SymBio Pharmaceuticals

Clinical update

Top-line data from registrational DLBCL study

Pharma & biotech

SymBio will be presenting data at the European Society of Hematology(EHA) meeting from its pivotal study in Japan of Treakisym (bendamustine)in combination with rituximab for the treatment of diffuse large B-cell
lymphoma (DLBCL). The 38-patient, single-arm study showed a 76%
overall response rate (ORR), with 47% of patients achieving a complete
response (CR). This gives us a high degree of confidence in the label
expansion for this population submitted in May 2020.

Year end
12/18
12/19
12/20e12/21eRevenue
(¥m)
3,836
2,838
2,608
9,228

PBT*
(¥m)
(2,749)(4,377)(5,256)
1,090

EPS*
(¥)
(166)
(189)
(181)
19

DPS
(¥)
0
0
0
0

P/E
(x)
N/A
N/A
N/A
24.8

Yield
(%)
N/A
N/A
N/A
N/A

26 May 2020

Price

¥472

Market cap¥16.1bn¥110/US$Net cash (¥m) at 31 March 2020 +subsequent exercises

5,584

Shares in issue

34.1mFree float

92.5

Code

4582

Primary exchange

TYO

Secondary exchange

OTC US

Share price performance

Note: *PBT and EPS are adjusted, excluding D&A and exceptional items.

No surprises in safety profile
The EHA abstract includes a report on the safety profile of the combination, whichis in line with expectations. Grade 3 and higher events were limited to hematologic
adverse events (AE), which is consistent with the profile of this treatment and otherreported results. The regimen is positioned as a more tolerable treatment thanother second-line therapies, so consistency in the AE profile is important. These
results were to be expected but we are pleased to see that no surprises wereencountered that could potentially endanger the recent submission of the
combination for a label expansion of Treakisym.

Results in line with or better than similar studies
The combination of bendamustine and rituximab (BR therapy) has previously beenstudied in unaffiliated non-registrational studies in DLBCL patients and otheraggressive lymphomas. The results in the current study replicate and/or surpass
these historical benchmarks. In particular, the median progression-free survival(PFS) seen in the study of 11.9 months is superior to other reports in this patient
population. Median overall survival was not reached during the study period.

Confirmed activity in difficult to treat populations

%

1m

3m

12m

Abs

45.2

(15.9)(33.0)

Rel (local)

37.4

(9.4)

(31.2)

52-week high/low¥264

Business description
SymBio Pharmaceuticals is a Japanese specialty
pharma company with a focus on oncology andhematology. The Treakisym powder formulation
was in-licensed from Astellas in 2005; liquid
Treakisym was in-licensed from Eagle
Pharmaceuticals in 2017. Rigosertib was inlicensed from Onconova. And brincidofovir was
licensed from Chimerix in 2019.

Next events

The results presented in the abstract also included a subgroup analysis based on
cancer subtype and patient age. The drug combination showed activity acrosssubgroups, including more difficult to treat non-germinal center B-cell (non-GBC)

Rigosertib Phase III results

disease and patients over 75. This supports the use of the regimen in its historicalrole for these higher-risk groups that are often unfit for other treatments.

AnalystTreakisym RTD approval decision

Nathaniel Calloway

Valuation: Unchanged at ¥39.0bn or ¥1,144

healthcare@edisongroup.com

Our valuation remains unchanged at ¥39.0bn ($354m), or ¥1,144 ($10.40) per
share as we had previously upgraded our valuation for the DLBCL program upon

Edison profile pagethe initial announcement of positive results in November 2019, and we remain
confident in its approval (90% probability of success).

