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.
OptiBiotix* (OPTI): LP-LDL agreement for US and ROW (CORP) | Proactis* (PHD): Strong trading update (CORP)
Companies: Optibiotix Health Proactis
Avingtrans (AVG.L) Sch1 on its Reverse Takeover of Hayward Tyler (HAYT). Combined market cap of c.£75m. Expected 01 September 2017 OnTheMarket—Intention to float on AIM to raise c. £50m which will be used to fund the growth of the OnTheMarket.com portal, already the third biggest UK residential property portal provider. Expected valuation £200m to £250m. Kosmos Energy—. Secondary listing, currently on NYSE. Oil and gas exploration and production company focused on frontier and emerging areas along the Atlantic Margins. During the first half of 2017, gross sales volumes from Ghana averaged approximately 132,000 barrels of oil per day (net: 26,900 bopd). Due 21 August. No offer. NYSE:KOS. Mkt Cap £2.54bn. Myanmar Strategic Holdings—Intention to float from the independent developer and operator of consumer-focused businesses in Myanmar, one of the fastest growing economies in the world. Expected Mkt Cap $22.7m at $10 per share. No details on funds to be raised. Expected late August. Hipgnosis Songs Fund investment Company offering pure-play exposure to Songs and associated musical intellectual property rights. Offer raising £200m at 100p. The Company has decided to extend the closing date for the Placing, Offer for Subscription and Intermediaries Offer to 1 August 2017. The Company may bring forward this closing date at any time. Admission 15 September 2017
Companies: VOF SRT MED WLF KMK YOLO OXB CLIN IDOX VOG
Vectura has a strong and growing revenue stream that generates sufficient cash flow to support a broad development pipeline founded on an extensive base of IP. In our view, share price significantly undervalues the company, currently attributing value to only the marketed products and cash – with the whole of the very extensive development portfolio, both partnered and in house, as upside. We believe the recent weakness in the shares, which have not recovered from the delay in VR315 approval, offers a very attractive entry point for investors. We initiate coverage with a BUY and a 150p target price.
Companies: Vectura Group
ECO Animal Health Group (EAH LN) Marketing authorisation for Aivlosin® in Egypt | Halfords Group (HFD LN) Positive view on stock re-iterated ahead of update | Rathbone Brothers (RAT LN) Potential merger with Smith and Williamson | Tribal Group (TRB LN) 2 Contracts won, total value £25.3m
Companies: HFD TRB EAH RAT
LoopUp—The provider of conference calls and online meetings is seeking to join AIM. 2015 revs of £9.2m and EBITDA of £1.02m | Bacanora Lithium— To list on AIM around 28 Sep as holding company for TSX listed Bacanora Minerals at £100m market cap | Aura Energy—ASX listed uranium developer (ASX:AEE) expected to join AIM 6 September | Autins Group plc - The acoustic and thermal insulation specialist now looks to join AIM late August
Companies: PEG COG IKA OMI EZH MMH UBI CIRC EPO
Oxford BioMedica’s interim results highlight the continued step up in bioprocessing and commercial development income. A new agreement with Novartis for the commercial and clinical supply of lentiviral vectors was recently established following the FDA advisory committee unanimously recommending CTL019 for approval in acute lymphoblastic leukaemia (ALL). Approval is anticipated by early October 2017. Novartis also announced encouraging Phase II results in a trial evaluating CTL019 in diffuse large B-cell lymphoma (DLBCL) in June with full data and potential filing in Q4. Oxford BioMedica is eligible to a royalty on sales in both indications. We look forward to regulatory approval of CTL019 in ALL in the coming months.
Companies: Oxford Biomedica
Last week saw the acquisition of Aptuit by Evotec (EVT.DE) for $300m. This is against forecasted revenues 2017 of €100m to €110m a multiple of circa 2.4x (forward) and adjusted EBITDA in 2016 of €11m, a multiple of circa 23x (historical).
Companies: Venn Life Sciences
Kosmos Energy (KOS.L)—Secondary listing (Standard), currently on NYSE. Oil and gas exploration and production company focused on frontier and emerging areas along the Atlantic Margins. During the first half of 2017, gross sales volumes from Ghana averaged approximately 132,000 barrels of oil per day (net: 26,900 bopd). No offer. NYSE:KOS. Mkt Cap £2.54bn. | Pembridge Resources (PERE.L) - the natural resource exploration and development company has today moved from AIM to the Standard List of the Main Market.
