16 June 2020 We are initiating coverage on Bioasis, a biopharma company that has

developed a platform for increasing the ability of drugs to pass the blood

brain barrier (BBB). We expect a wide array of applications, but the

company’s lead program xB3-001 is targeting brain metastases (BMs) in

metastatic HER2+ breast cancer (mBC) patients. The program is in IND-

enabling studies, targeting an IND filing in 2021. We are initiating with a

value of C$47.8m or C$0.71 per basic share.

Year end

Revenue

(C$m)

PBT*

(C$m)

EPS*

(C$)

DPS

(C$)

P/E

(x)

Yield

(%)

02/18 0.6 (3.8) (0.07) 0.00 N/A N/A

02/19 1.4 (2.4) (0.04) 0.00 N/A N/A

02/20e 0.6 (3.0) (0.05) 0.00 N/A N/A

02/21e 3.7 (7.9) (0.12) 0.00 N/A N/A

Note: *PBT and EPS are normalized, excluding amortization of acquired intangibles,

exceptional items and share-based payments.

The BBB

The BBB is formed by the cells that line the blood vessels of the brain. Unlike in

other tissues, these cells form a tight barrier that only allows certain chemicals to

pass. Historically, drugs that have targeted the brain have been limited to small

molecules with specific properties that allow them to pass and there has been no

effective way of delivering larger molecules such as biologics to the brain. The goal

of Bioasis’s xB3 technology platform is to provide a versatile method of delivering

these molecules to the brain.

The xB3 platform: Leveraging transcytosis

The xB3 platform uses a short peptide from the protein melanotransferrin that can

be coupled with antibodies, enzymes, oligonucleotides and small molecules. This

peptide interacts with the receptor LRP1 on the endothelial cells of the BBB and

these molecules enter the brain via a process called receptor-mediated

transcytosis. The value of the platform is both in the wide array of cargo that can be

delivered as well as the rate of transfer, which is significantly higher than other

methods that have been tried, at least in model systems.

xB3-001 for HER2+ breast cancer BMs

The company’s lead development program is xB3-001, a construct of the xB3

peptide and trastuzumab, the drug sold as Herceptin. Herceptin is a very effective

drug for HER2+ breast cancer but is unable to address metastasis to the brain due

to its inability to cross the BBB. Over 50% of HER2+ patients are expected to

develop BM in their lifetime.

Valuation: Initiated at C$47.8m or C$0.71/share

Our valuation of C$47.8m or C$0.71 per basic share is based on a risk adjusted

NPV analysis. We model xB3-001 for the treatment of BM initially, followed by an

expansion to systemic treatment. We forecast C$130m in additional financing

(including from potential licensing deals), starting with C$20m in CY20.

Bioasis Technologies Initiation of coverage

Bringing brain drugs into the 21st century

Price C$0.19

Market cap C$12m

C$1.36/US$

Net cash (C$m) at end November 2019 0.1

Shares in issue 63.6m

Free float 99%

Code BTI

Primary exchange TSX Venture

Secondary exchange OTCQB

Share price performance

% 1m 3m 12m

Abs (8.7) (18.3) (49.0)

Rel (local) (14.7) (27.8) (51.9)

52-week high/low C$0.32 C$0.15

Business description

Bioasis Technologies is a biopharma company

developing the xB3 platform to aid in the delivery of

molecules to the brain using receptor mediated

transcytosis. The company’s lead program is xB3-

001, which is in preclinical development for brain

metastases in HER2+ metastatic breast cancer

patients.

Next event

xB3-001 IND 2021

Analyst

Nathaniel Calloway +1 646 653 7036

healthcare@edisongroup.com

Edison profile page

Pharma & biotech

Bioasis Technologies is a

research client of Edison

Investment Research Limited

Bioasis Technologies | 16 June 2020 2

Investment summary

Company description: A BBB company

Bioasis is a biopharma company focused on developing therapies to cross the BBB. It has

developed a technology named xB3 that uses a small peptide to ferry molecules across the BBB in

a process called receptor-mediated transcytosis. This tag can be linked to monoclonal antibodies,

enzymes, oligonucleotides and small molecules. The company’s lead program is xB3-001 for the

treatment of BM in HER2+ mBC patients and is in preclinical testing, targeting entering the clinic in

H221. The drug is the conjugation of the xB3 peptide to trastuzumab, the drug commercially sold as

Herceptin.

Valuation: Initiated at C$47.8m or C$0.71 per basic share

We arrive at an initial valuation of C$47.8m or C$0.71 per basic share based on a risk adjusted

NPV analysis. We model the commercialization of xB3-001 for two programs: the initial approval for

treatment of HER2+ mBC patients with BMs in 2027 and a label expansion to earlier-line mBC

therapy in 2032. These have valuations of C$20.05m and C$23.88m respectively. We expect initial

approval through an accelerated clinical pathway as there is currently no treatment approved

specifically for BM on the market.

Financials: Significant recent cost cutting

The company significantly reduced its operational spending over 9MFY20 (fiscal year-ending in

February) and the most recent report for Q3 showed reductions by over half: C$0.694m for Q320

compared to C$1.482m for Q319. We expect spending, particularly on R&D, to increase as xB3-001

completes IND-enabling studies and enters the clinic. We forecast operational spending of

C$11.6m in FY21. We forecast the company will require C$130m before approval (recorded as

illustrative debt: C$20m in FY21, C$50m in FY23, C$60m in FY26), but expect the company to

attempt to meet these obligations through licensing agreements.

Sensitivities: Associated with the early stage

Bioasis faces the hurdles typically associated with an early-stage company with limited capital. The

company’s lead development program is very early stage and is not expected to have an IND filed

until 2021. This carries the unavoidable risks of clinical development as well as the financial risks of

financing a clinical program through completion. The clinical risks are at least partially mitigated

because xB3-001 is based on the very well understood drug Herceptin. However, the xB3 platform

and its ability to penetrate the BBB has not been tested in humans to date. In other words, we

expect the active drug to be biochemically active, but it may not penetrate the brain in sufficient

quantities to be clinically active. Moreover, the patient population being targeted in the initial clinical

program (mBC patients with pre-existing BM) are very sick, which may complicate the clinical trial.

Once approved the drug will likely compete with tucatinib (Tukysa) from Seattle Genetics, which

has clinically demonstrated activity in this population. If the drug undergoes label expansion, we

expect it to compete with Herceptin, trastuzumab biosimilars and other HER2 targeting agents.

