Corporate Research Alligator Bioscience · 2018-10-15 · deals which given the size of its recent...

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Corporate Research Alligator Bioscience NOT TO BE DISTRIBUTED IN, OR TAKEN OR TRANSMITTED INTO, THE UNITED STATES, CANADA, JAPAN, AUSTRALIA OR IN ANY OTHER JURISDICTION WHERE TO DO SO WOULD BE UNLAWFUL.

Initiation of coverage Healthcare Sweden 15 October 2018

Gathering the troops Immuno-oncology drugs have significantly changed cancer treatment outcomes and Alligator’s tumour-directed therapies could further contribute to these changes. With four pipeline drugs at an early stage of development, uncertainty is high, but the payoff if they are successful could be significant. New licencing deals may generate significant upfront payments and be supportive for the valuation.

A potent immuno-oncology player The oncology drugs market is rapidly growing as treatments are becoming increasingly effective, and the checkpoint inhibitor immuno-oncology drug market is worth about USD 16bn (2018E). Tumour-directed immunotherapies hold significant potential and Alligator holds a strong position in this market. With four products at an early developmental stage and collaborations with large pharma companies, the next couple of years are crucial for the company.

We estimate SEK 500m in risk adjusted sales by 2027 Alligator’s development projects hold strong potential in our view, but they are far from reaching the market. The visibility is best for ADC-1013 (in phase I) due to the deal with Janssen, but ATOR-1015 is advancing to phase I clinical studies this year and the other two in 2019 and 2020. We forecast more than SEK 500m of sales in 2027, despite heavy risk adjustments (using 4-6% likelihood of approval for the drugs).

Valuation: further deals may provide upside Our valuation approach combines risk adjusted NPV per drug and a traditional DCF valuation. Alligator’s strategy is to develop the drugs to phase II and we believe there is a good probability of further deals, which given the size of recent deals, could be highly supportive for the valuation of Alligator. Acquisition values of similar stage immuno-oncology assets have ranged from USD 0.6bn to USD 0.9bn.

Key Data (2018E)

Price (SEK)ReutersBloomberg

Market cap (SEKm)Market cap (USDm)Market cap (EURm)Net debt (SEKm)Net gearingNet debt/EBITDA (x) 2.8

Shares fully dil. (m)Avg daily turnover (m)Free float

ATORX.STATORX SS

1,913213

26.80

90%

184(432)

(93%)

71.40.0

Share Price (12M)

Absolute (green) / Relative to Sweden (purple).

20

25

30

35

40

Oct Dec Jan Apr Jun Aug Oct

Financials (SEK)

Source for all data on this page: SEB (estimates) and SIX/Thomson Reuters (prices)

Year end: Dec 2016 2017 2018E 2019E 2020ERevenues (m) 59 58 3 122 269Adj. EBIT (56) (62) (161) (87) 79Pre-tax profit (m) (48) (64) (156) (87) 79EPS (0.80) (0.89) (2.19) (1.22) 1.11Adj. EPS (0.80) (0.89) (2.19) (1.22) 1.11DPS 0.00 0.00 0.00 0.00 0.00

Revenue growth (%) (79.8) (2.7) (94.1) n.m. 119.5Adj. EBIT growth (%) n.m. n.m. n.m. n.m. n.m.Adj. EPS growth (%) n.m. n.m. n.m. n.m. n.m.

Adj. EBIT margin (%) (94.5) n.m. n.m. (71.1) 29.5ROE (%) (9.0) (9.9) (29.0) (20.8) 19.1ROCE (%) (10.5) (9.6) (29.0) (20.8) 19.1

PER (x) n.m. n.m. n.m. n.m. 24.1Free cash flow yield (%) (1.1) (7.5) (6.0) (4.2) 4.5Dividend yield (%) 0.0 0.0 0.0 0.0 0.0P/BV (x) 3.61 2.69 4.14 5.10 4.21

EV/Sales (x) 30.01 19.32 433.56 12.77 5.50EV/Adj. EBITDA (x) (56.7) (18.9) (9.5) (19.3) 17.3EV/Adj. EBIT (x) (31.8) (17.9) (9.2) (18.0) 18.6Operating cash flow/EV (%) (1.3) (11.1) (7.8) (5.2) 5.8Net debt/Adj. EBITDA (x) 20.99 9.26 2.78 4.32 (5.11)

Marketing communication commissioned by: Alligator Bioscience

Company Update Marketing communication commissioned by: Alligator Bioscience 15 October 2018 2

Corporate Research NOT TO BE DISTRIBUTED IN, OR TAKEN OR TRANSMITTED INTO THE UNITED STATES

Contents Page

Investment case summary ...................................................................................... 3 Company profile ........................................................................................................ 7

Introduction ......................................................................................................................... 7 Alligator’s business strategy ......................................................................................... 8 Alligator’s technology platforms ................................................................................ 10 Treating cancer using immunotherapy ..................................................................... 14

Market overview ..................................................................................................... 16 R&D pipeline ............................................................................................................. 21

ADC-1013: the out-licensed cash cow ..................................................................... 22 ATOR-1015: the potential golden egg ..................................................................... 23 ATOR-1017 ....................................................................................................................... 26 ALG.APV-527 ................................................................................................................... 27 Patents ............................................................................................................................... 29

Alligator’s market potential .................................................................................. 30 Sales modelling ................................................................................................................ 30 Sales model of ADC-1013 ............................................................................................ 33 Sales model of ATOR-1015 ......................................................................................... 34 Sales model of ATOR-1017 ......................................................................................... 35 Sales model of ALG.APV-527 ...................................................................................... 36 Summary of all projects ................................................................................................ 37 Acquisition/collaboration potential ........................................................................... 38

Financials .................................................................................................................. 40 P&L estimates ................................................................................................................... 40

Valuation................................................................................................................... 41 NPV per drug .................................................................................................................... 41 DCF valuation ................................................................................................................... 42

Management & Board............................................................................................. 44 Management ..................................................................................................................... 44 Board of Directors ........................................................................................................... 45

Overview................................................................................................................... 46



Investment case summary A clinical stage biotechnology company Alligator Bioscience is a clinical stage biotechnology company developing therapies for cancer treatment. The immuno-oncology antibody therapies are directed to tumours and activate an immune response primarily in the tumour. Alligator’s growing pipeline includes four clinical and pre-clinical drug candidates (ADC-1013, ATOR-1015, ATOR-1017, and ALG.APV-527).

Tumour-directed immunotherapies A healthy immune system protects the body against pathogenic microorganisms (viruses and bacteria) and cancer cells. Immunotherapy mechanisms aim to block or weaken the ability of cancer cells to evade the immune system. The current range of antibody based immunotherapies in the market generates an overall immune activation response throughout the body. However, tumour-directed immunotherapy involves targeting the antibodies to a specific cell type, i.e. the cancer cells of each patient, which reduces the risk of damage to healthy tissue. The total market for immuno-oncology drugs was worth about USD 41bn in 2016 (Grand View Research). The fastest growing segment of immuno-oncology drugs is checkpoint inhibitors, which are expected to generate sales of about USD 16bn in 2018 (Bloomberg).

Activation of the immune system using antibody immunotherapy

Source: Alligator

Research and development pipeline Alligator’s strategy is to develop antibody product candidates to be used in tumour-directed immunotherapy, focusing on the tumour necrosis family receptors (TNFR).

Alligator’s advanced development pipeline

Source: Alligator

Pre-clinical developmentResearch Phase I Phase II

ADC-1013 (CD40)

ATOR-1015 (OX40 - CTLA-4)

ATOR-1017 (4-1BB)

ALG.APV-527 (4-1BB – 5T4)



ADC-1013 is a monospecific antibody out-licenced to Janssen Biotech (part of J&J) and Alligator receives milestone payments and royalties. This monospecific antibody primarily activates dendritic cells using CD40 to stimulate immune T-cells to kill tumour cells. The phase I study is ongoing.

ATOR-1015 is currently the main focus for the company and a potential ‘golden egg’ which is under own development. ATOR-1015 is a bispecific antibody which simultaneously binds two different target molecules, CTLA-4 and OX40. This is closely related to the findings leading to the 2018 Nobel Prize in both Chemistry and Physiology/Medicine. The phase I study expected to start in Q4 2018.

ATOR-1017 is a monospecific agonistic antibody which activates the co-stimulatory receptor 4-1BB. The company believes that ATOR-1017 shows clear differentiation potential compared with other 4-1BB antibodies in development. The phase I study expected to start in H2 2019.

ALG.APV-527 is a bispecific agonistic antibody co-developed with Aptevo Therapeutics. The phase I study expected to start in H1 2020.

We estimate SEK 500m in risk adjusted sales by 2027 Alligator’s development projects hold strong potential in our view, but they are far from reaching the market. The visibility is best for ADC-1013 due to the deal with Janssen, but ATOR-1015 is advancing to clinical studies this year. We estimate the financial potential of Alligator using two approaches – modelling each project separately using risk adjusted estimates, and looking at recent takeover deals in the oncology sector for similar early stage projects.

Expected upcoming events

Project Event Time Comment

ATOR-1015 Phase 1 trial start Q4 2018 50 patients, 18 months duration ADC-1013 PD-1 combo study start Q4 2018 Run by Janssen ATOR-1017 Phase 1 trial start H2 2019 50 patients ALG.APV-527 Phase 1 trial start H1 2020 50 patients ADC-1013 Phase 2 trial start H1 2020 ATOR-1015 Phase 2 trial start 2020 ATOR-1015 Out-licencing deal 2022

Source: SEB

Low chance of reaching the market… …but good chance of progressing to phase II

Source: Biomedtracker data Source: Biomedtracker data

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Phase 1 to Approval Phase II to Approval Phase III to Approval Filing to ApprovalAll Indications Oncology Oncology, o/w Solid

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Phase I to Phase II Phase II to Phase III Phase III to filingAll Indications Oncology Oncology, o/w Solid



Non-risk adjusted sales Risk adjusted sales

Source: SEB Source: SEB

Acquisition/collaboration potential Alligator’s strategy is not to bring the drugs to the market on its own, but to develop them to phase II, and we believe there is a good probability of further deals which given the size of its recent deals could be highly supportive for the valuation of Alligator. Numerous acquisitions and strategic alliances and other deals have been recently made in the oncology space, and in the immuno-oncology space more than 1,000 deals have been made since 2013.

The average acquisition value of a company with phase I oncology assets has been about USD 0.6bn and the average deal value in the bispecific immuno-oncology antibodies space is about USD 0.9bn.

Deal value

Source: Global Data

Valuation Our valuation approach is based on a combination of a traditional DCF (which yields SEK 34 per share) and calculating the net present value per drug (which yields SEK 33 per share) but vary significantly depending on our assumptions, as demonstrated below. Using our income estimates for the different drugs and the projected related costs, our net present value per drug are shown in the chart below. Our estimates are risk adjusted using a gradually decreasing probability for our scenario for the coming years and 4-6% likelihood of approval for the drugs.

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ADC-1013 (risk-adj.) ATOR-1015 (risk-adj.)

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EPS estimates Risk adjusted NPV/share by drug (SEK)


The chart below shows the sensitivity of NPV to a few parameters. The sensitivity is greatest to the likelihood of approval (LOA), where our base case is 4-6% based on historical statistical data – 8% is normally used for oncology drugs in phase II.

Sensitivity, NPV per share (SEK)

Source: SEB

Risks and possible concerns The investment case is coupled with significant risks as the company is loss making and future income depend on several uncertain factors.

● Results from clinical studies. The company’s drugs are at an early stage of development and the vast majority of oncology drugs in this stage never make it to the market.

● Development of competing treatments could disrupt potential sales. There are numerous oncology development projects and other drugs could have a better clinical profile.

● Regulatory approvals by the FDA and EMA.

● The price of a pharmaceutical depends on reimbursement and is at risk of negative price change discussions. Oncology drug prices are high and account for an increasing total cost for payors.

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ADC-1013 ATOR-1015 ATOR-1017 ALG.APV-527 Total

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delayed 2years

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Company profile

Introduction A research driven biotechnology company Alligator Bioscience (Alligator) is a research based biotechnology company which develops novel immune activating antibody therapies for tumour-directed immunotherapy. Alligator primarily focuses on early stage drug development, from initial concept design to clinical studies in Phase IIA. The company’s registered office is in Lund, Sweden, and as of 2018 the company has about 50 employees, of whom 41 were in research and development.

