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

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 IFNα-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 IFNα-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 IFNα-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 IFNα-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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