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Research Tree provides access to ongoing research coverage, media content and regulatory news on Genmab. We currently have 21 research reports from 2 professional analysts.
Driven by steady demand for Darzalex in the US, Europe and Japan, total revenue surged by 51.8% in Q2 19. Growth in operating expenses was even higher (+70%), due to higher investments into R&D and, as a consequence, operating income was largely flat vs. Q2 18. Given that the Darzalex-Revlimid combo is now approved in the US in the frontline MM indication, the upgraded FY19 guidance seems within reach.
Genmab’s collaboration partner, J&J, has released better than expected sales numbers for Darzalex for Q2, but the beat was largely due to one-off adjustments. On a separate note, Genmab plans to raise c.$500m, through the listing of ADSs in the US, to fund its R&D investments and be commercially launch-ready.
While sales for Darzalex were a tad below expectations in Europe, the US performed well with a sustained share gain in the second-line MM setting. Given the upcoming approval in the frontline indication, the $3bn targets for the drug for FY19 remain within reach. Also, as the full-year profitability outlook was reiterated, the higher R&D expense for Q1 appears a timing issue. As long as the swelling cost base is well funded by the Darzalex royalty flow, we remain optimistic.
While sales for Darzalex were a tad below estimates, total revenue exceeded expectations in FY18 on the back of higher milestone income. Robust revenue acceleration is anticipated for FY19 as well, though operating profit would continue to be weighed down by higher investments into R&D. Given that the multi-blockbuster potential of Darzalex is still intact, we reiterate our ‘Buy’ recommendation.
Impacted by a one-off adjustment in Europe and modest growth in the third-line and fourth-line MM setting in the US, sales for Darzalex came in below our expectations. However, given the continuous market share gain in the second-line regimen and upcoming approval in frontline, we believe that the growth momentum would accelerate in the coming years. Though increased investment into the commercial infrastructure is a short-term FCF dampener, it is expected to create value in the long run.
Genmab released its Q2 18 results in which the top-line was in line with our estimates while profitability exceeded expectations. Total revenue came in at DKK509.6m (vs. Q2 17: DKK773.3m, which benefited from higher milestone income) with royalties from Darzalex being the largest contributor. Net sales for the multiple myeloma/MM drug reached $511m (+18.3% qoq), resulting in royalties of DKK385m from its collaboration partner, Janssen. Reimbursement income of DKK47m (from Seattle Genetics and BioNTech) and milestone income of DKK40m (from Janssen and Novo Nordisk) were the other key revenue contributors during the quarter. On the other hand, net sales for Arzerra slumped to $4m (-50% yoy; affected by the stiff competition) translating into a c.46% decline in royalties from Novartis (DKK6m). Operating profit for Q2 18 came in at DKK135m (vs. Q2 17: DKK536.4m) as Genmab continued with its budgeted R&D investments (+c.58% yoy; R&D accounted for c.86% of the opex base). In addition, higher employee costs (to support the expansion of the product pipeline) and continued investments to build the commercial infrastructure further suppressed profits. For FY18, management has reiterated its revenue as well as profitability guidance. On the regulatory front, the European Medicines Agency/EMA issued a positive opinion for the use of Darzalex (in combination with Velcade) in the frontline MM setting in July 2018. In addition, Genmab entered into a collaboration agreement with Immatics Biotechnologies to strengthen its presence in the immuno-oncology space (Genmab will pay an upfront fee of $54m). According to the terms of the agreement, Genmab’s duobody technology will be used with Immatics ‘XPRESIDENT’ T-cell receptor capabilities to develop next-generation bi-specific immunotherapies.
Following safety concerns at a planned review, Genmab’s collaboration partner ‘Janssen’ has decided to terminate the phase Ib/II study of Darzalex in combination with Roche’s PD-L1 antibody (Tecentriq) for previously treated non-small cell lung cancer. The findings of the study prompted Janssen to discontinue the phase I study of Darzalex along with Janssen’s PD-1 blocker for multiple myeloma as well.
