Flash Note - Four life sciences presents to unpack by the year-end holidays
Today, we publish our flash note: Four life sciences presents to unpack to the year-end holidays. As we enter the final quarter of the year, volatility returns to the markets. While prudent fund managers may be keen to lock in gains as the year-end comes closer, we have identified 4 healthcare names in our coverage with interesting setups going into 4Q21. We believe these 4 highlighted stocks have interesting risk/reward profiles and see them as strong candidates for outperformance in the coming months, driven by outspoken catalysts, fundamental undervaluation poised for a rebound or a combination of both. Investors can pick from these 4 names, each with their own dynamic, for some extra performance late in the year. We highlight UCB as our top pick.Fagron – the oversold compounder
While Fagron presents signals of topline recovery and acceleration, the company’s COVID-19 woes move from its revenues to the REBITDA level as increasing costs eat away at the margins. However, LATAM operations and US compounding, the company’s main growth drivers, remain intact and poised for sustained strong performance. Hence, we find the recent aggressive pullback in the stock price overdone.
We maintain our € 19.5 price target and upgrade our rating from Hold to Buy.
Hyloris – the steady builder
Having executed well on their business model and ambitions since their July 2020 IPO, we feel comfortable with management’s capacity to deliver on the ambition of adding at least 4 novel products to the pipeline per year. After adding Mico – DomiBro and Milrinone, at least two spots remain for novel products.
We proactively add € 10m rNPV per product for the two expected additions by year-end and increase our price target from € 15.5 to € 16.5, maintaining our Buy-rating.
Mithra – the looming trigger
With the eye on upcoming Donesta phase III primary efficacy readout coming out by year-end/early next year as clear trigger, we see ample upside in the name in the course of the coming months.
We maintain our € 33.5 price target and reiterate our Buy-rating.
UCB – the catalyst avalanche
With the renewal of the product portfolio well underway, UCB is on the verge of several high-impact catalysts which are relatively well de-risked: bimekizumab approval in PsO and phase III datasets in PsA and AxSpa, phase III data of zilucoplan in MG and phase III data of rozanolixizumab in MG. All but the latter are expected within 4Q21.
Anticipating bime’s approval in PsO, we increase our price target from € 119 to € 120 and maintain our Buy-rating.
Fagron supplies products, services to professionals and institutions in the healthcare sector in Europe, the U.S.A. and Brazil. Co.'s activities are subdivided into four divisions. Through Fagron, Co. offers products and concepts for pharmaceutical compounding. Through Arseus Dental, Co. supplies dental products and concepts to dentists and dental laboratories in Belgium, the Netherlands, France, Germany and Switzerland. Through Arseus Medical, Co. supplies medical and surgical products to specialists, elderly homes, homecare nurses and hospitals in Belgium and the Netherlands. Through Corilus, Co. supplies ICT total solutions for medical specialists in Belgium, the Netherlands and France.
Mithra Pharmaceuticals SA is a Belgium-based company active in the pharmaceutical industry. The Company is dedicated to provide products and services for the fertility, contraception and menopause of women. It has a number of patent families regarding Estetrol (E4), a natural estrogen produced by the human foetus, which enables the investigation of fertility and contraception products. Mithra is focused on the development of two late-stage E4-based products: Estelle, a 5th generation oral contraceptive, and Donesta, a hormone therapy for Vasomotor Symptoms in menopause. Mithra develops a contraceptive vaginal ring called Myring and Zoreline, a biodegradable subcutaneous implant for hormone dependant cancer.
UCB is a global biopharmaceutical company focused on severe diseases in two therapeutic areas, namely central nervous system disorders and immunology. In the area of central nervous system disorders, Co. is focused on advanced Parkinson's disease, epilepsy, restless legs syndrome and epilepsy. In the area of immunology disorders, Co. is focused on rheumatoid arthritis, axial spondyloarthritis, psoriatic arthritis, systemic lupus erythematosus, juvenile idiopathic arthritis, post-menopausal osteoporosis, systemic lupus erythematosus and immunological diseases.
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