RedHill Biopharma

US: RDHL

$171.4m market cap

$6.04 last close

RedHill Biopharma is a specialty pharma company focusing on gastrointestinal and inflammatory diseases and also promotes several GI products in the US. The most advanced programs are TALICIA (approved by the FDA) for H. pylori infection, RHB-104 for Crohn’s disease, BEKINDA for gastroenteritis and IBS-D, and RHB-204 for NTM.

Investment summary

RedHill Biopharma announced yesterday that the FDA has approved Talicia for the treatment of H. pylori infection in adults. The label is broad and potentially positions Talicia to compete as a front-line treatment. Talicia now is the only rifabutin-based combination antibiotic treatment approved by the FDA. In two Phase III clinical trials conducted by RedHill, no resistance to rifabutin was observed, which will be the key competitive advantage compared to standard-of-care clarithromycin-based H. pylori treatment. We previously assigned a high likelihood (90%) of successful approval given the good efficacy data and clean safety profile. Our last published RedHill valuation was $556m or $15.8 per ADS, which we increase to $571m or $16.2 per ADS following the removal of the remaining probability of success from our model.

Y/E Dec
Revenue (US$m)
EBITDA (US$m)
PBT (US$m)
EPS (fd) (c)
P/E (x)
P/CF (x)
2017A 4.0 (51.9) (45.5) (25.79) N/A N/A
2018A 8.4 (39.2) (38.8) (16.79) N/A N/A
2019E 10.0 (39.5) (39.5) (10.21) N/A N/A
2020E 13.0 (36.7) (36.8) (8.73) N/A N/A
Industry outlook

RedHill’s main focus on GI and inflammation include a range of conditions, which although can be treated with a variety of innovative and established products, there is still an unmet need in each of the diseases. In our view, carefully positioned, innovative solutions for the patients will attract attention.

Last updated on 19/11/2019
Sector
Healthcare
Share price graph
Balance sheet
Forecast net cash (US$m) 53.1
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (4.9) (13.0) (19.8)
Relative* (9.0) (18.5) (30.8)
52-week high/low US$9.0/US$5.2
*% relative to local index
Key management
Dror Ben-Asher CEO
Micha Ben Chorin CFO
Gilead Raday Chief Operating Officer
Guy Goldberg Chief Commercial Officer

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