Genmab released its Q1 18 results in which the top-line came in broadly in line with our estimates while profitability came in a tad below expectations. Total revenue for the quarter jumped to DKK681m (vs. Q1 17: DKK251m) benefiting from a c.DKK300m upfront payment from Novartis (due to an amendment in Arzerra’s collaboration agreement). In addition, net sales for multiple myeloma/MM drug ‘Darzalex’ reached $432m (vs. Q1 17: $255m), generating royalties of DKK310m for the Danish biotech firm. However, the sluggish performance continued for Arzerra (net sales of $7m vs. $10m in Q1 17) resulting in a decline in royalty income to DKK8m (vs Q1 17: DKK14m). As the benefits of higher revenue were partly offset by increased operating expenses (due to investments in tisotumab vedotin and other R&D pipeline), operating income came in at DKK324m for Q1 18 (vs. Q1 17: DKK46m). Management has reiterated its financial targets for FY18. On the regulatory front, the US FDA approved Darzalex (in combination with Velcade; based on ALCYONE study) as a first line of treatment for MM in May 2018.
Genmab released its FY17 results in which the top-line came in broadly in line with our estimates while profitability came in a tad above expectations. Total revenue jumped to DKK2.36bn (vs. FY16: DKK1.82bn), benefiting from higher royalties from multiple myeloma/MM drug ‘Darzalex’. Net sales for the drug reached $1.24bn (+117% yoy; within the guidance range of $1.1-1.3bn), resulting in royalties of DKK1.01bn from collaboration partner, Janssen. In addition, milestone income of DKK1.13bn (primarily from Janssen) was the other key revenue contributor. On the other hand, net sales for chronic lymphocytic leukaemia drug ‘Arzerra’ slumped to $36m (-22% yoy; affected by the stiff competition) translating into a c.24% decline in royalties from Novartis (DKK48m). For FY17, the operating profit came in at the higher end of the guidance range (DKK1.35bn vs. guidance: DKK1.19-1.39bn) due to lower than anticipated R&D expenses. For FY18, management expects revenue to be in the DKK2.7-3.1bn range, primarily consisting of Darzalex royalties of c.DKK1.75bn (based on net sales of $2-2.3bn; average royalty rate: c.13.5%). In addition, Darzalex milestones of c.DKK550m and one-time payment of c.DKK300m from Novartis (related to the transition of Arzerra from commercial availability to compassionate use programmes in non-US markets) would bolster the top-line further. With anticipated operating expenses of DKK1.4-1.6bn, operating profit is expected to be in the DKK1.3-1.5bn range for FY18.
Genmab is down c.30% from its lifetime high levels (in March 2017) as a lower than expected sales performance for Darzalex in Q3 17 triggered a sell-off in October 2017. Moreover, the 40-50% increase in operating expenses guided for FY18 further aggravated the pain in December 2017 (on a FY17 base of c.DKK1.1bn; primarily related to R&D). Below we analyse whether Genmab is still a worthy ‘Buy’?
