Bellus Health. Bellus s offer for Thallion snags a Jaguar. Thallion s lead Shigamabs asset in STEC infection

Transcription

1 Bellus Health Bellus s offer for Thallion snags a Jaguar Thallion purchase offer Pharma & biotech Bellus has made an offer to acquire Thallion Pharmaceuticals for C$6.3m, or C$ per fully-diluted (FD) share, with additional contingent value rights (CVRs) of up to C$ per CVR. The all-cash deal would extend Bellus s kidney disease pipeline without affecting its cash position. While Thallion s board unanimously supports the transaction, Jaguar Financial, Thallion s largest single shareholder (10.1%), has indicated it will vote against the deal unless CVR terms are significantly raised. 1 July 2013 Price C$0.27 Market cap C$13m Net cash (C$m) at end-q213e C$15.5m Shares in issue 47.4m Free float 47% Year end Revenue (C$m) PBT* (C$m) EPS* (C$) DPS (C$) P/E (C$) 12/ (1.7) (0.19) 0.0 N/A N/A 12/ (3.5) (0.11) 0.0 N/A N/A 12/13e 1.5 (3.2) (0.07) 0.0 N/A N/A 12/14e 1.4 (3.5) (0.07) 0.0 N/A N/A Note: *PBT and EPS are normalised, excluding intangible amortisation, exceptional items and share-based payments. Yield (%) Code Primary exchange Share price performance BLU TSX Thallion s lead Shigamabs asset in STEC infection The Shigamabs product is strategically a good fit for Bellus given the firm s experience in the rare kidney disease space. Shigamabs are designed to treat infections caused by Shiga-toxin secreting Escherichia coli (STEC) bacteria, which can cause haemolytic uremic syndrome (HUS), a deadly disease with kidney complications. However, the development of Shigamabs was suspended in February after LFB, Thallion s previous partner, terminated its licensing agreement. Bellus offer accretive to cash position... Thallion had C$9.5m in cash and equivalents in February 2013, and Bellus s offer is contingent on Thallion retaining C$7.5m as of closing (in August 2013); hence the deal would provide a mechanism for Bellus to extend its pipeline without impairing its balance sheet or diluting its shareholders.... Although Jaguar is opposing the bid Jaguar claims that Thallion is being sold for effectively nothing and is requesting significant amendments to CVRs that would compel Bellus to commit to three years of Shigamabs development and sharing 50% of future revenue (vs 5% proposed and no specific development commitment). We note that 10.17% of Thallion shareholders have indicated support for Bellus s bid, and suggest that the alternative dissolution of Thallion s assets may not result in a higher payout to shareholders than Bellus s offer and excludes the potential CVR upside in Bellus s bid. Valuation: C$31.6m unchanged % 1m 3m 12m Abs (10.0) (22.9) (60.3) Rel (local) (5.4) (18.9) (62.6) 52-week high/low C$0.74 C$0.25 Business description Bellus Health is a Canadian pharmaceutical company developing drugs for amyloid-related diseases. Its lead candidate, Kiacta, is in a pivotal Phase III trial for AA amyloidosis. BLU8499 is expected to start a Phase IIa study in Alzheimer s disease in Next events Q213 results August 2013 Completion of recruitment into Kiacta Phase III study Analysts H114 Pooya Hemami Christian Glennie +44 (0) healthcare@edisongroup.com Edison profile page Given the uncertainty as to whether Bellus will be successful in its bid to acquire Thallion, we are not revising our valuation approach at this time. We reiterate that the key investment case for Bellus lies in Kiacta undergoing a pivotal Phase III study for AA amyloidosis, which we estimate has a 60% probability of success. Bellus Health is a research client of Edison Investment Research Limited

2 Update: Bellus makes an offer to acquire Thallion Bellus Health recently announced that it is making an offer to acquire Montreal-based Thallion Pharmaceuticals for C$6.33m in cash, or C$ per fully-diluted (FD) share, with additional contingent value rights (CVRs) entitling Thallion shareholders to additional payments of up to C$7.66m, or C$ per CVR, if future product revenue milestones for Thallion s lead asset, Shigamabs, are realised, and if a future receivable is collected from Premium Brands Holding Corporation. Thallion had itself been undergoing a strategic review process since February 2013, when its thenglobal development partner for Shigamabs, LFB Biotechnologies (an affiliate of the Laboratoire Français du Fractionnement et des Biotechnologies), terminated their licensing agreement and transferred product rights back