Finally, the company will need significant additional capital to complete this clinical program:

C$130m before approval. We expect it to seek this capital through business development and

licensing activity, but it cannot be certain that it will be able to find willing partners. If it cannot

secure attractive partnerships, the company may need to seek this money in the capital markets,

which could result in substantial dilution.

Bioasis Technologies | 16 June 2020 3

Company description: A platform with a focus

Bioasis was founded in 2007 and became publicly listed in 2008 through acquisition by a special

purpose acquisition company (SPAC) on the Toronto Venture Exchange. The company was

founded on technology licensed from the University of British Columbia on methods to increase the

concentration of certain drugs in the brain, but it has subsequently internally developed

independent intellectual property in this space that surpasses the original technology. The

company’s xB3 technology uses a small peptide that can be fused to a range of molecules to

improve their entry into the brain. This technology has wide-reaching potential applications and is

the subject of two current development partnerships (with Prothena, and an undisclosed large

pharma) and one past development partnership (with MedImmune). Additionally, the company has

one ongoing internal development program, xB3-001, a derivative of Herceptin (trastuzumab,

Roche) with potentially improved brain-penetrating properties. The goal with this program is to

address BM in patients with HER2+ mBC. We expect the company to file an IND in 2021. The

company also has a series of earlier-stage preclinical programs that may serve as future directions

for the company (but are largely outside of the scope of this report). These programs are for a

range of diseases including brain cancers, lysosomal storage disorders, neuroinflammation, and

neurodegenerative disorders.

Exhibit 1: Bioasis pipeline

Program xB3 conjugate Indication Stage Notes

Internal

xB3-001 Trastuzumab HER2+ mBC with BMs IND enabling preclinical IND filing targeted for 2021

Partnered

Prothena collaboration Undisclosed Undisclosed Preclinical US$1m upfront, US$33m milestones and royalties (part of Bioasis’s interest subsequently sold to Xoma)

Large Pharma research

agreement

Undisclosed Undisclosed Preclinical US$0.5m upfront, US$3m in research support

Other Programs

xB3-004 (formerly partnered with MedImmune)

Anti-IL1RA Neuropathic pain, epilepsy, multiple sclerosis

Preclinical Deprioritized at MedImmune/AstraZeneca

xB3-002 Bevacizumab Glioblastoma POC

xB3-003 Doxorubicin Glioma POC

xB3-007 Imiglucerase Gaucher's disease, Parkinson's disease, Lewy body dementia

POC

xB3-008 I2S MPS II POC

Source: Bioasis Technologies

The BBB

Bioasis’s platform is centered on technology to deliver drugs to the brain and a necessary

component of getting drugs into the brain is crossing the BBB. The BBB is not a discrete structure

but rather the network of cardiovascular endothelium that lines the blood vessels of the brain, which

control what type of molecules can exit the blood and enter the mass of brain tissue. It is primarily

composed of endothelial cells, which form the physical barrier, and pericytes, which maintain the

barrier and control its permeability. Unlike in other areas of the body, the endothelial cells in the

BBB form tight junctions with each other, which prevent the diffusion of molecules between cells.

The BBB prevents a wide range of substances from entering the brain. These substances cross all

scales from small molecules and proteins (such as antibodies) to whole organisms such as

infectious viruses or bacteria. One of the primary functions of the BBB is to prevent infectious

agents from entering the brain, which is why infectious brain diseases are rare. However, by the

same token, the BBB largely prevents the body’s own immune system from entering the brain and

therefore alternative mechanisms of preventing infection have evolved in the central nervous

Bioasis Technologies | 16 June 2020 4

system (CNS). Because of this, under normal circumstances circulating antibodies (IgG) are largely

blocked from entering the brain. This has implications for antibody-based drugs targeting structures

in the brain (more below).

Exhibit 2: The BBB

Source: Edison Investment Research. Note: PGP: P-glycoprotein.

Additionally, the BBB is effective at preventing a wide range of toxins, drugs and other small

molecules from entering the brain. Neurotoxins can be extremely potent, so there is significant

evolutionary pressure to limit their ability to enter the cerebral space. Additionally, the BBB must

prevent the crossing of endogenous molecules that have specialized functions in the brain. For

instance, glutamate is an amino acid that circulates in the blood in high concentrations as an

essential nutrient, but is a neurotransmitter in the brain so its entry into the brain must be controlled.

This BBB barrier effect is achieved by multiple mechanisms depending on the structure of the

molecules. First, the endothelial cells of the BBB form a physical barrier that prevents the diffusion

of water-soluble drugs into the brain. More lipophilic small molecules can diffuse across the cell

membrane of endothelial cells, but many of these are scavenged by P-glycoprotein (PGP or

multidrug resistance protein). The protein binds a wide range of drug-like molecules and actively

transports them out of BBB endothelial cells. Interpersonal variation in the expression levels of this

protein is a major factor determining how susceptible different people are to treatment with CNS-

targeted drugs.1 PGP is one of several efflux transporters that ferry molecules out of the brain, each

of which recognizes different sets of structural motifs on small molecules and prevents these

classes from crossing the barrier. The design of drugs to target the CNS involves generating a

sufficiently lipophilic molecule that does not interact strongly with any of these classes of efflux

transporters.

Because it effectively blocks such a range of substances from entering the brain, the BBB must

therefore selectively privilege those molecules that are important for brain function and downstream

signaling. These include molecules important for normal metabolism such as oxygen, glucose and

essential vitamins as well as hormones and other signaling molecules either produced by or

targeting the brain. Most of these privileged molecules have dedicated transmembrane transporters

and there are some examples of these dedicated transporters being used to facilitate the transport

1 Begly DJ (2004) ABC transporters and the blood-brain barrier. Curr Pharm Des 10, 1295-1312.

Diffusion• Lipophilic drugs• Gases (O2)

Transport• Glucose• Vitamins

• Amino acids

Transcytosis• Insulin• Transferrin

• Albumin

Efflux• Drugs• Toxins

Tight

junction Transporter VesiclePGP

Blood

Brain

Endothelial

cell

Pericyte

Bioasis Technologies | 16 June 2020 5

of therapeutics to the brain. For instance, the widely used Parkinson’s drug levodopa is actively

transported into the brain using the L-type amino acid influx transporter 1. However, because these

transporters have a high degree of structural selectivity for their substrates, the applications for drug

delivery are limited.

