the disease is expressed is extremely wide, but

usually there is an itchy rash with widespread blistering (bullae). Blisters may

vary in size from a few millimetres to several centimetres. BP may be difficult to

diagnose before blistering starts since the symptoms are usually only itchy red

patches. BP is characterised by spontaneous outbreaks. Even without treatment,

BP symptoms are often self-limiting and the symptoms may disappear after a

period of several months to years, but can become very extensive during the

outbreak. The disease is rare, affecting approximately 14 in one million

worldwide, but the risk increases with age. In total there are an estimated 30,000

cases worldwide.

Treatment and management


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The goals for treatment of BP are currently focused on symptom relief and

prevention of infections, primarily to help the skin to heal as quickly as possible.

Antibiotics (tetracycline and minocycline) have been used primarily for mild to

moderate symptoms of the disease and are used in combination with various skin

creams containing steroids for more effective treatment. Once blisters have

stopped forming, the number decreases over a long period (months or years).

Because steroids have some unwanted side effects, dermatologists try to reducethe dose as quickly as possible. If this happens too quickly, outbreaks of blisters

occur again. Knowledge of the disease is still very limited. High mortality is

observed in BP patients previously suffering from severe heart disease (25-40%).

The highest mortality rate of BP is observed in patients undergoing a different

treatment. For example, patients at risk of BP also have heightened risk of, for

example, hypertension, diabetes and heart disease. Treatments for these disorders

may exacerbate the progression of BP.

Role of eotaxin-1 in bullous pemphigoid

Onset of BP is partly driven by eosinophils, which secrete pro-inflammatory

cytokines and proteases. Eotaxin-1 (CCL11) and related eotaxin CCL24 are also

involved in the onset of BP. The chart below illustrates the levels of eotaxin-1 in

the serum of BP patients compared with healthy donors (HD) and patients with

pemphigus vulgaris (PV), a related condition. Patients with BP had a statistically

significant difference in concentration of eotaxin-1 as compared to both healthy

donors and PV patients. The chart to the right shows the same data for individual

patients, according to severity of the patients' condition (mild, moderate and

severe).

Severe asthma

Asthma is a common chronic disease associated with episodic inflammation of

the airways. According to the Global Initiative for Asthma (GINA), more than

300 million people worldwide now have asthma, a number that is expected to rise

to 400 million by 2025. It is the most common chronic disease among childrenand is a global concern; over 80% of deaths due to asthma occur in low and lower

middle income individuals. The disease is under-diagnosed and under-treated,

and creates a substantial burden on individuals and families and can limit

Immune PharmaceuticalsEotaxin-1 levels in BP Immune PharmaceuticalsEotaxin-1 in BP

Source: Company reports, Erik Penser Bankaktiebolag, nther, C. et al., 2011. Source: Company reports, Erik Penser Bankaktiebolag, nther, C. et al., 2011.


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individuals' activities for a lifetime. Severe asthma affects up to 15% of patients

diagnosed with asthma and who respond poorly to current treatments.

The Immune Pharmaceuticals Bertilimumab project

Bertilimumab (formerly CAT-213)

Immune Pharmaceuticals leading drug candidate is Bertilimumab (b-mab), ahuman monoclonal antibody (mAb) designed to neutralise chemokine (a

signalling protein), eotaxin-1 (also known as CC-motif chemokine 11 or CCL11)

originally developed as CAT-213 by Cambridge Antibody Technology (CAT), a

company acquired by AstraZeneca in 2006.

In 2007, CAT-213 was licensed to ICO Therapeutics (a Canadian biotech

company that also develops b-mab under the name iCo-008 for ophthalmic

indications). In June 2011, ICO granted Immune Pharmaceuticals an exclusive

license to develop and commercialise b-mab for systemic applications, which

were initially moderate to severe ulcerative colitis (UC) and inflammatory bowel

disease (IBD), as well as for asthma and Crohn's disease (CD) as the next targets.

Immune Pharmaceuticals intends to develop b-mab for the treatment of UC and

CD, severe asthma and bullous pemphigoid (BP). Recently, the company

received permission from the Israeli health authorities to initiate a phase II

randomised, double blind, placebo-controlled, parallel group study on b-mab in

patients with moderate to severe UC. The study, which began in Q3 2013 and

will be expanded in 2014, is being conducted in parallel in both the EU and US.

The company anticipates that patient enrolment will be completed in 2014 and

that the first results will be published in 2015.

Pending a favourable outcome, the company plans to submit an application for

Orphan Drug status for b-mab for the treatment of BP to both the FDA and the

European Medicines Agency (EMA). If approval is granted, the company wouldhave market exclusivity as well as financial incentives for b-mab. The company

intends to initiate a pilot study of b-mab in patients with BP in mid-2014. Finally,

Immune Pharmaceuticals also plans to conduct a pilot phase II study on b-mab

for the treatment of severe asthma in patients with high concentrations of

eosinophil and eotaxin-1 in their sputum. The study is scheduled for 2015,

followed by an exploratory phase II study on CD, also in 2015.

Current treatments of IBD

Tumoricidal drugs (TNF inhibitors) such as Johnson & Johnsons Remicade

(infliximab) are the primary drugs used for the treatment of CD and UC today.

However, there is minimal product differentiation among these TNF inhibitors.Around 30% of patients for each disease (CD and UC) suffer from moderate to

severe disease states, and one third of these patients (who suffer from moderate to

severe conditions) are deemed as suitable candidates for advanced therapies.

Approximately 25-40% of anti-TNF treatments fail. We believe that b-mab could

be positioned as a first-line treatment in IBD, especially considering that b-mabs

mechanism impacts higher up in the signal path compared to anti-TNFs, where

the potential for premium pricing can occur.