Genmab released its Q3 17 results which were well below the street’s expectations. The reported revenue came in at DKK323.5m as the growth momentum decelerated (on a sequential basis) for the multiple myeloma/MM drug ‘Darzalex’. Genmab’s collaboration partner Janssen/J&J reported net sales of $317m for the drug (vs AV’s estimate: $355m; +6% qoq vs Q2 17: +17.3%) resulting in royalty income of DKK253m for the Danish biotech firm (accounted for c.78% of Q3 17 revenue). Note that, as sales of Darzalex have exceeded $750m in a calendar year (9M 17 sales: $871m), the royalty rate has moved up to the next tier (13% vs 12% earlier). Also, with dismal performance continuing for Arzerra (net sales of $9m vs Q3 16: $10m), royalties from Novartis were down 21.4% yoy (DKK11m; accounted for c.3% of Q3 17 revenue). The remainder of the revenue was derived from milestone income, deferred revenue and reimbursement income under R&D collaboration agreements with various pharmaceutical firms. The operating profit came in at DKK58.3m as Genmab continued with its budgeted R&D investments despite lower revenue (R&D accounted for c.86% of the opex base). In addition, higher than expected financial charges (forex movements negatively impacted the dollar-denominated portfolio) resulted in a net loss of DKK5.7m for Q3 17. On the regulatory front, Darzalex was approved as a second line treatment for MM in Japan in September 2017 (triggering a milestone payment of $25m/c.DKK160m upon the first sale in November 2017). As anticipated, Genmab received milestone income of $50m in November 2017 as sales of Darzalex crossed $1bn in a calendar year. Also, based on encouraging data from the phase I/II clinical trial of tisotumab vedotin in recurrent/ metastatic cervical cancer, Genmab/Seattle Genetics initiated a new phase II study in October 2017 (patient enrolment to start in H1 18; trial could form the basis for approval in the US). With earlier than anticipated launch of Darzalex in Japan, management has upgraded its FY17 revenue (DKK2.11-2.31bn; +DKK160m vs previous guidance) and operating profit guidance (DKK1.06-1.26bn).
Genmab released its Q2 17 results, wherein revenue and profitability came in slightly ahead of our estimates as well as market consensus. Reported revenue increased to DKK773.3m (vs AV’s estimate: DKK763m; Q1 17: DKK250.8m) primarily driven by higher than expected milestone income from the multiple myeloma/MM drug ‘Darzalex’ (DKK489m vs AV’s estimate: DKK475m; mainly related to second-line approval in Europe and third-line approval in the US). Net sales for the drug reached $299m (vs AV’s estimate: $305m; +177% yoy) resulting in royalty income of DKK243m from the collaboration partner Janssen (including milestones and royalties, Darzalex accounted for c.96% of group’s revenue in Q2 17). However, due to stiff competition in the chronic lymphocytic leukaemia space, sales for Arzerra were down 38.5% yoy (Q2 17: $8m), translating into a 35.3% decline in royalties from Novartis (DKK11m; accounted for c.2% of group’s revenue in Q2 17). Operating profit came in at DKK536m (vs AV’s estimate: DKK513m), led by the operating leverage. However, higher than expected financial charges (currency movements negatively impacted the dollar-denominated portfolio) and tax expenses (deferred tax assets not utilised yet) lowered the EPS to DKK5.05 per share (vs AV’s estimate: DKK8.2 per share). For FY17, management has reiterated its revenue (DKK1.95-2.15bn) and operating profit guidance (DKK0.9-1.1bn). On the regulatory front, Darzalex reported strong interim data in the front-line MM setting (phase III ALCYONE study combining Darzalex with Velcade met its primary endpoint; improved progression free survival by 50%). In addition, Genmab reported encouraging preliminary data from an ongoing phase I/II study of tisotumab vedotin in relapsed cervical cancer. Foreseeing additional potential in six other solid tumours, Seattle Genetics has opted-in for the drug’s co-development programme (costs and profits to be shared equally going forward).