The above mechanisms are specific to small molecules. Macromolecules cross the BBB through

the process of transcytosis. Transcytosis is when a macromolecule binds to the plasma membrane

on the blood side of the barrier and is drawn into an intracellular vesicle. This vesicle is then

exocytosed on the brain side. This process can either be mediated by a receptor that binds to

specific macromolecules (eg transferrin, insulin) or mediated by the direct binding of the plasma

membrane via electrostatic interactions (adsorptive transcytosis, eg albumin). Bioasis’s technology

is centered on leveraging the receptor mediated transcytosis pathway to deliver molecules to the

brain.

The xB3 platform

The proprietary xB3 platform developed by Bioasis uses a 12 amino acid peptide (the xB3 peptide)

derived from the protein melanotransferrin that can be conjugated to a range of molecules to ferry

them across the BBB. This is an evolution of the company’s previous Transcend technology

platform, which employed full-length melanotransferrin. Melanotransferrin is a serum protein of

poorly described function that shares a homology with other members of the transferrin family of

proteins. Both melanotransferrin and other transferrins are actively transcytosed across the BBB.

The titular member of this class, transferrin, is important for iron homeostasis in the brain and is

being investigated as a ligand to facilitate drug delivery across the BBB (see below). The xB3

peptide is the minimal region of the protein important for binding to its receptor on endothelial cells,

the low-density lipoprotein receptor-related protein (LRP1) receptor. This peptide can be fused to a

range of substrates such as antibodies, enzymes, oligonucleotides, and small molecules, and its

small size limits potential disruption to the substrate’s properties. Bioasis’s development approach

is therefore to take drugs with established efficacy outside of the brain and convert these into brain

penetrating drugs to address new indications or the shortcomings of the existing drug.

LRP1 is expressed on the surface of a range of different cell types, including brain cells such as

neurons and glia. This means a drug directed to the brain with the xB3 peptide can also be taken up

directly by brain cells, opening the potential to target intracellular proteins. This is of particular

importance for certain neurodegenerative diseases, such as Parkinson’s where intracellular bodies

are made and rare diseases such as lysosomal storage disorders. Interestingly, LRP1 is involved in

regulating amyloid-β peptides present in Alzheimer’s disease, although many questions regarding

its role in that disease remain.2 Additionally, because the receptor is expressed on a wide range of

cell types, it may reduce the effective concentration of drug delivered by targeting it, because it will

be absorbed by other tissues. However, this is not a feature unique to this system and is common in

the various programs leveraging transcytosis.

Improved brain concentrations compared to transferrin receptor

LRP1 is not the only receptor responsible for receptor mediated transcytosis. Most research into the

phenomenon since its discovery has been focused on transferrin receptor (TfR). Research into

using it as a method of delivering drugs to the brain date back to the early 1990s.3 Because of this,

it is the most widely employed receptor in other preclinical and clinical development programs

targeting transcytosis (see below). TfR, as the name implies, binds to transferrin, the major

2 Shinohara M, et al. (2017) Role of LRP1 in the pathogenesis of Alzheimer’s disease: evidence from clinical

and preclinical studies. J Lipid Res 58, 1267-1281. 3 Pardridge, WM, et al. (1991) Selective transport of an anti-transferrin receptor antibody through the blood-

brain barrier in vivo. J Pharmacol Exp Ther 259, 66–70.

Bioasis Technologies | 16 June 2020 6

mediator of iron homeostasis across the body. Similar to LRP1, TfR is expressed on a range of cell

types, including brain cells, which may allow it to be used to target these drugs intracellularly, but

also allow it to be taken up by off-target tissue.

Bioasis, however, believes LRP1 is a superior receptor to target compared to TfR and can achieve

higher brain concentrations, which is supported by some preliminary research in excised human

brain (Exhibit 3).

Exhibit 3: Comparison of xB3 and transferrin-mediated transcytosis

Source: Bioasis Technologies, adapted from Demeule et al.4

Other transcytosis programs

Bioasis is not the only company developing technology to allow drugs to cross the BBB. There are

a number of other companies looking to leverage the receptor-mediated transcytosis pathway to

improve the brain exposure of drugs for a variety of applications. Most of these programs use TfR

as the effector of transcytosis, although the ligands employed vary.

Denali Therapeutics is preparing to enter the clinic with its BBB program. The company has

engineered the antibody constant domain (Fc) to bind to TfR, presumably through the inclusion of a

sequence from transferrin. Although it employs a portion of an antibody, this domain can be fused to

a range of macromolecules (in addition to its use in a simple antibody) to ferry them into the brain.

Denali recently published two proof of concept papers5,6 showing delivery of active molecules to the

brain in animals, which is supportive of this methodology. The company is investigating the

technology for a range of lysosomal storage disorders and is preparing to enter the clinic with its

treatment for Hunter syndrome (mucopolysaccharidosis type II, MPS II) in H120.

The Roche Brain Shuttle technology is similar in that it targets TfR, although the ligand in this case is

a fragment of an antibody (Fab) that binds TfR. This is a much larger polypeptide than employed by

Bioasis or Denali and the company has previously encountered issues with it interfering with the

function of the therapeutic portion of the construct.7 Roche recently entered Phase I with the first

drug engineered with this technology in November 2019, a treatment for Alzheimer’s disease

targeting amyloid plaques. To complicate matters, Roche subsidiary Genentech had an independent

program to develop a bispecific antibody targeting TfR and BACE1 (beta-secretase) for the treatment

4 Demeule M et al. (2002) High transcytosis of melanotransferrin (P97) across the blood-brain barrier. J

Neurochem 83, 924-933. 5 Kariolis M (2020) Brain delivery of therapeutic proteins using an Fc fragment blood-brain barrier transport

vehicle in mice and monkeys. Science Trans Med 12, eaay1359.

6 Ullman JC, et al. (2020) Brain delivery and activity of a lysosomal enzyme using a blood-brain barrier transport vehicle in mice. Science Trans Med 12, eaay1163.

7 Webber F, et al. (2018) Brain shuttle antibody for Alzheimer's Disease with attenuated peripheral effector function due to an inverted binding mode. Cell Rep 1, 149-162.

Bioasis Technologies | 16 June 2020 7

of Alzheimer’s, but we consider this program is likely to be discontinued in favor of the more modular

program from Roche, and in light of the failure of other BACE1 inhibitors in the clinic.

Angiochem is the only other company we are aware of that is using LRP1 to cross the BBB, similar

to Bioasis. Also similar to Bioasis, the company’s lead program is the development of a drug to treat

leptomeningeal disease in mBC patients, albeit in HER2-negative patients. The company has a

special protocol assessment with the FDA for a Phase III study in these patients, but has not started

recruiting. Otherwise we know little about the company.

