DJ Marinomed Biotech AG: Q1 masks solid sales performance in most markets
goetzpartners securities Limited
Marinomed Biotech AG: Q1 masks solid sales performance in most markets
29-May-2019 / 18:03 GMT/BST
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*Published to the market and investors on 29th May 2019 @ 12.19pm (BST). *
*Marinomed Biotech AG (MARI-AT): Q1 masks solid sales performance in most
markets*
*Recommendation: OUTPERFORM*
*Target Price: EUR 103.00 *
*Current Price: EUR 81.50 (CoB on 28th May 2019) *
*KEY TAKEAWAY*
Marinomed reported slightly weaker Q1/2019 revenues than we had anticipated,
due largely to temporarily weaker demand for the marketed Carragelose products
(colds and flu infections) in two core markets, Germany and Poland.
Nevertheless, we believe that our projections for FY2019E remain achievable,
since: (1) most other markets delivered positive sales performance, (2) Q1 has
traditionally been a weaker quarter due to seasonality, with demand for
Marinomed's products usually much stronger in H2, and (3) additional launches
are planned to take place in the coming months. Importantly, lead pipeline
asset and key value driver Budesolv (dissolved budesonide), which recently met
key endpoints in the registrational Phase III trial in allergic rhinitis
("AR", hay fever), remains on track for submission in 2020E, paving the way
for launch in 2021E. We maintain and reiterate our OUTPERFORM recommendation
and EUR103 target price ("TP").
*Increase in operating loss reflects Budesolv Phase III trial costs*
Marinomed reported Q1/2019 revenues of EUR0.75m vs. EUR0.92m in Q1/2018. The
operating loss more than doubled to EUR2.63m from EUR1.05m, due largely to an
increase in R&D expenses to EUR1.39m from EUR0.78m, reflecting costs related
to the Budesolv Phase III trial, and one-off costs related to the recent IPO.
There was also an increase in net financial expenses to EUR0.61m from
EUR0.18m, which included EUR0.47m in non-cash costs related to the convertible
bond. For FY2019, we forecast revenues of EUR7.16m, which assumes that there
will be a significant ramp-up in revenues as Marinomed's 14 partners continue
to expand sales of its six products across 40 countries, including through new
launches. Our forecasts for operating and net loss are EUR9.14m and EUR9.54m,
respectively, and we expect Marinomed to end the year with a net cash balance
of EUR9.6m.
*Key driver Budesolv on track following positive Phase III trial results*
Marinomed had already reported that key value driver Budesolv (based on the
proprietary Marinosolv platform) had met the primary and a key secondary
endpoint of the pivotal Phase III trial in AR. In addition to demonstrating
non-inferiority to reference product Rhinocort Aqua (budesonide suspension,
marketed by J&J) after one week of treatment, the nasal spray also showed a
faster onset of action. In our view, this data positions Budesolv to become a
large product within the c.$13bn AR market, of which intranasal
corticosteroids account for c.$5bn. We forecast launch in 2021E and peak sales
of c.EUR760m in 2036E, which assumes a market share of around 5%. Marinomed
intends to sell Budesolv as an OTC product and is currently in discussions
with potential commercialisation partners.
*Target price of EUR103 per share suggests nearly 30% upside*
Our TP for Marinomed is based on a sum-of-the-parts valuation that consists of
risk-adjusted net present values for marketed products and developmental
product candidates plus net cash. Budesolv in AR accounts for 45% of our fair
value, the Carragelose products for 28%, Tacrosolv (dissolved tacrolimus) in
allergic conjunctivitis and dry eye disease for 21%, and net cash at YE2019E
for the remainder.
Kind regards,
Brigitte de Lima, PhD, CFA | Research Analyst
goetzpartners Healthcare Research Team | Research Team
goetzpartners securities Limited
The Stanley Building, 7 Pancras Square, London, N1C 4AG, England, UK.
T +44 (0) 203 859 7725 | brigitte.delima@goetzpartners.com /
healthcareresearch@goetzpartners.com
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May 29, 2019 13:03 ET (17:03 GMT)
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(END) Dow Jones Newswires
May 29, 2019 13:03 ET (17:03 GMT)