Genmab released its Q1 17 results which werer slightly below our estimates (both top-line and profitability). Reported revenue came in at DKK251m (vs AV’s estimate: DKK280m; +47% yoy) as the increase in royalty income (DKK225m vs Q1 16: DKK100m) was partially offset by lower than expected milestone income (nil vs Q1 16: DKK45m; milestones deferred by a few months). Net sales for the multiple myeloma ‘MM’ drug ‘Darzalex’ reached $255m (vs Q1 16: $101m), resulting in a royalty income of DKK211m (c.84% of Q1 17 sales) from its collaboration partner ‘Janssen’ (royalty rate: c.12%; Q1 16: DKK83m). However, net sales for Arzerra (c.6% of Q1 17 sales) were down 17%, translating into an 18% decrease in royalties from Novartis (DKK14m vs Q1 16: DKK17m; impacted by continued competitive pressure in the refractory chronic lymphocytic leukaemia market). Operating income came in at DKK46m (vs AV’s estimate: DKK50m) as the additional investments in pipeline products led to a 33% increase in operating expenses (reached DKK205m in Q1 17). For FY17, management has reiterated its revenue (DKK1.95-2.15bn) and operating income (DKK0.9-1.1bn) guidance. On the regulatory front, Darzalex received a label expansion approval in Europe in April 2017, wherein the drug was approved as a second-line of treatment for MM (first sale to trigger milestone payment of $48m from Janssen). The drug will be used in combination with either Revlimid or Velcade, the same arrangement which was approved in the US in November 2016. In addition, the US FDA approved the drug in the third-line setting in June 2017 (in combination with Pomalyst; triggered milestone payments of $25m).
Genmab released Q4 FY16 results broadly in line with our estimates as well as market consensus. The reported revenue came in at DKK927m (+61.2% yoy), primarily on the back of higher royalties and milestone payments under the Darzalex collaboration agreement with Janssen. For FY16, the reported revenue reached DKK1,816m (+60.3% yoy; -10bp vs AV’s estimate) with Darzalex being the primary contributor (accounts for c.86% of FY16 revenue). Sales for the drug reached $572m (vs FY15: $20m), resulting in higher royalty income for Genmab (DKK458m vs FY15: DKK16m). Moreover, a number of regulatory submissions/approvals in the US and Europe triggered milestone payments of DKK1,096m during the year (vs FY15: DKK587m; FY16 number also includes sales volume milestone payment of $25m). However, net sales for Arzerra were down 19% yoy (accounts for c.4% of FY16 revenue), resulting in a 17% decrease in royalty income from collaboration partner ‘Novartis’ (DKK63m vs FY15: DKK76m). The operating margin came in at 58% (+50bp vs AV’s estimate) on the back of higher revenue, but was slightly offset by increased investments in the R&D (DKK661m vs FY15: DKK488m). Moreover, higher financial income (due to favourable currency movements) and tax credits underpinned the EPS to DKK19.83 (vs AV’s estimate: DKK17.4). For FY17, management expects revenue and operating income to come in at around DKK1,950-2,150m and DKK900-1,100m, respectively.
Recommendation and upside We are initiating coverage of Genmab (market cap. of DKK68.6bn/€9.2bn and a float of 100%) with an ‘Add’ recommendation and a target price of DKK1,238 (c.9% upside). Our upside is driven by the company’s multi-blockbuster potential drug ‘Darzalex’, strict cost management and a cash surplus business model. Darzalex’s approval as a fourth line of therapy for multiple myeloma ‘MM’ in November 2015 triggered a spectacular rally in the stock, with the share price surging c.70% in the subsequent seven months. However, the stock has remained range-bound since then and is currently trading c.15% below its all-time high. Moreover, Darzalex’s recent approval as a second line of treatment for MM (in November 2016) has triggered the next growth phase for the stock. Given the clinical profile, we also expect Darzalex to get approval in the frontline setting as well (by 2019/20) and thus further propel growth in the long run. While we acknowledge Genmab’s upside potential, we restrict our recommendation to an ‘Add’, as we await the ‘on the ground’ performance of the drug in the second line setting and interim data from the frontline studies. Business and Trends Genmab is a Denmark-based biotech company with two approved antibodies for cancer treatment – Darzalex (c.79% of 9M 16 revenue) and Arzerra (c.5% of 9M 16 revenue). The remainder of the revenue is attributed to deferred/reimbursement income from the pipeline drugs. Darzalex was approved by the FDA in November 