Potential for Bertilimumab

In the US, the market for inflammatory bowel disease is over 1.4 million patients.

The US IBD market was worth USDbn 4.3 in 2011 and is expected to reach

USDbn 7.7 in 2017. The global IBD market could reach almost USDbn 10 in

2017. B-mab has the potential to take a significant part of the IBD market if it is

eventually approved for the treatment of both CD and UC. The ability to use b-


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mab in patients who have high levels of eotaxin-1 may provide an advantage for

b-mab over TNF inhibitor drugs, on the grounds that b-mab may inhibit

inflammation by binding of eotaxin-1.

Bertilimumab undergoing more clinical phase II studies

Three clinical studies of b-mab have been conducted in Europe: CAT-213-0101,

CAT-213-0103 and CAT-213 to 0203. These studies investigated thepharmacodynamic properties of b-mab to provide evidence of the tolerability of

b-mab in intravenous administration, both intranasally as intraocularly. These

trials included initial studies of the drug's efficacy in the treatment of allergic

rhinitis and allergen-induced conjunctivitis. B-mab was shown to be effective in

these indications. The problem in these trials was that the wrong patient groups

were selected, and the patients were chosen without regard to eotaxin-1 status.

The strategy of Immune Pharmaceuticals, to target indications such as IBD where

eotaxin-1 is a biomarker for the disease, has much more potential to be effective.

The Immune Pharmaceuticals AmiKet project

AmiKet: analgesic cream for pain relief

AmiKet is a topical analgesic consisting of amitriptyline 4% and ketamine 2%.

This patented combination has received FDA Fast Track as a treatment for

chemotherapy-induced peripheral neuropathy (CIPN) in cancer patients

previously treated with chemotherapy. AmiKet has been tested extensively in

phase II studies. In these studies, AmiKet demonstrated analgesic efficacy, good

tolerance and an attractive side-effect profile compared with oral therapies.

AmiKet can be placed as a primary therapy and used in combination with other

analgesics, which enhances the value of the product. AmiKet has received Fast

Track status from the FDA for a phase III study in chemotherapy-induced

peripheral neuropathy, a condition for which no treatments are approved. This

represents a significant market opportunity for a highly prevalent medical need.The company expects to license AmiKet in 2H 2014 to another unknown partner.

CIPN creates a significant market opportunity

Neuropathy is caused by nerve damage to the peripheral or central nervous

system, which may result from traumatic injuries, infections, metabolic problems,

or exposure to toxins. Many chemotherapeutic agents have severe neurotoxic

effects, and are directly linked to the development of CIPN in patients receiving

systemic treatment for their cancer, particularly treatment with platinum

compounds (taxanes). Taxanes are approved and recommended for the treatment

of the most common cancers, including breast, prostate, lung and ovarian cancers.

Patients treated with taxane-class chemotherapy have a 50-70% risk ofdeveloping CIPN. For some people, transient pain can be relieved by lowering

the dose of chemotherapy or temporarily halting it, which reduces the pain within

a few weeks. However, for other patients, symptoms can become persistent.

Using survey data from the National Cancer Institute 2011 on physician-stated

cytostatic treatment rates for cancer, we estimate that approximately 90% of

cancer patients are treated with chemotherapy, and around 60% are treated with a

taxane-based regimen. With an estimated 577,190 people in the US living with

advanced cancer, around 55-67% of patients are treated for neuropathic pain. We

believe that AmiKet is a potential candidate for these patients and we estimate a

potential value for the project of SEKm 130.

Competition is open in CIPN

According to Datamonitor, the overall market for neuropathic pain in the US is

expected to grow by 2.7% per year from 2010 until 2019, peaking in 2018. The


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total projected market is forecasted to be USDbn 2.7. Antidepressants and local

anaesthetic drugs represent the largest market share for the treatment of

neuropathic pain. However, there are products currently in clinical development

that are expected to gain significant market share if they reach the market.

Existing patents for approved products will also expire, with the exception of

Lyrica (pregabalin), the leading drug marketed by Pfizer. Most drugs currently

used for the treatment of peripheral neuropathic pain will go off-patent over thenext five years. Over the past 12 years, seven drugs have been approved for the

treatment of neuropathic pain. However, there are no drugs approved for the

treatment of CIPN, and only five compounds are being developed specifically for

CIPN, leaving the field open for AmiKet.

AmiKet opportunities

We believe that AmiKet has the potential to become a substitute for, or

complement to, oral therapies for pain. We believe that AmiKets advantages and

disadvantages, above all its safety and efficacy, will play a crucial role in the

market share it can take. However, these parameters are still uncertain but we

expect that the completion of the phase III study will shed light on how attractive

AmiKet is. We do not wish to make detailed forecasts of AmiKets market

opportunities. Our forecast is that a partnership agreement may be finalised in

mid-2014. Furthermore, we estimate with a probability of 35% that AmiKet will

receive FDA approval in 2016 and that pricing will be comparable with Lyrica

(USD 150 for a 30-day treatment). Our sum-of-the-parts indicate a present value

of SEKm 130.

The Immune Pharmaceuticals NanomAbs project

NanomAbs

Monoclonal antibodies (mAb) are used in biochemical and medical research as

reagents for proteins. Since they only bind to one type of protein they are morespecific than polyclonal antibodies, which can bind many different types of

protein. Many monoclonal antibodies have started to be used clinically in recent

years, in patients with rheumatoid arthritis and cancer. But many are not strong

enough to eliminate tumours on their own, and are used more for detection of, for

example, cancer. For this reason, conjugated mAbs have been developed. In

simple terms, a conjugated mAb is a mAb that carries a cytotoxic load (i.e. toxins

or radionuclides), also known as antibody-drug conjugates (ADC).

