NEOVACS (EPA:ALNEV) Original-Research: Neovacs S.A. (von GBC AG): BUY

Directive transparence : information réglementée

23/03/2017 10:31

Original-Research: Neovacs S.A. - von GBC AG

Einstufung von GBC AG zu Neovacs S.A.

Unternehmen: Neovacs S.A.
ISIN: FR0004032746

Anlass der Studie: Research Note
Empfehlung: BUY
Kursziel: 3.30 EUR
Kursziel auf Sicht von: End FY 2017
Letzte Ratingänderung:
Analyst: Cosmin Filker; Matthias Greiffenberger

High upfront payments expected through sales partnership for China; 'Fast Track' approval obtained from the FDA; Price Target increased to EUR 3.30 (previously: EUR 2.90); BUY rating confirmed

Since our last research study (see research study from 24/10/2016), Neovacs S.A. has published a positive newsflow. Of particular importance here is the recently concluded option agreement with BioSense Global LLC for the distribution of Neovacs' key product IFNα-Kinoid (Interferon Alpha-Kinoid) for the treatment of the autoimmune diseases SLE (systemic lupus erythematosus) and DM (dermatomyositis) in China. The focus here, as we understand, is to treat SLE, for which up-front fees and milestone payments of up to EUR 65 million could be received until the end of the first marketing year. In addition, revenue-based, double-digit royalties are incurred during the marketing of the Neovacs product.

This agreement with BioSense Global LLC is the second regional licensing of the IFNα-Kinoid after a first strategic distribution partnership for the South Korean market with Chong Kun Dang (CKD) was already completed in 2015. Marketing approval should be granted in China, for which the costs are covered by the sales partner, whilst marketing approval for IFNα-Kinoid is currently being sought globally for the treatment of SLE.

The fact that the costs of a Chinese Phase III trial would be covered by the marketing partner BioSense Global LLC is of paramount importance here. In addition, Neovacs S.A. will in the years ahead collect up-front fees and milestone payments, which would cover some of the costs for the global Phase III trial. Our forecasting model shows that Neovacs S.A.'s revenue and earnings performance will be characterised by these up-front fees until marketing of the IFNα-Kinoid key product starts.

The resulting fair value per share at the end of the 2017 fiscal year corresponds to the stock price target of EUR 3.30. In the DCF model, we have assumed a 22.8% marketing feasibility based on the currently ongoing Phase II trial. The corporate value indicated by the DCF valuation model (EUR 664.10 million) is weighted with this probability, resulting in a fair value of EUR 151.41 million (EUR 3.30 per share). If the clinical approval process continues to be successful, the probability of occurrence, and therefore the fair corporate value, will increase. Outgoing from the current share price we continue to assign a BUY rating.

Die vollständige Analyse können Sie hier downloaden: http://www.more-ir.de/d/14903.pdf

Kontakt für Rückfragen
Jörg Grunwald
Halderstraße 27
86150 Augsburg
0821 / 241133 0
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Für den Inhalt der Mitteilung bzw. Research ist alleine der Herausgeber bzw. Ersteller der Studie verantwortlich. Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss bestimmter Börsengeschäfte.