The most advanced program that we have been able to identify is at JCR Pharmaceuticals in

Japan, which has a treatment for Hunter syndrome that has completed pivotal Phase III clinical

studies in that country. This technology uses an enzyme fused to an anti-TfR mAb. The company

also has a collaboration with Sumitomo Dainippon for the development of CNS targeting drugs

(although it is unclear if the Hunter syndrome program is included), and it is planning on submitting

a marketing application for its Hunter syndrome drug in September 2020. Additionally, JCR recently

completed the acquisition of private US pharmaceutical company ArmaGen, which developed a

BBB platform targeting the insulin receptor (IR) to drive uptake of its drugs. This receptor, similar to

LRP1 and TfR, is also widely expressed and carries the same advantages and drawbacks.

ArmaGen’s lead program is for the treatment of Hurler syndrome (MPS I) and completed a Phase II

study in 2018.

Exhibit 1: Transcytosis development programs

Company Ligand Receptor Lead BBB program Stage

Bioasis 12 aa melanotransferrin peptide LRP1 mBR brain mets Preclinical

Denali Engineered Fc domain TfR Lysosomal storage diseases IND

Roche anti-TfR Fab TfR Alzheimer's Phase I

ArmaGen (JCR) anti-IR mAb IR Hurler syndrome (MPS I) Phase II

Angiochem LRP1 binding peptide LRP1 Leptomeningeal disease in mBC Phase III

JCR Pharmaceuticals anti-TfR mAb TfR Hunter syndrome (MPS II) Phase III

Source: Various

Other methods of crossing the BBB

Transcytosis is not the only mechanism companies are exploring to deliver drugs to the brain. It is

worth noting that there have been programs using biologics to target diseases of the CNS without

any special targeting technology, albeit with little success. These include programs using mAb to

target amyloid plaques for the treatment of Alzheimer’s disease, although most programs to date

have failed in the clinic (Biogen’s aducanumab is still in the clinic and has shown mixed results).

Herceptin and Kadcyla (trastuzumab emtansine, Genentech) have both been investigated for

efficacy in mBC BMs with little effect found on existing tumors (although they may prevent the initial

formation of these tumors or improve survival through better systemic disease control).8,9 The logic

behind all of these investigations is that the BBB can be partially disrupted in some diseases, which

may allow for these molecules to enter the brain without special modifications and have a

therapeutic effect, but this has not been born out in practice.

The Spanish company Iproteos has taken a unique approach to delivering ‘biologics’ to the brain by

developing peptidomimetics that replicate the function of certain peptides but can freely diffuse into

the brain like small molecules. The company has announced that it planned to enter Phase I

studies in 2019 with its lead program for cognitive impairment in Parkinson’s patients.

One of the only biologics ever successfully designed to cross the BBB is Zolgensma

(onasemnogene abeparvovec, AveXis/Novartis) for the treatment of spinal muscular atrophy (SMA).

8 Le Scodan R, et al. (2011) Brain metastases from breast cancer: prognostic significance of HER-2

overexpression, effect of trastuzumab and cause of death. BMC Can 11, 395. 9 Krop IE, et al. (2015) Trastuzumab emtansine (T-DM1) versus lapatinib plus capecitabine in patients with

HER2-positive metastatic breast cancer and central nervous system metastases: A retrospective,

exploratory analysis in emilia. Ann. Oncol 26, 113–119.

Bioasis Technologies | 16 June 2020 8

SMA is a disease of the spinal cord in which spinal motor neurons are progressively lost, but the

spinal cord, as part of the CNS, is also protected by the BBB (despite the potentially misleading

name). The drug is a gene therapy that uses an AAV9 vector to deliver its genetic payload, which is

known to cross the BBB. However, although an impressive accomplishment on many scores, this

technique of using viral vectors is likely limited to genetic therapies.

Finally, there are multiple ongoing studies investigating the use of ultrasound to disrupt the BBB.

These techniques involve using focused ultrasound to induce cavitation bubbles in the

microvasculature of the brain by physically disrupting its structure. The technique is being

investigated primarily for intractable diseases such as glioma due to worries of peripheral tissue

damage. However, it is not limited to a specific therapeutic.

xB3 value as a platform technology

One of the most compelling value propositions for Bioasis is that xB3 is a platform technology

potentially extendable to a wide range of indications. The company has an ongoing internal

development program, but we believe the potential of the platform far surpasses what can be

accomplished through a single drug. We believe there are ample opportunities to realize this value

through licensing and even at this early stage the company has been able to find partnering deals.

In October 2018 the company entered into a licensing agreement with Prothena, in which the latter

would use xB3 in certain preclinical development programs. The agreement included a US$1m

upfront payment and up to US$33m in milestones and royalties on sales. However, the company

subsequently sold a large portion of the interest in this program to Xoma for US$300,000 upfront

and US$225,000 in development milestones. Xoma will receive 100% of royalties and 10% of opt-in

option payments and 10% of milestone payments from the original Prothena agreement (ie Bioasis

will receive 90% of the original option payments and milestones).

In January 2019, the company signed a research agreement with an undisclosed ‘leading

pharmaceutical company’ in which the latter would provide a US$500,000 upfront payment and up

to US$3m in support for research employing the platform. We assume any potential drugs that arise

from this program will be subject to future licensing deals.

Finally, the company previously had a collaboration agreement with MedImmune to develop a

brain-penetrating antibody targeting interleukin 1 receptor antagonist for the treatment of

neuropathic pain.10 The xB3 platform was selected from eight platforms from different companies

that were under evaluation by MedImmune as the best candidate. The program showed positive

results in preclinical studies, which we view as an independent validation of the technology.

However, the program did not progress to the clinic for undisclosed reasons and is no longer

partnered.

The company has patents covering the xB3 platform (US9,364,567 and US9,993,530), which expire

in 2034 and can potentially be subject to five years of patent term extension if any drugs using the

platform are approved.

xB3-001: Brain-penetrating trastuzumab

The company’s lead development program is xB3-001 for the treatment of HER2+ mBC. xB3-001 is

a fusion of the xB3 peptide with trastuzumab designed to help address the phenomenon of BMs in

breast cancer patients. The program is in preclinical testing in preparation for an IND filing in 2021

and initiation of clinical studies thereafter.

10 Thom G, et al. (2018) A peptide derived from melanotransferrin delivers a protein-based interleukin 1

receptor antagonist across the BBB and ameliorates neuropathic pain in a preclinical model. J Cereb Blood

Flow Met 39, 2074-2088.

