Grifols reported a strong quarter with a decent recovery in the base business – the lynchpin Bioscience was the show-stopper, after a transient decline in Q1 21. While the improving plasma supply and sprawling collection base is soothing, the resurfacing pandemic and regulatory concerns in the US do warrant a caution. Also, while GIC’s investment does help to address leverage concerns, the resolution is only ‘partial’ and a full resolution is still awaited due to the (expected) continuation of o
Companies: Grifols (GRF:BME)Grifols, S.A. Class A (GRF:MCE)
In the last one month, Grifols has been the worst performer in the AV smaller pharma universe. While sector-specific factors have contributed to this downturn, the US CBP’s decision to deem plasma donations by Mexican immigrants on visitor visas illegal was the main pain-point. Interestingly, plasma donations by these immigrants have been one of the principal contributors to the global supply network, and this new rule has further deteriorated the plasma market’s supply-demand dynamics.
In Q1, Grifols reported a decline in both sales and profitability, and this was largely due to the weakness in the Bioscience division which suffered from reduced plasma collection. However, the group is expected to witness a sizeable recovery from H2 21 onwards, benefiting from the rising plasma collection capacity and COVID-19 vaccination programmes gathering pace. But, caution is warranted, as this recovery largely hinges on improving pandemic situation. The rising threat from the FcRN-based
Grifols’ Q4 20 top line and bottom line came under pressure as limited plasma collection and the postponement of elective surgeries weighed on the performance of the Bioscience segment. Although robust growth in the Diagnostics segment provided some respite, the change in ASFA rules have delayed Grifols’ Alzheimer’s dream, which further aggravated the pain. Competition from FcRN-based drugs in the CIDP space is brewing and this is also bothersome.
Strong underlying demand for plasma-derivative drugs and COVID-19 tests propelled the top line in Q3. Moreover, the recovery in plasma-collection bolstered the profitability. Grifols has initiated >25 plasma-based trials for the treatment of COVID-19 and convalescent plasma has already received a go-ahead from the FDA, though NIH’s suspicion over its efficacy has limited its usage. In Q4, the surge in demand for COVID-19 tests should fuel growth. Moreover, expansion in the CNS space – through th
Companies: Grifols, S.A. Class A
Grifols’ Q2 20 top-line growth remained resilient amid the pandemic, primarily driven by the robust demand for plasma-driven medicines. However, population confinements lowered plasma collection across the globe, in turn impacting the group’s profitability. Though plasma collection might remain a challenge until herd immunity is achieved, rising unemployment and GC Pharma’s acquisition should provide some respite. A positive result on convalescent plasma trial on COVID-19 would be the next key t
Grifols has reinforced its position in the American market (especially Canada) with the acquisition of plasma fractionation (in Canada) and plasma collection (in the US) facilities from the South-Korean-based Green Cross Pharma, for €402m. While this deal would reduce Grifol’s reliance on third-parties for plasma-sourcing, liquidity could come under pressure with the net-debt/EBITDA ratio rising to 4.7x. Nonetheless, the Spanish pharma should be able to finance the deal internally with its cash
Q1 was strong, led by third consecutive quarter of acceleration in sales in the Bioscience division and the return to growth of the Bio supplies division. While the Diagnostics division slipped into the red due to lockdowns across key geographies, the business should be back on track once Grifol’s COVID-19 tests hits the market. Approval (expected in July) of convalescent plasma for the treatment of COVID-19 could be a game-changer for Grifols, and the overall plasma industry.
Well-positioned in the plasma industry, Grifols could be a winner from the ongoing pandemic crisis — as the Spanish pharma giant has joined forces with the US to develop a COVID-19 treatment. The group’s resilient business — operating in an oligopolistic market, with high demand and significant barriers to entry — translating into strong potential for top-line growth and improving margins, along with a robust R&D pipeline, supports the investment case at current levels.
Q4 19 top-line growth was fuelled by the acceleration in sales for plasma-driven medicines and a sturdy show in the diagnostics division. Robust operational leverage combined with lower plasma procurement costs and financial expenses (due to debt refinancing) resulted in a significant jump in earnings. Given Grifols’ high exposure to China, 2019-nCoV could be a short-term dampener; nonetheless, the high unmet plasma demand in the region should bolster growth in the long term.
Grifols witnessed an acceleration in Q3 sales, driven by solid demand for plasma products, along with strong contributions from other divisions. Adjusted EBITDA also increased but the momentum was partly held back by higher R&D and SG&A expenses. After taking into consideration the increase in financial expenses, net earnings fell ~8%. Fortunately, given the low-interest rate environment, Grifols plans to refinance its existing debt of €5.3bn.
Grifols reported strong top-line growth (+9.2ppt at CER), boosted by a favourable FX (+6.2ppt) – group sales grew by 15.4% – mainly driven by continued demand for plasma-derived medicines. On the profitability side, although high financial costs put pressure on savings, the operational efficiencies were assuring. We expect the sales momentum to remain robust in H2 19, on the back of recent FDA approval of 20% SCIg.