¥791

H220
October 2020

+1 646 653 7036

SymBio Pharmaceuticals is a
research client of Edison
Investment Research Limited

Data supports label expansion
SymBio previously completed a Phase III study in Japan to support a label expansion of Treakisym(in combination with rituximab) to relapsed and refractory DLBCL in November 2019 and reported
that it received positive results. The company will be presenting the detailed results from this study
at the upcoming EHA virtual meeting in June 2020. The study enrolled 40 patients of whom 38 were
evaluated for safety and efficacy.
The abstract for the presentation reported an ORR in 29 out of 38 patients (76%), of whom 18 of 38(47%) showed a CR, with a median PFS of 11.9 months. These results are superior on a numericalbasis to other reported studies of this combination. For instance, an Italian retrospective study
reported a 50% ORR, 28% CR and a PFS of 8.8 months.1 Other studies have reported lower
response rates.2 The safely profile presented in the abstract was also consistent with other results
and predominantly showed hematologic AEs. A majority of patients saw grade 3 or higher drops inlymphocyte counts (90%), neutropenia (74%) or reduction in CD4 lymphocytes (66%). This is to be
expected for most drugs targeting hematologic malignancies and is indicative of the drugs’ activity.
This combination has been previously studied in a number of different trials across the globe, and isamong the arsenal of treatment regimens available to doctors despite not being formally approved.
The BR treatment regimen (as it is typically called) has historically been used as a salvage
treatment in patients following failure of first-line chemotherapy as an alternative to moreaggressive chemotherapy salvage or autologous stem cell transplant. The BR regimen has agenerally more tolerable profile than these other treatments. Because of this there have also been
attempts to investigate it as an alternative treatment in the first-line in frail patients.3 However, alimitation to evaluating the data on the BR combination is that there is a lack of placebo controlled
studies, although this has not limited other similar approvals. Bendamustine was approved in the
US for the treatment of indolent non-Hodgkin lymphoma (NHL) in patients who have failed rituximab
treatment, based on a single-arm study.
The company also provided a breakdown of response rates based on patient subgroups. Response
rates were provided on the basis of whether patients had germinal center B-cell type (GCB) DLBCLor the generally more aggressive non-GCB subtype of the disease, as well response rates by age(Exhibit 1). These results showed strong activity across subgroups, including the more difficult totreat non-GCB patients and those over 75. These results are relevant because they continue tosupport the use of Treakisym in harder to treat populations.
Exhibit 1: Patient subgroup analysis
Cancer subtype
Patient age

GCB
non-GCB
Under 65
65 to 74
75 or older

ORR
83%
78%
86%
75%
73%

CR
67%
39%
71%
45%
36%

Source: SymBio Pharmaceuticals

1

Arcari A. et al. (2016) Safety and efficacy of rituximab plus bendamustine in relapsed or refractory diffuse
large B-cell lymphoma patients: an Italian retrospective multicenter study. Leuk Lymph 57, 1823-1830.

2

Vacirca JL, et al. (2014) Bendamustine combined with rituximab for patients with relapsed or refractory
diffuse large B cell lymphoma Ann Hematol 93, 403-409.

3

Storti S, et al. (2018) Rituximab Plus Bendamustine As Front-Line Treatment In Frail Elderly (>70 Years)
Patients With Diffuse Large B-Cell Non-Hodgkin Lymphoma: A Phase II Multicenter Study Of The
Fondazione Italiana Linfomi. Haematologica 103, 1345-1350.

SymBio Pharmaceuticals | 26 May 20202

The label expansion to DLBCL is an important aspect of the company’s strategy to expand its salesof Treakisym. We estimate that it will expand the target market for the drug to 11,200 second-line
DLBCL patients in Japan, approximately double the current market for the drug. Moreover, this isconcurrent with the company’s pipeline management efforts to seek approval for new formulationsof the product: the ready to dilute (RTD) formulation, which was submitted for approval in
September 2019, and the rapid infusion (RI) formulation, for which it was recently announced in
March 2020 that the ongoing safety confirmation study was fully enrolled.