to Thallion. As LFB had been responsible for funding the Shigamabs programme, Thallion decided to suspend the product s development, with the exception of completing the remaining one-year patient follow-up safety assessments of the SHIGATEC Phase II study (now completed; top-line data reported in May 2012). Thallion s board of directors unanimously approved Bellus s proposed offer, which requires support of 66.67% of shareholders to proceed. A special meeting of Thallion shareholders to vote on the arrangement is planned on or around 6 August 2013, and a proxy circular will be mailed in mid-july. Thallion s share price increased by 38% to C$0.18/share on the day that Bellus s offer was announced (18 June 2013). Shigamabs: Phase II asset for STEC-HUS kidney infection The Shigamabs programme is strategically a good fit for Bellus given the firm s strong familiarity with the rare kidney disease space. Shigamabs are designed to treat infections caused by Shigatoxin secreting Escherichia coli (STEC) bacteria, such as strain 0157:H7, and for which there is no approved treatment. Shigamabs consist of two monoclonal antibodies designed to bind specifically and exclusively to the Shigatoxin 1 and Shigatoxin 2 toxins secreted by STEC bacteria. STEC infections are often food-borne bacterial infections that can cause severe health complications, particularly in young children, the elderly and immuno-suppressed individuals. Thallion estimates that STEC infections affect approximately 314,000 people annually in the industrialised world. While most cases selfresolve, a small percentage (<5%) lead to haemolytic uremic syndrome (HUS), a complication involving haemolytic anaemia, bloody diarrhoea, acute kidney failure and thrombocytopenia. The prevalence of STEC-HUS has been estimated at cases per 100,000 in the US, 1 and Bellus estimates the prevalence at 1,500-2,000 cases per year in the US, Japan and Europe. Acute renal failure often requiring dialysis occurs in about 55-70% of STEC-HUS patients, and up to 70-85% recover some renal function. 1 The risk of death from STEC-HUS is about 3-5%, and up to one-third of surviving patients have reduced kidney function, while others may have lifelong cardiovascular or neurological complications. There are currently no approved products available for the treatment of STEC-HUS. The Shigamabs antibodies are administered as a single intravenous injection, and are designed to bind to their respective toxin and neutralise them by forming a complex that is absorbed and destroyed by the liver and spleen. Shigamabs have obtained orphan drug designation both in the US and in Europe. 1 Parmar M. Medscape. Updated April Bellus Health 1 July

3 Shigamabs trials affected by endpoint selection and study sizes The challenge for Shigamabs development had historically been the selection of a well-validated clinical endpoint in the STEC infection population. Progression to STEC-HUS would presumably be an effective method to separate treatment from placebo, but given the low incidence of this condition, obtaining a statistically significant separation could require the recruitment of thousands of STEC infection patients. Thallion had preferred to employ a composite endpoint of surrogate efficacy parameters (persistence of bloody diarrhoea or presence of at least two out of the three of following: anaemia, thrombocytopenia and acute renal insufficiency). Top-line results for the Phase II SHIGATEC double-blinded study of 45 patients testing positive for STEC infection (aged between six months and 18 years) were reported in May 2012; Shigamabs was found to be safe and well-tolerated but no statistically significant trends of efficacy (based on the composite endpoint) were determined. We understand that only one or two patients in the SHIGATEC study had even progressed to STEC-HUS. Hence, we estimate that part of LFB s decision to terminate the Shigamabs licensing agreement may stem from the realisation that a larger study sample (potentially approaching 1,000 patients) may be needed to demonstrate efficacy, significantly increasing the required investment. An alternative development approach could be to restrict therapy (and the target population) to patients reaching the STEC-HUS stage. However, this could provoke recruitment challenges given the condition s low incidence and also may run the risk that treatment initiation at the STEC-HUS stage may be too late for the drug to show a meaningful