Companies: PHE EAH SPSY FDEV SSY MERC AVN MUBL ITM DCTA
IDOX (IDOX LN) Attractive £5.0m acquisition in Public Sector, strengthens position further | Oxford BioMedica (OXB LN) Interim results; CTL019 approval anticipated by early October | ReNeuron Group (RENE LN) Pipeline continues to progress
Companies: OXB IDOX RENE
OptiBiotix* (OPTI): LP-LDL supply agreement for NZ / Australia (CORP) | Elecosoft* (ELCO): H1 in line with expectations (CORP)
Companies: Optibiotix Health Elecosoft
OnTheMarket—Intention to float on AIM to raise c. £50m which will be used to fund the growth of the OnTheMarket.com portal, already the third biggest UK residential property portal provider. Expected valuation £200m to £250m. Wilmcote Holdings plc—Sch1 from the Company established with the objective of creating value for its investors through the acquisition and subsequent development of target businesses in the downstream and specialty chemicals sector. Offer raising £15m at 120p with market cap of £25m. Expected 17 August 2017 Hipgnosis Songs Fund investment Company offering pure-play exposure to Songs and associated musical intellectual property rights. Offer raising £200m at 100p. The Company has decided to extend the closing date for the Placing, Offer for Subscription and Intermediaries Offer to 1 August 2017. The Company may bring forward this closing date at any time. Admission 15 September 2017
Companies: DCD EAH GGP GTC FISH AAZ WJG SAV FTC LWRF
Novo Nordisk reported yet another better-than-expected quarter. Q2 sales of DKK28.6bn (+3% in LC; +4% in DKK) were close to our estimate of DKK28.4bn, but the operating profit margin of 46.7% came as a positive surprise, given management’s cautious guidance after a strong Q1. All revenue growth numbers in local currency unless specified otherwise. While the diabetes and obesity care increased by 8%, the bio-pharmaceuticals declined by a lower rate of 15% vs 25% in Q1. ~77% of the growth in the diabetes business was driven by new generation insulin (o/w 66% from Tresiba), while conventional insulin continued to sag due to price erosion and the continued roll-out of Tresiba. The bio-pharmaceuticals business saw an improvement in the haemophilia business but was disturbed by the erosion of the hormone replacement therapy product Vagifem, whose generic (from Amneal) was approved in the US in Q4 16. US (+2%) and AAMEO (Africa, Asia, the Middle East and Oceania; +9%) region led the growth, contributing 27% each, followed by LatAm (+25%; 20% of growth) and China (+6%; 15% of growth), while Japan declined by 3%. Following the strong performance, Novo Nordisk has upped its full-year guidance in local currency, although dollar depreciation is likely to more than offset the upgrade. The revenue outlook has been revised upwards from 0-3% to 1-3%, while operating growth guidance has also been revised upwards from -1-3% to +1-+5%. However, unfavourable forex is likely to kill this upgrade – sales will face a negative impact of 3% vs 1% benefit (earlier) and the operating profit is likely to come in 4% lower vs the earlier estimate of a 1% benefit from forex.
Companies: Novo Nordisk
Lundbeck reported strong Q2 17 results, ahead of consensus as well as our estimates (significant beat on profitability). Revenue increased 14% yoy to DKK4.3bn (+15% at LC), driven by the continued robust performance of the core portfolio (all at LC) – Brintellix /Trintellix (+70%), Rexulti (+56%), Northera (+48%), Onfi (+27%) and Abilify Maintena (+25%). The key differentiator, however, was the solid growth posted by the off-patent drug Sabril (+22%, lost patent in 2016) due to delayed launch of its generic, approved in April 2017 (by Par Pharma, subsidiary of Endo Pharma). On the other hand, while Xenazine (-28% at LC, albeit better than market expectations) continued to suffer from its patent expiration, revenue from other pharmaceuticals declined by 6% due to generic competition on Azilect (recently approved in China for Parkinson’s) and Ebixa in Europe. Revenue from contract manufacturing declined by 45% to DKK136m. Core EBIT increased 77% to DKK1.3bn (margin: 30%, 19.4% in Q2 16), driven by the strong operating leverage from the North American operations and cost control initiatives (primarily R&D). Despite higher financial expenses (primarily due to currency fluctuations), a 12.4% yoy reduction in the effective tax rate took earnings up c.162% to DKK608m (margin up c.800bp to 14%). Geographically, while the US remained the primary facilitator (+21% LC growth), Europe posted a marginal turnaround after a prolonged period in the red (+4% LC in Q2 17; -6% in Q1 17 and -25% in FY 16, due to patent expiries of the legacy portfolio) driven by Abilify Maintena and Brintellix (both have now been launched in most major European markets). International markets too picked up pace, recording a c.17% LC growth in the quarter (+3% in Q1), driven by the strong uptake of Brintellix (launch in 20 countries in the region) and the robust performance of Abilify Maintena in Australia (the only international market for the drug to date), offset to an extent by lower sales of Cipralex and Azilect. Factoring in the encouraging Q2 results, management has upgraded its FY 17 outlook (for the second successive quarter this year and the fifth quarter in a row) – revenue to reach DKK16.7-17.5bn (from the earlier DKK16.5-17.3bn) and EBIT guidance to DKK4.1-4.5bn (from the previous DKK3.6-4.0bn, including DKK200m from the divestiture of properties in May 2017).
Companies: H. Lundbeck
Quantum Pharma plc, the service-led niche pharmaceutical developer and supplier to the health and care sectors, has reported its Preliminary financial results for the 12 months to January 31, 2017. Net sales grew by 28% to £88.8m while adjusted EBITDA was in-line with expectations at £10.1m, down from £12.5m in FY16. During the year management took a number of decisive actions to focus and simplify the business, and the company is now on a much stronger operational and financial footing as it moves forward. The actions resulted in the prioritisation of the product development portfolio within the Niche Division and the closure of the loss-making NuPharm. The core Specials division continues to generate the majority of Group adjusted EBITDA and its strength in the UK unlicensed market was underscored again by renewed exclusive supply contracts with 3 of the 4 main wholesale and pharmacy chains. Our profit forecasts for FY2018 and FY2019 remain unchanged. Quantum is valued at around a 40% discount to peers at 7.4x EV/EBITDA (9.8x PE) in the year to Jan 31st, 2018.
Companies: Quantum Pharma
ECO Animal Health has received its fifth Aivlosin® marketing authorisation of the year with the most recent being in Egypt in chickens laying eggs for human consumptions in a water soluble formulation. Egypt is the second most important egg producing country in the Middle East and just outside the top twenty globally. ECO Animal Health continues its global roll out of Aivlosin® for commercial layers after it was first approved in a water soluble formulation for the treatment of layers in Europe in 2016. We re-iterate our positive stance and continue to expect Aivlosin® to generate strong growth in multiple geographies.
Companies: Eco Animal Health Group