2015 (Europe in May 2016), as a monotherapy for the fourth line of treatment for MM. Based on superior clinical efficacy data vs rival drugs, Darzalex was also approved in the second line setting (Europe approval expected by H1 17). The second line approval has significantly expanded the target population of the antibody, more than doubling the number of patients eligible to use Darzalex. Moreover, patients tend to stay on therapy for a long time (patients are less sick when the treatment starts in second line vs third line), resulting in higher revenue per patient and, in turn, higher royalties for Genmab. The company is also conducting trials for the third line and frontline setting, and, once approved, Darzalex has the potential to change the current landscape of the MM industry further. The global market for MM is valued at $8.9bn and is dominated by Revlimid/Celgene (c.43% share) and Velcade/Takeda/Janssen (c.33% share), with Darzalex holding an insignificant market share (<5%; it was used in the third line-plus setting until late 2016). The MM market size is expected to more than double to $22.4bn by 2023 and, given the better clinical profile of Darzalex, it is expected to grab a significant slice of the market in the mid/long term. Genmab’s other antibody ‘Arzerra’ was approved in 2009 in the US (Europe in 2010); however, it has not been a commercial success due to its narrow label approval and the lack of differentiation vs the market leader ‘Rituxan/Roche’. Genmab is now working to revive its Arzerra franchise by making inroads in the multiple sclerosis ‘MS’ market. Although the $14.9bn MS market offers larger market opportunities, it would not be easy for Genmab to compete with Roche in this domain. Need to know Genmab has relied on strategic partnerships with pharmaceutical companies to fund its R&D activities and bring the products to the market (Darzalex is out-licensed to Janssen/J&J and Arzerra is out-licensed to Novartis). Genmab is entitled to milestone payments (c.52% of 9M 16 revenue) and royalties (c.39% of 9M 16 revenue) under these collaboration agreements, which are also the primary FCF drivers as the operating expenses have been kept under control over the last five years. However, the royalty income is expected to contribute the lion’s share in the top-line post Darzalex’s approval in the second line setting. Genmab is also building a pre-clinical pipeline of c.25 programmes to identify the ‘next big winner’ and ensure sustainable long-term value creation. The company plans to bring the next product to the market by 2025 with complete/significant ownership (plans to hold on to at least 50% of the rights) and is focusing on next-gen antibody technologies (duobody, hexabody and antibody drug conjugate). The diversity of antibodies in the clinical pipeline reaffirms our belief in Genmab’s long-term growth potential. Upcoming triggers We expect the next triggers for the company to be the second line approval of Darzalex in Europe (expected by H1 17) and third line approval (in combination with pomalyst and dexamethasone) in the US (expected to come before the PDUFA date of June 2017). Moreover, the interim data from one of the studies in the frontline setting (expected in H2 17) is also highly awaited.
Research Tree provides access to ongoing research coverage, media content and regulatory news on Genmab. We currently have 21 research reports from 2 professional analysts.
Bioventix reported full-year results in line with expectations, although 4% (£0.3m) higher than expected revenues were offset by higher costs. A 47p special dividend was proposed, resulting in full-year dividend of 120p, up 3%. Strong underlying revenue growth (c.16%), which excludes c.£0.8m of backdated royalties, supported by evidence of early sales traction of troponin, provides a solid base for future growth. We have made minor changes to FY 2020 forecasts as well as introducing FY 2021, which implies c.10% EPS growth. We nudge up our target price to 3750p, which implies a 3.1% FY 2020 free cash flow yield, underpinned by 54% free cash flow/capital employed and 71% ROCE.
Following continued delays of a Brexit agreement, few sectors within the UK market have remained attractive to investors despite low valuations. One sector which has continued to outperform despite the political drama has been the UK video gaming sector (henceforth UK gaming), which we are fans of. We believe a combination of sector-leading growth, strong cash conversion and timely cyclical positioning support our positive view on the UK video gaming sector.
