London, UK, 3 May 2017

Edison issues outlook on Abzena (ABZA)

Abzena recently announced a placing of £25m gross (issuing 75.8m new shares at 33p) to expand its service offering, capacity and capabilities. Importantly, we expect this fund-raising to take Abzena to profitability, which will be a significant milestone for the company. We have increased our valuation to £132m (vs £105m), primarily due to the increase in forecast service revenues, improved gross margin and cash position.

We have raised our rNPV to £132m (vs £105m) primarily due to the increase in forecast service revenues, improved gross margin and increase in cash. This has been slightly tempered as we have also increased the percentage of group admin costs relating to the service business to 90% (vs 70%). We have also rolled the model forward by three months and incorporated the estimated FY17 cash position of £4.1m and included the £23.9m net fund-raising cash. We maintain our assumptions around the Abzena inside clinical pipeline at this stage. We believe Abzena is well positioned following its fund-raising to grow its integrated service offering and, as its Abzena inside products move through the clinic and onto the market, we expect upside to our current estimates.

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