London, UK, 22 February 2018

Edison issues outlook on TxCell (TXCL)

TxCell has disclosed that it has a viable manufacturing route for its novel CAR Treg products. This uses a stable but low-frequency Treg cell type. The TxCell methodology uses a robust design to give low inter-patient variability with potentially consistent therapeutic results. Regulatory filings for a dose-ranging clinical trial are expected by late 2018. On the financial side, TxCell will need to draw at least EUR10m of a new, less onerous set of convertible loans to support CAR Treg development. The indicative valuation has been increased to EUR87.9m from EUR84.4m as probabilities have been slightly adjusted. Cash on 31 December 2017 was EUR4.9m.

Cash on 31 December 2017 was EUR4.9m, reflecting an advance payment of EUR1.4m of the tax credit for 2017 plus careful cost control, although no balance sheet has been published yet. TxCell has up to EUR13.5m of convertible loans available in 2018 out of a EUR15m drawdown facility, now on better terms. Now that a manufacturing route for CAR Tregs has been clarified, we have increased the probability of a transplant CAR Teg to 13.5% (formerly 12.5%). This raises the indicative value to EUR87.9m (formerly EUR84.4m). We assume at least a EUR10m drawdown of convertible loans in 2018 plus a granted EUR1.2m Bpifrance loan. The use of convertible loans will lead to further dilution over 2018. TxCell is becoming well placed to enter a CAR Treg partnering agreement, although the timing and size of any deal remains uncertain.

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