Alligator’s research and development initiatives focus on the company’s technology platforms which comprise the human antibody library (ALLIGATOR-GOLD®) and the protein optimisation technology (FIND®). Alligator intends to further develop and improve its technology platforms to be able to continue developing innovative antibodies. The company conducts both in-house research and development, in addition to collaboration with international biotechnology and pharmaceutical companies and academic institutions.

Alligator’s project portfolio comprises antibody based product candidates for tumour-directed immunotherapy, most of which are agonistic antibodies which activate immune receptors in the tumour necrosis factor receptor super family (TNFR-SF). The company believes that its product candidates (ADC-1013, ATOR-1015, ATOR-1017, and ALG.APV-527) have the potential to become the first-in-class or best-in-class, or both.

ADC-1013 is one of only seven known agonistic CD40 antibodies which biotech and pharmaceutical companies are using in clinical development for future use as immunotherapy for cancer. Alligator believes that the product candidate has the potential to become the first CD40 directed drug in the market. ATOR-1015 is a bispecific antibody (targeting CTLA-4 and OX40) with potentially strong anti-tumour effects, especially when combined with established immunotherapies. ATOR-1017 is an immunostimulatory antibody binding to the receptor 4-1BB with a unique binding profile.. ALG.APV-527 is a bispecific antibody developed to be administered in combination with other immunotherapies, and the company believes that the product candidate could generate strong tumour-directed immune activation without significant side effects.

In addition to these leading development candidates, Alligator has several other unnamed product candidates in multiple stages of research and development.

A brief history of Alligator Bioscience Alligator was founded in Lund in 2001 based on the FIND technology platform, which was previously developed at the Institute for Immune Technology at Lund University under the leadership of Professor Carl Borrebaeck.

At first, Alligator’s operations were focused on contracts for improving external customers’ protein products using FIND, and during the first few years of Alligator’s operations, a large number of assignments were performed in which the company managed to improve and optimise its customers’ protein products according to the targets set. A brief history of Alligator’s major milestones is shown below:



Key events in Alligator’s history

Year Milestone 2001 Alligator was founded in Lund, Sweden 2007 The company decided to primarily use the FIND technology platform to develop its own product candidates 2008 The strategic decision was taken to focus activities on immuno-oncology 2009 Optimisation of an antibody candidate using FIND initiated, which would later become ADC-1013 2012 The decision was taken to focus the business operations on both monospecific and bispecific antibodies 2013 Atlas Therapeutics was acquired, while the ALLIGATOR-GOLD antibody library was completed, which has since been used to develop Alligator's products 2015 An exclusive licencing agreement was entered into with Janssen for further development and commercialisation of ADC-1013. First clinical phase I of ADC-1013 started. 2016 IPO and listing on Nasdaq Stockholm. Second phase I study with Janssen of ADC-1013. 2017 Milestone payment of USD 6m to start combination study with ADC-1013 and a PD-1 blocker. Co-development agreement signed with Aptevo Therapeutics for ALGAPV-527

Source: Alligator

A key development in Alligator’s history was the licencing agreement signed with Janssen in August 2015 for further development and commercialisation of the product candidate ADC-1013, an agonistic antibody targeted at the CD40 receptor. ADC-1013 is currently in phase I study. Under the agreement, Janssen has been granted an exclusive global licence for ADC-1013. The agreement includes both an initial payment and milestone payments, which together are worth up to USD 695m, in addition to a royalty percentage of sales ranging from a high single-digit percentage to a low double-digit percentage. In addition to the licencing agreement of ADC-1013, Alligator and Janssen have entered into a cooperation agreement for the research and development ADC-1013 in metastatic cancer. Within the framework of this agreement, Janssen has undertaken to take over all the costs of the research project. In addition, Janssen has invested in Alligator and owns 8% of the shares.

In addition, in July 2017 Alligator Biosciences and Aptevo Therapeutics signed an agreement to co-develop a novel immunotherapy bispecific antibody candidate, ALG.APV-527, based on Alligator’s first generation bispecific antibody, ATOR-1016. The new bispecific candidate was developed using Aptevo’s bispecific technology platform and includes proprietary binding elements generated by Alligator’s ALLIGATOR-GOLD antibody library.

Alligator’s business strategy Alligator’s business vision is to develop an innovative and competitive portfolio of product candidates for tumour-directed immunotherapy. The company’s strategy includes the following key elements:

Focus on being the first and the best – Strengthen the company’s competitive advantages by focusing on product candidates with the potential to be first-in-class, best-in-class, or both. The major focus is to create product candidates with improved safety and efficacy by using the company’s technology platforms. The goal is to achieve significant immune activating effect, while enabling selective activation of the relevant part of the immune system.



Extend product development – Extend internal product development until, and including, clinical phase IIa, followed by licencing or strategic partnerships after proof-of-concept in patients. An important goal for Alligator is to secure suitable partners for licencing or partnership agreements and to maximise value for shareholders based on the company’s product candidates. The company aims to achieve favourable agreements with valuation support in extensive data from pre-clinical and clinical studies. The company’s strategy is to continue to develop its most advanced non-licenced product candidates until proof-of-concept in patients has been demonstrated in clinical phase IIa.

By continuing development in-house up to and including clinical phase IIa, the company intends to achieve favourable agreements with higher fees, while avoiding the costs of performing larger phase IIb/III studies and commercialisation. In addition, the company believes that increasing competition in immuno-oncology will lead to the large pharma companies requiring clinical efficacy data before licencing product candidates. The company intends to pursue the same strategy for its other development candidates, and choose to licence or enter into partnership before proof-of-concept has been established.

Expansion of Alligator’s product candidates – Expand its project portfolio of tumour-directed product candidates. Alligator intends to expand its portfolio of innovative and differentiated immuno-oncology candidates. The company aims to continue to focus on monospecific and bispecific antibodies with agonistic tumour-directed properties given its extensive knowledge and expertise with this type of antibody development. A first step to realise the strategy for its product portfolio will be to pursue its advanced candidates into clinical phase, which the company expects to occur in 2018 and 2019. In addition, Alligator intends to broaden its pre-clinical programme with the goal to rapidly advance its unnamed product candidates to pre-clinical development if they demonstrate significant improvement relative to its products currently in development.

Technology platforms and intellectual property – Further develop technological platforms and strengthen its intellectual property rights. Alligator intends to continue to heavily invest in research and development to further develop the ALLIGATOR-GOLD and FIND platforms, in addition to develop new and improved technologies to create the next generation of immuno-oncology products. ALLIGATOR-GOLD will be further developed to generate a wide and updated antibody library, which is critical to continue to produce and develop immunotherapy antibodies. Alligator aims to develop the next generation of technologies on its experience with the development of FIND over the past 18 years. Alligator intends to actively protect all its innovations, proprietary technology platforms, and product candidates, and strengthen its intellectual property portfolio by registering patents in all major markets.

Investing in human capital and research collaborations – Promote an attractive environment for human capital and increase the number of research collaborations. Alligator intends to attract talented researchers by aiming to be an employer of choice for scientists in immuno-oncology and antibody development. In addition, the company intends to expand the number of partnerships with external competence, from universities as well as from small to medium-sized biotechnology companies.



Patent strategy Alligator has an active patent strategy which covers all major geographical markets, including the US, the EU, and Japan. The company has secured 16 patent families comprising more than 50 patents and patent applications covering its technology platforms and all antibody molecules in pre-clinical development phase. The duration of Alligator’s patents for its proprietary technology platforms, ALLIGATOR-GOLD and FIND, varies according to the technology, applications, and geographical area.

In addition to its technology platforms used in its research and development, the company has a number of antibody specific patent applications to protect its product candidates. For example, the patent applications for ADC-1013 have an expected earliest expiry date of 2032, following patent approval.

Alligator’s technology platforms Complex technologies for developing targeted antibodies Alligator has developed patented technologies to develop antibodies targeted to specific tumour types. These technology platforms comprise the antibody library ALLIGATOR-GOLD and the protein optimisation technology FIND. The company’s ALLIGATOR-GOLD platform forms the basis of its research and development initiatives, and is used to develop novel antibody candidates, while the company’s FIND technology is used to optimise the properties of its candidate molecules.

Alligator GOLD and FIND overview

Source: Alligator

The anatomy of an antibody molecule Antibodies are Y-shaped proteins, mainly produced by plasma B cells of the immune system. Antibodies neutralise pathogens such as bacteria, viruses, and infected cells. The Y-shaped antibody comprises four polypeptide (protein) chains – two identical heavy chains and two identical light chains, connected by disulphide bonds. Each of the heavy and light chains contain two regions – the constant region and the variable region.

The antibody recognises a unique molecule of the pathogen, called an antigen, via the antigen binding fragment (Fab) of the antibody. The Fab comprises one constant and one variable domain of each of the heavy and the light chains. Each arm of the Fab binds an epitope, the part of an antigen that is recognised by the antibody. The variable regions of the heavy and light chains can be fused together to form a single chain variable fragment (scFv), which is half the size of the Fab, yet retains the original specificity of the parent antibody.



Each tip of an antibody contains a paratope (analogous to a lock), or antigen binding receptor, which is specific for one particular epitope (analogous to a key) on an antigen, allowing these two structures to bind together with high precision. Using this highly specific binding mechanism, an antibody can tag a microbe or an infected cell for attack by other parts of the immune system, or neutralise its target directly (for example, by inhibiting a part of a microbe that is essential for its invasion and survival). The base of the antibody plays a role in modulating immune activity. This region is called the Fc (fragment crystallisable) region, and comprises two heavy chains which contribute two or three constant domains depending on the class of the antibody. The Fc region ensures that each antibody generates an appropriate immune response for a given antigen by binding to a specific class of Fc receptors and other immune molecules, such as complement proteins, and mediates different physiological effects.

The anatomy of an antibody The Fab, Fc, and scFv regions of an antibody

Source: Wikimedia Source: Wikimedia

ALLIGATOR-GOLD The company’s ALLIGATOR-GOLD technology platform is a proprietary human antibody library which contains more than 60 billion unique single chain variable fragments (scFv). The unique scFv fragments are generated by genetically modified viruses which infect bacterial cells (called bacteriophages, or phages). These phages have been engineered to harbour and express the genes encoding the variable light (VL) and variable heavy (VH) fragments, which comprise the scFV fragments.

The paratope, or antigen binding receptor, of each variable fragment (VL and VH) comprises a set of three complementary determining regions (CDR1-3), or sometimes referred to as hypervariable regions. Consequently, each gene encoding for the VH and VL fragments compromises the genetic code for each of the three CDRs (CDRH1-3 and CDRL1-3). The variability in ALLIGATOR-GOLD is designed to emulate and surpass the variability found in human antibodies.

scFv



ALLIGATOR-GOLD phage display library

Source: Alligator



Specific antibody fragments that bind to a pre-defined target molecule can be identified using a selection process comprising successive rounds of washing, elution, and amplification. Large quantities of the selected antibodies can then be produced. The diagram below shows the selection process for specific antibody fragments, comprising the following steps:

1. The phage display library is mixed with magnetic beads with the target molecule attached. All the phage particles which express an antibody that selectively binds to the target molecule will become attached to the magnetic bead, via the target molecule.

2. The phage particles which do not express an antibody specific for the target molecule are washed away.

3. The phage particles which have bound to the target molecule on the magnetic beads are released (eluted).

4. These phage particles are replicated into large numbers using bacterial cells hosts.

5. Screening is then initiated of all the remaining beads.

6. The selection process is repeated three to five times with increasing stringency to specifically enrich the population of antibodies which bind the target molecule with high affinity.

Selection process for antibody fragments

Source: Alligator

By combining the various sub-libraries containing a large number of antibody fragments (randomised and/or customised), an optimum adaptation to each specific target molecule is achieved, and the strategy used for the selection is adapted to the specific needs of each individual project.

After the selection process, the antibody fragments are screened for binding to the target protein, binding characteristics, specificity, and heat stability. The scFv fragments are then converted to whole antibodies, which are evaluated more thoroughly, including functional tests and affinity to the epitope of the target molecule.



FIND The company’s FIND (Fragment Induced Diversity) technology is used to optimise antibodies and other proteins, and in particular to further optimise antibodies that have previously been isolated and identified in ALLIGATOR-GOLD. The FIND technology makes it possible to create a large number of functional variants of an antibody in a relatively short time.