Valuation
Our valuation remains unchanged at ¥39.0bn ($354m) or ¥1,144 ($10.40). We previously upgraded
the probability of success for the Treakisym DLBCL program to 90% from 60% following the initial
announcement that the study met its endpoints in November 2019, and the current more granular
data does not change our already positive expectations.
Exhibit 2: Valuation of SymBio
Product

Indication

Treakisym
Low grade NHL/MCL (r/r and 1st line); CLLTreakisym (DLCBL)
r/r DLBCL
Rigosertib (IV)r/r HR-MDS
Rigosertib (oral)
LR-MDS (mono) or First-line HR-MDS (combo)
BrincidofovirvHC
Net cash (March 2020 + subsequent exercises)
Valuation

Launch Peak sales
(¥m)
2010
8,600
2021
9,600
2023
3,800
2025
7,500
2025
4,200

NPV Probability(¥m)
19,571 100–95%
13,383
90%
2,909
50%
4,302
15%
3,383
30%
5,584
100%
49,132rNPV(¥m)
18,724
11,975
1,365
436
882
5,584
38,967

rNPV/share(¥/share)
549.8
351.6
40.1
12.8
25.9
164.0
1,144.2

Source: SymBio Pharmaceuticals reports, Edison Investment Research

Financials
Our financial forecasts remain unchanged at this time.

SymBio Pharmaceuticals | 26 May 20203

Exhibit 3: Financial summary
Accounts: JPN GAAP; year-end 31 December; ¥m
Total revenues
Cost of sales
Gross profit
SG&A (expenses)
R&D costs
Other income/(expense) included in adjusted
Other income/(expense) excluded from adjusted
Reported EBIT
Finance income/(expense)
Other income/(expense) included in adjusted
Other income/(expense) excluded from adjusted
Reported PBT
Income tax expense
Reported net income
Average number of shares - basic (m)Basic EPS (¥)
Adjusted EBITDA
Adjusted EBIT
Adjusted PBTAdjusted EPS (¥)
Adjusted diluted EPS (¥)
BALANCE SHEET
Property, plant and equipment
Goodwill
Intangible assets
Other non-current assets
Total non-current assets
Cash and equivalents
Inventories
Trade and other receivables
Other current assets
Total current assets
Non-current loans and borrowings
Trade and other payables
Other non-current liabilities
Total non-current liabilities
Trade and other payables
Current loans and borrowings
Other current liabilities
Total current liabilities
Equity attributable to company
Non-controlling interest
CASH FLOW STATEMENT
Profit before tax
Depreciation and Amortisation
Share based payments
Other adjustments
Movements in working capitalInterest paid / received
Income taxes paid
Cash from operations (CFO)
Capex
Acquisitions & disposals net
Other investing activities
Cash used in investing activities (CFIA)
Net proceeds from issue of shares
Movements in debt
Other financing activities
Cash from financing activities (CFF)
Currency translation differences and other
Increase/(decrease) in cash and equivalents
Opening net (debt)/cash
Cash and equivalents at end of period
Net (debt)/cash
Movement in net (debt)/cash over period

2016
2,368
(1,464)904(1,364)(1,667)00(2,127)5
7(195)(2,309)(4)(2,313)9.8(235.27)(2,101)(2,127)(2,317)(236.02)(236.02)

2017
3,444
(2,413)
1,031(1,961)(3,018)0
0(3,947)3
3(33)(3,974)(4)(3,978)12.5(319.14)(3,917)(3,947)(3,977)(319.35)(319.35)

2018
3,836
(2,663)
1,173(1,996)(1,833)00(2,656)1(0)(93)(2,749)(4)(2,753)16.6(165.54)(2,621)(2,656)(2,749)(165.54)(165.54)

2019
2,838
(1,973)865(2,725)(2,442)00(4,302)0
4(75)(4,372)(4)(4,376)23.2(189.03)(4,264)(4,302)(4,377)(189.22)(189.22)

2020e
2,608
(1,956)652(3,325)(2,603)00(5,276)20
0
0(5,256)(4)(5,260)29.0(181.42)(5,179)(5,276)(5,256)(181.42)(181.42)

2021e
9,228
(1,619)7,609(5,772)
(765)
0
0
1,072
19
0
0
1,090
(437)
653
34.1
19.17
1,165
1,072
1,090
19.17
18.94

