Mithra Long-Term Guidance, Short-Term Struggles (Model Update)

At the end of May, Mithra's new CEO David Solomon issued a letter to shareholders, highlighting three short-term priorities: 1) strengthening the company's balance sheet and financial resources; 2 close a US deal on Donesta; and 3) maximize the value of the CDMO. In a (well-appreciated) effort to increase transparency, the company also provided long-term revenue guidance on Estelle product sales for the first time. Although the long term estimates were in line with our expectations, we adjust our mid-term estimates to reflect a somewhat slower sales ramp-up in the coming years. Furthermore, in its latest corporate presentation, Mithra indicates current cash runway until September 2023, suggesting a higher FY23 spend than we previously anticipated. For prudence, we remove our expectations on a US Donesta deal from our modelling to show a better picture of underlying cash flows. We applaud Mithra's new openness to investors, however as a result of these various changes, we reduce our TP from € 5.3 to € 2.5 while adjusting to a Hold rating. We see several options for near-term cash flows into the company, but the timing of some of these are still unclear, while others could have a dilutive impact on shareholders.