Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on Crossject. We currently have 14 research reports from 2 professional analysts.
Crossject recently announced that it has received regulatory approval to launch the bioequivalence study for Zeneo Midazolam (being developed for the acute treatment of epileptic seizures) in healthy volunteers. This puts the company on track for the expected H218 EU filing and the H119 US filing. Due to this milestone, Crossject has received €2.9m from Bpifrance as part of the Programme des Investissements d’Avenir (PIAVE). Also, the company has successfully completed a €5m rights offering.
The capital increase was 137% subscribed, raising the group equity by some €4.98m gross after the exercise of the 15% extension clause.
We have not changed our assumptions and the apparent higher EPS only stems from the fact the company is still loss-making (thus the loss per share is lower after the capital increase).
Crossject released its FY16 results. Revenues reached €1.43m vs €2.73m in FY15 (-48%), operating result €-7,291k (vs €-7,013k), and the net result €-6,663k (vs €-5,687k). Net cash at the end of FY16 amounted to €2.6m (vs €5.2m a year before). The company also announced a capital increase (€4.3m at €4.5 per share with subscription rights), which is 75% underwritten by the main shareholder, Gemmes Ventures.
As part of its revised strategic plan, Crossject has expanded its partnership with CENEXI to fill and finish all of Crossject’s products in all regions for a period of five years, with a potential extension up to 10 years. Also, the timelines for its expected regulatory submissions have shifted across the board; most notably, the EU filing for ZENEO Methotrexate has been pushed back from H216 to H218 due to its non-emergency nature and higher requirement for manufacturing resources than other products. As a result, we reduce our valuation to €9.91 per share (from €12.07).
A strategic review… and some adjustments to our forecasts TARGET CHANGE CHANGE IN TARGET PRICE€ 19.3 vs 24.4 -21.0% Our target price goes down, mainly due to the lower DCF valuation after the group presented its new strategy in mid-november, which is based on a focus on emergency products, the US and a larger agreement with Cenexi, which should spend over €5m to bring total capacities to over 10m units a year (vs 2m). Timing remains the main issue and is of course the first reason behind our lower valuation, which also captures the disappointment after the group postponed again the market launch of Zeneo, by at least a year (2019 at the earliest vs late 2017 previously). CHANGE IN EPS2016 : € -0.90 vs -0.90 2017 : € -0.50 vs -0.36 ns Our EPS goes marginally down for FY17, where we initially had the first revenues stemming from Methotrexate, which are now postponed to FY19. Other than this, we have not changed our short–term forecasts. CHANGE IN NAV€ 24.5 vs 28.7 -14.7% Our SOTP valuation also goes down, since it is computed on average sales over the first year after each product reaches the market (FY19-21). In particular, sales are lower per product since US sales will typically come a year after first European sales, while average prices are higher in the US, explaining the bulk of the lower valuation obtained through this method, which leads to very similar results to the DCF. CHANGE IN DCF€ 23.0 vs 31.6 -27.2% We have revised our forecasts, based on later-than-expected product launches (with, for each product, a first launch in Europe and a year later in the US). We have also lowered the level of capex from 2017 onwards, since the bulk of capex will be spent by Cenexi, the group’s global industrial partner. We have so far considered that the level of margins is unchanged compared to the scenario where Crossject was investing and producing Zeneo devices instead of subcontracting. Our valuation, unsurprisingly, goes down, in line with our view that timing is the biggest issue the group currently has to face and despite a lower future capex level.
Crossject held a presentation at the end of last week to disclose its new strategy, in particular in the light of its extended patnership with Cenexi.
Crossject released H1 16 results. Revenues reached €1.6m vs €1,238k in H1 15 (+29%), the operating result was €-2,279k (vs €-3,765k), and the net result €-2,831k (vs €-3,558k). Net cash at the end of H1 16 amounted to €3.2m (€5.2m).
Mylan’s EpiPen was subject to fierce criticism from politicians including “President-to-be” Hillary Clinton after the generics maker raised the price of its emergency allergy injector by some 500% (!) in the past five years to over US$300 per unit (i.e. over US$600 for a pack of two, sold for €76 in France for instance).