Bioasis Technologies | 16 June 2020 9

The National Cancer Institute estimates that 268,600 new cases of breast cancer were diagnosed

in 2019 in the US, which corresponds to an age-adjusted incidence of 127.5 per 100,000 women.11

Of these, approximately 20% are HER2+. Metastatic disease is initially diagnosed in approximately

5% of these women. However, a much larger fraction of women will progress to metastatic disease

from stage I to III breast cancer following their initial diagnosis, at approximately 15%.12 Combined,

this corresponds to approximately 10,700 new diagnoses of HER2+ mBC per year in the US.

BMs are a major complicating factor in breast cancer patients, especially those with HER2+ mBC.

One retrospective study of patients in Belgium found that among HER2+ breast cancer patients,

10.8% had BMs at their initial screening and 41.7% developed BMs within their lifetime.13 Survival of

these patients was significantly reduced, from 46.7 months for those with no CNS involvement to

20.8 months for those with BMs. The standard of care for these patients is surgery and/or

radiotherapy. There are no available pharmacological solutions for BMs outside of better general

disease control. However, this is a double-edged sword because as treatments have improved and

mBC patients are living longer, this allows for more time for these patients to develop BMs.

Herceptin in particular is associated with a significant increase in the rate of BMs at the first

recurrence of disease, despite unequivocally improving survival: in one study the use of Herceptin

increased the rate of BMs at four years of follow-up by over sixfold (in patients with stage I to III

invasive BC at initial diagnosis).14 The theory is that because they are living longer, these patients

have more time to develop BMs, and they accumulate because they cannot be targeted by the drug.

Although xB3-001 is designed to cross the BBB, the majority will be present systemically and should

have activity against the primary tumor site and other non-CNS metastases. This is supported by

mouse xenograft data collected by the company (Exhibit 5). Importantly, significant activity of this

construct is also seen in the brains of mice with brain invasive mBC xenografts (Exhibit 6). Although

there can be no guarantees these results will translate into activity in humans, these data are highly

encouraging that the drug’s activity is in accordance with its design.

11 SEER database 12 Mariotto AB, et al. (2017) Estimation of the number of women living with metastatic breast cancer in the

United States. Can Epidem Biomark Evid 26, 809-815. 13 Maurer C, et al. (2018) Risk factors for the development of brain metastases in patients with HER2-positive

breast cancer. ESMO Open 3, e000440. 14 Musolino A, et al. (2011) Multifactorial central nervous system recurrence susceptibility in patients with

HER2‐positive breast cancer. Cancer 117, 1837-1846.

Bioasis Technologies | 16 June 2020 10

Exhibit 5: xB3-001 activity similar to Herceptin in mouse xenografts

Exhibit 6: xB3-001 shows increased activity in brain tumor mouse xenografts

Source: Bioasis Technologies Source: Bioasis Technologies, adapted from Nounou et al.15

Clinical plans

xB3-001 is in preclinical testing and the company is performing the necessary animal toxicology

data needed to proceed to the clinic. The timeline for entering the clinic is somewhat contingent on

the evolving COVID-19 situation and the company’s ability to raise capital in this environment, so

we conservatively expect the company to at minimum be able to file an IND in 2021. There is

potential upside if Bioasis is able to finance and complete its IND enabling studies by the end of

2020, which should also enable the program to enter the clinic before the end of 2021.

The company has a multi-stage development strategy for the product centered on a stepwise

expansion of its addressable indications and expansion of its addressable market. The plan is to

initially seek approval specifically for the treatment of HER2+ mBC patients with already

established BMs. This is the path of least resistance for an initial approval because Herceptin is not

approved specifically for the treatment of BMs, and therefore the drug will not need to meet the

higher statistical burden of non-inferiority. We model the company performing a Phase Ib/II dose

escalation/expansion study in the population of patients with BMs following progression after

surgical or radiological treatment. Given the well-established safety parameters for Herceptin, we

expect the study to quickly progress through dosing phases. There is little reason to expect that the

xB3 tag will have an impact on safety, because this would be highly unusual for a small peptide and

it is not associated with the targeted effects of the drug (only its delivery).

The clinical program for xB3-001 will be one of the first of its kind to specifically target BMs as part

of its trial description. In our opinion, this program would be a good candidate for accelerated

approval. Accelerated approval allows for the use of surrogate endpoints (besides survival) to

support approval. Given that BMs are strongly correlated with survival in these patients, these could

be used as a biomarker to predict outcomes. Moreover, we believe that the agency will likely have a

high degree familiarity with the safety profile of xB3-001 given its long history with Herceptin.

We expect the company to expand the clinical program for xB3-001 beyond the initial indication of

BM treatment. Although the results need to be replicated in humans, it stands to reason that it will

retain peripheral activity (outside the brain) and can be used in place of Herceptin (or other HER2

15 Nounou MI, et al. (2016) Anti-cancer antibody trastuzumab-melanotransferrin conjugate (BT2111) for the treatment of metastatic HER2+ breast cancer tumors in the brain: An in-vivo study. Pharm Res 33, 2930-

2942.

Bioasis Technologies | 16 June 2020 11

targeting treatments). In this scenario it could have the same peripheral effects as Herceptin, while

also having CNS activity, which could prevent the formation of BMs to begin with. We expect the

company to pursue expansion into these patients at some time in the future, but this will likely

depend on progress in the initial indication and financial resources.

We should note that this current clinical plan is subject to change, given the rapidly evolving

landscape for treatment of these patients. The recent approval of tucatinib (see below) may have

an impact on the study populations that can reasonably be enrolled.

Competitive landscape

There are currently no approved medications specifically designed to address BMs in mBC.

Additionally, relatively few drugs have been investigated for activity in this population as they are

frequently excluded from clinical studies.

One recent exception is the drug tucatinib from Seattle Genetics, which was approved in April 2020.

Tucatinib is a small molecule inhibitor of HER2 that is designed to pass the BBB, and the drug

completed a pivotal study in a mixed population of previously treated HER2+ mBC patients with

and without BMs.16 Patients in the study were treated with or without tucatinib in combination with

Herceptin and capecitabine. The study met its primary endpoint in of improvement in progression-

free survival (PFS) in the initial study population (there was an expanded trial population for

secondary endpoints): 7.8 months vs 5.6 months for placebo (HR=0.54, p<0.001). Moreover,

improvement in overall survival (OS) was seen in the expanded trial population (21.9 months vs

17.4 months, HR=0.66, p=0.005) and improvement in PFS was seen in patients with BMs (7.6

months vs 5.4 months, HR=0.48, p<0.001). The drug was approved for patients, with and without

BMs, who have received one or more prior HER2-targeted treatments.