One or more sub-libraries are constructed for the protein or antibody fragment intended for improvement, and all functional variants are taken from the library using phage selection. These functional variants are then combined using Alligator’s FIND technology. The improved variants are then identified using another round of phage selection, followed by screening. Candidates are then converted to whole antibody molecules, followed by functional characterisation to identify a viable product candidate.

From these variants, antibodies with optimised properties can be selected, and used to change almost any property of an antibody. For example, the improved properties may result in significant clinical benefits, such as efficacy, pharmacokinetics (the molecule’s conversion in the human body), safety, or reduced antigenicity (the tendency to be identified as a foreign object by the immune system).

Selection process for a candidate in ALLIGATOR-GOLD Candidate optimisation using FIND

Source: Alligator Source: Alligator

Treating cancer using immunotherapy A healthy immune system protects the body against pathogenic microorganisms (viruses and bacteria) and cancer cells. However, cancer cells often develop protection mechanisms against the immune system, for example by forming immunosuppressant compounds. An expanding tumour often harbours a large number of immune cells which should be able to attack cancer cells; however, these can be rendered ineffective by the immune resistant mechanisms developed by the cancer cells. Immunotherapy mechanisms aim to block or weaken the ability of cancer cells to evade the immune system, and augment the effective response of the immune system against cancer cells. Furthermore, the immune cells which are activated to destroy cancer cells persist in the circulatory system and provide continued defence against any cancer cells which may remain and which could develop metastasis, once treatment has been completed. This “vaccination effect” is unique compared with chemotherapy treatments. Antibody based immunotherapies for cancer include monospecific and bispecific antibodies – monospecific antibody therapies are targeted against a single antigen or cell receptor, while bispecific antibody therapies are targeted against two different molecules, providing synergistic efficacy.



Agonistic and antagonistic antibodies There are typically two types of commonly used antibodies for use in cancer immunotherapy – agonistic and antagonistic. Agonistic antibodies stimulate cell surface receptors in immune cells to activate an immune response, while antagonistic antibodies have no stimulatory effect on immune cell surface receptors, but instead activate the immune system by blocking the cancer cell’s immunosuppressive signals. Contemporary antagonistic antibodies inhibit a range of cell surface receptors, such as CTLA-4 (Yervoy, Bristol-Myers Squibb), PD-1 (Keytruda, Merck, and Opdivo, Bristol-Myers Squibb) and PD-L1 (Tecentriq, Roche).

There are currently no agonistic antibody based immunotherapies on the market, largely because the development of these types of antibodies is significantly more complex than the development of antagonistic antibody based immunotherapies. Agonistic antibodies need significantly high specificity of binding to receptors, in addition to strong receptor activation properties. Furthermore, the side effect profile of these two types of antibodies is very different. Agonistic antibodies usually cause inflammation which occurs within hours after initial treatment, while antagonistic antibodies can cause autoimmune reactions which do not become apparent until after long periods of treatment.

Tumour-directed immunotherapies The current range of antibody based drugs for immunotherapy in the market generate an overall immune activation response throughout the body. Although these types of treatments result in long-lasting anti-tumour effects, because they cause a general immune activation response, they may be associated with severe side effects as there is a risk of a direct effect on non-specific healthy tissue.

However, tumour-directed immunotherapy involves targeting the antibodies to a specific cell type, i.e. the cancer cells of each patient. Tumour-directed therapies generate selective activation of tumour specific immune cells, which reduces the risk of damage to healthy tissue. These activated tumour specific immune cells circulate in the patient and target cancer cells for destruction by the patient’s immune system, and could significantly reduce the risk of metastasis, without damaging healthy tissue. Tumour specific antibodies can be administered directly into the tumour, or systemic administration of the antibodies, after which the antibodies are activated after contact with the tumour.

Activation of the immune system using antibody immunotherapy

Source: Alligator



Market overview The global cancer therapy market According to Alligator’s market data based on the World Health Organisation’s (WHO) World Cancer Report (2014), there are 14 million cases of cancer diagnosed each year across the world, and this is expected to reach 22 million cases over the next two decades, which is equivalent to an average annual increase of 2.7%. The increase in incidence of cancer, especially in developed regions of the world, has been driven by an increase in life expectancy and early detection and diagnosis, which significantly improves the chances of successful treatment. According to the company’s data, more than 24% of cases of cancer in the world occur in Europe, 13% in North America, and around 50% of global cancer cases in Asia. Based on WHO 2014 data, the most common forms of cancer are breast, prostate, colorectal, and lung. The incidence rate is around 180 cases per 100,000 individuals, with the highest incidence in developed regions of the world, such as North America and Western Europe, as well as Japan, Korea, Australia, and New Zealand.

In 2012, 8.2 million people died from cancer across the world, with more than 70% of global deaths in Africa, Asia, and Central America. The significantly high rate of death in these regions is partly due to a combination of poorly developed healthcare and a higher incidence of cancer types with high mortality rates, such as liver, stomach, and oesophageal. The mortality is higher in Asia (27% in China and 8% in India) relative to Europe (21%) and North America (9%).

Global incidence of cancer, by type (2012) Global incidence of cancer, by region (2012)

Source: Alligator, WHO World Cancer Report, 2014 Source: Alligator, WHO World Cancer Report, 2014

Global mortality due to cancer, by type (2012) Global mortality due to cancer, by region (2012)

Lung13%

Breast12%

Colorectum10%

Prostate8%

Stomach7%

Liver5%

Cervix uteri4%

Oesophagus3%

Other38%

Sub-Saharan Africa4% Middle East & North

Africa4%

East & Central Asia17%

India7%

China22%

Oceania1%

Latin America & Caribbean

8%

North America13%

Europe24%

Lung26%

Breast9%

Colorectum11%Prostate

5%

Stomach12%

Liver7%

Cervix uteri8%

Oesophagus9%

Other13%

Sub-Saharan Africa6% Middle East & North

Africa4%

East & Central Asia17%

India8%

China27%

Oceania1%

Latin America & Caribbean

7%

North America9%

Europe21%



Source: Alligator, WHO World Cancer Report, 2014 Source: Alligator, WHO World Cancer Report, 2014

The global oncology market The increase in the incidence of cancer has resulted in the concomitant increase in high social costs for the treatment of cancer. According to GlobalData and IQVIA, sales of cancer drugs increased by around 9% CAGR in the past five years and reached about USD 95bn in 2016, from USD 60bn in 2010. Moreover, 45 new cancer drugs were marketed during 2010-14 for 53 different therapeutic areas, while 10 new cancer drugs were marketed in the global market in 2014 alone. Of these, five were biological therapies, of which two were immunotherapies, according to data from IMS. In addition, the oncology market accounted for 17% of the total drugs market, according to GlobalData, and is expected to account for 18% of the total drugs market in 2019.

Market size of therapy areas (USDm)

Source: GlobalData

According to estimates by IQVIA, sales of cancer drugs are expected to continue to increase by an average annual growth rate of 10-13% up to 2023 and reach USD 200bn. Furthermore, according to IMS, a number of new innovative treatment methods are expected to be released in the market, of which new immunotherapies will comprise an important part of treatment options for cancer.

The immunotherapy market According to data from IMS, of the 10 best selling drugs in the global market, six are biologics, of which three are antibody based. Furthermore, according to antibodysociety.org, antibody based therapies dominate the oncology segment, and of the 54 antibody based drugs which are approved in Europe and/or the US, 22 are in oncology, including bestselling therapies, such as Roche’s Avastin, Herceptin, and Rituxan. The total market for immuno-oncology drugs was worth about USD 41bn in 2016, according to Grand View Research.

The fastest growing segment of immuno-oncology drugs is checkpoint inhibitors, which target immune checkpoints and stimulate the immune system. From 2011 to 2014, three new antibody based immunotherapies were approved for the treatment of cancer, Bristol-Myers Squibb’s Yervoy and Opdivo, and Merck’s Keytruda. In addition, Roche’s Tecentriq was approved by the FDA in 2016 and AstraZeneca’s Imfinzi and Pfizer’s Bavencio in 2017.



These six immuno-oncology checkpoint inhibitors had sales in 2017 of about USD 10bn and are expected (Bloomberg consensus) to increase to USD 16bn in 2018. Global Data estimates this market could be worth USD 34bn by 2024.

Sales immuno-oncology, checkpoint inhibitors

Source: SEB, Company data, Bloomberg

In 2011, the US FDA approved Bristol-Myers Squibb’s Yervoy, which has since then demonstrated improved survival for patients suffering from malignant melanoma. In addition, in 2014 the FDA approved Merck’s Keytruda and Bristol-Myers Squibb’s Opdivo. These three immunotherapies were initially launched for the treatment of malignant melanoma, but are now being used for the treatment of other cancer types, such as head and neck, renal and lung cancer, as well as lymphoma.

These three therapies are antagonistic antibodies, i.e. they block key cell surface receptors, CLTA-4 (Yervoy) and PD-1 (Keytruda and Opdivo), which inhibits the ability of cancer cells to evade the immune system. Roche’s Tecentriq, which was approved by the FDA in 2016 for the treatment of bladder cancer, also prevents the activation of the PD-1 receptor, but instead by binding the target protein PD-L1. AstraZeneca’s Imfinzi was approved by the FDA in 2017 and is used for treatment of bladder and lung cancer (NSCLC). Pfizer’s Bavencio was also approved in 2017 for the treatment of bladder cancer and metastatic skin cancer (merkel cell carcinoma, MCC).

Sales of Yervoy (USDm) Sales of Opdivo (USDm)

Source: Bristol-Myers Squibb Source: Bristol-Myers Squibb

0

5,000

10,000

15,000

20,000

25,000

30,000

2016 2017 2018E 2019E 2020E 2021E

USD

m

Yervoy (Ipilimumab), BMS Opdivo (Nivolumab), BMS

Keytruda (Pembrolizumab), Merck Tecentriq (Atezolizumab) , Roche

Imfinzi (durvalumab), AZN Bavencio (Avelumab), Pfizer/Merck KgGa

263 241285 264

330 322 323269 249

315

1,0531,120

1,2011,239 1,244

1,163 1,156

0

200

400

600

800

1,000

1,200

1,400

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Sale

s, U

SD m

Yervoy (ipilimumab) LTM

704 840 9201,310

1,127 1,195 1,265 1,361 1,511 1,627

3,774

4,1974,552

4,897 4,9485,332

5,764

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Sale

s, U

SD m

Opdivo (nivolumab) LTM



Sales of Keytruda (USDm) Sales of Tecentriq (CHFm)

Source: Merck Source: Roche

Given that immunotherapy products are biological molecules, the immunotherapy market does not suffer from the competition of generic chemical compound drugs as it is not possible to replicate identical biological molecules at a lower cost when patents expire. Consequently, new products need to be developed and marketed with similar or improved efficacy (biosimilar compounds) to drive competition in the market and lower treatment prices. The average cost of treatment using existing immunotherapies is around USD 150,000 per patient per year.

In addition to the existing immunotherapeutic products, there a number of antibody based product candidates in clinical development phase. The table below lists the approved products, in addition to some of the immunotherapeutic products in clinical development. The highlighted candidates are those targeted against CD40, similar to Alligator’s leading candidate, ADC-1013.

