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Edison Investment Research is terminating coverage on BONESUPPORT, Orexo, Transcontainer and UmweltBank. Please note you should no longer rely on any previous research or estimates for these companies. All forecasts should now be considered redundant. Previously published reports can still be accessed via our website.
Companies: Orexo AB
Edison
On 17 March 2020 Orexo held a capital markets day at which it provided an update on its programs and estimates of the impact of COVID-19 on its business. In short, Orexo is predicting a limited impact from the virus, which is consistent with our estimates. It also highlighted its development pipeline, which will be a major focus of the company. It will be launching its next product, vorvida for problem drinking, in Q320 if the FDA signs off.
Orexo announced on 6 March 2020 that it has submitted an application to the FDA for its vorvida digital therapy for the treatment of heavy drinking. It expects a hearing from the FDA on the approval status of the program in Q220 and to commercialize the product in H220 if it is cleared. The product uses cognitive behavioral therapy coupled with machine learning and has been vetted in a randomized, controlled study to reduce problematic drinking episodes.
Orexo continues to weather the shift in its payer base away from exclusivity to the open market well. It has managed to maintain 4% sequential growth in Zubsolv sales from Q3 to Q419 (SEK190.5m), in the context of a 3% decline in units. Growth in the open market strongly resembles overall market trends (14% AGR for 2019). The company intends to use some of these Zubsolv revenues to advance its pipeline, which will have five products advancing in 2020.
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Orexo reported a record performance for Q319 with revenue of SEK231.2m (+6.7% year-on-year). The top line was lifted by a combination of factors including currency and a shift in the reimbursement landscape for Zubsolv in the US toward higher-margin business, translating into a record EBIT of SEK105.9m, over three times that of Q318, and SEK135.7m in operating cash flow. Orexo ended the period with SEK813m in cash (SEK524m net), which we expect the company will reinvest in new assets and its pip
Orexo has announced a partnership for the digital therapy of opioid use disorder (OUD) with GAIA, a global leader in digital therapeutics. The partnership will use GAIA’s expert system technology platform, broca, to develop a treatment management and support a product tailored to individual OUD patients.
After a strong Q119, which is seasonally the weakest quarter, Orexo also had a higher bar to beat Q218 due to milestone income making it one of its best ever quarters. Nevertheless, total Q219 revenues rose 0.8% to SEK201.2m. Zubsolv continued to perform well with Q219 sales of SEK184.4m, even against generic film and sublingual tablet competition.
Orexo’s Q119 results reinforced its continuing profitability with total revenues rising 25% y-o-y to SEK174.3m. Zubsolv led the revenue charge comprising 93% of total revenues and growing 23% y-o-y despite the seasonally weak first quarter of the opioid use dependency market. The effect on US Zubsolv (which increased in price by 4% from January 2019) from four Suboxone film generic entrants is so far minor.
Orexo’s FY18 results demonstrated continuing profitability derived from its lead product, Zubsolv, responsible for 21.7% y-o-y net sales growth driven by US Zubsolv Q418 prescription and revenue growth of 22% and 31.8%, respectively. The weakness in partnered products compared to our targets (although FY18 partnered sales were SEK125.4m) and higher Q4 investment (including litigation) reduced FY18 EPS compared to our estimate by SEK1.8. We have tempered our revenue growth expectations for FY19 u
Orexo’s capital markets day (CMD) emphasised the scale of the US opioid crisis. We have forecast 8.2% market growth pa for US opioid dependency in FY19 and FY20, although external speakers at the CMD suggested this may be higher. Orexo’s marketed product Zubsolv, sales of which grew 37% y-o-y in Q318 in SEK, and its other products in development, form a treatment franchise in the growing markets of opioid dependency and related disorders. The recent return of EU Zubsolv rights defers the royalti
The growing US Zubsolv franchise continues to drive Orexo’s quarterly performance. Total Q3 revenue growth of c 30% puts Orexo in an attractive position with potential business development partners. Orexo’s Q318 results were the first since Zubsolv’s exclusivity was strengthened for another 13 years in the US, so with Zubsolv sales growing by 1.2% q-o-q in Q3, against the backdrop of a 0.3% decline in the buprenorphine/naloxone market volumes, and continued material CoGS improvements, Orexo is m
Orexo’s appeal of the US District Court’s invalidation of the ‘330 patent, which had been anticipated for some months, has been successful. Zubsolv is Orexo’s largest and fastest-growing product – we anticipate sales of c SEK620m and over 25% growth in FY18. The initial invalidity of the ‘330 patent had weighed on the shares since 2014 and this overhang has now been removed. The exclusivity of the Zubsolv patents runs until 2019 and 2032. We have updated our valuation ahead of the Q318 results.