The most immediate impact we see from the approval of tucatinib will be on the xB3-001 clinical

program. The existence of an approved medication for the treatment of BMs may have a negative

impact on the ability of Bioasis to enroll patents. If xB3-001 is ultimately approved, we can envision

a scenario in which they are used concurrently, given the label for tucatinib includes combination

with trastuzumab (for which xB3-001 can serve as a better alternative). Although these results are

significant for this patient population as the first medication expected to directly address BMs, there

remains ample room for continued improvement of the treatment regimen in the future.

There are also a number of other programs to develop ‘better’ HER2-targeting antibodies and

antibody-drug conjugates such as margetuximab from Macrogenics (Phase III) or trastuzumab

deruxtecan from AstraZeneca and Daiichi Sankyo (filed, decision in Q220), but these programs

fundamentally do not address the issues of penetrating the brain and treating BM.

Other xB3 programs

In addition to xB3-001, the company has a series of other programs in the proof-of-concept phase.

These programs serve as a useful demonstration of the xB3 platform and its extensibility. The

company’s four proof-of-concept programs fall into two classes: xB3-002 and xB3-003 for the brain

cancers glioblastoma and glioma, respectively, xB3-007 and xB3-008 for the lysosomal storage

disorders Gaucher’s and MPS II, respectively, and xB3-004 for neuroinflamation

The brain cancer programs (xB3-002 and xB3-003) are a natural evolution of the BMs program for

xB3-001. Brain cancers are among the most difficult to treat in part due to limited treatment options

from the resistant nature of the disease. The programs are the xB3 peptide covalently attached to

16 Murthy RK, et al. (2020) Tucatinib, Trastuzumab, and Capecitabine for HER2-Positive Metastatic Breast

Cancer. N Eng J Med 382, 597-609.

Bioasis Technologies | 16 June 2020 12

Avastin and doxorubicin respectively, the latter being interesting because it additionally serves as a

proof of concept for using xB3 to tag small molecules.

The lysosomal storage disorder programs (xB3-007 and xB3-008) could potentially address a

significant treatment gap that exists for these diseases. There are enzyme replacement therapies

for Gaucher’s and MPS II, but unfortunately these treatments only alleviate peripheral symptoms

and cannot address their cognitive symptoms. The goal is to effectively deliver these enzymes to

the brain to provide a more complete profile. Moreover, xB3-007 may potentially be extended to the

treatment of GBA-1 associated Parkinson’s disease and Lewy body dementia. And finally, the

company has the xB3-004 program (formerly partnered with MedImmune/AstraZeneca, but

deprioritized) targeting IL-1RA that is being examined for the future potential indications of

neuropathic pain, epilepsy and multiple sclerosis.

Sensitivities

The risks faced by Bioasis are typical of an early-stage biotechnology company. The company

faces the unavoidable risks associated with clinical development. Some clinical risks are mitigated

as xB3-001 is a derivative of a well-understood molecule, trastuzumab, but the ability to deliver

effective concentrations of this molecule to the brain has not yet been tested in humans. We expect

early clinical studies to be highly illustrative of the potential of this platform. Moreover, the patient

population being studied are very sick, which may complicate the data in these studies.

There are some risks to the company associated with the ongoing COVID-19 pandemic. Based on

feedback from Bioasis, it intends to perform a non-human primate (NHP) study, and the availability

of animals may be affected as they are diverted to COVID-19 studies. An NHP study may not be a

strict requirement and other toxicology studies may be sufficient (contingent on FDA feedback).

Additionally, the ability to complete these studies is contingent on the financing situation in light of

the pandemic. We conservatively expect the company to be able to file an IND in 2021, but we may

accelerate this timeline if the company is able to progress these preclinical studies with few delays.

We also expect xB3-001 to face commercial risk. Tucatinib was recently approved, so we expect

xB3-001 to face a well-established competitor if it is approved. If the company seeks approval in the

future for the prevention of BMs in early-line therapy, the product will compete with many other

HER2 targeted therapies, including low-priced Herceptin biosimilars.

Finally, the company faces financing and partnering risks. We expect it to require a minimum

C$130m in additional financing to reach approval for xB3-001, including C$20m forecasted for

CY20. The company will likely be required to seek licensing opportunities to meet this obligation,

but there can be no guarantees that it will be able to find deals on favorable terms. We believe

there is potential for licensing of the platform itself, but this is unlikely sufficient to meet all the

company’s financing needs and it may therefore resort to dilutive sources of capital.

Valuation

We arrive at an initial valuation of C$47.8m or C$0.71 per basic share. This is based on a risk

adjusted NPV analysis of two clinical programs for xB3-001: the initial approval for treatment of

mBC BMs (C$20.05m) and a follow-on approval for prevention of mBC BMs during first-line HER2

targeted treatment (C$23.88m). These valuations depend on a number of assumptions for these

programs. We model commercialization in the US and Europe. We assume a launch pricing of

US$11,500 per month in the US and US$7,500 in Europe. This pricing is roughly on par with

Kadcyla, adjusted for 2% price growth until launch. We include a gross/net sales discount of 30%.

We also include costs of selling in our models: US$10m +10% of revenue for each geography and

Bioasis Technologies | 16 June 2020 13

indication. We model revenue through 2039, assuming a five-year extension on the patent terms for

xB3. For each indication, we use our standard discount rate for pre-commercial products of 12.5%.

For the initial indication of treatment of BCBMs, we expect patients to remain on the drug for 10

months on average. We expect the company will capture 30% of the addressable market (HER2+

diagnosed mBC patients with existing BMs; we estimate that 51% of mBC patients will develop

BM). In our model, we assume approval through an accelerated clinical pathway, requiring

approximately 600 patients, at a cost of US$61m. We assign a probability of success for this

program of 10% based on the available evidence supporting the program. The program’s prospects

for success are bolstered by the fact that it is based on a very well understood molecule

(trastuzumab) with definitive activity and an understood safety profile. We therefore do not expect

any surprises with toxicology. The majority of the risk in this case is on whether the xB3 peptide can

deliver the drug to the brain and in sufficient quantities to achieve efficacy. Getting cancer drugs to

cross the BBB has been a challenging hurdle for many drug development companies.