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Full-year results were in line with July’s trading update. Revenues grew by 18% CER, with a stronger-than-expected UK performance (+9% vs +2% in FY 2018), driven in part by the launch of new products, supporting the continued expansion in international markets (+26%) that now account for 55% of group revenues. The expected response to Tristel’s pre-submission request to the FDA, expected in December, should help determine the next steps for US registration. We maintain our FY 2020 adjusted pre-tax profit forecasts (+16%) with changes to reflect IFRS16 and introduce FY 2021 forecasts for 10% and 7% revenue and EPS growth. These are towards the bottom of Tristel’s newly set three-year financial plan, which bodes well for potential upside given the strong delivery over the past three years. Our unchanged 325p target price implies a 4% FY 2020 FCF yield.
IXICO has released a trading update for FY19 (YE September), announcing revenues of £7.6m and a first full year EBITDA profit, driven by accelerated revenue growth. Revenues for the year are ~6% ahead of our previous forecast and ~15% ahead of our ‘initiation' forecast (29 Apr 19). Having reported an EBITDA profit for H1/19A, the company is expecting to deliver a full year EBITDA profit, supported by strong revenue growth and operational leverage. We have upgraded our forecasts to reflect this update. IXICO's strong revenue generation and operational gearing support our BUY recommendation.
Avacta is a preclinical stage biopharmaceutical company engaged in the development of its proprietary therapeutic platforms (Affimer® immuno-oncology drugs and targeted chemotherapy) as well as generating early revenue through licensing Affimer reagents for research and diagnostics. Avacta has raised £9m, subject to a General Meeting, to fund the Phase I clinical trial of AVA6000 (pro-doxorubicin) and advance its immunotherapy pipeline with partners, as well as delivering further commercial progress for both therapeutics and diagnostics. This should lead to a substantial licensing deal for AVA6000, given the shortcomings of doxorubicin (cardiotoxicity) and size of the existing market (c.$1bn). Underpinned by the value in its reagents business and with significant upside to come from its therapeutics business that is already endorsed by the likes of LG Chem, Tufts, ADC Therapeutics and Moderna Therapeutics. We retain a target EV of c.£125m. This is based on analysis of comparable companies and implies a target price of 76p.
Companies: Avacta Group
Avacta (LON:AVCT) is preparing for a crucial year in its cancer therapeutics programmes in 2020e, with an opportunity now identified for a targeted chemotherapy programme to enter clinical trials during the first half (H1) of 2020. The company has released its interim results to July 2019 (released
Companies: Avacta Group
Last week, OPTI announced two major milestones for marketed ingredient LP-LDL, currently sold as a probiotic in foods and food supplements for the reduction of cholesterol: (1) achievement of process validation under good manufacturing practices ("GMP"), a necessary step in developing LP-LDL as a pharmaceutical drug; (2) confirmation of generally regarded as safe ("GRAS") status by the FDA. Both milestones reflect OPTI's commitment to improving the quality of the science and manufacturing conditions for probiotics to bring them closer to pharmaceutical standards. They should increase LP-LDL's attractiveness to both food companies looking to differentiate their products with evidence-backed ingredients and pharma companies looking to target the microbiome with live bacteria. With both events taking OPTI closer to achieving our forecasts and hence valuation expectations, we reiterate our OUTPERFORM recommendation and target price of GBp97 per share.
Companies: Optibiotix Health
Oxford BioMedica (OXB) is a gene-based medicine viral-vector biopharma company. It offers vector manufacturing and development services, while developing proprietary therapies, with its LentiVector® platform. Growth in gross income and profitability were driven by new licensing deals in 2018. Despite steady growth in 1H’19 group sales (bioprocessing and commercial development), a reduction in licensing income resulted in a first-half operating loss; the absence of significant deals in 2019 has also dampened the shares. Although interim results were in line with our expectations, they highlight the importance of 2H’19 for a full-year profit.
Companies: Oxford Biomedica
We are just back from a two-day visit to Genus's bovine business, ABS, in Madison, Wisconsin. We met with all the key ABS leadership team, Genus's new global head of R&D and visited a dairy customer.