249 314 356 483 584881

1,0471,297

1,4641,667

1,4021,737

2,304

2,995

3,809

4,689

5,475

0

1,000

2,000

3,000

4,000

5,000

6,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Sale

s, U

SD m

Keytruda (pembrolizumab) LTM

113 124 118 132 139

181

113

237

355

487513

570

0

100

200

300

400

500

600

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Sale

s, U

SD m

Tecentriq (atezolizumab) LTM



Existing immunotherapeutic products and candidates in development

Company Product/Product candidate Indication Phase Molecular target Bristol-Myers Squibb Yervoy (ipilimumab) Melanoma Approved 2011 CTLA-4 Merck Keytruda (pembrolizumab) Melanoma, NSCLC, H&N, bladder, gastric, cervix, Hodgkin´s and large B-cell

lymphomas, colorectal Approved 2014 PD-1

Bristol-Myers Squibb Opdivo (nivolumab) Melanoma, NSCLC, renal, H&N, bladder, liver, SCLC, Hodgkin lymphoma, colorectal

Approved 2014 PD-1

Roche Tecentriq (atezolimumab) Bladder, non-small cell lung cancer (NSCLC) Approved 2016 PD-L1 Pfizer & Merck KgaA Bavencio (avelumab) Bladder, Skin: Merkel cell carcinoma Approved 2017 PD-L1 AstraZeneca Imfinzi (durvalumab) Bladder cancer, NSCLC Approved 2017 PD-L1 Sanofi Libtayo (cemiplimab) Skin: Cutaneous squamous cell carcinoma Approved 2018 PD-1 AstraZeneca tremelimumab Non-small cell lung cancer, bladder, head and neck, pancreatic cancer III CTLA-4 Agenus AGEN-1884 Solid tumours II CTLA-4 Apexigen APX005M Solid tumours II CD40 Pfizer PF-04518600 Solid tumours II OX40 AstraZeneca tavolimab Solid tumours II OX40 Bristol-Myers Squibb urelumab Solid tumours II CD137 Pfizer utomilumab Solid tumours II CD137 Celldex varlilumab Solid tumours II CD27 Jounce JTX-2011 Solid tumours II ICOS Merck KGaA M7824 Solid tumours II PD-L1XTGF-β Novartis LAG525 Solid tumours II LAG3 Bristol-Myers Squibb relatlimab Solid tumours II LAG3 Macrogenics enoblituzumab Solid tumours II B7-H3 GlaxoSmithKline GSK-3174998 Solid tumours I/II OX40 Leap TRX518 Solid tumours I/II GITR Incyte/Agenus INCAGN1876 Solid tumours I/II GITR GlaxoSmithKline GSK-3359609 Solid tumours I/II ICOS Regeneron REGN3767 Solid tumours I/II LAG3 Novartis MBG-453 Solid tumours I/II TIM-3 BMS BMS-986258 Solid tumours I/II TIM-3 Astellas ASP8374 Solid tumours I/II TIGIT Roche tiragolumab Solid tumours I TIGIT Bristol-Myers Squibb BMS-986207 Solid tumours I TIGIT EliLilly LY-3321367 Solid tumours I TIM-3 Alligator Bioscience/Janssen

ADC-1013/JNJ-7107 Solid tumours I CD40

Roche selicrelumab Solid tumours I CD40 Seattle Genetics SEA-CD40 Solid tumours I CD40 Celldex CDX-1140 Solid tumours I CD40 AstraZeneca MEDI5083 Solid tumours I CD40 Abbvie ABBV-927 Solid tumours I CD40 Abbvie ABBV-428 Solid tumours I Mesothelin x CD40 Roche RG7827 Solid tumours I FAP x CD137 Pieris PRS343 Solid tumours I HER2 x CD137 AstraZeneca MEDI5752 Solid tumours I CTLA-4 x PD-1 Xencor XmAb20717 Solid tumours I CTLA-4 x PD-1 Akeso AK104 Solid tumours I CTLA-4 x PD-1 Macrogenics MGD013 Solid tumours I LAG3 x PD-1 F-Star FS118 Solid tumours I LAG3 x PD-L1

Source: SEB, Alligator, FDA



R&D pipeline Alligator’s strategy is to develop antibody product candidates to be used in tumour-directed immunotherapy, focusing on the tumour necrosis family receptors (TNFR).

Alligator’s advanced development pipeline

Source: Alligator

ADC-1013 is a monospecific antibody which was licenced to Janssen Biotech (part of Johnson & Johnson) in August 2015 for further development and commercialisation and Alligator receives milestone payments and royalties. This monospecific antibody primarily activates dendritic cells using CD40 to stimulate immune T-cells to kill tumour cells. ADC-1013 could act through a secondary mechanism of action by directly killing CD40 tumour cells. The phase I study is ongoing.

ATOR-1015 is currently the main focus for the company and a potential ‘golden egg’ which is under own development. It is a bispecific antibody which simultaneously binds two different target molecules, CTLA-4 and OX40, overexpressed by regulatory T-cells in the tumour environment. This is closely related to the findings leading to the 2018 Nobel Prize in both Chemistry and Physiology/Medicine. ATOR-1015 reduces the number of regulatory T-cells and activates effector T-cells, resulting in an immune-mediated anti-tumour effect. The phase I study expected to start in Q4 2018.

ATOR-1017 is a monospecific agonistic antibody which activates the co-stimulatory receptor 4-1BB, and developed using the ALLIGATOR-GOLD antibody library. The company believes that ATOR-1017 shows clear differentiation potential compared with other 4-1BB antibodies in development. The phase I study expected to start in H2 2019.

ALG.APV-527 is a bispecific agonistic antibody co-developed with Aptevo Therapeutics. ALG.APV-527 was generated using ALLIGATOR-GOLD and using Aptevo’s bispecific technology platform. ALG.APV-527 is based on Alligator’s first generation bispecific antibody, ATOR-1016. The phase I study expected to start in H1 2020.




Source: SEB

Pre-clinical developmentResearch Phase I Phase II

ADC-1013 (CD40)

ATOR-1015 (OX40 - CTLA-4)

ATOR-1017 (4-1BB)

ALG.APV-527 (4-1BB – 5T4)



ADC-1013: the out-licensed cash cow ADC-1013 was licenced to Janssen Biotech (part of Johnson & Johnson) in August 2015 for further development and commercialisation and Alligator receives milestone payments and royalties. Phase 1 studies are ongoing.

ADC-1013 is a human, monospecific, agonistic antibody intended for cancer immunotherapy. The candidate antibody is targeted against the co-stimulatory receptor CD40, which is expressed on antigen presenting dendritic cells, amongst others. The dendritic cells reside in blood vessels and other tissues where they discover and digest proteins from viruses, bacteria, or cancer cells. The digested proteins are presented to T-cells of the immune system which are then activated and kill the infected cells or cancer cells. ADC-1013 activates CD40 on dendritic cells, enabling them to activate T-cells more effectively and thereby increase the immune system’s response against cancer cells.

Although this is the primary mechanism of action of ADC-1013, give that some cancer cells express CD40 on their surface, ADC-1013 may act through a secondary mechanism of action by directly killing cancer cells.

Mechanism of action of ADC-1013

Source: Alligator

Preclinical studies indicate that agonistic CD40 antibody therapy can be used to treat several tumour types, such as lymphoma, melanoma, hepatocellular carcinoma, osteosarcoma, renal cell carcinoma, breast cancer, colorectal cancer, lung cancer, and bladder cancer. ADC-1013 has been optimised using FIND to improve its efficacy, in particular at lower doses. Because ADC-1013 was initially developed for intratumoral injection, it has been optimised for improved tumour retention.

A phase I study of ADC-1013 was initiated in April 2015 with international clinical oncology specialised contract company Theradex as CRO, and completed in March 2017. The study was a dose escalation study involving intratumoral and intravenous administration of ADC-1013 at five clinical sites in Sweden, Denmark, and the UK. The study was sponsored by Alligator and included 24 patients and 10 different tumour types.

In August 2015, Alligator licenced all rights to further develop and commercialise ADC-1013 to Janssen. Alligator will remain the sponsor of the ongoing clinical study, but Janssen sponsors the phase I study and all future studies will be conducted with Janssen as a sponsor. The potential agreement value totals USD 695m, according to Alligator, including both upfront and milestone payments. In addition, Alligator is entitled to receive incremental royalty rates on future sales (of about 10%, ‘high single to low double digit’).



ADC-1013: out-licensed to Janssen

Source: Alligator

In 2017, the first results in humans from a clinical Phase I trial showed that ADC-1013 is well tolerated, supporting the continued clinical development as a single or combination therapy. Pre-clinical data had previously shown that ADC-1013 effectively activates T-cells by binding with the costimulatory receptor CD40 in dendritic cells.

The second Phase I clinical trial led by Janssen is currently ongoing, and as of May 2018 over 80 patients had been recruited. In early 2018, Janssen decided to initiate a combination study with ADC-1013 and a PD-1 inhibitor which is expected to start in H2 2018, and Alligator received a milestone payment of USD 6m. Additional milestone payments related to Phase 2 should be USD 29m. We expect no further milestone payments in 2018, but likely about USD 15m in 2019 and USD 14m in 2020.

ATOR-1015: the potential golden egg ATOR-1015 is being developed by Alligator alone and is currently the main focus point for the company. Phase 1 study is expected to start in H2 2018.

It is a bispecific immune activating antibody, developed for tumour-directed immunotherapy. The antibody candidate binds to two different immunomodulatory target proteins – the inhibitory checkpoint receptor CTLA-4 (ipilimumab – Yervoy), and the co-stimulatory receptor OX40. This is closely related to the findings leading to the 2018 Nobel Prize in both Chemistry (awarded to Arnold, Smith and Winter) and Physiology/Medicine (awarded to Allison and Honjo). The OX40 binding structure of ATOR-1015 originates from ALLIGATOR-GOLD, and the CTLA-4 binding structure was generated by Alligator’s FIND optimisation of CD86, which is a natural binder to CTLA-4.

ATOR-1015 is capable of binding individual T-cells simultaneously, bringing these cells into close proximity, which may support the immune activating effect. ATOR-1015 reduces the number of regulatory T-cells and activates effector T-cells. Strong immune activation is expected to be achieved in environments where both target molecules are expressed at high levels, such as inside a tumour. Combined, this results in effective immune response activation, in addition to localisation of the effect to the tumour environment, which is expected to minimise immune-related side effects. ATOR-1015 could be the first CTLA-4 and OX40 binding bispecific antibody to achieve a strong anti-tumour effect, either as a monotherapy or in combination with established immunotherapies, such as PD-1 and PD-L1 blockers. ATOR-1015 is expected to be suitable for treating a large number of different cancer types.



Mechanism of action of ATOR-1015

Source: Alligator

Based on the promising results from concept validation and initial preclinical studies, cell line development, aimed at subsequent largescale production for clinical trials, was initiated in January 2016. Cell line development has been performed for Alligator by the contract manufacturing company Cobra Biologics, but development and production for clinical trials during 2018 will be performed by another undisclosed company.

Data presented in 2017 and 2018 demonstrated effects in multiple

Source: Alligator

We expect a Phase 1 study to start in Q4 2018 and last for about 18 months. The study will be conducted on about 50 patients with advanced solid malignancies refractory after standard of care therapy. Endpoints are safety and maximum tolerated, and recommended dose. Efficacy is most likely not uncertain as CTLA-4 has a proven effect (in Yervoy), but safety may be a greater concern. ATOR-1015 has a good chance of handling the toxicity well due to the dose accumulation in the tumour with less concentration in other body tissue.

A Phase 2 trial could start around mid-2020 with read-out in 2022. We believe Alligator wishes to take the compound at least to proof-of-concept, i.e. late Phase 1 or early Phase 2, and then perhaps make a deal with a larger pharmaceutical company.



ATOR-1015 will be the first bispecific CTLA-4 and OX40 targeting antibody to enter clinical development. There are several other anti-CTLA-4 compounds in development, as summarised in the table below.

Other anti-CTLA-4 compounds in development

Company Name Stage Description Data expected Other AstraZeneca Tremelimumab Phase III CTLA-4 mAb, IgG2 Q4 2018 Combo with Imfinzi in lung cancer (NSCLC) Agenus AGEN-1884 II CTLA-4 mAb, IgG1 H2 2020 Combo with Keytruda in lung cancer (NSCLC) Bristol-Myers Squibb BMS-986218 I CTLA-4 mAb; non-fucosylated H1 2020 Bristol-Myers Squibb BMS-986249 I CTLA-4 probody H1 2020 Merck MK-1308 I CTLA-4 mAb Biocad BCD-145 I CTLA-4 mAb Cstone pharma CS1002 I CTLA-4 mAb, IgG1 Regeneron REGN-4659 I CTLA-4 mAb, IgG1 Innovent IBI-310 CTA filed CTLA-4 mAb

Source: SEB, Alligator

Sales of Yervoy (quarterly) Sales of Yervoy (annually)

Source: Bristol-Myers Squibb Source: Bristol-Myers Squibb, Bloomberg

263

241

285

264

330 322 323

269249

315

0

50

100

150

200

250

300

350

Q1/16 Q2 Q3 Q4 Q1/17 Q2 Q3 Q4 Q1/18 Q2

Sale

s, U

SD m

Yervoy (ipilimumab)

960

1308

11261,053

1,2441163

1304

1496

1644

0

200

400

600

800

1000

1200

1400

1600

1800

FY13 FY14 FY15 FY16 FY17 FY18E FY19E FY20E FY21E

Sale

s, U

SD m

Yervoy (ipilimumab)



ATOR-1017 ATOR-1017 is an agonistic antibody which activates the co-stimulatory receptor 4-1BB (CD137, TNFRSF9). ATOR-1017 was developed using the ALLIGATOR-GOLD antibody library, and the company believes that ATOR-1017 shows clear differentiation compared with other 4-1BB antibodies in development. ATOR-1017 has a unique target binding profile compared with the two 4-1BB antibodies currently in clinical development. In addition, its agonistic function is dependent on cross-linking by Fcγ receptors expressed by immune cells. The properties of the antibody directs the immune activation to the tumour area where 4-1BB, as well as Fcγ receptors, are highly expressed, resulting in a favourable safety-efficacy profile. Therefore, ATOR-1017 has the potential to be a best-in-class 4-1BB antibody in terms of risk-benefit profile.