NanomAbs basically consists of PEGylated polymeric nanoparticles (PPNs),

proprietary linker molecules embedded within the PPN, an anti-cancer drug

incorporated within the PPN and a therapeutic monoclonal antibody (mAb) thatbinds to a specific tumour antigen. The goal of Immune Pharmaceuticals with

NanomAbs is to create various attractive drug candidates.

AMB8LK is Immune Pharmaceuticals initial drug candidate, developed using

NanomAbs. AMB8LK is an anti-H ferritin formed with NanomAbs to deliver

paclitaxel and gemcitabine in the same nanoparticle. The idea behind the

selection of H ferritin is based on its overexpression on the surface of tumour

cells in certain cancers, such as pancreatic and lung cancers.

Only two ADCs, Adcetris (brentuximab vedotin, developed by Seattle Genetics)

and Kadcyla (ado-trastuzumab emtansine, developed by Roche and Immuno

Gen), have been launched on the market, in 2011 and 2012, respectively.


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Others, such as CDX-011 from Celldex, use SGEN ADC technology, and are in

late-stage clinical development. Combined sales of Adcetris and Kadcyla reached

USDm 160 in H1 2013. But according to market assessment by Roots, the market

is expected to grow to USDbn 9 by 2023. This is supported by increased

investment in the biotechnology sector. For example, Roche expects to spend

over USDm 200 to build an ADC production facility to support Kadcyla, and

eight other ADCs are in development. Other companies making similarinvestments in the segment include MedImmune (a subsidiary of AstraZeneca),

Bayer Healthcare and BristolMyers Squibb. At the beginning of the year,

MedImmune paid USDm 240 to acquire privately owned Spirogen, which has

new ADC technology that includes pyrrolobenzodiazepine-binding mAbs.

Contract manufacturers, such as Sigma Aldrich and Lonza, have also recently

expanded their commercial ADC capability. Immune Pharmaceuticals

NanomAbs platform is an ADC technology discovered by Professor Shimon

Benita at the Hebrew University of Jerusalem (HUoJ) in collaboration with the

company's founder, Jean Kadouche, PhD. In April 2011, Immune

Pharmaceuticals was granted an exclusive license for NanomAbs technology for

intravenous and intramuscular targeted delivery of active agents. This gives

Immune Pharmaceuticals the right to develop NanomAbs with clinical studies in-

house to develop drug candidates for cancer and other diseases.

Compared with independent mAbs and ADC, the therapeutic profile of

NanomAb is more effective. For example, Immune Pharmaceuticals research

shows that NanomAbs binds very strongly with target tissue and has a minimal

off-target effect, which could lead to fewer/less severe side effects. When

NanomAbs binds to tumour tissue it enters the tumour with the help of the mAb

component. Once inside the cancer cell, the nanoparticle is released in a

controlled manner, stimulating the tumour to eliminate itself. This is a unique

feature of NanomAbs not found in other ADCs (according to companymanagement). We expect the company to enter the clinical phase with AMB8LK

in 2019, and we value NanomAb at a total of approximately SEKm 30.

Immune PharmaceuticalsNanomAb

Source: Erik Penser Bankaktiebolag,.

Forecasts for Immune Pharmaceuticals

We used a sum-of-the-parts (SOTP ) methodology to arrive at a value of SEKm

1235. We believe that SOTP is the best method to value Immune

Pharmaceuticals, as the company has several proprietary assets with potential in

multiple indications. We have used the following assumptions in ourmethodology:


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Bertilimumab is approved in 2017 for bullous pemphigoid (BP) and in

2019 for ulcerative colitis (UC) with a 35% chance.

Introductory pricing for Bertilimumab of USDk 25 on an annual basis

per treatment (3% annual price increase). If Bertilimumab receives OD

indication for BP the price may be increased further, since Remicade

costs up to USDk 24 for an annual course.

Bertilimumab achieves 12% maximum penetration in severe BP in themajor markets (USA/EU/CA/JP).

Bertilimumab achieves 28% maximum penetration in moderate/severe

UC in the world by 2027.

Contribution of SEKm 130 from AmiKet (in phase III but uncertain

potential).

Sales

We calculate that Immune Pharmaceuticals will not be able to generate revenue

from Bertilimumab until 2017. Then we believe that the drug candidate will

receive approval as an Orphan Drug for BP in the USA and EU. We also expect

that the company will license out the rights for Bertilimumab in the treatment of

IBD during 2015-2016 up to SEKbn 1,2 plus a royalty percentage of sales of

12%. In total this corresponds to an income of approximately SEKm 611 in 2020.

COGS/gross margin

It is difficult to currently state the manufacturing costs for Bertilimumab. But if

we compare with previous data from CAT-213 (the predecessor of

Bertilimumab), we estimate that Immune Pharmaceuticals could achieve a gross

margin of 55-60%, which is in line with the production of therapeutic antibodies

and vaccines.

Operating costs

Driven by the costs associated with the development of Bertilimumab for BP andNanomAbs, we expect operating expenses totalling SEKm 769 from 2014 to

2020. We anticipate that research and development (R&D) will increase by 15%

annually, from SEKm 52 in 2014 to SEKm 115 in 2019, when we expect that the

first royalties on sales of Bertilimumab for UC will be realised. We also expect

the company to receive funding from the Israeli government's Science and

Technology Office.

We believe that Immune Pharmaceuticals is powered by an efficient

organisational structure, as there are fewer than 10 employees in the US, and the

remainder, including research and development, are in Herzliya Pituach, Israel.

