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Precision in diagnosis & therapy: Promising theranostic approach with validated target

Note regarding MiFID II: This research report has been prepared by order of the issuer based on a contractual agreement and is being compensated for by the issuer. The research report has simultaneously been made publicly available to all interested persons. Hence, the receipt of this research report is to be regarded as a permitted insignificant non-monetary benefit according to § 64 para 7 sentence 2 No. 1 and 2 of the German Securities Trading Act (WpHG).

The motivation for the spin-off of the wholly owned subsidiary Pentixapharm AG (PTP) from the Eckert & Ziegler Group (EZSE) results from the different risk profiles of the respective business models. EZSE's proven, rather low-risk core business focuses on the production and sale of radioisotopes and - as a service provider - the radioactive labeling of pharmaceutical preparations. PTP's business model, on the other hand, focuses on the development and approval of novel radiopharmaceuticals. It is primarily aimed at specialized biopharma investors interested in financing the development of proprietary compounds for the diagnosis and treatment (theranostic principle) of several diseases, including cancer and hypertension. In addition to the currently ongoing advanced clinical studies for diagnostic applications, the further development of the active principle is aimed at establishing a drug platform based on the theranostic concept for a variety of other indications.
Precision oncology: a “game changer” in diagnostics and therapy
Due to the precise, disease-specific point of attack, we see a high market potential for radioligand therapy. While the more mature development projects - in terms of clinical phases - are initially dedicated to diagnostic applications, they serve as a blueprint for therapeutic use in line with the theranostic concept. The medical relevance and economic potential of the radiopharmaceutical theranostic approach is reflected in the most recent four M&A transactions within the last 12 months totalling USD 8.4 billion on the part of Big Pharma.
The risk-adjusted DCF analysis results in a fair value of the equity of € 302 million, taking full account of the accumulated losses carried forward. For reasons of prudence, we also carried out a valuation without taking loss carryforwards into account and derive an NPV of € 279 million.
Overall, we value the operating business of Pentixapharm Holding AG in a corridor of € 279 - 302 million.