Mechanism of action of ATOR-1017

Source: Alligator

Comparing ATOR-1017 with other investigational competing drugs, urelumab (Bristol-Myers Squibb) and utomilumab (Pfizer), the high efficacy and good tolerability is promising and opens the potential for best-in-class. ATOR-1017 seems to have a stronger tumour-directed effect than urelumab’s general immune activation and a higher efficacy than utomilumab.

ATOR-1017: could become best-in-class

Source: Alligator



ATOR-1017 is currently in preclinical development phase where cell line development is ongoing at Sartorius Stedim Celica GmbH for the subsequent production of material for clinical studies. Recent (announced September 2018) preclinical data includes a good safety and tolerability profile, including repeated doses. The data also supports the potential of ATOR-1017 to lead to stronger immune activation in the tumour area compared with the rest of the body.

ATOR-1017 can likely be used as a combination therapy with PD-1 antibodies or tumour targeting antibodies (e.g. rituximab), and it is possible Alligator will find a partner for the development of ATOR-1017. We expect a Phase 1 study to start in H2 2019.

Other 4-1BB (CD137) monospecific antibodies in development

Company Name Stage Description Bristol-Myers Squibb Urelumab II 4-1BB mAb, IgG4 Pfizer Utomilumab II 4-1BB mAb, IgG2 Adagene ADG-106 IND 4-1BB mAb Eutilex EU-101 (Phase I 2018) 4-1BB mAb, silenced IgG1 Agenus AGEN-2373 Preclinical 4-1BB mAb Tusk therapeutics 4-1BB agonist Preclinical 4-1BB mAb


ALG.APV-527 ALG.APV-527 is a bispecific agonistic antibody for tumour-directed immunotherapy co-developed with Aptevo Therapeutics. ALG.APV-527 was generated by proprietary binding elements obtained from ALLIGATOR-GOLD, which were produced as a bispecific compound using Aptevo’s bispecific technology platform. ALG.APV-527 is based on Alligator’s first generation bispecific antibody, ATOR-1016.

ALG.APV-527 targets 4-1BB (CD137), a member of the TNFR superfamily of co-stimulatory receptors found on activated T-cells, and the tumour antigen 5T4. The co-stimulatory receptor 4-1BB is known to play an important role in modulating and augmenting the immune response to cancer by promoting the activation, expansion, and enhanced effector function of tumour-specific T-cells.

5T4 is a protein predominantly expressed on tumour cells, and is present at low levels or not at all in normal tissue. This enables the immune activating effect of ALG.APV-527 to be targeted specifically to the tumour and not against normal tissue, with the goal of effective tumour-directed immune activation with minimal side effects. The 5T4 tumour antigen is present on a number of different solid tumours, including breast, cervical, non-small cell lung, prostate, renal, gastric, colorectal and bladder cancers, indicating that ALG.APV-527 may be used for the treatment of several different types of cancer.



Mechanism of action of ALG.APV-527

Source: Alligator

By combining tumour specific binding and an immunomodulatory antibody in one molecule, Alligator and Aptevo have created a candidate which activates tumour specific immune cells localised to the tumour. ALG.APV-527 is currently in the preclinical development phase and initial production activities for clinical trial materials have commenced.

In July 2017, Aptevo and Alligator signed an agreement to co-develop ALG.APV-527, under which both companies will equally own and finance the development of the product candidate through the Phase II clinical trial. In Phase II, the companies can choose whether to out-license the candidate, or to continue the development process jointly or individually. In addition, the agreement includes the option for the companies to jointly develop an additional bispecific antibody, based on the same underlying mechanism of action. Ownership and costs for this potential programme will also be shared equally between Aptevo and Alligator.

Preclinical data released in May 2018 demonstrated that ALG.APV-527 has the potential to selectively activate and enhance tumour specific T cell responses at the tumour site without triggering systemic immune activation. T-cell activation was stimulated in the presence of 5T4-expressing cells. Tumour growth was inhibited in a 5T4 expressing in vivo human colon carcinoma model.

We expect a Phase 1 study to start in H1 2020.

Other 4-1BB (CD137) bispecific antibodies in development

Company Name Stage Description Pieris PRS343 I HER2 x 4-1BB bispecific anticalin Roche RG7827 I α-FAP-fab x 4-1BBL trimer x Fc fusion Molecular partners MP-0310 Preclinical FAP x 4-1BB DARPin Pieris PRS-344 Preclinical PD-L1 x 4-1BB bispecific anticalin Inhibrx INBRX-105 Preclinical PD-L1 x 4-1BB bispecific mAb Macrogenics Tumor antigen x 4-1BB Preclinical TAA x 4-1BB DART-Fc Crescendo CB307 Preclinical PSMA x 4-1BB bispecific humabody Elpiscience ES101 Preclinical PD-L1x4-1BB Numab ND021 Preclinical PD-L1xHSAx4-1BB




Patents Patent protection

Source: Alligator



Alligator’s market potential Alligator’s development projects hold strong potential in our view, but they are far from reaching the market. The visibility is best for ADC-1013 due to the deal with Janssen, but ATOR-1015 is advancing to clinical studies this year. We estimate the financial potential of Alligator using two approaches – modelling each project separately using risk adjusted estimates, and looking at recent takeover deals in the oncology sector for similar early stage projects.

Sales modelling Likelihood of approval The historical success rate in clinical studies is a good starting point when assessing the likelihood of approval, but depending on the product, market, and known results, some adjustments can be made. Drugs in phase I development statistically have about 10% success rate, but within these the oncology segment has only a 5% success rate. Oncology drugs directed at tumours have an even lower success rate, at only 4%.

Probability of success

Source: Biomedtracker data

Oncology drugs have the lowest probability of success


10%15%

50%

85%

5%8%

33%

82%

4% 6%

27%

80%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Phase 1 to Approval Phase II to Approval Phase III to Approval Filing to ApprovalAll Indications Oncology Oncology, o/w Solid

26%

19%17% 16%

15% 15% 15%13% 13%

11% 11%10%

8%7% 6%

5%

0%

5%

10%

15%

20%

25%

30%

Phase 1 to Approval

Phase 1 to Approval



Oncology drugs have a good chance to move to phase II


Pricing The launch price for cancer drugs has increased significantly over the past decades and, as a consequence, most cancer drugs launched between 2009 and 2014 were priced at more than USD 100,000 per patient for one year of treatment. More recently, we have seen launch prices of more than USD 400,000 for a year of treatment, but the average cost is about USD 150,000 per year. For Alligator’s ATOR-1015, the most relevant reference price is Yervoy’s USD 120,000.

Cancer drugs, annual cost per patient

Price examples, cancer drugs Drug Company Annual price per patient (USD) Zelboraf Genentech 130,200 Mekinist Novartis 120,852 Yervoy Bristol-Myers 119,862 Erivedge Genentech 112,692 Keytruda Merck 156,000 Tafinlar Novartis 105,564 Opdivo Bristol-Myers 157,200 Tecentriq Roche 150,000

Source: SEB, QuintilesIMS Institute

63%

31%

58%63%

25%

40%

64%

23%

34%

0%

10%

20%

30%

40%

50%

60%

70%

Phase I to Phase II Phase II to Phase III Phase III to filingAll Indications Oncology Oncology, o/w Solid



Cancer drugs, annual cost per patient

Source: SEB, QuintilesIMS Institute

Patient population We estimate the addressable patient population by using incidence data for the US market (SEER, US department of Health and Human Services) for the respective cancer type. The total addressable patient population is estimated as the US data multiplied by a factor of three based on population size.

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

Zelboraf Mekinist Yervoy Erivedge Keytruda Tafinlar Opdivo Tecentriq

USD

Annual price per patient (USD)



Sales model of ADC-1013 In the licence agreement with Janssen, the initial payments and milestones amount to a maximum of USD 695m, of which Alligator has so far received USD 46m, which means another USD 649m of payments is possible at certain regulatory stages and first commercial sales in the US, Europe, and Japan. Alligator has given some guidance on milestones in 2019-20, but beyond that our estimates are more uncertain. Alligator is also entitled to royalties on future sales, which we estimate are 10% of sales.

ADC-1013 model

2018E 2019E 2020E 2021E 2022E 2023E 2024E ADC-1013 phase 1 phase 1 phase 2 phase 2 phase 3 phase 3 launch 2025E 2026E 2027E 2028E 2029E Melanoma patient population 105,600 106,656 107,723 108,800 109,888 110,987 112,097 113,217 114,350 115,493 116,648 117,815 % treated 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 5.3% 10.5% 14.1% 18.8% 25.0% 23.8% # treated patients 0 0 0 0 0 0 5,911 11,941 16,080 21,655 29,162 27,981

Lung cancer patient population 702,090 709,111 716,202 723,364 730,598 737,904 745,283 752,736 760,263 767,865 775,544 783,300 o/w NSCLC patients (85%) 596,777 602,744 608,772 614,859 621,008 627,218 633,490 639,825 646,223 652,686 659,213 665,805 o/w Non-squamous and Squamous patients (85%) 512,333 517,456 522,631 527,857 533,135 538,467 543,851 549,290 554,783 560,331 565,934 o/w Stage IV, treated, 1st line 370,300 374,003 377,743 381,520 385,335 389,189 393,081 397,012 400,982 404,991 409,041 413,132 % treated 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 1.1% 2.1% 2.8% 3.8% 5.0% 4.8% # treated patients 0 0 0 0 0 0 4,146 8,374 11,278 15,187 20,452 19,624

Pancreatic patient population 166,320 167,983 169,663 171,360 173,073 174,804 176,552 178,318 180,101 181,902 183,721 185,558 % treated 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.5% 0.7% 1.0% 1.4% 2.0% 1.9% # treated patients 0 0 0 0 0 0 848 1,223 1,765 2,547 3,674 3,526

# treated patients, total 0 0 0 0 0 0 10,905 21,539 29,123 39,389 53,289 51,130 annual price (USD) 120,000 121,200 122,412 123,636 124,872 126,121 127,382 128,656 129,943 131,242 132,555 133,880 sales, SEKm 0 0 0 0 0 0 12,224 24,385 33,302 45,491 62,160 60,239 Royalty to Alligator (10%) 0 0 0 0 0 0 1,222 2,439 3,330 4,549 6,216 6,024 Milestones 132 123 0 440 1,320 1,760 642 642 642 Total income, SEKm 0 132 123 0 440 1,320 2,982 3,081 3,973 5,192 6,216 6,024 Likelihood (%) 100% 90% 90% 29% 19% 10% 6% 6% 6% 6% 6% 6% Royalty (risk-adjusted) 0 0 0 0 0 0 73 146 200 273 373 361 Milestones (risk-adjusted) 0 119 111 0 84 132 106 39 39 39 0 0 Risk-adjusted total income, SEKm 0 119 111 0 84 132 179 185 238 311 373 361

Source: SEB

ADC-1013 income, non-risk adjusted ADC-1013 income, risk adjusted


0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E

SEK

m

Royalty to Alligator (10%) Milestones

0

50

100

150

200

250

300

350

400

2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E

SEK

m

Royalty (risk-adjusted) Milestones (risk-adjusted)



Sales model of ATOR-1015 We assume that ATOR-1015 will be out-licensed during the latter part of phase 2 studies. We assume an upfront payment and a royalty rate on future sales. The size of payments will obviously depend heavily on future study results and development of competing drugs, but our estimates are based on levels seen in other deals.