Upon commercialisation and launch of Bertilimumab for BP, we expect that

administration costs will grow modestly by 12% annually, from SEKm 33 in2014 to SEKm 62 in 2019. We expect Immune Pharmaceuticals to continue its

strategy of licensing out potential drugs to different partners, which means that

opex as a percentage of revenues is less predictable from 2019, when we expect

NanomAbs product candidates to have reached midpoint of clinical development.

Profits

Until significant revenues from a successful launch of Bertilimumab are realised,

Immune Pharmaceuticals will not generate positive earnings and will show

significant net losses. We expect that the company will generate net losses until

early 2019, when hopefully Bertilimumab can be launched.

Liquidity and capital requirements

We expect Immune Pharmaceuticals to have a capital requirement of SEKm 70 -

100 annually until 2018, representing a total of about SEKm 592.


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Appendix

Immune PharmceuticalsBertilimumab for Bullous Pemphigoid (BP) market modelUSA 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

Antal patienter med BP 30,013 30,016 30,019 30,022 30,025 30,028 30,031 30,034 30,037 30,040 30,043 30,046 30,049 30,049Andel (%) som har svr BP 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50%

Antal patienter med svr BP 15,007 15,008 15,010 15,011 15,013 15,014 15,016 15,017 15,019 15,020 15,022 15,023 15,025 15,025

Bertilimumab marknadsandel 0% 0% 0% 0.49% 2.40% 5.08% 6.47% 8.04% 8.68% 9.21% 9.58% 10% 11% 12%Antal patienter som behandlas med Bertilimumab 0 0 0 74 360 763 971 1,208 1,304 1,384 1,439 1,502 1,653 1,803rlig kostnad fr behandling 25,000$ 25,000$ 25,000$ 25,000$ 25,750$ 26,523$ 27,318$ 28,138$ 28,982$ 29,851$ 30,747$ 31,669$ 32,619$ 33,598$Prisfrndring 0% 0% 0% 0% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3%

Total frsljning av Bertilimumab SEKm (USA) 0 0 0 12 60 132 172 221 246 269 288 309 350 394

vriga vrldenAntal patienter med BP 90,030 90,038 90,046 90,054 90,062 90,070 90,078 90,086 90,094 90,102 90,110 90,118 90,126 90,134Andel (%) som har svr BP 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50%

Antal patienter med svr BP 45,015 45,019 45,023 45,027 45,031 45,035 45,039 45,043 45,047 45,051 45,055 45,059 45,063 45,067Bertilimumab mark nadsandel 0.00% 0.00% 0.00% 0.05% 1.00% 2.00% 3.00% 5.00% 6.00% 6.00% 6.00% 6.50% 6.50% 6.50%

Antal patienter som behandlas med Bertilimumab 0 0 0 23 450 901 1,351 2,252 2,703 2,703 2,703 2,929 2,929 2,929rlig kostnad fr behandling 20$ 15,001$ 15,002$ 15,003$ 15,004$ 15,005$ 15,006$ 15,007$ 15,008$ 15,009$ 15,010$ 15,011$ 15,012$ 15,013$Prisfrndring 0% 0% 0% 0% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2%

Total frsljning av Bertilimumab SEKm (vriga vrlden) 0 0 0 2 44 88 132 220 264 264 264 286 286 286

Total frsljning av Bertilimumab SEKm (USA + vriga vrlden) 0 0 0 14 104 219 304 441 509 532 551 595 636 680NPV 0 0 0 10 68 131 166 221 235 225 214 212 208 203Chans fr att lyckas 35%Sum NPV 662 Klla: Bolagsrapporter, Erik Penser Bankaktiebolag

Immune PharmceuticalsBertilimumab fr Ulcerative Colitis (UC) market modelUSA 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027IBD patienter 1,171,902 1,171,914 1,171,925 1,171,937 1,171,949 1,171,961 1,171,972 1,171,984 1,171,996 1,172,007 1,172,019 1,172,031 1,172,043 1,172,054

Andelen patienter med Ulcers kolit (UC) 50.5% 50.5% 50.5% 50.5% 50.5% 50.5% 50.5% 50.5% 50.5% 50.5% 50.5% 50.5% 50.5% 50.5%

Antal patienter med UC 591,811 591,816 591,822 591,828 591,834 591,840 591,846 591,852 591,858 591,864 591,870 591,876 591,882 591,887Andelen patienter med mttligt Ulcers kolit (UC) 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15%

Andelen patienter med svr Ulcers kolit (UC) 28% 28% 28% 28% 28% 28% 28% 28% 28% 28% 28% 28% 28% 28%

Antal patienter med mttlig och svr UC 254,479 254,481 254,484 254,486 254,489 254,491 254,494 254,496 254,499 254,501 254,504 254,507 254,509 254,512Andelen patienter med mttligt UC med hg andel Eotaxin-1 20% 20% 20% 21% 22% 23% 24% 24% 24% 25% 26% 27% 28% 29%

Andelen patienter med svr UC med hg andel Eotaxin-1 20% 20% 20% 21% 22% 23% 24% 24% 24% 25% 26% 27% 28% 29%

Antal patienter som kan behandlas med Bertilimumab 101,791 101,792 101,793 106,884 111,975 117,066 122,157 122,158 122,159 127,251 132,342 137,434 142,525 147,617Bertilimumab mark nadsandel 0.0% 0.0% 0.0% 0.0% 0.0% 3.0% 10.0% 15.0% 23.0% 25.0% 28.0% 28.0% 28.0% 28.0%

