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Edison Investment Research Limited London, UK, 1 November 2018 Edison issues outlook on Probiodrug (PBD) We believe one of the main reasons for the devaluation of Probiodrug's shares over the past year was the largely disappointing industry newsflow frustrating research on Abeta theory, even though Probiodrug's technology is differentiated from all other Abeta therapies studied in late-stage trials. The recent surprise announcement of disease-modifying effect obtained by Biogen/Eisai with their MAb BAN2401 in a Phase II trial may reignite interest in the amyloid theory and in the Alzheimer's disease (AD) field in general. While funding and lack of visibility on a partnering deal are near-term risks, we find Probiodrug's asset PQ912, a small molecule glutaminyl cyclase (QC) inhibitor, and its Phase IIa data interesting. In our view, any progress with raising new funds or finding a partnering would unlock substantial upside from the current low valuation level. We believe Probiodrug's lack of progress in business development is underpinned by lacklustre industry newsflow, but PQ912 seems an interesting asset based on data reported so far. The new Biogen/Eisai data may renew interest in Abeta theory in general, but lack of visibility on Probiodrug deal leads us to introduce a 50% licensing risk in our model. Our updated valuation is EUR270m or EUR32.9/share, down from EUR513m or EUR62.4/share. Progress with partnering or a successful fund-raise could unlock substantial upside from the current levels, in our view. All reports published by Edison are available to download free of charge from its website About Edison: Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the . Edison is not an adviser or broker-dealer and does not provide investment advice. Edison's reports are not solicitations to buy or sell any securities. For more information please contact Edison: Jonas Peciulis, +44 (0)20 3077 5728
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