For the expansion indication, we assume patients will be on the drug for an average of 12 months

but expect the company to achieve a lower 10% market share. We also expect an additional Phase

II and Phase III study enrolling approximately 850 patients combined. We assign a 5% probability of

success for this program, because it is predicated on the prior success of the initial approval.

We also include potential milestones from Prothena associated with the licensing agreement in our

valuation. We have very limited visibility on this program, including which indications will be

targeted, the timing of programs or the precise milestones payable. The company reported that the

Prothena deal included US$33m in milestones and option payments (and potential royalties), but it

subsequently sold 100% of royalties and 100% of option interest to Xoma (and 10% of future

milestones). We provisionally include US$20m in clinical milestones (before payables to Xoma):

US$3m upon selection of a lead (CY20), US$3m entering Phase I (CY21), US$5m on entering

Phase II (CY22) and US$9m on entering Phase III (CY24), and a US$13m option payment on

successful approval (CY27). We assign a 2.5% probability of success for this program, which

encompasses both the program’s early stage and our lack of visibility.

We acknowledge there may also be unrealized value in the xB3 platform as a whole. We envision

this being realized primarily through licensing and other business development activity. However, it

is difficult to estimate the value of future unrealized partnerships as these may not materialize

through no fault of the technology itself. We are therefore withholding any platform value from our

models until such deals are signed. Moreover, the value of the platform will likely be substantially

higher once it has been vetted in the clinic through success in the xB3-001 clinical program.

Exhibit 7: Valuation of Bioasis

Development program

Indication Clinical stage

Geography Prob. of success

Launch year

Launch pricing

($/month)

Peak sales

(US$m)

Patent/ exclusivity protection

Royalty/ margin

rNPV (C$m)

xB3-001 Treatment of mBC BMs IND US 10% 2027 11,500 125 2039 52% $15.97

Europe 10% 2027 7,500 115 2039 52% $14.82

R&D 10%

($10.73)

1st line, prevention of

BCBMs

Planned US 5% 2032 12,700 397 2039 57% $12.85

Europe 5% 2032 8,200 437 2039 57% $14.45

R&D 5% 2032

($3.42)

Prothena milestones Undisclosed Discovery

2.5% 2028

$3.30

Total $47.2

Net cash and equivalents (Q320 less converted debentures) (C$m)

$0.6

Total firm value (C$m)

$47.8

Total basic shares (m)

67.7

Value per basic share (C$)

$0.71

Dilutive warrants and options (m)

21.6

Total diluted shares (m)

89.3

Value per diluted share (C$)

$0.64

Source: Bioasis Technologies reports, Edison Investment Research

Bioasis Technologies | 16 June 2020 14

Financials

The company had operational expenses of C$0.694m for Q320 compared to C$1.482m for Q319.

However, we expect costs to increase in FY21 as the company prepares to enter the clinic with xB3-

001. Based on guidance from the company, it will need to manufacture drugs for the studies and

perform toxicology studies (among other preparations), including an NHP study. We forecast

operational spending of C$11.6m in FY21 associated with these activities.

The company ended Q320 with C$0.590m in cash and a carry value of C$0.506m in debt (a

C$0.751m bridge loan of convertible debentures taken in November 2019). In April 2020 it

converted this debt for 4,129,207 shares valued at C$0.20 each. We expect the company to need

C$130m in additional capital to complete the development of xB3-001, which we record as

illustrative debt: C$20m in FY21, C$50m in FY23 and C$60m in FY26. We expect the company

wholly or in part to meet these financing obligations though the licensing of xB3-100 or the xB3

platform, as seeking this funding in the capital markets is likely to result in substantial dilution.

Bioasis Technologies | 16 June 2020 15

Exhibit 8: Financial summary

C$m 2018 2019 2020e 2021e

Year end 28 February

IFRS IFRS IFRS IFRS

INCOME STATEMENT

Revenue 589.8 1,422.0 609.0 3,726.0

Cost of Sales

(467.9) (10.4) 0.0 0.0

Gross Profit

122.0 1,411.6 609.0 3,726.0

R&D

(946.8) (1,954.3) (1,729.2) (6,581.5)

SG&A

(4,452.4) (4,314.5) (3,168.8) (5,095.4)

EBITDA (3,744.2) (3,805.0) (3,585.5) (7,887.9)

Normalised operating profit (3,749.2) (3,815.8) (3,597.6) (7,892.1)

Amortisation of acquired intangibles

(53.9) (61.1) (58.8) (58.8)

Exceptionals

0.0 0.0 0.0 0.0

Share-based payments

(1,474.1) (980.2) (632.6) 0.0

Reported operating profit

(5,277.3) (4,857.2) (4,289.0) (7,950.9)

Net Interest

11.3 1.8 (25.4) 0.0

Other income

(42.0) 986.9 601.8 0.0

Exceptionals

0.0 395.1 0.0 0.0

Profit Before Tax (norm) (3,779.9) (2,432.1) (3,021.1) (7,892.1)

Profit Before Tax (reported) (5,307.9) (3,473.4) (3,712.5) (7,950.9)

Reported tax

0.0 0.0 0.0 0.0

Profit After Tax (norm)

(3,779.9) (2,432.1) (3,021.1) (7,892.1)

Profit After Tax (reported)

(5,307.9) (3,473.4) (3,712.5) (7,950.9)

Minority interests

0.0 0.0 0.0 0.0

Discontinued operations

0.0 0.0 0.0 0.0

Net income (normalised)

(3,779.9) (2,432.1) (3,016.1) (7,886.1)

Net income (reported)

(5,307.9) (3,473.4) (3,712.5) (7,950.9)

Basic average number of shares outstanding (m)

50,901 56,675 64,262 67,476

EPS - basic normalised (c) (0.07) (0.04) (0.05) (0.12)

EPS - diluted normalised (c) (0.07) (0.04) (0.05) (0.12)

EPS - basic reported (c) (0.10) (0.06) (0.06) (0.12)

Dividend (c)

0.00 0.00 0.00 1.00

Revenue growth (%)

15.0 141.1 0.0 0.0

Gross Margin (%)

20.7 99.3 100.0 N/A

EBITDA Margin (%)

N/A N/A N/A N/A

Normalised Operating Margin

N/A N/A N/A N/A

BALANCE SHEET

Fixed Assets 428.5 360.9 290.1 227.1

Intangible Assets

386.6 327.8 269.0 210.2

Tangible Assets

41.9 33.1 21.0 16.8

Investments & other

0.0 0.0 0.0 0.0

Current Assets 793.4 1,382.3 266.9 14,862.2

Stocks

0.0 0.0 0.0 0.0

Debtors

33.7 9.7 6.1 0.0

Cash & cash equivalents

678.0 1,360.0 109.8 14,711.1

Other

81.7 12.6 151.0 151.0

Current Liabilities (787.7) (1,262.9) (1,899.4) (4,382.6)