ATOR-1015 model

2019E 2020E 2021E 2022E 2023E 2024E ATOR-1015 2018E phase 1 phase 1/2 phase 2 phase 2/3 phase 3 launch 2025E 2026E 2027E 2028E 2029E Melanoma patient population 105,600 106,656 107,723 108,800 109,888 110,987 112,097 113,217 114,350 115,493 116,648 117,815 o/w CTLA-4 eligible 26,400 26,664 26,931 27,200 27,472 27,747 28,024 28,304 28,587 28,873 29,162 29,454 % treated 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 6.8% 20.4% 29.2% 41.7% 59.5% 85.0% # treated patients 0 0 0 0 0 0 1,906 5,776 8,335 12,026 17,351 25,036

Lung cancer patient population 702,090 709,111 716,202 723,364 730,598 737,904 745,283 752,736 760,263 767,865 775,544 783,300 o/w NSCLC patients (85%) 596,777 602,744 608,772 614,859 621,008 627,218 633,490 639,825 646,223 652,686 659,213 665,805 o/w Non-squamous and Squamous patients (85%) 512,333 517,456 522,631 527,857 533,135 538,467 543,851 549,290 554,783 560,331 565,934 o/w Stage IV, treated, 1st line 370,300 374,003 377,743 381,520 385,335 389,189 393,081 397,012 400,982 404,991 409,041 413,132 % treated 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.2% 0.5% 0.7% 1.0% 1.4% 2.0% # treated patients 0 0 0 0 0 0 629 1,906 2,751 3,969 5,727 8,263

Kidney (renal cell), patient population 196,020 197,980 199,960 201,960 203,979 206,019 208,079 210,160 212,262 214,384 216,528 218,693 % treated 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.1% 0.2% 0.2% 0.4% 0.5% # treated patients 0 0 0 0 0 0 83 252 364 525 758 1,093

# treated patients, total 0 0 0 0 0 0 2,619 7,935 11,449 16,520 23,836 34,392 annual price (USD) 120,000 121,200 122,412 123,636 124,872 126,121 127,382 128,656 129,943 131,242 132,555 133,880 sales, SEKm 0 0 0 0 0 0 2,936 8,984 13,092 19,079 27,804 40,518 Royalty to Alligator (15%) 0 0 0 0 0 0 440 1,348 1,964 2,862 4,171 6,078 Milestones 880 440 880 880 R&D cost -50 -50 -50 Total income, SEKm 0 -50 -50 -50 880 440 1,320 2,228 1,964 2,862 4,171 6,078 Likelihood (%) 100% 90% 64% 64% 45% 15% 6% 6% 6% 6% 6% 6% Royalty (risk-adjusted) 0 0 0 0 0 0 26 81 118 172 250 365 Milestones (risk-adjusted) 0 0 0 0 394 65 53 53 0 0 0 0 R&D cost (risk-adjusted) 0 -45 -32 -32 0 0 0 0 0 0 0 0 Risk-adjusted total income, SEKm 0 -45 -32 -32 394 65 79 134 118 172 250 365 Source: SEB

ATOR-1015 income, non-risk adjusted ATOR-1015 income, risk adjusted


0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E

SEK

m

Royalty to Alligator (15%) Milestones

0

50

100

150

200

250

300

350

400

450

2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E

SEK

m

Royalty (risk-adjusted) Milestones (risk-adjusted)



Sales model of ATOR-1017 We believe Alligator will find a partner for the clinical development of ATOR-1017. We model an upfront payment in 2020 and milestones during the development.

ATOR-1017 model

2020E 2021E 2022E 2024E 2026E ATOR-1017 2018E 2019E phase 1 phase 1/2 phase 2 2023E phase 3 2025E launch 2027E 2028E 2029E Milestones 308 176 132 132 528 880 R&D cost -10 Total income, SEKm 0 -10 308 176 132 132 528 0 880 0 0 0 Likelihood of success (%) 100% 90% 50% 50% 32% 32% 15% 4% 4% 4% 4% 4% Milestones (risk-adjusted) 0 0 154 88 42 42 78 0 35 0 0 0 R&D cost (risk-adjusted) 0 -9 0 0 0 0 0 0 0 0 0 0 Risk-adjusted total income, SEKm 0 -9 154 88 42 42 78 0 35 0 0 0

Source: SEB

ATOR-1017 income, non-risk adjusted ATOR-1017 income, risk adjusted


-100

0

100

200

300

400

500

600

700

800

900

1,000

2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E

SEK

m

R&D cost Milestones

-20

0

20

40

60

80

100

120

140

160

180

2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E

SEK

m

R&D cost (risk-adjusted) Milestones (risk-adjusted)



Sales model of ALG.APV-527 ALG.APV-527 is developed with Aptevo and all costs and income are shared equally. We assume Alligator will out-license its rights during phase 2 studies.

ALG.APV-527 model

2020E 2021E 2022E 2024E 2025E ALG.APV-527 2018E 2019E phase 1 phase 1/2 phase 2 2023E phase3 launch 2026E 2027E 2028E 2029E Patient population (NSCLC, bladder, breast, cervical, pancreatic, renal cancer)

932,876 942,205 951,627 961,143 970,755 980,462 990,267 1,000,170 1,010,171 1,020,273 1,030,476

% treated 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.3% 0.8% 1.2% 1.7% 2.5% # treated patients 0 0 0 0 0 0 0 2,774 8,405 12,127 17,498 25,247 annual price (USD) 120,000 121,200 122,412 123,636 124,872 126,121 127,382 128,656 129,943 131,242 132,555 133,880 sales, SEKm 0 0 0 0 0 0 0 3,141 9,611 14,006 20,411 29,744 Royalty to Alligator (7.5%) 0 0 0 0 0 0 0 236 721 1,050 1,531 2,231 Milestones 352 176 528 352 R&D cost -15 -15 -30 Total income, SEKm 0 -15 -15 -30 0 352 176 764 1,073 1,050 1,531 2,231 Likelihood (%) 100% 90% 90% 64% 32% 32% 15% 4% 4% 4% 4% 4% Royalty (risk-adjusted) 0 0 0 0 0 0 0 9 29 42 61 89 Milestones (risk-adjusted) 0 0 0 0 0 113 26 21 14 0 0 0 R&D cost (risk-adjusted) 0 -14 -14 -19 0 0 0 0 0 0 0 0 Risk-adjusted total income, SEKm 0 -14 -14 -19 0 113 26 31 43 42 61 89

Source: SEB

ALG.APV-527 income, non-risk adjusted ALG.APV-527 income, risk adjusted


-500

0

500

1,000

1,500

2,000

2,500

2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E

SEK

m

Royalty to Alligator (7.5%) Milestones R&D cost

-100

0

100

200

300

400

500

600

2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E

SEK

m

Royalty (risk-adjusted) Milestones R&D cost (risk-adjusted)



Summary of all projects Summary model

Total income by drug (SEK m) 2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E ADC-1013 0 132 123 0 440 1,320 2,982 3,081 3,973 5,192 6,216 6,024 ATOR-1015 0 -50 -50 -50 880 440 1,320 2,228 1,964 2,862 4,171 6,078 ATOR-1017 0 -10 308 176 132 132 528 0 880 0 0 0 ALG.APV-527 0 -15 -15 -30 0 352 176 764 1,073 1,050 1,531 2,231 Total non-risk adjusted 0 57 366 96 1,452 2,244 5,007 6,072 7,889 9,104 11,917 14,332 ADC-1013 (risk-adj.) 0 119 111 0 84 132 179 185 238 311 373 361 ATOR-1015 (risk-adj.) 0 -45 -32 -32 394 65 79 134 118 172 250 365 ATOR-1017 (risk-adj.) 0 -9 154 88 42 42 78 0 35 0 0 0 ALG.APV-527 (risk-adj.) 0 -14 -14 -19 0 113 26 31 43 42 61 89 Total(risk-adj.) 0 51 219 37 521 352 362 349 434 525 684 815

Source: SEB

Total income, non-risk adjusted Total income, risk adjusted





Source: SEB

-2,000

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E

SEK

m

ADC-1013 ATOR-1015 ATOR-1017 ALG.APV-527

-200

-100

0

100

200

300

400

500

600

700

800

900

2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E

SEK

m

ADC-1013 (risk-adj.) ATOR-1015 (risk-adj.)

ATOR-1017 (risk-adj.) ALG.APV-527 (risk-adj.)



Acquisition/collaboration potential Alligator’s strategy is not to bring the drugs to the market on its own but to develop them to phase II and then enter some form of collaboration with another pharma company. Alligator’s deal with Janssen is obviously a good example, and we believe there is a good probability of further deals which given the size of recent deals made could be highly supportive for the valuation of Alligator. As elaborated below, the average acquisition value of a company with phase I oncology assets has been about USD 0.6bn and the average deal value in the bispecific immuno-oncology antibodies space has been about USD 0.9bn.

Numerous acquisitions and strategic alliances and other deals have been made in the oncology space recently and in the immuno-oncology space more than 1,000 deals have been made since 2013.

Oncology acquisitions and deals

Date Acquirer Target Characteristic Stage Focus Deal value (USDbn)

Aug-2018 Servier Shire Business unit In market/ early stage Hematologic 2.4 Jun-2018 Eli lilly Armo BioSciences Company Ph III Tumour 1.6 May-2018 Eli lilly AurKa Pharma Company Ph I Tumour 0.5 May-2018 Janssen BeneVir Biopharm Company Pre-clinical Tumour 1 Apr-2018 BMS Nektar Therapeutics Profit sharing deal Ph I/II Tumour 1.9 Mar-2018 Celgene Juno therapeutics Company Pivotal trials (Ph II/III) Hematologic 9 Feb-2018 Merck Viralytics Company Ph I/II Tumour 0.4 Feb-2018 Roche Ignyta (Company) Ph II Tumour 1.7 Jan-2018 Celgene Impact Biometrics Company Ph III/clinical trials Hematologic 2.5 Nov-2017 Bayer Luxo Oncology Collaboration agreement Ph II Tumour 1.5 Oct-2017 Merck Rigontech Company Ph I Tumour 0.6 Aug-2017 BMS IFM Therapeutics Company Pre-clinical Tumour 1.3 Jun-2017 NantCell Altor Bioscience Company Ph I Tumour 1.1 Jan-2017 Ipsen Merrimark Oncology assets solely Ph II Tumour 1 Dec-2016 Astellas Ganymed Company Ph II Tumour 1.4 Sep-2016 Celgene EngMab Company Ph I Hematologic 0.6 Jul-2016 BMS Cormorant Company Ph I Tumour 0.5 Apr-2016 AbbVie Stemcentrx Company Ph II Tumour 9.8 Jan-2016 Merck lOmet Pharma Company Pre-clinical Tumour 0.4 Oct-2015 Novartis Admune Therapeutics Company Ph I Tumour 0.3 Jul-2015 Merck cCAM Biotheapeutics Company Ph I Tumour 0.6 Feb-2015 BMS Flexus Company Pre-clinical Tumour 1.3 Dec-2014 Merck OncoEthix Company Ph I Hematologic 0.4 Feb-2014 Novartis CoStim Company Late discovery stage Tumour 0.2 Oct-2013 AstraZeneca Amplimmune Company Pre-clinical Tumour 0.5

Source: SEB, Company data

Some of recent years’ deals are listed in the table above. The average deal value is about USD 1.7bn but this varies significantly with the development stage. As demonstrated in the chart below, the average deal value for phase I assets are about USD 0.6bn and significantly higher for phase II assets at about USD 2.9bn.

Data from Global Data identifies the average deal value in the immuno-oncology space at about USD 0.43bn (with an average upfront payment of USD 65m). In the bispecific immuno-oncology antibodies space, which is the most relevant for Alligator’s future deals, the average deal value is about USD 0.9bn (with an average upfront payment of about USD 94m).



Deal value by target’s development stage

Source: SEB, Company data

Deal value

Source: Global Data

Deal value by target’s cancer type

Source: Global Data

0.6

2.9

4.4

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

USD

bn

Phase 1 Phase 2 Phase 3

428

65

915

94

0

100

200

300

400

500

600

700

800

900

1000

Immuno-oncology o/w upfront Bispecific I-Oantibodies

o/w upfront

USD

m

Deal value

1.4

3.0

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

USD

bn

Tumor Hematologic



Financials

P&L estimates Our financial estimates are shown in the table below and sums up the sales model previously described. Sales estimates and R&D costs are risk adjusted.