Recently, Crossject disclosed the identity of the product behind its L15 programme. L15 is its needle-free version of hydrocortisone, which Crossject will develop for the treatment of acute adrenal insufficiency, a potentially fatal condition. The company expects the commercial launch of the product in H118, although we believe peak sales will be a modest €9m as it is a niche market with little pricing power.
Crossject has developed a deep pipeline of products that are based on its proprietary needle-free injection system, ZENEO, across a variety of indications. The benefits of ZENEO include no need for needles, as well as a simple and quick (~1/10th of a second) delivery of the drug. Its first commercial product, ZENEO Methotrexate for rheumatoid arthritis, should reach the market in 2017. We value the company at €11.96 per share, which is based on the value of four of its nearer-term disclosed programmes.
Crossject develops proprietary versions of generic drugs to be used with its needle-free injection system, ZENEO, a drug delivery and manufacturing platform for multiple potential products, including biologics and vaccines. Crossject's needle-free, pre-filled, single-use ZENEO injection systems are designed to be self-administered and can be tailored to deliver drugs via intradermal, subcutaneous and intramuscular routes, allowing the system to be used in a broad range of indications. A 2014 study by the University of Texas showed that fewer than 20% of patients used their epipens correctly. ZENEO has been successfully tested in more than 10,000 humans, including seven preclinical and eight clinical trials. Crossject has seven products in development including products for rheumatoid arthritis, anaphylactic shock, migraine, Parkinson’s and epileptic seizures.
Recommendation and upside We initiate coverage of Crossject, a new entrant in the New Therapeutic Entities field. Its differentiating feature is its delivery mechanism, Zeneo, a pretty unique injection system. Crossject has completed clinical trials on a first well-known molecule, Methotrexate, with another six to go in the pipeline. The current market capitalisation stands at c. €50m based on a share price of €7.5, while we see a massive potential upside (over 220%), with a target price of €24.5, reflecting the company’s huge growth prospects. Business and Trend Today, Crossject has a portfolio of seven products under development: Methotrexate (anti-rheumatic), Sumatriptan (acute migraine), Epinephrin (treatment of anaphylactic shocks), Naloxone (opioid overdoses), Apomorphine (Parkinson disease) Midazolam (epilepsy) and L15 (name and indication confidential). The first sales are expected in FY17 (Methotrexate in H2, with clinical studies already done), while clinical studies are currently being carried out for Sumatriptan, which should get market approval and be commercially launched in H1 18 as well as for L15, while Midazolam should be filed in H2 17 for a market launch in FY18. Epinephrin should be on shelves in FY18 and Apomorphine a year later together with Naloxone. Based on our estimates, Crossject should be able to generate total turnover of over €190m as soon as 2021, which should breakdown as follows: Need to know Zeneo, an automatic, single-use needle-free injection device was orginally developed within Laboratoires Fournier in its « drug delivery » division, together with SNPE (Société Nationale des Poudres et Explosifs, which is a shareholder of Crossject). In 2001, the technology was sold to the newly-created Crossject. GSK was originally the main partner of Crossject, with a view to developing a solution for its vaccines. This market was ultimately considered as too risky in terms of investment needs, low margins and the high volumes required. Therefore, Crossject was restructured in 2011-13, with a change in the group’s strategy: the goal of Crossject is no longer to sell a device to the Big Pharmas to market their own chemical entities, but to provide the market with its own pre-filled devices, on the basis of New Therapeutic Entities, using a known drug (generic) with an innovative delivery system. New industrial partnerships were also signed with Hirtenberger (for the pyrotechnical and mechanical sides) and Cenexi (aseptic filling and final packaking). Today, the Zeneo device is protected by over 400 patents covering 80% of the market (including the US, Europe and Japan) valid until 2035.
Crossject develops new therapeutic entities (proprietary versions of generic drugs) to be used with its needle-free injection system, ZENEO. ZENEO is a drug delivery and manufacturing platform for multiple potential products, including biologics and vaccines, and has the potential to improve therapeutic delivery, safety, patient compliance and comfort for many conditions. In November, Crossject received a €6.7m grant to expand development and manufacturing capabilities to include new ZENEO products for drug overdose, Parkinson’s disease and epileptic seizures.
