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Abivax SA (ABVX-FR): ABX464 reduces HIV DNA in latent viral gut reservoir
Recommendation: OUTPERFORM
Target Price: EUR19.50
Current Price: EUR6.78 (COB on 2^nd July 2018)

KEY TAKEAWAY

Data released from the second cohort of the ABX-464-005 trial indicates that ABX-464 can reduce the latent HIV reservoir in gut as well as in peripheral blood in patients receiving anti-retroviral therapy. Compared to the first trial cohort, these data suggest that the drug is safe when used over a longer period (3 months vs. 28 days) and has an impact on multiple latent viral reservoirs in HIV-infected patients; even when used at a third of the dose (50mg/day vs. 150mg/day). While full data from the trial is not expected until late Q3 / early Q4 2018E, these preliminary data should be seen as encouraging, suggesting that the trial should form a strong platform for movement into a Phase 2b study. We reiterate our OUTPERFORM recommendation and EUR19.50 target price.

Effective at lower dose - Although patient responses were lower than in the first cohort (4 of 8 vs. 8 of 9), using a third of the dose this second cohort does indicate that the drug is effective and well tolerated when used over a longer time period.

Full data expected in Q3 /Q4 2018E - Further data including that from three patients still to complete twelve-week therapy, will be available in the Autumn. We expect this to include an assessment of drug impact on residual HIV production from the latent reservoirs, as well as the immunological and inflammatory markers for patient responder identification and stratification.

Strong basis for Phase 2b - These data are expected to provide the basis for patient and dose selection in a planned Phase IIb.

Anti-viral and inflammatory action - ABX-464 appears to have both anti-viral and inflammatory effects. Inflammation is a significant problem in HIV patients. A drug with both sustained anti-viral and anti-inflammatory effects could have significant benefit in these patients. Results from an on-going Phase 2a using ABX-464 to reduce inflammation in ulcerative colitis ("UC") are expected in September 2018E.

Under-valued at current levels - Given this further encouraging data on latent HIV infection and the prospect of the UC Phase IIa readout in September, the stock looks significantly undervalued at current levels. We reiterate our OUTPERFORM recommendation and EUR19.50 target price.

Kind regards,

goetzpartners Healthcare Research Team | Research Team

Dr. Chris Redhead | Analyst

goetzpartners securities Limited

The Stanley Building, 7 Pancras Square, London, N1C 4AG, England, UK.

T +44 (0) 203 859 7725 | healthcareresearch@goetzpartners.com / chris.redhead@goetzpartners.com

www.goetzpartnerssecurities.com

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