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The strategic shift in investment strategy implemented since 2014 appears to be bearing fruit. The greater emphasis on commercial considerations means Karolinska Development is now focussed on nine active investments in mid- and late-stage opportunities. A number of major value inflection points, across several of the portfolio companies, are expected over the next 12-18 months. The convertible debt remains an issue, as does the complexity of the Rosetta Capital share-out. However, our DCF valua
Companies: Karolinska Development AB Class B
Over the past month Karolinska Development has reported a series of positive outcomes for several of its portfolio companies. The most important in terms of impact on our valuation are the encouraging results from Umecrine Cognition’s Phase Ib study and, to a lesser extent, the successful flotation of BioArctic. A number of further value inflection points, across many of the portfolio companies, are expected over the next 12-18 months. Updating our DCF-based model sees our valuation rise from SE
The investment strategy implemented over the past two years appears to be playing out as planned. Karolinska Development is now firmly focussed on disruptive technologies, with the emphasis on an active investment in mid- and late-stage opportunities. A number of value inflection points, across many of the portfolio companies, are expected over the next 12-18 months. The convertible bond remains an issue, and the equity element of the balance sheet is sub-optimal. However, our DCF-based valuatio
Last night’s Q2 results were in line with expectations. Net portfolio fair value increased by SEK8.3m during the quarter to SEK180.9m, mainly as a result of investments in Modus Therapeutics. Cash, cash equivalents & ST investments at period-end stood at SEK189.1m. In addition, we have updated forecasts following the set-off equity issue in April (the uptake of which was modest at SEK67m). Although we look forward to a wealth of Phase II trial read-outs in 2018, we remain concerned about the out
Singer Capital Markets
Karolinska Development has reported continuing progress in all its portfolio companies but the near-term remains focussed on the proposal to restructure the convertible bonds, with the EGM scheduled for the 8th March. We view the offer as marking the closing stages of the major transformation that has been underway at Karolinska Development over the last 24 months. Our valuation of Karolinska Development was placed under review pending the outcome of the offer, but previously was SEK 473m (SEK9.
Karolinska Development intends to restructure the convertible bonds, due to mature in December 2019. The proposal would materially strengthen the balance sheet and allow full implementation of the revised investment strategy. Additionally, in our view, it would remove what has been a distraction for management and a major overhang on the share price. Our valuation of Karolinska Development, based on its four main assets, was SEK 473m (SEK9.10 per share) and is placed under review pending the out
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Karolinska Development's turnaround maintained its momentum in Q316. Portfolio companies, Promimic and Dilafor, raise a total of SEK75m (including commitments) with SEK53m already invested by third-party investors; and Umecrine Cognition has since completed a SEK45m fundraising. On the operation front, BioArctic has formed a collaboration with AbbVie; and after the period end, following the publication of very promising Phase I data in ovarian cancer, Aprea has advanced APR-246 into Phase II. Ou
Over the past two years Karolinska Development has successfully repositioned itself, with the investment strategy firmly focussed on disruptive technologies that could materially alter current treatment models. New management has re- galvanised the entire organisation, with a greater emphasis on an active investment in these mid- and late-stage opportunities. Our DCF-based valuation of the four main investments alone suggests a value of SEK473m, SEK9.10 per share, which represents an uplift of 5
Q2 results on 31st August revealed a further reduction in net portfolio value to SEK143.7m. The stock is currently trading at a price/NAV of 2.4x and an EV/portfolio value of 3.2x, the latter representing a significant premium over the 1.75x average for quoted IP commercialisation companies (when adjusted for quoted company holdings). Although we believe that the portfolio is now conservatively valued, the valuation premium is in our view too wide given the convertible debt (SEK586.4m payable i
This morning’s Q3 results highlight a net loss of SEK27.5m and investment in the portfolio of SEK44.0m, broadly in line with our expectations. We have taken the opportunity to release new forecasts to reflect both the reduction in portfolio size and underlying fair value during H1 and the revised portfolio asset valuation methodology introduced by the company, which also triggered a restating of FY2014 results. Our revised target price is SEK10.0 (from SEK13.7). Remains a Hold.
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Weekly round-up of AIM-listed healthcare news.