Antal patienter som behandlas med Bertilimumab 0 0 0 0 0 3,512 12,216 18,324 28,097 31,813 37,056 38,481 39,907 41,333rlig kostnad fr behandling 25,000$ 25,000$ 25,000$ 25,000$ 25,000$ 25,000$ 25,500$ 26,010$ 26,530$ 27,061$ 27,602$ 28,154$ 28,717$ 29,291$Prisfrndring 0% 0% 0% 0% 0% 0% 2% 2% 2% 2% 2% 2% 2% 2%

Total frsljning av Bertilimumab SEKm (USA) 0 0 0 0 0 571 2,025 3,098 4,845 5,596 6,648 7,042 7,449 7,870

vriga vrlden 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027IBD patienter 3,515,200 3,515,201 3,515,202 3,515,203 3,515,204 3,515,205 3,515,206 3,515,207 3,515,208 3,515,209 3,515,210 3,515,211 3,515,212 3,515,213

Andelen patienter med Ulcers kolit (UC) 50.5% 50.5% 50.5% 50.5% 50.5% 50.5% 50.5% 50.5% 50.5% 50.5% 50.5% 50.5% 50.5% 50.5%

Antal patienter med UC 1,775,176 1,775,177 1,775,177 1,775,178 1,775,178 1,775,179 1,775,179 1,775,180 1,775,180 1,775,181 1,775,181 1,775,182 1,775,182 1,775,183Andelen patienter med mttligt Ulcers kolit (UC) 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15%

Andelen patienter med svr Ulcers kolit (UC) 28% 28% 28% 28% 28% 28% 28% 28% 28% 28% 28% 28% 28% 28%

Antal patienter med mttlig och svr UC 763,326 763,326 763,326 763,326 763,327 763,327 763,327 763,327 763,327 763,328 763,328 763,328 763,328 763,329Andelen patienter med mttligt UC med hg andel Eotaxin-1 20% 20% 20% 21% 22% 23% 24% 24% 24% 25% 26% 27% 28% 29%Andelen patienter med svr UC med hg andel Eotaxin-1 20% 20% 20% 21% 22% 23% 24% 24% 24% 25% 26% 27% 28% 29%

Antal patienter som kan behandlas med Bertilimumab 305,330 305,330 305,330 320,597 335,864 351,130 366,397 366,397 366,397 381,664 396,930 412,197 427,464 442,731Bertilimumab marknadsandel 0.0% 0.0% 0.0% 0.0% 0.0% 0.1% 1.1% 4.0% 8.0% 15.0% 25.0% 28.0% 28.0% 28.0%

Antal patienter som behandlas med Bertilimumab 0 0 0 0 0 351 4,030 14,656 29,312 57,250 99,233 115,415 119,690 123,965rlig kostnad fr behandling 20,000$ 20,000$ 20,000$ 20,000$ 20,000$ 20,000$ 20,400$ 20,808$ 21,224$ 21,649$ 22,082$ 22,523$ 22,974$ 23,433$Prisfrndring 0% 0% 0% 0% 0% 0% 2% 2% 2% 2% 2% 2% 2% 2%Total frsljning av Bertilimumab SEKm (vriga vrlden) 0 0 0 0 0 46 534 1,982 4,044 8,056 14,243 16,897 17,873 18,882

Total frsljning av Bertilimumab SEKm (USA + vriga vrlden) 0 0 0 0 0 616 2,559 5,080 8,889 13,652 20,891 23,939 25,322 26,751Immune Pharmaceuticals royalty 12% 12% 12% 12% 12% 12% 12% 12% 12% 12% 12% 12% 12% 12%

Intkter fr Immune Pharmaceuticals 0 0 0 0 0 74 307 610 1,067 1,638 2,507 2,873 3,039 3,210NPV 0 0 0 0 0 44 168 306 491 692 972 1,021 991 961Chans fr att lyckas 35%Sum NPV 1,976 Klla: Bolagsrapporter, Erik Penser Bankaktiebolag

Immune PharmceuticalsCost2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

R&D -52 -62 -74 -87 -100 -115 -132 -152 -175 -201 -231 -266 -306 -352rligkning 20% 18% 18% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15%

SG&A -33 -37 -43 -49 -55 -62 -69 -78 -87 -98 -109 -122 -137 -154rligkning 15% 15% 15% 12% 12% 12% 12% 12% 12% 12% 12% 12% 12%Total kostnadsbas -85 -100 -117 -136 -155 -177 -202 -230 -262 -299 -340 -388 -443 -505NVP -78 -84 -90 -97 -101 -105 -110 -115 -121 -126 -132 -138 -144 -151Sum NPV -1,592 Klla: Bolagsrapporter, Erik Penser Bankaktiebolag

Intellectual property

AmiKet

Immune Pharmaceuticals holds a US patent for a formulation containing a

combination of amitriptyline and ketamine used for treatment of pain, including

neuropathic pain. The patent expires in August 2021. The company also has a

license for additional patents for topical use of tricyclic antidepressants

(including amitriptyline) and NMDA antagonists (including ketamine).

NanomAbs


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Immune Pharmaceuticals has licensed the technology for NanomAb from

Yissum, Technology Transfer Company of the Hebrew University of Jerusalem.

The platform, which was discovered by Dr Shimon Benita, allows binding of

monoclonal antibodies to nanoparticles loaded with chemotherapeutic agents.

Management teamDr Daniel Teper

CEO and Chairman

Dr Teper is the founder and CEO of Immune Pharmaceuticals. Dr Teper was

formerly CEO of Bionest Partners, a global strategy consulting firm in

pharmaceuticals. Dr Teper started his career at Sandoz (now Novartis), where he

was responsible for sales, marketing and new product development. He held

senior executive positions in Europe, first at GSK as head of commercial

operations for Glaxo France and then as president and chief operating officer of

Laboratoires Delagrange through the acquisition by Synthelabo (now part of

Sanofi). Dr Teper holds a doctor of pharmacy degree from Paris XI University

and an MBA from INSEAD.