improvement (given the high Shigatoxin load and underlying inflammation at that stage). Deal to be cash-accretive; Kiacta data runway maintained The Thallion transaction terms would be accretive to Bellus s net cash position. As of 28 February 2013, Thallion held C$9.5m in cash and equivalents, C$1.0m in restricted cash, and C$0.4m in tax credits receivable and C$0.6m in balance of sales receivable (related to the sale of Caprion Proteomics in 2012). Bellus s offer is contingent on Thallion retaining at least C$7.5m in net cash (inclusive of all liabilities including the C$0.6m in current operating lease payments and C$1.1m in anticipated change-of-control and/or severance payments to current Thallion executives) at the effective closing date of the transaction, expected in August Given its anticipated net C$1.2m cash inflow from the deal, Bellus has stated that the Thallion transaction will not affect its ability to reach the expected completion of the Kiacta pivotal Phase III study in 2017 without requiring additional financing. While Bellus has not specified its intended Shigamabs development approach, given its arrangements with other parties (Auven for Kiacta; Asclepios for BLU8499), we expect the firm will select an approach that involves partnerships to minimise the financial investment required on its part for the advancement of the product. As for the CVRs within Bellus s offer, they will only engender cash payments by Bellus to holders once the assets to which they are related generate cash. In 2009, Thallion transferred tax losses to Premium Brands and could receive additional payments in 2016 if loss pools continue to be exploited. Holders of CVRs will receive 80% of any future cash consideration received by Thallion from Premium Brands, up to C$1.45m (or C$ per CVR). CVR holders will also be entitled to 5% of any future sales/licence, royalty or milestone revenue from Shigamabs generated or received by Bellus, capped at C$6.5m (or C$ per CVR). In addition to Shigamabs, Thallion also holds rights to TLN-4601, an oncology candidate that inhibits the RAS/MAPK signalling pathway; in 2009 a Phase II study in glioblastoma multiforme (GBM) was terminated for lack of measurable efficacy and we do not expect Bellus to pursue further development of this compound. Bellus Health 1 July

4 Eculizumab could potentially hit STEC-HUS market more quickly Alexion s eculizumab (Soliris), a monoclonal antibody inhibiting the complement system used in inflammatory processes, is also being investigated in STEC-HUS. Eculizumab is already approved (in the US and EU) for paroxysmal nocturnal haemoglobinuria (PMH) and atypical HUS (ahus), a non-infectious form of HUS often attributed to a genetic disorder and unaccompanied by diarrhoea, and which represents about 5-10% of HUS cases (the remaining cases being STEC-HUS). Eculizumab is one of the world s most expensive drugs, with an annual treatment cost of approximately $600,000. In November 2012, Alexion reported 28-week data from a 23-site investigational open-label non-randomised study covering use of Soliris in STEC-HUS cases as part of an emergency protocol during a German STEC infection outbreak over the summer of STEC-HUS patients with TMA (thrombotic microangiopathy, characterised by platelet decrease and haemolysis) and organ complications (evidence of kidney or central nervous system complications, or thrombosis) were recruited, with 91% of patients receiving plasma exchange and 72% requiring dialysis at baseline (prior to receiving eculizumab). Patients then received 900mg/week for the first three weeks, followed by 1,200mg of drug on weeks four, six, and eight. Investigators had the discretion to dose 1,200mg every other week for an additional eight weeks. Of the eculizumab-treated patients, 94% responded to therapy by eight weeks, prospectively defined as either a complete response (CR), which consisted of hematologic normalisation, clinically important improvement in all affected vital organs, and no clinically significant worsening in any vital organ; or a partial response (PR), reflecting hematologic improvement or normalisation and no clinically significant worsening in any vital organ. At eight weeks, 80% of patients had a CR and 14% had a PR, and at week 28, 89% had a CR and 5% had a PR. Alexion undertook an exploratory post hoc, matched-control analysis based on data from STEC-HUS patients receiving eculizumab in its study compared to other patients who