Adherium’s FY16 sales of A$2.6m were 7% below expectations, likely due to a pause in commercial supply to AstraZeneca (AZN) in H216 as the pharma used inventory purchased in CY15 for initial market testing. The net loss of A$7.9m included A$1.4m of one-off costs. We have amended near-term forecasts to allow for a slower initial roll-out by AZN, but leave peak uptake assumptions unchanged given the large addressable market. We have also trimmed forecast profit margin by 20% for second-generation embedded devices following a potential 2020 launch. This reduces our valuation to A$171m or A$1.01/share (from A$188m or A$1.31/share).