Creditors

(787.7) (998.5) (1,899.4) (4,382.6)

Tax and social security

0.0 0.0 0.0 0.0

Short term borrowings

0.0 0.0 0.0 0.0

Other

0.0 (264.4) 0.0 0.0

Long-term Liabilities 0.0 (1,027.0) (962.6) (20,456.6)

Long-term borrowings

0.0 0.0 (506.0) (20,000.0)

Other long-term liabilities

0.0 (1,027.0) (456.6) (456.6)

Net Assets 434.1 (546.7) (2,305.1) (9,750.0)

Minority interests

0.0 0.0 0.0 0.0

Shareholders' equity 434.1 (546.7) (2,305.1) (9,750.0)

CASH FLOW

Op Cash Flow before WC and tax

(3,744.2) (3,805.0) (3,585.5) (7,887.9)

Working capital

101.8 568.4 501.7 2,489.3

Exceptional & other

(30.7) 6.9 (24.7) 0.0

Tax

0.0 0.0 0.0 0.0

Net operating cash flow (3,673.1) (3,229.7) (3,108.6) (5,398.7)

Capex

(107.7) (2.1) 0.0 0.0

Acquisitions/disposals

0.0 395.1 0.0 0.0

Net interest

0.0 0.0 0.0 0.0

Equity financing

3,904.5 3,526.7 1,205.0 825.8

Dividends

0.0 0.0 0.0 0.0

Other

0.0 0.0 0.0 (319.8)

Net Cash Flow

123.7 690.0 (1,903.6) (4,892.6)

Opening net debt/(cash) (554.3) (678.0) (1,360.0) 396.1

FX

0.0 (7.9) (14.6) 0.0

Other non-cash movements

0.0 0.0 162.0 0.0

Closing net debt/(cash) (678.0) (1,360.0) 396.1 5,288.8

Source: Bioasis Technologies reports, Edison Investment Research

Bioasis Technologies | 16 June 2020 16

Contact details Revenue by geography

14 Water Street

Guilford, CT 06437 USA 203-533-7082 bioasis.us

N/A

Management team

Executive Chair: Deborah Rathjen CFO: Christine Antalik

Deborah Rathjen, BSc (Hons), PhD, MAICD, FTSE, is the previous chief executive officer and managing director at Bionomics. Dr Rathjen joined Bionomics in 2000 from Peptech, where she was general manager of business

development and licensing. She was a co-inventor of Peptech’s TNF technology and leader of the company’s successful defense of its key TNF patents against a legal challenge by BASF. Dr Rathjen has been recognized internationally with awards and honors including the 2004 AusBiotech President’s Medal, 2006

Flinders University Distinguished Alumni Award, 2009 BioSingapore Asia Pacific Biotechnology Woman Entrepreneur of the Year, 2009 Regional Finalist Ernst & Young – Entrepreneur of the Year and 2014 Woman Executive of the Year BioPharm Industry Awards. In 2015 Dr Rathjen was included in the top 50 most

influential Australian businesswomen by The Australian.

Christine Antalik is the managing member of Founders Bridge Advisors, a business advisory firm located in Connecticut, through which she previously served as chief financial officer of Aeromics. Antalik also served as chief financial

officer of SurgiQuest, where she led the $265m acquisition of SurgiQuest by CONMED Corporation after filing the company’s public S-1 statement. Antalik closed a $108m initial public offering as the vice president of finance and controller at HigherOne, a financial technology company. Prior to HigherOne,

Antalik served as controller for Tangoe, a software services company. As chief financial officer and treasurer of Hematech, Antalik formed a joint venture with a key services provider to mitigate business risk and ultimately steered the company to a successful exit, being acquired by Kirin Brewery Company.

VP, Head of External Research: Mei Mei Tian CMO: May Orfali

Dr Tian has more than 10 years of experience working on melanotransferrin-

related research in both academia and biotech. At the University of British Columbia, she investigated the role of melanotransferrin in melanoma malignancy, as well as mechanisms involved in melanotransferrin uptake in cells. Since joining the Bioasis team in 2012, she has been a significant contributor in

the early development and continued expansion of its proprietary blood-brain barrier technology, xB3.

Dr May Orfali’s most recent role was president at Oncology and Rare disease

Consulting, LLC. She was the chief medical officer at CANbridge Life Sciences where she led the clinical development and medical affairs group, focused on progressing Phase I and Phase II oncology assets in glioblastoma multiforme and esophageal cancer, filing an NDA for neratinib in China in adjuvant and

metastatic breast cancer therapy. Dr Orfali also spent several years at Pfizer as global medical lead and executive director, global product development across multiple rare disease assets in hematology, sickle cell disease, hemophilia, endocrinology, gene therapy and TTR-amyloidosis. Prior to her time at Pfizer, Dr

Orfali held several clinical leadership positions, at Wyeth, Artisan Pharma, Aeris Therapeutics, Cubist Pharmaceuticals and Boston Scientific Corporation.

Principal shareholders (%)

Rathjen (Deborah Ann) 0.28%

Wurzer (David M) 0.08%

Curran (John E) 0.08%

Companies named in this report

Biogen (BIIB), Denali Therapeutics (DNLI), JCR Pharmaceuticals (4552), Novartis (NVS), Seattle Genetics (SGEN), Roche (RO)

Bioasis Technologies | 16 June 2020 17

General disclaimer and copyright

This report has been commissioned by Bioasis Technologies and prepared and issued by Edison, in consideration of a fee payable by Bioasis Technologies. Edison Investment Research standard fees are £49,500 pa for

the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision

of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of

this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information

or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other

factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in

connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or

prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of

investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any

positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to

Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2020 Edison Investment Research Limited (Edison). All rights reserved FTSE International Limited (“FTSE”) © FTSE 2020. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial

Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice

given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having

regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like

instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the

purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the

topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in

relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is

intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the par ticular financial situation or goals of any person). As such, it should not be relied upon in making

an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or sol icitation for investment in any securities mentioned or in the topic of this document. A

marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any

prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article

19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net -worth companies, unincorporated associations or other bodies within the meaning of Article 49

of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be

distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not

offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that

any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia