Scancell : Upcoming SCIB1 data could provide first proof of concept

Trinity Delta

Scancell

Upcoming SCIB1 data could provide first proof of concept

Scancell has several key clinical data points due through to end-2024. First data will be from the Phase II trial of SCIB1 in combination with checkpoint inhibitors (CPIs) in advanced skin cancer. If successful the study will transition to the enhanced iSCIB1+ formulation that offers greater potency and broader applicability. If SCIB1 promising early data mature as hoped, then this programme could improve current outcomes. Top-lineModi-1 CPI combination data in multiple tumours are expected in 2024. The antibody platforms, GlyMab and AvidiMab, provide attractive out-licensing opportunities. Our Scancell rNPV valuation remains £300.1m, or 36.7p/share.

Year-end: April 30	2021	2022	2023E	2024E
Revenues (£m)	0.0	0.0	5.3	0.0
Adj. PBT (£m)	(17.7)	(11.9)	(17.6)	(24.0)
Net Income (£m)	(15.5)	(2.1)	(15.7)	(21.9)
EPS (p)	(2.28)	(0.25)	(1.93)	(2.68)
Cash (£m)	41.1	28.7	17.8	20.2
EBITDA (£m)	(8.6)	(12.6)	(13.8)	(20.2)

Source: Trinity Delta Note: Adjusted numbers exclude exceptionals

• Initial SCIB1 combo data could provide first important insights Initial data from the first stage (Cohort 1 in up to 15 patients) of the Phase IISCOPEtrial of SCIB1 in combination with checkpoint inhibitors (CPIs) in advanced melanoma are expected during Q423. To validate the hypothesis that SCIB1 could have synergistic effects with doublet therapy (nivolumab + ipilimumab) nine responses are required (>55% response rate). If nine responses are achieved in fewer than 15 patients, for a higher response rate, this would suggest that SCIB1 + doublet therapy could meaningfully improve current outcomes, which would be a significant achievement, in our view.
• Second-generationiSCIB1+ could broaden the addressable market Scancell's
  AvidiMab platform has been used to enhance SCIB1, with SCIB1 limited to the
  c 30-40% of patients that have the appropriate human leukocyte antigen type. The enhanced second-generation programme, iSCIB1+, can address 100% of melanoma patients, broadening the target market, and is also more potent. Scancell intends to transition the SCOPE study to iSCIB1+ in combination with doublet therapy in Q423 for initial data H124. Preclinical data suggest the benefits of iSCIB1+ (performance, efficacy, and ease of admin) are a significant advance over SCIB1.
• Data for lead Moditope vaccine, Modi-1, are expected 2024 The Phase I/IIModiFYtrial of Modi-1as monotherapy and in combination with CPIs in various challenging solid tumours is ongoing. Initial early signals of efficacy have already been observed in various monotherapy cohorts and further data are expected in 2024. The CPI combination data will be particularly important for understanding Modi-1'spositioning and potential, and will be a key de-riskingevent.
• Multiple catalysts could drive significant upside Catalysts include: (1) Stage one SCIB1 doublet combination data in Q423 (9 responses from up to n=15) with stage two data (28 responses from up to n=43) expected in H124; (2) iSCIB1+ doublet combination top-linedata in H124; (3) Modi-1CPI combination data in 2024 from various cohorts; (4) partnering optionality with the GlyMab antibody platform.

Update

5 September 2023

Price	8.06p
Market Cap	£71.7m
Enterprise Value	£58.9m
Shares in issue	818.4m
12 month range	8.05p-29.4p
Free float	55.0%
Primary exchange	AIM London
Other exchanges	N/A
Sector	Healthcare
Company Code	SCLP.L
Corporate client	Yes

Company description

Scancell is a clinical-stage immuno- oncology specialist that has four broadly applicable technology platforms. Two are therapeutic vaccines, Moditope and ImmunoBody, and two are antibody based, GlyMab and AvidiMab.

Analysts

Lala Gregorek

[e-mail] [phone]

Philippa Gardner

[e-mail] [phone]

Trinity Delta

Scancell

Scancell: multiple programmes and catalysts

Four distinct platforms with broad applicability

Scancell is a clinical stage immunology specialist. It has two promising oncology vaccine platforms, Moditope and ImmunoBody, and two antibody technologies, GlyMab (anti-glycans) and AvidiMab, with the potential to treat many solid

cancers, either as monotherapy or in combination. Modi-1, the first Moditope

programme, is progressing in a Phase I/II trial targeting hard-to-treat tumours

with further efficacy data due 2024. The lead ImmunoBody programme,

currently SCIB1, is in a Phase II study in metastatic melanoma, with a transition

to the next-generation iSCIB1+ expected later this year. The broad acting

GlyMab antibodies are generating exciting preclinical data, and a first partnering

deal with Genmab is already in place and further deals are possible. AvidiMab

technology will be increasingly employed to enhance avidity and potency. Our

risk adjusted NPV valuation for Scancell is currently £300.1m, or 36.7p/share, with significant upside from multiple upcoming catalysts.

Scancell has four proprietary technology platforms, which can be classified into Vaccines (Moditope and ImmunoBody) and Antibodies (GlyMab and AvidiMab). More details on each are available in our February 2023 Outlook.Scancell's pipeline of newsflow is summarised in Exhibit 1.

Exhibit 1: Scancell pipeline key newsflow over the next three years

SCIB1 in combination with doublet therapy is being investigated in the SCOPE study

Hypothesis is that SCIB1 with CPIs can act synergistically to improve outcomes

Source: Scancell

SCIB1: upcoming melanoma doublet data

The lead ImmunoBody programme is currently SCIB1, which is being developed for the treatment of advanced melanoma. The open label Phase II SCOPEstudy is ongoing, which is examining SCIB1 in combination with checkpoint inhibitors (CPIs). Reflecting the changes in the treatment regimen for advanced metastatic melanoma, the focus is on the combination with doublet therapy, which consists of Bristol Myers Squibb's Yervoy(ipilimumab) plus Opdivo(nivolumab).

The study rationale is that the SCIB1 ImmunoBody vaccine primes an immune response against the tumour, whilst the CPI reduces the immune-suppressant effect seen in the tumour microenvironment, which together could increase the number of patients who respond to treatment. Preclinical studies show a strong

2	5 September 2023

Trinity Delta

Doublet therapy response rates

are around 48-58%...

…so anything above this would be impressive

Positive SCOPE data in H124 could lead to the start of a registrational trial in H224

Scancell

synergistic effect when SCIB1 is combined with a relevant CPI (c 85% response rates in animal models).

For context, and with the caveat of cross trial comparison limitations, the FDA approved labelfor Opdivo in combination with Yervoy, based on the CHECKMATE-067 study, cites an overall response rate (ORR) of 50% for the combination (based on a primary analysis with nine months of follow-up) vs 40% for Opdivo monotherapy and 14% for Yervoy alone. The ORR for the combination is 58% in longer-termCHECKMATE-067dataat both five and 6.5 years. Real- world data(at median follow-up of 12 months) reports an ORR of 48%. The ORRs achieved with doublet therapy are the highest observed in advanced melanoma.

Top-line data from the first stage (Cohort 1) of the SCOPE study, examining SCIB1 in combination with doublet therapy, are expected during Q423. This cohort will recruit up to 15 patients and a >55% response rate (ie nine responses) is required to validate the study hypothesis before progressing to the second stage. If nine responses are achieved in fewer than 15 patients, this would represent an ORR that appears higher than ORRs observed with doublet therapy alone, as described above. Hence, this could translate to improved outcomes for patients which would be a significant achievement, in our view.

The second stage will recruit up to a further 28 patients (for a total of up to 43 patients across both stages). The aim is to achieve 19 responses (ie 28 responses in total), which would represent at least a 65% response rate (28/43). This would demonstrate that SCIB1 in combination with doublet therapy exceeds currently achievable ORRs. Recruitment is expected to be complete by the end of 2023 with data around three months later ie during H124. If response rates of these magnitudes are achieved, then this could generate partnering interest, in our view.

The plan is to transition the SCOPE study to the enhanced, second-generation iSCIB1+. A repeat of Cohort 1 using iSCIB1+ in combination with doublet therapy could start by YE23 for top-line data H124e. If expanded data from these cohorts are positive, then a potentially registrational Phase II/III trial could be initiated.

Phase I/II basket design to maximise understanding

Initial safety phase complete and recruitment into expansion cohorts is ongoing

Modi-1: combination data in challenging cancers in 2024

The Phase I/II ModiFY studyof Modi-1 is a two stage trial with an initial dose escalation and safety phase, already successfully completed, followed by a number of specific expansion cohorts that explore Modi-1 in a variety of hard-to- treat solid tumours as monotherapy, in combination with CPIs, as well as in the neoadjuvant (pre-surgical) setting. These include triple-negative breast cancer (TNBC), ovarian cancer, head & neck cancer, and renal cancer. A total of up to 138 patients across up to 20 UK sites will be treated. An overview of the trial design is shown in Exhibit 2.

The initial dose escalation and safety phase has been successfully completed with Modi-1 injections well tolerated at both low and high doses as monotherapy and in combination with a CPI. Recruitment into the ovarian cancer monotherapy cohort is complete, whilst recruitment into other expansion cohorts (monotherapy, combination with CPI, and neoadjuvant settings) is ongoing.

3	5 September 2023

Trinity Delta

Scancell

Exhibit 2: Modi-1 Phase I/II clinical trial design

Source: Scancell Note: CPI = checkpoint inhibitor

Early monotherapy data are encouraging

The ovarian cancer monotherapy expansion cohort has completed recruitment of 16 patients. All patients had failed prior treatment and had actively progressing disease. The disease control rate was 44% (7/16) following treatment with Modi-1 (stable disease for at least eight weeks), with some patients experiencing disease stabilisation for four or more months. In other monotherapy expansion cohorts, eight patients have received a full dose of Modi-1, with the following results:

• One TNBC patient remains on trial with stable disease beyond 8 weeks

CPI combination data will be key in defining Modi-1's clinical and commercial positioning

• One head & neck patient achieved a partial response and remains on study at week 37.

Recruitment into the key CPI combination expansion cohorts has been approved and is underway, with data expected during 2024. These are focused on Modi-1 in combination with a CPI in head & neck and renal cancers, and in the neoadjuvant (pre-surgery) setting in head & neck cancer.

GlyMabs: partnering optionality

Genmab deal provides validation of GlyMab platform and an example of the partnering optionality potential

Scancell has built a pipeline of differentiated broad acting anticancer GlyMab antibodies, and currently has five in early-stage development. In October 2022Genmab effectively validated the GlyMab platform when it acquired the rights to develop one of these preclinical antibodies, SC129, into multiple novel therapeutic product modalities for all disease areas, excluding cell therapy applications (which are retained by Scancell). The Genmab deal, which could generate up to a maximum of $624m in milestones if all the modalities were to be progressed, plus royalties, is an example of the partnering optionality within the GlyMab pipeline. We expect the remaining programmes, and other undisclosed ones in earlier stages of preclinical development, will be progressed to preclinical validation points and then also be partnered for further clinical development.

4	5 September 2023

Trinity Delta

Scancell

Exhibit 3: Summary of financials

Year-end: April 30	£'000s	2020	2021	2022	2023E	2024E
INCOME STATEMENT
Revenues		0	0	0	5,271	0
Cost of goods sold		0	0	0	0	0
Gross Profit		0	0	0	5,271	0
R&D expenses		(4,667)	(6,406)	(9,477)	(14,504)	(15,144)
General and administrative expenses		(2,115)	(3,346)	(4,787)	(5,266)	(5,792)
Underlying operating profit		(6,782)	(9,752)	(14,264)	(14,499)	(20,936)
Other revenue/expenses		0	918	965	0	0
EBITDA		(6,739)	(8,585)	(12,559)	(13,842)	(20,249)
Operating Profit		(6,782)	(8,834)	(13,299)	(14,499)	(20,936)
Interest expense		14	(1,648)	(2,878)	(2,220)	(3,041)
Other financing costs/income		0	(6,323)	12,409	(910)	0
Profit Before Taxes		(6,768)	(16,805)	(3,768)	(17,628)	(23,977)
Adj. PBT		(6,768)	(17,723)	(11,899)	(17,628)	(23,977)
Current tax income		1,262	1,328	1,703	1,895	2,031
Cumulative preferred stock dividend		0	0	0	0	0
Net Income		(5,506)	(15,477)	(2,065)	(15,733)	(21,947)
EPS (p)		(1.21)	(2.28)	(0.25)	(1.93)	(2.68)
Adj. EPS (p)		(1.21)	(2.42)	(1.25)	(1.93)	(2.68)
DPS (p)		0.00	0.00	0.00	0.00	0.00
Average no. of shares (m)		456.2	678.6	815.2	815.9	818.4
Gross margin		N/A	N/A	N/A	100%	N/A
BALANCE SHEET
Current assets		5,208	44,668	32,362	21,156	23,500
Cash and cash equivalents		3,575	41,110	28,725	17,766	20,160
Accounts receivable		371	968	647	400	350
Inventories		0	0	0	0	0
Other current assets		1,262	2,590	2,990	2,990	2,990
Non-current assets		3,610	4,390	6,159	5,702	5,215
Property, plant & equipment		195	975	2,744	2,287	1,800
Other non-current assets		0	0	0	0	0
Current liabilities		(1,091)	(2,295)	(2,452)	(3,980)	(24,476)
Short-term debt		0	0	0	0	(20,000)
Accounts payable		(1,041)	(2,087)	(2,137)	(3,665)	(4,161)
Other current liabilities		(50)	(208)	(315)	(315)	(315)
Non-current liabilities		(79)	(27,278)	(17,959)	(19,909)	(19,659)
Long-term debt		0	(27,215)	(17,103)	(19,303)	(19,303)
Other non-current liabilities		(79)	(63)	(856)	(606)	(356)
Equity		7,648	19,485	18,110	2,969	(15,420)
Share capital		38,853	65,834	65,834	65,977	65,977
Other		(31,205)	(46,349)	(47,724)	(63,008)	(81,397)
CASH FLOW STATEMENTS
Operating cash flow		(4,772)	(7,803)	(10,730)	(9,900)	(17,245)
Profit before tax		(6,768)	(16,805)	(3,768)	(17,628)	(23,977)
Non-cash adjustments		22	8,553	(8,101)	4,786	4,828
Change in working capital		143	449	372	1,775	545
Interest paid		0	0	(537)	(537)	(537)
Taxes paid		1,831	0	1,304	1,703	1,895
Investing cash flow		(13)	(741)	(1,264)	(42)	(111)
CAPEX on tangible assets		(27)	(744)	(1,268)	(200)	(200)
Other investing cash flows		14	3	4	158	89
Financing cash flow		3,800	46,079	(391)	(107)	19,750
Proceeds from equity		3,827	22,727	0	143	0
Increase in loans		0	23,506	0	0	20,000
Other financing cash flow		(27)	(154)	(391)	(250)	(250)
Net increase in cash		(985)	37,535	(12,385)	(10,959)	2,394
Cash at start of year		4,560	3,575	41,110	28,725	17,766
Cash at end of year		3,575	41,110	28,725	17,766	20,160
Net cash at end of year		3,575	13,895	11,622	(1,537)	(19,143)

Source: Company, Trinity Delta Note: Adjusted numbers exclude exceptionals.

5	5 September 2023