Research Tree provides access to ongoing research coverage, media content and regulatory news on Crossject. We currently have 14 research reports from 2 professional analysts.
Last Friday we reprised our successful speed dating format with excellent presentations from the CEOs of Access Intelligence, Corero Network Security, LiDCO Group, OrganOx and Yu Group. Each company gave a ten minute overview of its business and the investment case and we had quick-fire Q&A from a group of fund managers. Below we summarise our thoughts on each company, with more details inside, plus we include the slides presented by each management team. We believe all five companies have excellent potential and are happy to arrange further contact. We also look forward to setting up our next speed dating event.
Companies: ACC CNS LID YU/
This morning AnimalCare has announced it has entered into a conditional share purchase agreement to acquire the entire issued share capital of Ecuphar NV, a European animal health company focused on the development and sale of veterinary pharmaceutical products that provide significant benefits to animal health in the companion animal, equine and production animal markets.
Companies: Animalcare Group
Carador Income Fund (CIFU LN) Level of refinancing and reset activity remains high | Imagination Technologies Group (IMG LN) No progress with Apple; Whole group for sale | Uncovered Gems - Speed Dating Lunch Another five sparkling gems
Companies: IMG CIFU ACC CNS LID YU/
Europa Oil & Gas* (EOG): Irish licence update (CORP) | Victoria* (VCP): Share price fall is entry opportunity (CORP) | CareTech (CTH): Interims, acquisitions and upgrades (BUY)
Companies: EOG CTH VCP
CareTech has announced in line interim results and the acquisition of an Adult Learning Disabilities business which adds circa £2.4m to EBITDA. Investment in management and infrastructure ahead of further scaling of the business tempers our upgrades but CareTech remains well positioned to take advantage of the consolidation in this expanding sector. We increase our target price to 470p (previously 458p) and reiterate of BUY recommendation.
Abzena reported solid FY17 results with underlying revenue growth of 41% (to £18.7m). In FY17, Abzena continued to focus on the integration of its service offering across its three sites (US and UK), which has been expanded by its recent placing of £25m gross (issuing 75.8m new shares at 33p). We expect this to enable strong growth and take Abzena to profitability in FY20, which will be a significant milestone for the company. We maintain our valuation at £132m, 62p per share, but note potential upside as it demonstrates growth and as Abzena inside products progress.
FFI Holdings— specialist in the provision of completion contracts to the entertainment industry for films, television, miniseries and streaming product. Offer TBA. Expected 30 June. QUIZ— omni-channel fast fashion womenswear Company intention to float. Due July 2017. Offer TBA Ethernity Networks—Schedule 1 from Israeli based specialist in data processing technology used in high end carrier ethernet applications across the telecom, mobile, security and data centre markets . Expected late June. Offer TBA. Jangada Mines—Schedule 1 advanced stage PGM exploration project containing what the Directors understand to be the largest PGM resource, as well as being the only pre-development PGM project, in South America. Offer TBA. Expected late June. Phoenix Global Mining— US Brown field copper play. Expected late June. Offer TBA Touchstone Exploration— Oil exploration and production company active in the Republic of Trinidad and Tobago. Interests of approximately 90,000 gross acres. Production c. 1,300 boepd. Raising £1.45m. Expected mkt cap £7.5m. Due 26 June. I3 Energy –Schedule 1. Independent oil and gas company with assets and operations in the UK. Offer TBC, 7 June admission. Verditek— Schedule 1 update. On Admission, the Company's subsidiaries will be involved in advanced solar photovoltaic, filtration and absorption technologies specialising in providing environmental services. Issue price 10p. Admission late June Tiso Blackstar Group—Schedule 1 update. Media, entertainment and marketing solutions group/ £160m mkt cap. Admission only. Expected late June. sidential Secure Income - social housing REIT raising up to £300m Admission due c.12 July. ScotGems—Admission due 26 June. Seeking £50-£100m. To investing in a diversified portfolio of Small Cap Companies