Mr Robert Cook

Senior Vice President and CFO

Mr Cook was appointed as the CFO in August 2013. Mr Cook previously served

as the companys CEO and director since August 2012 and CFO and senior vice

president since April 2004. Prior to joining Immune Pharmaceuticals, Mr Cook

was vice president and CFO at Pharmos Corporation since January 1998, and

became executive vice president of Pharmos in February 2001.

Ms Suzy Jones

Chief Business Development Officer

Ms Jones is the founder and managing partner of DNA- Ink LLC, a life sciencesfirm in San Francisco, California. Prior to starting her own firm, Ms Jones spent

20 years at Genentech in research and product development. In 2010, Ms Jones

was named by Black Health Magazine as Top 25 Most Influential African

Americans in Healthcare, Medicine, Pharmaceutical and Food Industries.

Alongside her work with Immune, Ms Jones is currently on the board of Patrys,

an Australian biotech company, and on the advisory board of CentRx.

Dr Jean Eli Kadouche

Vice President, Biologics R&D

Dr Kadouche is vice president, innovation & research, focusing on research. He

helped develop the NanomAbs technology, and is a co-author of several paperswith Professor Benita. Dr Kadouche has 25 years of experience in the

development of monoclonal antibodies in both academia and in industry. Dr

Kadouche has been an advisor to Sangstat, Roche and J&J. He holds a PhD in

immunology from the Pasteur Institute and was an assistant professor at St Louis

Hospital in Paris, France.

Dr Michal Ayalon

Vice President, R&D Operations

Dr Ayalon is the VP new product development. Dr Ayalon previously served as

senior biopharmaceutical development manager at BioLineRx.

Dr Adam Foley-ComerIs the VP of Medical Affairs of IMMUNE Pharmaceuticals.


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Before joining Immune Pharmaceuticals Adam served as Medical Director at

BioLineRx, providing medical expertise in the design, conduct, oversight and

reporting of clinical programs in gastrointestinal, oncology, dermatology,

neurology and infectious disease indications. Prior to that he served at Roche UK

as Clinical Pharmacologist with global responsibility for the Avastin franchise

and medical lead in their internal clinical pharmacology unit.

Board of Directors

Dr. Sidransky, Vice Chairman

Dr. Sidransky is a renowned oncologist and research scientist named and profiled

by TIME magazine in 2001 as one of the top physicians and scientists in

America, recognized for his work with early detection of cancer. Since 1994, Dr.

Sidransky has been the Director of the Head and Neck Cancer Research Division

at Johns Hopkins University School of Medicine and Professor of Oncology,

Otolaryngology, Cellular & Molecular Medicine, Urology, Genetics, and

Pathology at John Hopkins University and Hospital.

Dr. Isaac Korbin, R&D

Dr. Isaac Korbin led worldwide clinical programs from Phase I development

through to regulatory approval, marketing and launch for several major drugs. He

spent 10 years at Roche Global Headquarters in Basel, Switzerland and in Nutley,

New Jersey, USA. He then joined Actelion Pharmaceuticals (SIX: ATLN) in

September 1999 to build and lead its clinical development department. Dr.

Korbin held the position of Head of Clinical Development till 2009, when he was

appointed to Chief Medical Officer and Chairman of the Strategic and Portfolio

Board.


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Immune PharmaIncome Statement, Cash Flow and Balance Sheet (SEKm)

Income Statement2006 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E

Net Sales 0 0 0 0 0 0 4 0 65 65

Other Operating Income 0 0 0 0 0 0 47 0 0 0

Personnel Costs 0 0 0 0 0 0 0 0 -51 -60

Other Operating Costs 0 0 0 0 0 0 -67 -18 -34 -40

EBITDA 0 0 0 0 0 0 -17 -17 -19 -34

Depreciation 0 0 0 0 0 -1 -1 -1 -1 -1Amortisation of Goodwill 0 0 0 0 0 0 0 0 0 0

EBIT 0 0 0 0 0 0 -17 -18 -20 -35

Non-recurring Items 0 0 0 0 0 0 0 0 0 0

Associated Companies 0 0 0 0 0 0 0 0 0 0

Net Financial Items 0 0 0 0 0 0 0 -4 -4 -4

Pre-tax Result 0 0 0 0 0 0 -17 -22 -23 -38

Tax 0 0 0 0 0 0 0 0 0 0

Minority Interest 0 0 0 0 0 0 0 0 0 0

Net Result 0 0 0 0 0 0 -17 -22 -23 -38

Cash Flow

2006 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E

EBITDA 0 0 0 0 0 0 -17 -17 -19 -34

Change in Working Capital 0 0 0 0 0 0 -15 36 -55 -59

Other Operating Cash Items 0 0 0 0 0 0 1 0 0 0

Operating Cash Flow 0 0 0 0 0 1 -30 19 -73 -91

Net Financial Costs 0 0 0 0 0 0 0 -4 -4 -4

Taxes Paid 0 0 0 0 0 0 0 0 0 0

Capital Expenditure 0 0 0 0 0 0 -5 -6 -7 -7Free Cash Flow 0 0 0 0 0 1 -35 9 -83 -101

Dividends 0 0 0 0 0 0 0 0 0 0

Acquisitions 0 0 0 0 0 0 0 0 0 0

Disposals 0 0 0 0 0 0 1 0 0 0

Equity Issue/Share Buybacks 0 0 0 0 0 0 0 0 150 0

Other Adjustments 0 0 0 0 0 1 2 0 0 0

Total Cash Flow 0 0 0 0 0 2 -32 9 67 2

Other Non-cash Adjustments 0 0 0 0 0 0 1 0 0 0

Net Debt 0 0 0 0 0 0 48 39 -28 -26

Balance Sheet

2006 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E

ASSETS

Goodwill 0 0 0 0 0 0 0 0 0 0

Other Intangible Assets 0 0 0 0 0 0 0 0 0 0

Tangible Assets 0 0 0 0 0 0 0 5 11 16

Shares in Participations 0 0 0 0 0 0 0 0 0 0

Other Fixed Assets 0 0 0 0 0 0 0 0 0 0

Total Fixed Assets 0 0 0 0 0 0 1 6 11 17Inventories 0 0 0 0 0 0 0 0 7 65

Accounts Receivable 0 0 0 0 0 0 0 0 0 0

Other Current Assets 0 0 0 0 0 0 7 0 14 14

Cash and Cash Equivalents 0 0 0 0 0 0 1 10 77 74

Total Current Assets 0 0 0 0 0 0 8 10 97 153

TOTAL ASSETS 0 0 0 0 0 0 9 16 108 170

EQUITY AND LIABILITIES

Shareholder Equity 0 0 0 0 0 0 -91 -113 14 76

Minority Interest 0 0 0 0 0 0 0 0 0 0

Total Equity 0 0 0 0 0 0 -91 -113 14 76

Long-term Financial Liabilities 0 0 0 0 0 0 49 49 49 49

Pension Provisions 0 0 0 0 0 0 0 0 0 0

Deferred Tax Liabilities 0 0 0 0 0 0 0 0 0 0

Other Long-term Liabilities 0 0 0 0 0 0 0 0 0 0

Total Long-term Liabilities 0 0 0 0 0 0 49 49 49 49

Current Financial Liabilities 0 0 0 0 0 0 0 0 0 0

Accounts Payable 0 0 0 0 0 0 0 0 0 0

Tax Liabilities 0 0 0 0 0 0 0 0 0 0

Other Current Liabilities 0 0 0 0 0 0 51 80 46 46

Total Current Liabilities 0 0 0 0 0 0 51 80 46 46

TOTAL EQUITY AND LIABILITIES 0 0 0 0 0 0 9 16 108 170 Source: Company Reports, Erik Penser Bankaktiebolag


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Immune PharmaValuation and Key Ratios (SEK)

Per Share Data

2006 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E

EPS Reported 0.00 0.00 0.00 0.00 0.00 0.00 -1.37 -1.74 -1.54 -2.11

EPS Adjusted 0.00 0.00 0.00 0.00 0.00 0.00 -1.37 -1.74 -1.54 -2.11

CEPS 0.00 0.00 0.00 0.00 0.00 0.00 -3.13 1.19 -5.09 -5.28

Free Cash Flow 0.00 0.00 0.00 0.00 0.00 0.08 -2.88 0.71 -5.52 -5.58

Dividend 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Book Value 0.00 0.00 0.00 0.00 0.00 0.00 -7.44 -8.48 0.87 3.95

Tangible Book Value (Excl Goodwill) NM NM NM NM NM 0.00 -7.47 -8.51 0.85 3.93

Net Asset Value 0.00 0.00 0.00 0.00 0.00 0.00 -7.47 -8.51 0.85 3.93

Net Debt 0.00 0.00 0.00 0.00 0.00 0.00 3.90 2.91 -1.75 -1.34

Enterprise Value - - NM NM NM 88.00 18.78 17.07 26.16 26.64

Diluted No of Shares, Weighted Average (m) - - - - - 12.2 12.2 12.6 15.1 18.1

Diluted No of Shares, Year-end (m) - - - - - 12.2 12.2 13.3 16.0 19.2

Valuation

2006 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E

P/E Reported - - NM NM NM NM NM NM NM NM

P/E Adjusted - - NM NM NM NM NM NM NM NM

P/CEPS - - NM NM NM NM NM 23.6 NM NM

P/FCFPS - - NM NM NM 1,073.6 NM 39.5 NM NM

FCF Yield - - 0.0 0.0 0.0 0.1 -19.4 2.5 -19.7 -19.9

Dividend Yield - - 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Dividend Payout Ratio Adjusted NM NM NM NM NM NM NM NM NM NM

P/BV - - NM NM NM NM NM NM 32.16 7.09

P/Tangible BV - - NM NM NM NM NM NM 33.03 7.13

P/NAV - - NM NM NM NM NM NM 33.03 7.13

EV/Sales NM NM NM NM NM NM 60.47 1,909.00 6.96 8.26

EV/EBITDA - - - - - high NM NM NM NM

EV/EBIT - - - - - high NM NM NM NM

Share Price, Year-end - - 573.60 522.00 232.00 88.00 14.80 14.00 28.00 28.00

Share Price, High - - 660.00 906.00 744.00 236.00 100.00 29.20 35.90 -

Share Price, Low - - 567.60 517.20 99.20 75.20 14.80 10.55 13.50 -

Share Price, Average - - 615.60 638.56 379.82 138.49 46.10 17.29 19.96 -

Market Cap, Year-end and Current (SEKm) - - - - - 1,074 181 353 423 508

Enterprise Value, Year-end and Current (SEKm) - - 0 0 0 1,074 229 382 452 537

Growth Rate and Margins

2006 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E

Sales Growth, YoY - NM NM NM NM NM NM -94.7 NM 0.0EBIT Growth, YoY - NM NM NM NM NM - NM NM NM