Venture Life Group, GENinCode, Kromek, Alliance Pharma, Polarean Imaging, Benchmark Holdings, Ondine Biomedical, Verici Dx, Faron Pharmaceuticals, Avacta Group, Abingdon Health, Open Orphan, Belluscura, Hutchmed (China), Oxford Biodynamics
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Companies: H&T Group plc
Urban Logistics REIT (“ULR”) has delivered a solid FY22 performance – deploying capital apace and driving strong returns through active asset management. Earnings and dividend are both in line vs SCMe. EPRA NAV is 190p (+7% vs SCMe); as yield compression came as a bonus. Caution is being exercised in deploying remaining capital, which impacts FY23e earnings only. We upgrade EPRA NAV by 14-20% incorporating some (but not all) recent yield compression. We increase our Target Price to 210p (FY23e E
Companies: Urban Logistics REIT plc
Mercia Asset Management reported FY22 results, with a significant uplift in adj. operating profit to £8.4m, driven by strong management fee margins of >2% on stable FuM as well as strong finance income during the year. Group AuM has grown to >£1bn post period end, driven by fundraises across the Northern VCTs. The Group is well set to achieve its Mercia 20:20 Vision, with ~£27m (~46%) of its cumulative three-year PBT target delivered in year one. We increase our adj. EBITDA forecasts by 1-26% on
Companies: Mercia Asset Management PLC
1 July 2022
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This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectives
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Argentex Group (“AGFX” or the “Group”) is a regulated, commercial FX specialist, offering a range of service-led and technology-enabled FX products to corporate, institutional and HNW clients. The Group’s core business has a strong growth track record and we expect a normalising market environment post-COVID to support organic growth within this. Additionally, we see attractive opportunities across its newly launched platform with a range of technology-enabled products as well as its continuing
Companies: Argentex Group Plc
Arrow Exploration (AXL LN)C; Target price of £0.45 per share: Another well delivers flow rate above expectations – The RCS-1 well was flow tested at oil rates of up 1,872 bbl/d (936 bbl/d net to Arrow) of 30 API crude from the C7B sands. The zone was tested for 33 hours at an average oil rate of 1,076 bbl/d (538 bbl/d net to Arrow) with no formation water. Production will start next week at ~1,000 bbl/d (500 bbl/d net) in order to mini
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Augmentum Fintech has delivered a strong finish to FY22, with NAV per share up 19% YoY and +9% HoH to 155.2p, driven by both investments and positive fair value changes across the majority of its portfolio companies. The 23% IRR since IPO is above the Group’s 20% Internal Target Return, demonstrating overall attractive investment performance. Post-period end The Group has invested £4.0m in new portfolio company Kenbi and the £43m proceeds from the sale of its stake in ii strengthens AUGM’s cash
Companies: Augmentum Fintech
Companies: Real Estate Investors plc
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Marlowe delivered an impressive set of FY22A results, with underlying organic revenue growth of 9%, Adj EBITDA margins up 240bps to 18.6%, and Adj EBITDA of £54.4m (ahead of our £50.7m forecast). We make minor updates to our FY23E forecasts (Adj Diluted EPS increases 1% to 49.6p) and release new FY24E forecasts. Given the strength of Marlowe's business model, its defensive nature (non-discretionary products and services; 85%+ recurring revenue), the group's continued positive momentum (including
Companies: Marlowe Plc
Dish of the day
Visum Technologies has joined the AQSE Growth Market. The Company's business is to own and operate an "on-ride" video and photographic camera system that it sells and/or licenses to customers (being theme parks, ride manufacturers, souvenir imaging providers, and other leisure operators).
No Leavers Today.
What’s cooking in the IPO kitchen?
Immediate acquisitions (IME.L) is to re-join AIM via a Reverse Takeover of Fiinu Holdings Limited. Once complete the Compan
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Further to its strategic review, Palace Capital intends to focus on becoming an ESG driven, regional office market specialist. To that end the company has announced a new £46.5m property disposal programme including its entire industrial property portfolio with the proceeds to be reinvested into the office sector. Palace Capital has also announced a buyback for up to 5% of its shares and continues to review its cost base. The outcome of the strategic review is to sharpen the focus on themes mana
Companies: Palace Capital plc
The final decision on CRB III (see below) on streaming revenues is positive for Songwriters, Music publishing and Hipgnosis (SONG). The decision will result in addition revenues being paid to SONG over the coming periods. We view the ruling as positive and evidence of a continuing shift in the understanding of the value of a Songwriter’s contribution to a hit record and the willingness of industry stakeholders to recognise it. YTD SONG has de-rated significantly and currently trades on a 23.8% d
Companies: Hipgnosis Songs Fund Limited Shs GBP
Stocks in focus this week are Personal Group, Johnson Service Group, Capita and Mears
Companies: Personal Group Holdings Plc