only received current best supportive care (BSC) at four other German sites during the outbreak. Alexion reported that the preliminary results showed that eculizumab was associated with consistently higher rates of renal and neurological function improvement at weeks eight and 28, versus matched patients not treated with eculizumab. Alexion is currently evaluating historical STEC-HUS outcomes and control data of patients receiving BSC, and its goal is to file a regulatory submission in the US and EU in STEC-HUS before end We believe it is unlikely that regulators would require randomised double-blinded studies given the condition s low prevalence and high morbidity. All in, we view eculizumab as more advanced in the STEC-HUS development pipeline than Shigamabs, and hence it may reach STEC- HUS patients as a registered therapeutic well before Shigamabs (which we view as unlikely to reach the market before , as a registration study will need to be (re)designed and further preclinical trials could also be required). Not a done deal largest shareholder to vote against Bellus bid Merchant banking firm Jaguar Financial announced on 18 June that it holds a 10.1% interest in Thallion (making it the single largest shareholder) and that it will vote against Bellus s proposed offer. Jaguar expressed its view that given that Thallion had C$11.6m in cash, short-term investments, restricted cash and short-term receivables as of 28 February 2013, Bellus s offer is inadequate. Jaguar estimates that other options, such as a dissolution/wind-up of Thallion s assets, may result in a higher value to Thallion shareholders. Thallion s board on 20 June reiterated its unanimous support for Bellus s offer and it reaffirmed that its special committee of independent directors conducted a complete due diligence analysis of all options, including dissolution, prior to recommending Bellus s offer as the best option available for Thallion shareholders as a whole. Further, 10.17% of Thallion shareholders have affirmed that they will vote in favour of Bellus s offer. Bellus Health 1 July

5 While Thallion currently holds a higher net cash position than the C$6.3m offered by Bellus, the unwinding of Thallion s liabilities (including lease and severance payments) will decrease the available amount to acquirers or shareholders under any scenario (ie dissolution or acquisition). With Jaguar voting against the offer, we note that it will need to convince c 25% of remaining shareholders to vote against the deal to prevent it from succeeding. We are not in a position to value Bellus s offer from the perspective of Thallion shareholders, but we suggest that with Thallion s R&D and business development operations suspended, the legal and administrative costs involved in a protracted dispute over the value of the assets, or in a dissolution scenario, may render the net liquid assets available to shareholders (or potential purchasers) to be under the C$6.3m offered by Bellus in the present offer. Partly in recognition of this, Jaguar on 25 June enumerated a series of suggested revisions for the CVRs attached to Bellus s offer. Jaguar recommends: 1. CVR holders receive 100% (not 80% as currently proposed) of the Premium Brands receivable; 50% of any Shigamabs revenue (not 5% as currently proposed) without any minimum threshold revenue requirement and with an added requirement that Bellus develop Shigamabs for a minimum three-year period. 2. CVR holders receive 50% of any revenue from any of Thallion s other product candidates, its issued patents, and of any future consideration from Thallion s 2012 sale of Caprion Proteomics (vs zero as currently proposed). CVR holders also receive 50% of any value realised from Thallion s tax loss carry-forwards and R&D credits (vs zero as currently proposed). 