listed on global stock markets DP Eurasia—Intention to float from the exclusive master franchisee of the Domino's Pizza brand in Turkey, Russia, Azerbaijan and Georgia . £20m primary raise plus a partial vendor sale. AIB—Intention to float from AIB, Ireland's leading retail and commercial bank . The Minister for Finance intends to sell approximately 25% of the Ordinary Shares of AIB. Valuation range €10.6-€13.3bn. Admission end June. Curzon Energy—Report on Proactive Investors of intended LSE float this year with acquisition of coal bed methane assets in Oregon. Looking to raise £3m plus. NLB Group—financial and banking institution based in Slovenia, with a network of 356 branches. Seeking Ljubliana Stock Exchange listing with GDRs on the LSE. Expected mid June. Kuwait Energy— $150m raise plus vendor offer. Admission due June. 2p reserves 810.0 mmboe
Companies: IDP SKIN IVO MSYS CTH SAR ARL PTSG MWE MAFL
Ergomed (ERGO LN) Top line PeproStat™ Phase IIb data now expected in Q4 2017 | Touchstone Innovations (IVO LN) IP Group confirms Takeover Offer | Walker Greenbank (WGB LN) Strong o/seas & manufacturing demand counter soft patch in UK in May
Companies: WGB IVO ERGO
GYG—Intention to float by the superyacht painting, supply and maintenance company. Due 5 July. Raising £6.9m new plus vendor sale of £21.5m at 100p. Mkt Cap c. £47m. Revenue of €54.6m in FY16 and adjusted EBITDA of €6.7m. Greencoat Renewables - Schedule 1. Targeting a portfolio of operating renewable electricity generation assets, initially investing in wind generation assets in Ireland. Offer TBC. Due Mid July. FFI Holdings— Specialist in the provision of completion contracts to the entertainment industry for films, television, mini-series and streaming product. Offer TBA. Expected 30 June. QUIZ— Omni-channel fast fashion womenswear Company intention to float. Due July 2017. Offer TBA Ethernity Networks—Schedule 1 from Israeli based specialist in data processing technology used in high end carrier ethernet applications across the telecom, mobile, security and data centre markets. Expected late June. Offer TBA. Jangada Mines—Sch 1 advanced stage PGM exploration project containing what the Directors understand to be the largest PGM resource, and only pre-development PGM project, in South America. Offer TBA. Expected late June. Phoenix Global Mining— US Brown field copper play. Expected late June. Offer TBA Touchstone Exploration— Oil E&P company active in the Republic of Trinidad and Tobago. Interests of approximately 90k gross acres. Production c. 1.3k boepd. Raising £1.5m. Expected mkt cap £7.5m - 26 June. I3 Energy –Schedule 1. Independent oil and gas company with assets and operations in the UK. Offer TBC, 7 June admission. Verditek— Schedule 1 update. On Admission, the Company's subsidiaries will be involved in advanced solar photovoltaic, filtration and absorption technologies specialising in providing environmental services. Issue price 10p. Admission late June Tiso Blackstar Group—Schedule 1 update. Media, entertainment and marketing solutions group/ £160m mkt cap. Admission only. Postponed. Rockpool Acquisitions—Northern Ireland based Company seeking strong NI acquisition with an international outlook. Raising £1.5m at 10p. Due 5 July. Residential Secure Income - social housing REIT raising up to £300m Admission due c.12 July. ScotGems—Admission due 26 June. Seeking £50-£100m. To investing in a diversified portfolio of Small Cap Companies listed on global stock markets DP Eurasia—Intention to float from the exclusive master franchisee of the Domino's Pizza brand in Turkey, Russia, Azerbaijan and Georgia . £20m primary raise plus a partial vendor sale. AIB—Intention to float from AIB, Ireland's leading retail and commercial bank. The Minister for Finance intends to sell approximately 25% of the Ordinary Shares of AIB. Valuation range €10.6-€13.3bn. Admission end June. Curzon Energy—Report on Proactive Investors of intended LSE float this year with acquisition of coal bed methane assets in Oregon. Looking to raise £3m plus. NLB Group—financial and banking institution based in Slovenia, with a network of 356 branches. Seeking Ljubliana Stock Exchange listing with GDRs on the LSE. Expected mid June. Kuwait Energy— $150m raise plus vendor offer. Admission due June. 2p reserves 810.0 mmboe Supermarket Income REIT– Up to £200m raise to acquire a diversified portfolio of supermarket real estate assets in the UK, providing long-term RPI-linked income. Due 21 July.