2022e
11,484(2,261)
9,223(6,397)(1,040)
0
0
1,786
28
0
0
1,814
(571)
1,243
34.1
36.47
1,883
1,786
1,814
36.47
36.03

2023e
12,769(1,904)
10,864(7,542)(1,815)
0
0
1,507
57
0
0
1,564
(555)
1,008
34.1
29.59
1,613
1,507
1,564
29.59
29.23

2024e
14,048(2,097)
11,951(7,440)(1,547)
0
0
2,964
96
0
0
3,061
(801)
2,259
34.1
66.30
3,081
2,964
3,061
66.30
65.50

2025e
15,395(2,299)13,096(8,005)
(866)
0
0
4,226
177
0
0
4,403
(1,024)
3,379
34.1
99.16
4,356
4,226
4,403
99.16
97.96

75
0
42
77
193
5,719
273
487
205
6,685
450
0
1
451
322
0
620
942
5,485
0

47
0
69
100
216
2,947
363
490
237
4,037
0
0
1
1
604
0
407
1,011
3,239
0

57
0
71
73
201
4,821
534
412
272
6,038
0
0
1
1
726
0
610
1,336
4,902
0

75
0
241
70
386
3,911
0
549
427
4,887
0
0
2
2
121
0
751
872
4,400
0

80
0
211
70
362
1,875
220
286
427
2,808
0
0
2
2
479
0
751
1,231
1,937
0

136
0
191
70
398
1,855
182
1,011
427
3,476
0
0
2
2
530
0
751
1,281
2,591
0

201
0
178
70
449
2,801
254
1,258
427
4,741
0
0
2
2
603
0
751
1,355
3,833
0

263
0
169
70
503
3,812
214
1,399
427
5,852
0
0
2
2
760
0
751
1,512
4,842
0

323
0
163
70
557
5,824
236
1,540
427
8,027
0
0
2
2
729
0
751
1,480
7,101
0

380
0
159
70
609
8,970
258
1,687
427
11,343
0
0
2
2
718
0
751
1,470
10,4810(2,309)
26
137
197
(13)
6
(4)
(1,960)
(28)
0
(16)
(44)
3,226
450
(18)
3,658
(196)
1,458
4,261
5,719
5,269
1,008

(3,974)
30
121
42
(35)
3
(4)
(3,817)
(57)
0
(20)
(78)
1,164
0
0
1,164
(42)
(2,772)
5,719
2,947
2,947
(2,322)(2,749)
35
148
61
184
1
(4)
(2,325)
(40)
0
14
(26)
4,272
0
0
4,272
(47)
1,874
2,947
4,821
4,821
1,874

(4,372)
38
0
229
(242)
1
(4)
(4,351)(217)(5,256)
97
0
(20)
402
20
(4)
(4,761)
(72)

1,090
93
0
(19)
(637)
19
(437)
110
(129)

1,814
98
0
(28)
(246)
28
(571)
1,095
(149)

1,564
106
0
(57)
56
57
(555)
1,171
(160)

3,061
117
0
(96)
(193)
96
(801)
2,183
(171)

4,403
130
0
(177)
(181)
177
(1,024)
3,329
(183)

0
(216)
3,738
0
2
3,740
(83)
(911)
4,821
3,911
3,911
(911)

0
(72)
2,797
0
0
2,797
0
(2,036)
3,911
1,875
1,875
(2,036)

0
(129)
0
0
0
0
0
(20)
1,875
1,855
1,855
(20)

0
(149)
0
0
0
0
0
946
1,855
2,801
2,801
946

0
(160)
0
0
0
0
0
1,011
2,801
3,812
3,812
1,011

0
(171)
0
0
0
0
0
2,012
3,812
5,824
5,824
2,012

0
(183)
0
0
0
0
0
3,146
5,824
8,970
8,970
3,146

Source: SymBio Pharmaceuticals reports, Edison Investment Research

SymBio Pharmaceuticals | 26 May 20204

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