Alligator P&L

Income statement (SEK m) 2015 2016 2017 2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E 2026E Licensing income 15 6 2 2 2 2 2 2 3 3 3 ATOR-1013 290 43 51 0 119 111 0 84 132 179 185 238 ATOR-1015 0 0 0 0 394 65 79 134 118 ATOR-1017 0 0 154 88 42 42 78 0 35 ALG.APV-527 0 0 0 0 0 113 26 31 43 Other 4 1 1 1 2 2 2 2 2 2 2 2 SALES (risk-adjusted) 294 59 58 3 122 269 92 525 356 366 354 439 growth (%) -66% 471% -32% 3% -3% 24% Cost of Goods Sold 0 0 0 0 0 0 0 0 0 0 0 0 Gross profit 294 59 58 3 122 269 92 525 356 366 354 439 gross margin 100% 100% 100% 100% 100% 100% 100% Personnel costs -29 -27 -38 -55 -57 -59 -61 -62 -64 -66 -68 -70 Other external costs -49 -63 -79 -104 -146 -124 -130 -95 -90 -85 -81 -77 Depreciation -13 -25 -3 -6 -6 -6 -6 -6 -6 -7 -7 -7 EBIT 203 -56 -62 -161 -87 79 -105 361 195 208 198 285 -margin 30% -114% 69% 55% 57% 56% 65% growth -191% -232% -444% -46% 7% -5% 44% Net financials 4 8 -1 5 0 0 Pre-tax profit 207 -48 -64 -156 -87 79 -105 361 195 208 198 285 Tax 0 0 0 0 0 0 0 0 0 -31 -43 -63 tax rate 0% 0% 0% 0% 0% 0% 0% 0% 0% 15% 22% 22% Net profit 207 -48 -64 -156 -87 79 -105 361 195 177 154 222

EPS 3.81 -0.80 -0.89 -2.19 -1.22 1.11 -1.47 5.06 2.73 2.48 2.16 3.11

Source: SEB

EPS per year

Source: SEB

-3

-2

-1

0

1

2

3

4

5

6

2015 2016 2017 2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E 2026E

SEK

EPS



Valuation Our valuation approach is based on the combination of calculating the net present value per drug and a traditional DCF (which yields SEK 34 per share) and calculating the net present value per drug (which yields SEK 33 per share) but vary significantly depending on our assumptions, as demonstrated below.

In addition, the acquisition deal sizes demonstrated in a previous section is also of interest (average acquisition value of a company with phase I oncology assets is about USD 0.6bn and the average deal value in the bispecific immuno-oncology antibodies space is about USD 0.9bn).

NPV per drug Using our income estimates for the different drugs and the projected related costs, our net present values per drug is shown in the chart below. Our estimates are risk adjusted using a gradually decreasing probability for our scenario for the coming years and a 4-6% likelihood of approval for the drugs, as previously demonstrated in the sales model tables.

Risk adjusted NPV/share by drug

Source: SEB

The chart below shows the sensitivity of NPV to a few parameters – the USD/SEK exchange rate, the drug price, delayed development progress for all projects, and different risk adjustments (likelihood of approval, LOA). The sensitivity is greatest to LOA, where our base case is 4-6% based on historical statistical data – 8% is normally used for oncology drugs in phase II.

15

11

4

3

33

0

5

10

15

20

25

30

35

40

ADC-1013 ATOR-1015 ATOR-1017 ALG.APV-527 Total

NP

V/s

hare



NPV sensitivity

Source: SEB

DCF valuation Our DCF valuation depends heavily on several assumptions. The value shown below uses our estimates outlined in previous sections, but this is only one of several possible scenarios. We have also included a sensitivity table.

DCF valuation

Source: SEB

10.3

7.0

5.0

4.1

33.5

3.24.1

9.0

0

10

20

30

40

50

60

Risk-adjusted 3%

LOA

Marketlaunch

delayed 2years

Price $90k(vs 120)

USD/SEK -10%

Base caserisk-

adjustedNPV/shr

USD/SEK+10%

Price $150k(vs 120)

Risk-adjusted 8%

LOA

NP

V/s

hare

DCF valuation (SEKm) Weighted average cost of capital (%)NPV of FCF in explicit forecast period 657 Risk free interest rate 2.5NPV of continuing value 1,308 Risk premium 7.5Value of operation 1,966 Cost of equity 10.0

Net debt (432) After tax cost of debt 2.0Share issue/buy-back in forecast period -Value of associated companies - WACC 10.0Value of minority shareholders' equity -Value of marketable assets - AssumptionsDCF value of equity 2,397 Number of forecast years 10DCF value per share (SEK) 34 EBIT margin - steady state (%) 71.2Current share price (SEK) 28.00 EBIT multiple - steady state (x) 8.0DCF performance potential (%) 20 Continuing value (% of NPV) 66.6



DCF sensitivity

Source: SEB

DCF sensitivity

Source: SEB

DCF – assumption details

Average Average Average (SEKm) 2018E 2019E 2020E 2021E 2022E year 6 year 7-8 year 9-10

Sales growth (%) (94.1) 3480.9 119.5 (65.8) 471.2 (32.2) (0.3) 22.5 EBITDA margin (%) (4551.1) (66.3) 31.8 (107.6) 70.1 56.7 58.2 69.5 EBIT margin (%) (4721.0) (71.1) 29.5 (114.3) 68.9 54.9 56.3 68.1 Gross capital expenditures as % of sales 0.0 0.0 0.0 0.1 0.3 0.5 0.8 1.2 Working capital as % of sales 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Sales 3 122 269 92 525 356 360 485 Depreciation (6) (6) (6) (6) (6) (6) (7) (7) Intangibles amortisation 0 0 0 0 0 0 0 0 EBIT (161) (87) 79 (105) 361 195 203 331 Taxes on EBIT 35 19 (17) 23 (79) (43) (45) (73) Increase in deferred taxes 0 0 0 0 0 0 0 0 NOPLAT (126) (68) 62 (82) 282 152 158 258

Gross capital expenditure 0 0 0 (0) (2) (2) (3) (6) Increase in working capital 35 0 0 0 0 0 0 0 Free cash flow (85) (62) 68 (76) 287 157 162 259

ROIC (%) (27.2) (18.1) 13.6 (18.3) 63.6 34.7 36.5 60.2 ROIC-WACC (%) (37.2) (28.1) 3.6 (28.3) 53.6 24.7 26.5 50.2 Share of total net present value (%) 0.0 (2.9) 2.9 (3.0) 10.2 5.1 9.1 12.0

Source: SEB

9.0 9.5 10.0 10.5 11.080 49 46 43 41 39

Equity capital 90 43 40 38 36 34weight (%) 100 38 36 34 32 30

100 38 36 34 32 30100 38 36 34 32 30

Cost of equity (%)

-2% -1% 0 +1% +2%-2% 29 29 30 30 30

Abs. change in -1% 31 31 32 32 32sales growth - 0 33 33 34 34 34

all years +1% 35 35 36 36 37+2% 37 37 38 38 39

Absolute change in EBITDA margin - all years



Management & Board

Management Management

Member of the senior Employed at Holdings* Name Role management team since the company since AK W SO Per Norlén CEO 2010 2010 100500 200000 480000 Anu Balendran Vice President Business Development 2018 2018 0 0 135000 Peter Ellmark Vice president Discovery 2018 2008 10000 50000 185000 Christina Furebring Senior Vice President Research 2001 2001 100000 120000 285000 Charlotte A. Russel Chief Medical Officer 2018 2018 0 0 135000 Per-Olof Schrewelius Chief Financial Officer 2016 2016 10000 125000 135000

Source: Alligator

CEO, Per Norlén ● Born 1970. Board certification in clinical pharmacology and PhD and

associate professorship in clinical pharmacology, Lund University. 25 Y of research experience in pharmacology incl. 15 Y experience in clinical drug development.

● Board member of Atlas Therapeutics AB and A Bioscience Incentive AB.

CFO, Per-Olof Schrewelius ● Born 1963. MSc in business administration and Economics, Lund

University. 20 Y+ experience from different CFO and Finance Merger positions in various industries (incl. medical technology and engineering).

CMO, Charlotte A. Russel ● Born 1964. Medical doctor with board certifications in haematology and

internal medicine. PhD in medical science , Copenhagen University. 25 Y+ experience of research and clinical experience (incl. 10 Y with clinical drug development in biotech/pharmaceutical companies).

Anu Balendran ● Born 1975. PhD in Biochemistry, University of Dundee. External Innovation

Director, AZN. About 20 Y experience within AZ R&D. Extensive international experience in drug licencing.

Peter Ellmark ● Born 1973. PhD and an associate professorship in immuno-technology,

Lund University. 15 Y+ experience of developing antibodies for immunotherapy of cancer.

Christina Furebring ● Born 1964. PhD in immune technology, Lund University. Co-founder of the

FIND technology (cornerstone of Alligator´s technology platform. 20 Y+ experience of working on the optimization of proteins and antibodies.

● Deputy Board Member in A Bioscience Incentive AB and Atlas Therapeutics AB.



Board of Directors Board of directors

Independent in relation to company and its

Independent in relation

Name Role Board member since management to major stakeholders Holdings Peter Benson Chairman 2011 Yes Yes - Carl Borrebaeck Board member 2001 No Yes 1200833 shares Ulrika Danielsson Board member 2016 Yes Yes - Anders Ekblom Board member 2017 Yes Yes 19658 shares Kenth Peterson Board member 2001 Yes Yes 408000 shares Jonas Sjögren Board member 2015 Yes Yes 4736700 shares Laura von Schantz Board member 2017 No Yes 25000 SO

Source: Alligator

Chairman, Peter Benson ● Born 1955. Business administration, Lund University and Economics,

University of California. Currently managing partner of Sunstone Capital Life Science Ventures. Formerly at the Danish growth fund and Pharmacia group management.

● Chairman of Ascelia AB. Board member of Arcoma aktiebolag, Jollingham AB, Montela AB, Opsona Therapeutics Ltd. and Sunstone Capital.

Carl Borrebaeck ● Born 1948. Engineer, Lund University. Co-founder of Alligator and a board

member of the Royal Swedish Academy of Engineering Sciences (IVA). Former Vice-Chancellor of Lund University.

● Chairman of Immunovia AB and SenzaGen AB. Board member of Clinical Laserthermia Systems AB and CB Ocean Capital AB. Deputy board member of Endo Medical AB. Partner of Immunova HB.

Ulrika Danielsson ● Born 1972. MBA Gothenburg School of Business and Law at the University

of Gothenburg. CFO of Castellum AB since 2014 and has worked for the company in senior positions since 1998.

● Board member for number of subsidiaries and second-tier subsidiaries within Castellum. Board member of Slättö Förvaltning AB.

Anders Ekblom ● Born 1954. Physician, board certified in anaesthesia and intensive care,

dentist and Associate professor in physiology at Karolinska Institute. Experience from the biopharmaceutical industry globally (EVP Global Medicines Development, AZN and CEO and president, AZN Sweden.

● Chairman of TFS international AB. Board member of AnaMar AB, Infant Bacterial Therapeutics AB, Mereo Biopharma Group Ltd. and LEO Pharma.

Kenth Peterson ● Born 1956. BA, Lund University. Experience from finance and biotech.

Sector. Business angel for 15 Y+ and has founded a number of biotechnology companies.

● Chairman of AlphaBeta, Biocrine, Biocrine Regenative Medicine and Spibner Technologies. Board member of Science Pacific and Genovis.

Jonas Sjögren ● Born 1966. Electrical engineering, Chalmers University of Technology.

Registred medical doctor, Sahlgrenska Academy. MBA, INSEAD.

● Board member of Storytel, Execa Allocation and Delibr (deputy).

Laura von Schultz ● Born 1982. Biotechnical engineering and has a doctorate in immuno-

technology, Lund University. Board employee representative.



Overview Investment case

Immuno-oncology drugs have changed cancer treatment outcomes significantly and Alligator’s tumour-directed therapies may improve it further. With four pipeline drugs in early stage development uncertainty is high but the payoff in case of success could also be gigantic.

Company profile

Alligator Bioscience is a clinical-stage biotechnology company developing pharmaceuticals for cancer treatment. The immuno-oncology antibody drugs are tumor-directed and activate the immune system primarily in the tumor. Alligator’s growing pipeline includes lead clinical and pre-clinical drug candidates (ADC-1013, ATOR-1015, ATOR-1017 and ALG.APV-527). ADC-1013 (JNJ-64457107) is licensed to Janssen Biotech (part of J&J), for global development and commercialization. Alligator was founded in 2001 and is based in Lund, Sweden, and has about 50 employees.