3. The CVRs be listed on the TSX Venture Exchange (Bellus proposes that the CVRs will not be listed and not be freely transferable). Given the significant gap between Jaguar s CVR requests and Bellus s present offer (5% vs 50% of Shigamabs revenue, and the requirement of three years of development), it would seem unlikely that Bellus would accept these requests, as they would skew the Shigamabs risk-reward benefit considerably from Bellus to the favour of CVR-holders. We have already stated the development risks associated with Shigamabs development (noting that human-efficacy proof of concept has not yet been met) and we do not believe that any party would agree to a minimum time-period or funding-related commitment to its development. Valuation Given the uncertainty as to whether Bellus will be successful in its bid to acquire Thallion, we are not revising our valuation approach at this time. We value Bellus using a risk-adjusted net present value (rnpv) model, using a 12.5% cost of capital. Our valuation includes the potential for lead candidate Kiacta in AA amyloidosis, as well as the expected revenue stream from Vivimind sales to channel partners (Exhibit 1). For Kiacta, we continue to assign a 60% probability of success for its commercialisation in Amyloid A (AA) amyloidosis. We continue to project that Bellus/Auven will partner Kiacta and collectively be entitled to 25% of net sales (Bellus s net share would reflect a 12.5% royalty and up to US$45m in upfront and milestones), a US market launch in H218, and an initial US$40,000/year US treatment price. Bellus Health 1 July

6 Exhibit 1: Bellus Health rnpv assumptions Product Status rnpv (C$m) Prob. of success Est. launch Est. peak market share Est. current market Est. max royalty Est. peak WW sales Kiacta (AA amyloidosis) Phase III $ % % $1.5bn 12.5% $446m in 2024 Vivimind Market $ % 2007 <0.1% $3-5bn N/A $1.8m* in 2022 Total pipeline rnpv $31.6 Source: Edison Investment Research. Note: *Refers to API or tablet sales from Bellus to distribution partners. Our C$31.6m rnpv calculation, or C$0.99 per share (basic)/c$0.75 per share (fully diluted) inclusive of C$15.5m net cash (estimated Q213 position of 30 June 2013), represents significant upside to Bellus s EV of negative C$2.5m. Our fully diluted (FD) share calculation of 65.63m shares is based on 47.43m listed shares outstanding at March 2013 and includes the conversion of the notional C$10.93m Amended Note (which will convert into 7.29m common shares in 2016), the exercise of 4.57m current options outstanding (exercisable at C$0.50/share) and the conversion of Pharmascience s 10.4% interest in BHI LP into 6.35m Bellus shares. BHI LP is the entity that holds Bellus s operating assets and IP, and Bellus owns 89.6% of BHI LP. Pharmascience has the right to exchange its BHI LP interest into 6.35m Bellus shares. Bellus can force Pharmascience to exercise this right after September Sensitivities Bellus s valuation is highly tied to the merits of Kiacta in AA amyloidosis. Positive Phase III data should lead to material upside from current levels (potentially raising our probability of success to 80%), programme de-risking and the likely partnership negotiations. To gain approval, Kiacta must demonstrate a reduction in the time-to-first worse (TTFW) persistent events vs placebo and not raise health concerns. Negative results could cause a severe devaluation in the shares and may require the company to revisit its strategy. Given that the pivotal trial for Kiacta is an events-driven study, the precise length of the study is unknown and could be longer than management s 2017 forecast (ie if events occur more slowly than expected), and potentially delay Kiacta s commercial launch. Other sensitivities include competition considerations (currently Kiacta is the most advanced stage product in AA amyloidosis, but biological immuno-regulator drugs are being increasingly used in this population) and pricing/reimbursement risk, as well as partnership risk. While we believe that Bellus has sufficient funds on hand to reach the 2017 targeted completion date of the Kiacta Phase III study, if the study takes longer than expected or unforeseen events lead to an increased burn rate, there could be a risk that Bellus will require additional capital before the completion of the study. Financials While clinical study costs for Kiacta and BLU8499 are largely borne by its partners, Bellus provides supportive R&D activities for these compounds, in addition to its normalised G&A cost run-rate of about C$4m per year. While Vivimind sales are expected to increase, we expect overall cash burn to be between C$ m per year through FY17. As of 31 March 2013, Bellus had a net cash position of C$16m, which is based on its C$17.6m in cash and short-term investments, its C$6.7m ABCP notes, minus the C$8.2m drawn for its secured revolving credit facility. We forecast a net cash position on 30 June 2013 (Q213) of C$15.5m. Given our burn rate assumptions, we believe Bellus has sufficient funds on hand to maintain operations through Q118, which should permit it to reach the completion of the Kiacta Phase III study (as per current guidance of 2017) without requiring additional funding. Our financial model is summarised in Exhibit 2. Bellus Health 1 July

