Frost & Sullivan Publishes Q1-2018 and 12 months since Initiation Updates Coverage Report on RedHill BioPharma Ltd.

Net revenues for Q1-18 lower than estimated;

RedHill needs to raise capital prior to announcement of top-line Phase III results for Crohn's disease, expected in mid-2018;

Target price remains at NIS 2.59

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Summary of Highlights

On 8 May 2018 RedHill released its financial report for Q1-2018, detailing the following:

• Important top-line results expected over the next few months
• Top-line results from Phase III study with RHB-104 for Crohn's disease (MAP US study) expected in approximately 3 months. We analyze the RHB-104 asset in detail, in the following report.
• Top-line results from confirmatory Phase III study with TALICIA® for H. pylori infection (ERADICATE Hp2 study) expected Q4/2018
• RedHill continues to present lower quarterly net revenues than expected ($4 miilion) of $2.4 million and gross profit of $1.5 million in Q1-2018.
• Operating loss of $9.9 million in Q1-2018, reduced 30% over the previous quarter and expected according to the company to continue to decrease over the coming quarters.
• Debt-free balance sheet with $36.4 million in cash at the end of Q1-2018
• RedHill announced it does not have plans to raise additional capital ahead of the MAP US Phase III study top-line results with RHB-104 for Crohn's disease. Albeit, the company has a burn rate of approx. $10 million per quarter, and with just $36.4 million in cash RedHill, in our understanding, will need to raise capital within 3-9 months.
• Current estimation of the company's equity value is retained at $159.8 million (NIS 551.6M) corresponding to a target price ranging between NIS 2.54 and NIS 2.65; a mean of NIS 2.59.
• In Frost & Sullivan's most recent valuation of 11 March 2018 the target price was raised to to NIS 2.59 from the price of NIS 2.27 set on 14 December 2017.
• Frost & Sullivan Independent Equity Research's valuation methodology for RedHill BioPharma Ltd. is detailed in full in the Initiation of Coverage report for RedHill dated 12 July 2017.
• Read the Q1-2018 and 12 months since Initiation Updates in full here.

About the company - RedHill Biopharma Ltd. ("the Company" and/or "RedHill") is an Israeli publically-traded specialty biopharmaceutical company focused on the development and commercialization of late clinical-stage drugs candidates. The Company's main focus is advanced clinical development and commercialization in the US of orally-administered, proprietary, small molecule drugs for the treatment of gastrointestinal and inflammatory diseases and cancer.

RedHill is currently promoting three gastrointestinal products and is advancing multiple clinical programs: three Phase III for gastrointestinal and inflammation indications and multiple Phase II for various indications including multiple myeloma, hepatocellular carcinoma, pancreatic cancer, and irritable bowel syndrome with diarrhea.

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Contact:

Kristi Cekani 
Corporate Communications - Frost & Sullivan, Europe
P: +39.02.4851.6133
E: kristi.cekani@frost.com 
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