EPS Adjusted Growth, YoY - NM NM NM NM NM - NM NM NM

EBITDA Margin NM NM NM NM NM NM -441.0 -8,534.0 -28.5 -52.0

EBITA Margin NM NM NM NM NM NM -441.0 -9,034.0 -30.0 -53.5

EBIT Margin NM NM NM NM NM NM -441.0 -9,034.0 -30.0 -53.5

Pre-tax Margin Adjusted NM NM NM NM NM NM -441.0 -10,980.2 -35.9 -58.9

Net Margin Adjusted NM NM NM NM NM NM -441.0 -10,980.2 -35.9 -58.9

Tax Rate NM NM NM NM NM NM NM NM NM NM

Profitability

2006 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E

Return on Equity, ROE - NM NM NM NM NM 36.8 21.6 47.2 -85.6

Return on Equity 5-Year Average - - - - - NM NM NM NM NM

Return on Capital Employed, ROCE - NM NM NM NM NM 77.4 30.8 44.3 -193.2

Return on Capital Employed 5-Year Average - - - - - NM NM NM NM NM

Capital Expenditure and Efficiency2006 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E

Capital Expenditure 0 0 0 0 0 0 5 6 7 7

Capex/Sales NM NM NM NM NM NM 143.9 3,000.0 10.0 10.0

Capex/Depreciation NM NM NM NM NM 0.0 5.5 6.0 6.5 6.5

Inventory/Sales NM NM NM NM NM NM 0.0 10.0 10.0 100.0

Receivables/Sales NM NM NM NM NM NM 0.0 0.0 0.0 0.0

Payables/Sales NM NM NM NM NM NM 0.0 0.0 0.0 0.0

Net Working Capital/Sales NM NM NM NM NM NM 0.0 10.0 10.0 100.0

Asset Turnover - NM NM NM NM NM 0.88 0.02 1.05 0.47

Financial Position

2006 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E

Interest-bearing Net Debt (SEKm) 0 0 0 0 0 0 48 39 -28 -26

Equity Ratio NM NM NM NM NM NM -1,051.9 -706.3 12.9 44.5

Net Debt/Equity NM NM NM NM NM NM -0.52 -0.34 -2.01 -0.34

Net Debt/Market Cap - - NM NM NM 0.00 0.26 0.22 -0.07 -0.05Net Debt/EBITDA NM NM NM NM NM NM -2.8 -2.3 1.5 0.8 Note: Key ratios based on fully diluted number of shares. Historical key ratios are calculated using the year-end share price.Source: Company Reports, Erik Penser Bankaktiebolag


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Immune PharmaQuarterly Operating Performance (SEKm)

Income Statement

Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213

Net Sales 0 0 0 0 0 0 0 0 0 0 0 0

Other Operating Income 0 0 0 0 0 0 0 0 0 0 0 0

Other Operating Costs 0 0 0 0 0 0 0 0 0 0 -10 -12

EBITDA 0 0 0 0 0 0 0 0 0 0 -10 -11

Depreciation and Amortisation -0 -1 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0EBIT 0 0 0 0 0 0 0 0 0 0 -10 -12

Non-recurring Items 0 0 0 0 0 0 0 0 0 0 0 0

Associated Companies 0 0 0 0 0 0 0 0 0 0 0 0

Net Financial Items 0 0 0 0 0 0 0 0 0 0 0 0

Pre-tax Result Reported 0 0 0 0 0 0 0 0 0 0 -10 -12

Pre-tax Result Adjusted 0 0 0 0 0 0 0 0 0 0 -10 -12

Tax 0 0 0 0 0 0 0 0 0 0 0 0

Minority Interest 0 0 0 0 0 0 0 0 0 0 0 0

Net Result Reported 0 0 0 0 0 0 0 0 0 0 -10 -12

Growth Rates and Margins

Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213

Sales Growth, YoY - - - - - - - - - - - NM

EBIT Growth, YoY - - - - - - - - - - NM NM

EBITDA Margin NM NM NM NM NM NM NM NM NM NM NM -5,694.8

EBIT Margin NM NM NM NM NM NM NM NM NM NM NM -5,794.8

Pre-tax Margin Adjusted NM NM NM NM NM NM NM NM NM NM NM -5,794.8Tax Rate NM NM NM NM NM NM NM NM NM NM NM NM Source: Company Reports, Erik Penser Bankaktiebolag

Immune Pharma Sales, 12-month Moving Average Immune PharmaEBITDA, 12-month Moving Average

0

0

0

1

1

1

1

0

0

0

0

0

0

10 11 11 11 11 12 12 12 12 13 13Sales, 12-month Moving Average YoY Change

Sales,

SEKm

YoYChange,

Percentages

-12,000

-10,000

-8,000

-6,000

-4,000

-2,000

0

-25

-20

-15

-10

-5

010 11 11 11 11 12 12 12 12 13 13

EB ITD A E BITD A Margin

EBITDA,

SEKm

EBITD

AMargin,

Percentages


Immune Pharma EBIT, 12-month Moving Average Immune PharmaPre-tax Result, 12-month Moving Average

-12,000

-10,000

-8,000

-6,000

-4,000

-2,000

0

-25

-20

-15

-10

-5

010 11 11 11 11 12 12 12 12 13 13

EBI T EBI T Margin

EBIT,

SEKm

EBITMargin,

Percentages

-12,000

-10,000

-8,000

-6,000

-4,000

-2,000

0

-25

-20

-15

-10

-5

010 11 11 11 11 12 12 12 12 13 13

Pre-tax Result Adjusted Pre-tax Margin Adjusted

Pre-taxResult,

SEKm

Pre-taxMargin,

Percentages



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Immunepharmaceuticals Analys 140314 Eng

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