In a well-received set of quarterly results, Orexo continued to execute on Zubsolv in the US, which, for the second quarter running, continued to be the only branded product in the category that increased its market share in the face of multiple generics. Zubsolv US revenues of SEK158.4m grew by 27.6% y-o-y, driving total revenues to SEK200m. EBITDA of SEK50.6m, cash flow from operations of SEK39m and a gross cash balance of SEK494.8m made Q218 one of Orexo’s best ever quarters.
Research Tree provides access to ongoing research coverage, media content and regulatory news on Orexo AB. We currently have 32 research reports from 2 professional analysts.
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Shore Capital
Feature article: Steady as she goes, but could be better: A review of investment company liquidity since 2016 Liquidity is the lifeblood of equity markets. The measurement of liquid asset availability to a market or company is a way of gauging a market’s health. This article builds on our previous work, which analysed the liquidity data for non-financial trading companies, by applying the same analytical techniques to the investment companies (IC) space. We analyse liquidity for ICs as a whol
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Hardman & Co
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Hybridan
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Cavendish
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Avon Protection’s capital markets day highlighted its continued focus on medium-term margin expansion (targeting operating margin of 14–16%), concentrating on its core business of respirators and head protection. The unwinding of the armour business, alongside the consolidation of Team Wendy (acquired in H220) should enable Avon to benefit from rising global defence spending. Its strong relationship with the US DoD, and organic growth opportunities with recurring revenue from necessary product r
Companies: Avon Protection PLC
Cambridge Nutritional Sciences (CNS) has published its H1 2024 results to end September 2023. Group revenues grew 44% to £4.9m and gross profits increased by 63% to £3.1m, with the company benefitting from newfound operational efficiencies. With its now streamlined strategy focussing on the core Health & Nutrition business and the initial signs of an encouraging uptick in sales momentum, we believe the company is well positioned for growth that will help create future value for shareholders. We
Companies: Cambridge Nutritional Sciences PLC
Venture Life has reported FY23 results to December 2023, following the February trading update. Revenues grew 17% in the year to £51.4m (our est. £50.7m) and adjusted EBITDA was £11.6m (our est. £11.6m). Cash conversion was 85%, generating £9.8m of cash from operations. Cash generation and no M&A in 2023 allowed the company to de-lever, closing FY23 with net debt to adjusted EBITDA at 1.3x. Management have focused on growth with three therapy areas generating double-digit revenue growth and onli
Companies: Venture Life Group Plc
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Liberum
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Diaceutics has released a trading statement for the year to December 2023 guiding to revenue growth of 22% YoY to £23.7m, up 19% on a constant currency basis. The order book jumped 57% to £26.6m, of which c£12.3m is expected to be realised in FY24, and which currently stands at £30.8m. The proportion of recurring revenue continues to increase and is now over 50% (FY22 35%). Cash at YE23 stood at £16.7m, indicating a near halving of the rate of cash burn in 2H23 compared to 1H23. We adjust our FY
Companies: Diaceutics Plc
Capital Access Group
Belluscura has released a Trading Update stating that due to the delay in securing funding and Chinese NMPA approval, sales and manufacturing have been delayed by at least four months and it now expects EBITDA breakeven in Q3 and to turn cashflow positive in Q1 2025.
Companies: Belluscura PLC
Dowgate Capital
Zoetis delivered a decent set of results for the last quarter of 2022 meeting analyst expectations as well as the high end of its management guidance. Despite the economic challenges, ongoing pandemic recovery, and the political unpredictability brought on by the war in Ukraine, they delivered operational growth for the year in each of their top 13 markets. The company's unique companion animal portfolio drove its 8% operational revenue increase for the year, growing 14% operationally. In compar
Companies: Zoetis (ZTS:NYSE)Zoetis, Inc. Class A (ZTS:NYS)
Baptista Research
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