Grifols (+17.8%) is one of the best performing companies in the Ibex35 (+0.95%), and a top performer in AV’s pharma coverage (+0.99%) over the last one month. We attribute this outperformance to primarily two developments – the FDA approval of its 20% SCIg (Xembify) on 4 July 2019 and the presentation of the AMBAR (Alzheimer Management by Albumin Replacement) study result (for the treatment of Alzheimer’s disease) on 16 July 2019.
Grifols reported strong constant currency sales, further helped by currency tailwinds, culminating in sales growth of 13.1% to €1,157m. Profitability, although better sequentially, remained under pressure, on account of the investments going towards increasing plasma collection and preparing for the launch of 20% SCIG. Overall, not impressive.
Grifols’ Q4 had the same theme as the last quarter – strong top-line but stumbling at the profitability level, due to high raw material costs and other investments. Albumin sales in China were negatively impacted by a delay in the renewal of some licenses. US and Europe reported strong delivery but ROW, perhaps also attributable to China, declined during the quarter. Profit estimates are likely to be revised downwards marginally but our recommendation is likely to be maintained.
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Full-year results were in line with the trading update of 21 July, with revenues of £31m (-2%), reflecting the impact of COVID-19 on out-patient procedure rates, resulting in 14% and 24% declines in adjusted EBITDA and pre-tax profit, respectively. Lower than expected procedure growth rates and the decision to discontinue non-core (non-chlorine dioxide products) reduces forecast revenues by c.£3m to £33m in FY 2022. However, higher gross profit and tight control of costs (+6%) results in an unch
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Recruitment resumed the Phase 2a trial of the lead programme hRPC in retinitis pigmentosa (RP) with the treatment of the first UK-patient in Oxford. The protocol gives greater infection control after the safety issue (a possible infection) in June. Five patients were treated up to mid-October and the remaining four could be treated by December 2021. By late March 2022, ReNeuron expects to give an interim update. The full data set should be available around mid-2022. This will enable regulatory d
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Arrow Exploration Corp. (AIM: AXL ; TSXV: AXL) , the oil and gas exploration and production company, has conditionally raised approximately £8.8m and is due to complete its dual listing on AIM on 25 Oct. Market cap c£13.1m.
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IXICO has provided an upgraded trading statement for FY21E following its previous update in August 2021. Revenues are now expected to be £9.2m (vs £8.7m previously), broadly in line with FY20A, which we see as a strong result given the pandemic and Huntington's Disease (HD) trials de-scope. EBITDA is expected to be materially ahead of FY20A's £1.3m, supported by strong Q4/21 trading, cost control and positive one-offs. The company has ended FY21 with a strong order book (£18.8m) and cash positio
CareTech is a specialist social care and educational services provider. This morning, the group has announced an update for the year to 30 September pointing to the fact that results will be in line with market expectations. The net debt position of £259m illustrates a further reduction since the end of H1 (31 March £263.1m) and implying a reduction to 2.7x adjusted EBITDA. During the year, seven new developments have opened, with a further eight properties purchased in H2. The group's freehold
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H1 EBITDA declined by 45% YoY, albeit this was slightly better than we had anticipated after the pre-close update in August. The beat was cost related (efficiencies/savings). There was a significant gross margin drag though and, while transitory in nature and diminishing in H2, this means further savings need to be realised to hit full year forecasts. This is our view and we retain a good level of confidence in next year’s forecasts. Having de-rated, valuation looks very undemanding now on just
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Synairgen reported interim results to 30 June in which the adjusted net loss was £32.8m with period-end cash of £46.2m. Substantial pre-commercial progress and manufacturing activities have made in the half, although slower country approvals for trial sites will result in Phase III data readout slipping into Q1 2022. With increasing evidence of the need for a broad-spectrum antiviral delivered to the lungs and recognition that vaccines don’t provide complete protection against hospitalisations d
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Hikma’s H1 20 top-line acceleration was driven by COVID-19-related demand in Injectables and Generics and the economic recovery in Algeria propelled growth in the Branded segment. Combined with a favourable product-mix, the operating margin was up 1.5ppt. In the near term, new launches across segments should provide some respite against the ongoing pricing pressure. Given the company’s thin R&D pipeline and a robust balance sheet, M&A (probably in the biosimilars space) seems on the cards.
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The oncology consultancy using mathematical models to support the development of cancer treatment regimens and personalised medicine solutions yesterday announced it has entered into a partnership with Tabula Rasa HealthCare® (TRHC) (NASDAQ: TRHC), a healthcare technology Company advancing the field of medication safety. Through this initiative, Physiomics' personalised docetaxel model will be integrated into TRHC's market-leading precision dosing solution, DoseMeRx®. Both parties expect positiv
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