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Published to the market and investors on 15^th October 2018 @ 10.29am (London time).

 

Probiodrug (PBD-NA): Loss announcement a non-event
Recommendation: OUTPERFORM
Target Price: EUR71.00
Current Price: EUR2.40 (live trading price upon publication on 15^th October 2018 @ 10.25am)

KEY TAKEAWAY

Probiodrug announced to the market that a cumulative loss of more than half of the nominal share capital of the company has been incurred, due to operating losses resulting from ordinary business operations. Management will therefore need to summon an extraordinary general meeting ("EGM") without undue delay. Invitation and agenda will be provided in due course. We note that this is a technicality required to comply with the German Stock Corporation Act and has no further consequences beyond the calling of an EGM. It does not affect Probiodrug's financial position or financing ability. Management reiterated that the company has sufficient resources to fund operations until the end of Q3/2019E and continues to explore financing options.

EGM the only consequence of German Stock Corporation Act requirement

The German Stock Corporation Act states that "Should it become apparent in the course of drawing up the annual balance sheet or an interim balance sheet, or if it is to be assumed in duly assessing the circumstances, that a loss amounting to half of the share capital has been incurred, the management board is to convene the general meeting without undue delay and is to notify it of this fact".

Preparations for PQ912 Phase IIb trial in Alzheimer's disease continue

Probiodrug remains focused on raising funds to finance the Phase IIb trial of its first-in-class asset PQ912 in Alzheimer's disease. All options remain on the table, including debt, equity and a licensing deal with a pharma partner. We continue to believe that PQ912's differentiated profile should lead to a deal this or early next year, particularly following encouraging Phase II data for Eisai's / Biogen's / BioArctic's anti-amyloid beta ("Abeta") protofibril mAb BAN2401, which showed an improvement in both clinical function and Abeta plaque reduction in the brain.

Kind regards,

Brigitte de Lima | Analyst

goetzpartners Healthcare Research Team | Research Team

goetzpartners securities Limited

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

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

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