7 Exhibit 2: Financial summary C$ 000s e 2014e 2015e 31-December IFRS IFRS IFRS IFRS IFRS PROFIT & LOSS Revenue 3,066 2,298 1,505 1,384 1,485 Cost of Sales Gross Profit 3,066 2,298 1,505 1,384 1,485 General & Administrative (2,357) (4,961) (3,856) (3,946) (4,037) Research & Development (1,315) (954) (1,130) (1,164) (1,201) EBITDA (606) (3,617) (3,481) (3,725) (3,753) Operating Profit (before amort. and except.) (1,792) (3,617) (3,481) (3,730) (3,763) Intangible Amortisation Exceptionals 5,108 (9,690) Other Operating Profit 3,316 (13,307) (3,322) (3,730) (3,763) Net Interest Profit Before Tax (norm) (1,684) (3,480) (3,201) (3,479) (3,581) Profit Before Tax (FRS 3) 3,424 (13,170) (3,042) (3,479) (3,581) Tax Profit After Tax (norm) (1,684) (3,480) (3,201) (3,479) (3,581) Profit After Tax (FRS 3) 3,424 (13,170) (3,042) (3,479) (3,581) Average Number of Shares Outstanding (m) EPS - normalised (C$) (0.19) (0.11) (0.07) (0.07) (0.07) EPS - normalised and fully diluted (C$) (0.08) (0.11) (0.05) (0.05) (0.05) EPS - (IFRS) (C$) 0.39 (0.41) (0.06) (0.07) (0.07) Dividend per share (p) BALANCE SHEET Fixed Assets 6,275 7,441 7,483 7,517 7,551 Intangible Assets Tangible Assets Investments (new ABCP Notes) 6,057 6,597 6,748 6,748 6,748 Current Assets 6,043 19,657 16,363 12,954 9,459 Short-term investments 0 7,824 10,025 2,325 0 Debtors Cash 5,105 10,745 5,377 9,660 8,485 Other 938 1, Current Liabilities (6,372) (2,679) (5,629) (5,629) (5,629) Creditors (6,372) (2,679) (2,573) (2,573) (2,573) Short term borrowings 0 0 (3,056) (3,056) (3,056) Long Term Liabilities (44,768) (13,343) (9,480) (8,892) (8,305) Long term borrowings (40,599) (8,245) (5,193) (5,193) (5,193) Other long term liabilities (4,169) (5,098) (4,287) (3,699) (3,112) Net Assets (38,822) 11,076 8,736 5,950 3,077 CASH FLOW Operating Cash Flow (5,959) (3,149) (3,464) (3,628) (3,639) Net Interest Tax Capex 0 0 (20) (40) (44) Acquisitions/disposals 1,337 8, Financing Dividends Other Net Cash Flow (4,513) 5,208 (3,133) (3,417) (3,500) Opening net debt/(cash) 31,635 29,437 (16,921) (13,901) (10,484) HP finance leases initiated Other 6,711 41, (0) 0 Closing net debt/(cash) 29,437 (16,921) (13,901) (10,484) (6,984) Source: Edison Investment Research, Bellus Health Bellus Health 1 July

8 Edison, the investment intelligence firm, is the future of investor interaction with corporates. Our team of over 100 analysts and investment professionals work with leading companies, fund managers and investment banks worldwide to support their capital markets activity. We provide services to more than 400 retained corporate and investor clients from our offices in London, New York, Berlin, Sydney and Wellington. Edison is authorised and regulated by the Financial Services Authority ( Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number ) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is not regulated by the Securities and Exchange Commission. Edison Investment Research Limited (Edison Aus) [ ] is the Australian subsidiary of Edison and is not regulated by the Australian Securities and Investment Commission. Edison Germany is a branch entity of Edison Investment Research Limited [ ] DISCLAIMER Copyright 2013 Edison Investment Research Limited. All rights reserved. This report has been commissioned by Bellus Health and prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Aus and any access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is not registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison s solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are wholesale clients for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a personalised service and, to the extent that it contains any financial advice, is intended only as a class service provided by Edison within the meaning of the FAA (ie without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited ( FTSE ) FTSE [2013]. FTSE is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE s express written consent. Berlin +49 (0) Bellus Friedrichstrasse Health 95 1 July High Holborn 245 Park Avenue, 39th Floor Level 33, Australia Square Level 15, 171 Featherston St Berlin Germany London +44 (0) London, WC1V 7EE United Kingdom New York , New York US Sydney +61 (0) George St, Sydney NSW 2000, Australia Wellington +64 (0) Wellington 6011 New Zealand