Oncopeptides (No_rec, TP: SEK) - Rights issue announced

Oncopeptides this morning announced plans for a cSEK300m fully guaranteed rights issue. This should not come as a surprise to the market as the company was very clear in its Q4 report that it had financial resources to last into Q2 2024. Due to DNB Markets’ role in the rights issue, we have withdrawn our target price and recommendation.

Oncopeptides (Hold, TP: SEK5.50) - US not an option, focus on Europe

In line with our base-case scenario, the FDA has withdrawn the accelerated approval for Pepaxto in the US. As a result, the focus is now growth in Europe, where it has full approval. Q4 earnings were weaker than we expected, but we believe the sales trend is moving in the right direction. We reiterate our HOLD, but have lowered our target price to SEK5.5 (7).

BioArctic (Buy, TP: SEK350.00) - Focus remains on Leqembi

The Q4 report was a non-event as Leqembi royalties had already been published. We believe investors will continue to focus on the Leqembi launch trajectory; however, we believe BioArctic’s pipeline will come into greater focus with the approaching start of the phase IIa trial for exidavnemab in Parkinson’s disease. We reiterate our BUY but have lowered our target price to SEK350 (365).

Lundbeck (Buy, TP: DKK44.00) - New guidance structure

Q4 sales and EBITDA missed our forecasts as strategic brands sales were soft. The 2024 guidance was also soft but in a new better structure, we believe, for revenue growth of 7–10% CER (-4% in DKK) and adj. EBITDA growth of 10–16% in CER (-9% in DKK). We also note the decision to move Lu AF82422 into phase III in MSA. We reiterate our BUY and DKK44 target price.

Lundbeck (Buy, TP: DKK44.00) - Focus on guidance and M&A

We expect Lundbeck to reach the high end of its 2023 guidance, and forecast Q4 revenue of DKK5,111m and adj. EBITDA of DKK929m. For 2024, we look for continued good growth across strategic brands (we forecast 12.9%), and we believe investors will focus on the M&A agenda to strengthen the late-stage pipeline. We expect the 2024 guidance to be for revenue of DKK21.0bn–21.6bn and EBITDA of DKK5.7bn–6.3bn. We reiterate our BUY and DKK44 target price.

BioArctic AB: 1 director

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Lundbeck (Buy, TP: DKK44.00) - Focus on progressing the pipeline

At Lundbeck’s R&D event in London yesterday, focus was on pipeline progression and its R&D commitment. Lundbeck believes two of the six discussed pipeline candidates could reach the market in 2029. In the coming years, we expect increased focus on acquisitions to strengthen the late-stage pipeline to facilitate timely new product launches before the ‘patent cliff’ (we estimate in 2029). We reiterate our BUY and DKK44 target price.

Oncopeptides (Hold, TP: SEK7.00) - Europe launch progressing

Q3 sales were slightly below our forecast. However, Q4 seems to be off to a good start (almost as many vials sold in October as in Q3). A new official price is in place in Germany, with which Oncopeptides is satisfied (we had expected a higher price). The company said its liquidity would take it to end-Q2 next year, and thus we believe the financial risks are increasing. We reiterate our HOLD but have cut our target price to SEK7 (8.5).

BioArctic (Buy, TP: SEK365.00) - Launch progressing in the US

Q3 earnings were slightly below our estimate, as the milestone received from Eisai was less than we expected. We have adjusted our uptake trajectory for Leqembi to reflect the complex infrastructure needed to administer the drug (multiple MRIs and i.v. infusions) and have significantly reduced our short-term sales forecasts. Longer-term, we expect Leqembi to be a game-changer for Alzheimer’s patients. We reiterate our BUY, but have cut our target price to SEK365 (410).

Lundbeck (Buy, TP: DKK44.00) - R&D event ahead

Despite a Q3 revenue miss, Lundbeck has narrowed its 2023 revenue guidance to DKK19.8bn–20.1bn but raised adj. EBITDA to DKK5.6bn–5.8bn, reflecting the Q3 beat on lower R&D costs. We expect the R&D event due on 30 November to be an eye-opener, as we believe most investors have assigned limited value to the pipeline. We reiterate our BUY and target price of DKK44.

