Original-Research: Neovacs S.A. (von GBC AG): BUY

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Original-Research: Neovacs S.A. - von GBC AG

Einstufung von GBC AG zu Neovacs S.A.

Unternehmen: Neovacs S.A.

ISIN: FR0004032746

Anlass der Studie: Research Note

Empfehlung: BUY

Kursziel: 3.30 EUR

Kursziel auf Sicht von: End FY 2017

Letzte Ratingänderung:

Analyst: Cosmin Filker; Matthias Greiffenberger

High upfront payments expected through sales partnership for China; 'Fast

Track' approval obtained from the FDA; Price Target increased to EUR 3.30

(previously: EUR 2.90); BUY rating confirmed

Since our last research study (see research study from 24/10/2016), Neovacs

S.A. has published a positive newsflow. Of particular importance here is

the recently concluded option agreement with BioSense Global LLC for the

distribution of Neovacs' key product IFN-Kinoid (Interferon Alpha-Kinoid)

for the treatment of the autoimmune diseases SLE (systemic lupus

erythematosus) and DM (dermatomyositis) in China. The focus here, as we

understand, is to treat SLE, for which up-front fees and milestone payments

of up to EUR 65 million could be received until the end of the first

marketing year. In addition, revenue-based, double-digit royalties are

incurred during the marketing of the Neovacs product.

This agreement with BioSense Global LLC is the second regional licensing of

the IFN-Kinoid after a first strategic distribution partnership for the

South Korean market with Chong Kun Dang (CKD) was already completed in

2015. Marketing approval should be granted in China, for which the costs

are covered by the sales partner, whilst marketing approval for IFN-Kinoid

is currently being sought globally for the treatment of SLE.

The fact that the costs of a Chinese Phase III trial would be covered by

the marketing partner BioSense Global LLC is of paramount importance here.

In addition, Neovacs S.A. will in the years ahead collect up-front fees and

milestone payments, which would cover some of the costs for the global

Phase III trial. Our forecasting model shows that Neovacs S.A.'s revenue

and earnings performance will be characterised by these up-front fees until

marketing of the IFN-Kinoid key product starts.

The resulting fair value per share at the end of the 2017 fiscal year

corresponds to the stock price target of EUR 3.30. In the DCF model, we

have assumed a 22.8% marketing feasibility based on the currently ongoing

Phase II trial. The corporate value indicated by the DCF valuation model

(EUR 664.10 million) is weighted with this probability, resulting in a fair

value of EUR 151.41 million (EUR 3.30 per share). If the clinical approval

process continues to be successful, the probability of occurrence, and

therefore the fair corporate value, will increase. Outgoing from the

current share price we continue to assign a BUY rating.

Die vollständige Analyse können Sie hier downloaden:

http://www.more-ir.de/d/14903.pdf

Kontakt für Rückfragen

Jörg Grunwald

Vorstand

GBC AG

Halderstraße 27

86150 Augsburg

0821 / 241133 0

research@gbc-ag.de

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http://www.gbc-ag.de/de/Offenlegung.htm

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Für den Inhalt der Mitteilung bzw. Research ist alleine der Herausgeber bzw.

Ersteller der Studie verantwortlich. Diese Meldung ist keine Anlageberatung

oder Aufforderung zum Abschluss bestimmter Börsengeschäfte.

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