Warren Buffett once said that as an investor, it is wise to be ‘fearful when others are greedy and greedy when others are fearful’. Fear is not in short supply right now.
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LiDCO reported interims to 31 July 2019, which contained no surprises in light of the 20 August trading update, although the revenue mix was slightly different to the anticipated figure. H1 performance continued to be influenced by the transition, particularly in the UK, from capital sales to SaaS licenced High Usage Programme (HUP) monitors, which typically results in destocking of older smartcard consumables ahead of the transition, as well as being able to recognise only part of the annual licence fee depending on timing. Despite this, LIDCO product revenues increased 10%, resulting in substantially reduced adjusted LBITDA and pre-tax loss of £0.2m (vs. -£0.8m) and £0.8m (vs. -£1.3m), respectively, demonstrating the operational leverage within the business. We remain confident that the pipeline of HUP interest, given the inherent economic benefits that HUP offers to high volume users, will convert to long-term licence revenue. We leave our adjusted pre-tax forecast unchanged and reiterate our 11p price target.
Companies: Lidco Group
Data presented at the United European Gastroenterology Conference ("UEG") further support the impact of Abivax's ABX464 on ulcerative colitis ("UC"). While response to biologic therapies such as anti-TNFs often wains with time and alternatives including JAK inhibitors are associated with serious safety issues, 12-month Phase 2a extension endoscopic data indicate sustained and improving clinical remission with ABX464 in 75% of patients observed. Matched by improvements in both Mayo Score and faecal calprotectin, these impressive results provide confidence for the on-going confirmatory Phase 2b trial as well as potential in Crohn's disease and rheumatoid arthritis ("RA"). These data provide an even stronger basis for a licensing / development deal expected by mid 2020E in a > $70bn market. We reiterate and maintain both our OUTPERFORM recommendation and €31.30 target price.
Full-year results to 30 April 2019 were in line at the revenue line but 5% (£0.1m) better than expected at the adjusted pre-tax profit level. Underpinned by c.5.5% organic growth, the 20% and 26% increases in revenue and adjusted EBITDA were driven by full-year contributions from ATC and QSI, acquired in FY 2018, as well as five acquisitions in FY 2019. Notable was the 35% increase in free cashflow. Additional investments into Sentek, Atik, Graticules and Astles and the integration of ATC with Thermal Exchange in FY 2020 should benefit the businesses in FY 2021. We upgrade our FY 2020 adjusted EPS by 7% as well as introduce FY 2021 forecasts, which indicate 13% EPS growth. The company indicates that it expects to add at least one new business in FY 2020, which will be incremental to these forecasts. We are raising our target price by 9% to 60p, reflecting the improved gross margins and stronger underlying cashflow.
Companies: Scientific Digital Imaging
Since their privatisation in 1989, the 10 water companies have faced a periodic review every five years; it is undertaken by Ofwat, and prescribes customer prices, along with the investment requirements. As part of the ongoing review, PR19, Ofwat will publish its Final Determination numbers on 11 December 2019; they will apply as from April 2020, although water companies do have the option to seek a reference to the CMA.
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Avacta has announced a collaboration and licensing agreement with ADC Therapeutics to develop multiple Affimer drug conjugates. The conjugates will combine Avacta’s Affimers with ADC’s warhead and linker technology. The collaboration is multi-target and will aim to generate Affimer binders to three undisclosed cancer targets. ADC will be responsible for all pre-clinical research and development except for Affimer selection, which will be carried out by Avacta. The agreement includes an option on each target to gain an exclusive clinical and commercial licence. Avacta will also be eligible to receive option fees, development and commercial milestones and single-digit royalties. Additionally, ADC will cover Avacta’s costs during the collaboration. No further financial details were announced. We retain our valuation of Avacta at £51m or 44p/share.
Companies: Avacta Group