Valuation approach

We use a blend of a NPV valuation and a traditional DCF valuation. All estimates are risk-adjusted. Acquisition value of phase I oncology assets are about USD 0.6bn and the average deal value in the bispecific immuno-oncology antibodies space about USD 0.9bn.

Risks Results from clinical studies may disappoint and remove or lower the marketing

potential. Regulatory approvals by the FDA and EMA are also uncertain and rely on upcoming study results. Development of competing treatments could disrupt sales potential. The price of a pharmaceutical depends on reimbursement and is at risk for negative price discussions.



PER - 12 month forward P/BV - 12 month forward


EV/Sales - 12 month forward EV/EBITA - 12 month forward


Net sales & EBITDA margin EBIT & Operating margin


Comparison with sector index - 1 year Comparison with AstraZeneca - 1 year

Source: SIX Source: SIX

(5,000.0)(4,500.0)(4,000.0)(3,500.0)(3,000.0)(2,500.0)(2,000.0)(1,500.0)(1,000.0)(500.0)0.0

(25,000)(22,500)(20,000)(17,500)(15,000)(12,500)(10,000)(7,500)(5,000)(2,500)

0

2014 2015 2016 2017 2018E 2019E 2020E

(%)

(SEK

m)

Net sales EBITDA margin

0100200300400500600700

2016 2017 2018 2019

(%)

P/BV - 12 month forward

(5,000.0)(4,500.0)(4,000.0)(3,500.0)(3,000.0)(2,500.0)(2,000.0)(1,500.0)(1,000.0)(500.0)0.0

(25,000)(22,500)(20,000)(17,500)(15,000)(12,500)(10,000)(7,500)(5,000)(2,500)

0

2014 2015 2016 2017 2018E 2019E 2020E(%

)

(SEK

m)

EBIT Operating margin

05

10152025303540

2016 2017 2018 2019

(x)

PER - 12 month forward

05

1015202530354045

2016 2017 2018 2019

(x)

EV/EBITA - 12 month forward

0.0

5.0

10.0

15.0

20.0

25.0

2016 2017 2018 2019

(x)

EV/Sales - 12 month forward

2022242628303234363840

Oct 17 Dec 17 Apr 18 Jul 18 Sep 18

Alligator Bioscience Rel Nordic Healthcare

2022242628303234363840

Oct 17 Dec 17 Apr 18 Jul 18 Sep 18Alligator Bioscience Rel AstraZeneca



Profit & loss statement - Alligator Bioscience(SEKm) 2014 2015 2016 2017 2018E 2019E 2020ENet Sales 0 294 59 58 3 122 269Other revenues 0 0 0 0 0 0 0Total revenues 0 294 59 58 3 122 269

Total expenses (76) (78) (91) (117) (159) (203) (183)Profit before depreciation (76) 216 (31) (59) (156) (81) 85

Depreciation - Fixed assets (2) (3) (3) (3) (6) (6) (6)Depreciation - Other assets 0 (10) (22) 0 0 0 0Amortisation - Goodwill 0 0 0 0 0 0 0Amortisation - Other intangibles 0 0 0 0 0 0 0Operating profit (78) 203 (56) (62) (161) (87) 79

Net interest expenses 2 4 8 (1) 5 0 0Foreign exchange items 0 0 0 0 0 0 0Other financial items 0 0 0 0 0 0 0Value changes - Fixed assets 0 0 0 0 0 0 0Value changes - Financial assets 0 0 0 0 0 0 0Value changes - Other assets 0 0 0 0 0 0 0Reported pre-tax profit (77) 207 (48) (64) (156) (87) 79

Minority interests 0 0 0 0 0 0 0Total taxes 0 0 0 0 0 0 0Reported profit after tax (77) 207 (48) (64) (156) (87) 79

Discontinued operations 0 0 0 0 0 0 0Extraordinary items 0 0 0 0 0 0 0Net Profit (77) 207 (48) (64) (156) (87) 79

Adjustments:Discontinued operations 0 0 0 0 0 0 0Interest on convertible debt 0 0 0 0 0 0 0Minority interests (IFRS) 0 0 0 0 0 0 0Value changes 0 0 0 0 0 0 0Goodwill/intangibles amortisations 0 0 0 0 0 0 0Restructuring charges 0 0 0 0 0 0 0Other adjustments 0 0 0 0 0 0 0Tax effect of adjustments 0 0 0 0 0 0 0Adjusted profit after tax (77) 207 (48) (64) (156) (87) 79

Margins, tax & returnsOperating margin 0.0 69.1 (94.5) n.m. n.m. (71.1) 29.5Pre-tax margin 0.0 70.6 (81.5) n.m. n.m. (71.1) 29.5Tax rate 0.0 0.0 0.0 0.0 0.0 0.0 0.0ROE n.m. 101.7 (9.0) (9.9) (29.0) (20.8) 19.1ROCE n.m. 99.5 (10.5) (9.6) (29.0) (20.8) 19.1

Growth rates y-o-y (%)Total revenues n.a. n.a. (79.8) (2.7) (94.1) 3,480.9 119.5Operating profit n.m. n.m. n.m. n.m. n.m. n.m. n.m.Pre-tax profit n.m. n.m. n.m. n.m. n.m. n.m. n.m.EPS (adjusted) 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Cash flow(SEKm) 2014 2015 2016 2017 2018E 2019E 2020ENet profit (77) 207 (48) (64) (156) (87) 79Non-cash adjustments 2 13 25 3 6 6 6Cash flow before work cap (75) 220 (24) (61) (151) (81) 85

Ch. in working capital / Other (4) 226 0 (63) 35 0 0Operating cash flow (78) 446 (23) (124) (115) (81) 85

Capital expenditures 0 61 0 0 0 0 0Asset disposals 0 0 0 0 0 0 0L/T financial investments 0 0 0 0 0 0 0Acquisitions / adjustments 0 0 0 11 0 0 0Free cash flow (78) 507 (23) (113) (115) (81) 85

Net loan proceeds 0 0 0 0 0 0 0Dividend paid 0 0 0 0 0 0 0Share issue 0 121 359 5 0 0 0Other 0 0 (32) 0 0 0 0Net change in cash (78) 628 304 (108) (115) (81) 85

AdjustmentsC/flow bef chng in work cap (75) 220 (24) (61) (151) (81) 85Adjustments 0 0 0 0 0 0 0Int on conv debt net of tax 0 0 0 0 0 0 0Cash earnings (75) 220 (24) (61) (151) (81) 85

Per share informationCash earnings (1.54) 4.05 (0.39) (0.85) (2.11) (1.14) 1.2Operating cash flow (1.62) 8.19 (0.39) (1.74) (1.62) (1.14) 1.2Free cash flow (1.62) 9.31 (0.39) (1.58) (1.62) (1.14) 1.2

Investment coverCapex/sales (%) 0.0 0.0 0.0 0.0 0.0 0.0 0.0Capex/depreciation (%) 0 0 0 0 0 0 0

Source for all data on this page: SEB



Balance sheet - Alligator Bioscience(SEKm) 2014 2015 2016 2017 2018E 2019E 2020ECash and liquid assets 1 366 659 473 358 276 362Debtors 0 4 17 60 0 7 15Inventories 0 0 0 0 0 7 15Other 7 0 0 0 0 0 0Current assets 8 370 676 533 358 290 391

Interest bearing fixed assets 0 0 0 74 74 74 74Other financial assets 0 0 0 0 0 0 0Capitalized development cost 6 0 0 0 0 0 0Goodwill 0 0 0 0 0 0 0Other intangibles 0 43 20 19 19 19 19Fixed tangible assets 0 2 4 16 10 4 (2)Other fixed assets 0 0 0 0 0 0 0Fixed assets 6 46 25 110 104 98 92

Total assets 15 415 701 643 462 388 483

Creditors 0 5 13 14 0 7 15Other trade financing 3 1 1 1 0 7 15S/T interest bearing debt 0 0 0 0 0 0 0Other 0 14 11 10 0 0 0Current liabilities 4 19 25 25 0 13 29

L/T interest bearing debt 0 0 0 0 0 0 0Other long-term liabilities 0 0 0 0 0 0 0Convertible debt 0 0 0 0 0 0 0Pension provisions 0 0 0 0 0 0 0Other provisions 0 0 0 0 0 0 0Deferred tax 0 0 0 0 0 0 0Long term liabilities 0 0 0 0 0 0 0

Minority interests 0 0 0 0 0 0 0

Shareholders' equity 11 397 676 618 462 375 454

Total liabilities and equity 15 416 701 643 462 388 484

Net debt (m) (1) (366) (659) (547) (432) (351) (436)Working capital (m) 4 (15) (7) 35 0 0 0Capital employed (m) 11 397 676 618 462 375 454Net debt/equity (%) (10) (92) (97) (88) (93) (94) (96)Net debt/EBITDA (x) 0.0 (1.7) 21.0 9.3 2.8 4.3 (5.1)Equity/total assets (%) 76 95 96 96 100 97 94Interest cover 48.9 (46.4) 7.3 (42.7) 0.0 0.0 0.0

Valuation(SEK) 2014 2015 2016 2017 2018E 2019E 2020E

No of shares, fully dil. (y/e) 48.6 59.0 70.1 71.4 71.4 71.4 71.4No of shares, fully dil. avg. 48.4 54.4 60.1 71.3 71.4 71.4 71.4

Share price, y/e 34.8 23.3 26.8 26.8 26.8Share price, high 40.1 35.3 38.7Share price, low 31.3 22.1 23.9Share price, avg 33.7 28.9 29.0

EPS (reported) (1.59) 3.81 (0.80) (0.89) (2.19) (1.22) 1.11EPS (adjusted) (1.59) 3.81 (0.80) (0.89) (2.19) (1.22) 1.11Cash earnings/share (1.54) 4.05 (0.39) (0.85) (2.11) (1.14) 1.20Dividend/share 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Enterprise value/share 25 15.6 21 22 21Book value/share 0.2 6.7 9.6 8.7 6.5 5.3 6.4Adjusted equity/share 0.2 6.7 9.6 8.7 6.5 5.3 6.4

PER (adjusted) n.m. n.m. n.m. n.m. 24.1CEM (88.3) (27.4) (12.7) (23.6) 22.4Dividend yield 0.0 0.0 0.0 0.0 0.0

EV/EBITDA (56.7) (18.9) (9.5) (19.3) 17.3EV/EBITA (31.8) (17.9) (9.2) (18.0) 18.6EV/EBIT (31.8) (17.9) (9.2) (18.0) 18.6EV/Sales (x) 30.01 19.32 433.56 12.77 5.50Price/Book value 3.61 2.69 4.14 5.10 4.21Price/adjusted equity 3.61 2.69 4.14 5.10 4.21

Free cash flow/Market cap (%) (1.1) (7.5) (6.0) (4.2) 4.5Operating cash flow/EV (%) (1.3) (11.1) (7.8) (5.2) 5.8EV/Capital employed (x) 2.6 1.8 3.2 4.2 3.3

Main shareholders Management Company informationName (%) Votes Capital Title Name ContactJohnson & Johnson 8.1 8.1 COB Peter Benson Internet 0.0Sunstone 8.1 8.1 CEO Per Norlén Phone number 0Jonas Sjögren 6.9 6.9 CFO Per-Olof SchreweliusForeign owners (total) 49.0 49.0 IR Cecilia Hofvander

Source for all data on this page: SEB



About this publication This report is a marketing communication commissioned by Alligator Bioscience and prepared by Skandinaviska Enskilda Banken AB (publ). It does not constitute investment research; as such, it has not been prepared in accordance with the legal requirements to promote the independence of investment research, nor is it subject to any prohibition on dealing ahead of the dissemination of investment research.

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Company specific disclosures and potential conflicts of interest A member of, or an entity associated with, SEB or its affiliates, officers, directors, employees or shareholders of such members (a) is not, and has never been, represented on the board of directors or similar supervisory entity of Alligator Bioscience, (b) has from time to time bought or sold the securities issued by the company or options relating to the company, and (c) SEB does not hold any short / long position exceeding 0.5% of the total issued share capital of Alligator Bioscience as of 30 Sep 2018. The analyst(s) responsible for this research report (jointly with their closely related persons) hold(s) 0 shares in Alligator Bioscience and do(es) not have holdings in other instruments related to the company.

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