Companies: VLS GSH EGI MSG FDEV UNG TND LTHM REDX CREO
After a disappointing end to FY 16, Smith & Nephew (S&N) exhibited improved sequential sales evolution in Q1 17 (trading update, only sales disclosed) – underlying sales grew 3% (the highest since Q1 16) to $1.1bn, in line with consensus expectations. However, a negative disposal impact of 2% and a currency headwind of 1% neutralised the underlying expansion, resulting in the reported growth being flat. On a geographical basis, the underlying recovery was primarily driven by the strong uptick in emerging markets growth (12% vs. 3% in Q4 16 and -6% in Q1 16) on the back of a sturdy Chinese performance (+14%) and annualisation of the Gulf headwinds. Meanwhile, established markets (including both the US and other established markets) remained weak, recording an underlying growth of 1%. Notably, franchise-wise (underlying basis), advanced wound care turned positive (1%; after remaining flat or negative throughout FY 16) while knee implants (5%. vs. +9% in Q1 16), sports medicine joint repair (7% vs. 11% in Q1 16), trauma & extremities (5% vs. -7% in Q1 16) and advanced wound devices (+16% vs. Q1 16: +11%) all contributed healthily. Conversely, hip implants remained flat (vs. +4% in Q1 16) while weak arthroscopic-enabling technologies (-1% vs. Q1 16: +4%) and advanced wound bioactives (-8% vs. Q1 16: -4%) adversely impacted the performance. Based on current exchange rates, management now expects a currency headwind of 0.6% (previously 1%). Factoring in the reduced currency headwind, management has slightly increased its reported revenue growth estimate to 1.6-2.6% from the previous 1.2-2.2% while maintaining its underlying revenue guidance of 3-4%.
Companies: Smith & Nephew
Microsaic Systems (MSYS LN) Challenges persist, but encouraging progress with biopharma strategy | ReNeuron Group (RENE LN) FDA approval of cryopreserved formulation of hRPC candidate | Sinclair Pharma (SPH LN) Acquisition of Refine™ broadens the aesthetic portfolio
Companies: SPH RENE MSYS
OptiBiotix* (OPTI): Supply agreement with HLH (CORP) | Seeing Machines* (SEE): Guardian arrives in the UK (CORP)
Companies: Optibiotix Health Seeing Machines
genedrive, an emerging UK medtech company, focuses on the development and commercialization of an innovative, point-of-care diagnostic system, also called Genedrive® (in this report, "genedrive" refers to the company, whereas "Genedrive®" indicates the product). genedrive is poised to become the first company to launch a decentralized Hepatitis C diagnostic, entering a large market at a time when new curative therapies for the disease are transforming opportunities for testing and treatment. A Genedrive® TB diagnostic has already been launched and the platform has a wide range of alternative applications.
The Refine™ Support System appears to be a good fit with Sinclair’s Silhouette® range of suture-based aesthetic products. In the US, the product will be marketed by ThermiGen, primarily targeting the aesthetic breast surgery market (a 600,000-procedure market in the US alone). Other markets in Europe, LatAm and Asia will be added in due course following regulatory approvals. We reiterate our Buy with a target price of 37p.
Companies: Sinclair Pharma
LiDCO reported full-year results to 31 January 2017 in line with expectations. Following our change to forecasts after its £3m placing in December, there were no surprises and we make only minor changes to forecasts for FY 2018-20. FY 2018 should be a transformative year, benefiting from the company’s recent fundraise, which will support the build-out of its sales capabilities, but coupled also with the introduction of a new monitor platform and high usage pricing model that is expected to position the business very competitively. Our target price of 14p remains unchanged, which implies FY 2018 EV/Sales multiple of 3.0x, falling to 2.0x in FY 2020 as the company exploits overseas expansion, underpinned by a solid and growing domestic market.
Companies: Lidco Group