Edison Issues Outlook on Genkyotex (GKTX)

Genkyotex is a Euronext-listed company formed by the merger of Genticel and Genkyotex focused on NOX science and its application in fibrosis and other indications. The lead asset, GKT831, will start a Phase II trial in primary biliary cholangitis (PBC) in Q217, with data expected in 2018. Positive results could justify future development in other large fibrotic diseases including non-alcoholic steatohepatitis (NASH). GKT771 will be Phase I ready in late 2017 and will focus on inflammation and angiogenesis. A partnership for immunotherapies with the Serum Institute of India (SIIL) for up to $57m in milestone payments plus royalties is also in place. Cash of €21.8m at end March 2017 should be sufficient to fund operations for two years. Our valuation is €268m.

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Our valuation of the combined company is €268m based on an rNPV and includes the PBC indication, the SIIL deal and net cash. Additionally, should the company pursue NASH, we estimate this could add €30m to €90m, depending on the commercialisation strategy (via a partner or alone).  

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