Lundbeck (Buy, TP: DKK44.00) - Another increase to guidance likely

We expect Q3 top-line growth of 8.7% YOY (consensus 7.8%), driven by strategic brands, for which we forecast sales growth of 10.5% YOY, and an EBIT margin of 16.5% versus consensus of 15.5% (results due at 07:00 CET on 8 November). We expect the company to raise its 2023 guidance for revenue to DKK19.9bn–20.2bn (from DKK19.5bn–20.1bn) and for adj. EBITDA to DKK5.4bn–5.7bn (from DKK5.2bn–5.6bn). We reiterate our BUY and have raised our target price to DKK44 (41).

Lundbeck (Buy, TP: DKK41.00) - CEO leaving on a high note

Bowing out on a high note, CEO Deborah Dunsire unveiled robust Q2 sales and a solid beat on adj. EBITDA, prompting an increase in the 2023 revenue guidance to DKK19.5bn–20.1bn (from DKK19.4bn– 20.0bn) and adj. EBITDA to DKK5.2bn–5.5bn (from DKK5.1bn–5.4bn). We see a strong possibility of incoming CEO Charl van Zyl extending the run of raised guidance with the Q3 report, and reiterate our BUY and DKK41 target price.

Lundbeck (Buy, TP: DKK41.00) - Still too early to raise guidance

We forecast Q2 top-line growth of 9.1% YOY (consensus 7.9%), driven by strategic brands, for which we forecast 15.4% sales growth YOY, and an EBIT margin of 16.1% (consensus 15.7%). We expect an unchanged 2023 guidance for revenues of DKK19.4bn–20.0bn and adj. EBITA of DKK5.1bn–5.5bn, but see scope for Lundbeck to raise its guidance later this year. We reiterate our BUY and DKK41 target price.

Lundbeck (Buy, TP: DKK41.00) - Still too early to raise guidance

We forecast Q2 top-line growth of 9.1% YOY (consensus 7.9%), driven by strategic brands, for which we forecast 15.4% sales growth YOY, and an EBIT margin of 16.1% (consensus 15.7%). We expect an unchanged 2023 guidance for revenues of DKK19.4bn–20.0bn and adj. EBITA of DKK5.1bn–5.5bn, but see scope for Lundbeck to raise its guidance later this year. We reiterate our BUY and DKK41 target price.

Northern Lights

Oncopeptides (Hold, TP: SEK8.50) - Downgraded to HOLD

Q2 product sales were in line with our forecast; however, we believe a Pepaxti roll-out in Europe will take longer than previously anticipated and that a potential Type 2 variation is now of less value. Oncopeptides is appealing the FDA’s formal request for the withdrawal of Pepaxto from the US market, and expects a response from the agency in H2. We have cut our target price to SEK8.5 (15) (our target price includes potential dilution from future share issues). Given the limited potential upsid...

BioArctic (Buy, TP: SEK410.00) - Approvals in focus; sales ramp-up adj...

The Q2 report was fairly undramatic, coming just after the most important event in the company’s history – full FDA approval of Leqembi. BioArctic is turning its sights to possible approval in Japan in September as well as a full launch in the US by its partner Eisai. The pipeline of new projects looks solid, although there was no more detail. We reiterate our BUY but have lowered our target price to SEK410 (430) on our view of a slower sales ramp-up.

Northern Lights

BioArctic (Buy, TP: SEK430.00) - Leqembi fully approved in the US

The FDA announced on 6 July that it had converted the accelerated approval for Leqembi to a full approval. As a result, we expect the CMS to grant the drug full reimbursement under the condition that patients take part in a data registry for the real-world outcomes of treatment with Leqembi. We note that the FDA recommends patients to be typed for ApoE4 status prior to initiation of treatment and that there is a Boxed Warning added to the label. We do not see this as something that should negati...

Swedish Small - caps - summer 2023

Swedish Small - caps - summer 2023