MITHRA - KBC Securities Company Note 08.06.2018 - Seeking opportunities on shifting grounds

Mithra is a clinical-stage company with a pipeline focused on novel native estrogen estetrol (E4)-based products and complex therapeutics for women’s healthcare. • Mithra is coming to a turning point with results coming up in 3Q18 on a phase III trial in Europe/Russia for the combined oral contraceptive Estelle. Results for the US/Canada trial are anticipated for 1Q19. Next step is the regulatory approval and commercialization of the drug for which the company intends to attract a strategic partner. • Positive phase IIb data on a second drug, Donesta, for women suffering from menopausal complications (or hot flushes), were communicated in 2Q18. Mithra indicated that it intends to continue with this pipeline drug via a co-development scenario. As such, a strategic partner with commercial footprint can reduce the development and commercialization risk and bring out the maximal sales potential of the drug. • In 2018, we will as well see upside in a third program, MyRing. This is a complex generic for Merck’s vaginal ring, NuvaRing, that went off patent in Apr 2018. Commercial launch in Europe is foreseen for 2Q18 and 1Q19 in the US through a local partner, Mayne pharma. • In anticipation of the Estelle phIII results and the announcement(s) on partnerships for Estelle and/or Donesta (co-development), we updated our investment case. Estelle and Donesta now each take up € 10/share. MyRing accounts for € 4.0/share and we as well revised the potential of the CDMO facility for which multiple contracts already have been signed. Following our SOTP/DCF analysis, we increase the Target Price to € 35.0/share (from € 27/share) with Buy rating maintained.