Last close As at 05/08/2026
—
— 0.00 (0.00%)
Market capitalisation
—
Research: Healthcare
We believe Oasmia is entering a definitive phase of its transformation in the months ahead. Apealea is due to be launched in Europe (early 2022), enabling an inflow of commercial revenues in 2022. Importantly however, licensee Elevar has notified Oasmia that it is reviewing the previously communicated strategy for Apealea in the United States; we note that accelerating timelines (expected launch 2025) or expansion into indications beyond advanced ovarian cancer could potentially present upside to our current assumptions. Progress on its underlying strategy to further diversify the pipeline will also be key over the near term. In October, Oasmia settled its legal disputes, clearing outstanding litigation risks. We note this has slightly shortened our forecast cash runway and additional financing is now likely to be required before end-2022. Our valuation is unchanged at SEK2.89bn.
Written by
Oasmia Pharmaceutical |
A definitive year ahead |
Q321 update |
Pharma & biotech |
6 December 2021 |
Share price performance
Business description
Next events
Analysts
Oasmia Pharmaceutical is a research client of Edison Investment Research Limited |
|||||||||||||||||||||||||||||||||||||||||||||||||||
We believe Oasmia is entering a definitive phase of its transformation in the months ahead. Apealea is due to be launched in Europe (early 2022), enabling an inflow of commercial revenues in 2022. Importantly however, licensee Elevar has notified Oasmia that it is reviewing the previously communicated strategy for Apealea in the United States; we note that accelerating timelines (expected launch 2025) or expansion into indications beyond advanced ovarian cancer could potentially present upside to our current assumptions. Progress on its underlying strategy to further diversify the pipeline will also be key over the near term. In October, Oasmia settled its legal disputes, clearing outstanding litigation risks. We note this has slightly shortened our forecast cash runway and additional financing is now likely to be required before end-2022. Our valuation is unchanged at SEK2.89bn.
Year end |
Revenue (SEKm) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
04/19 |
2.0 |
(168.5) |
(0.7) |
0.00 |
N/A |
N/A |
04/20 |
201.8 |
(43.4) |
0.0 |
0.00 |
N/A |
N/A |
12/21e** |
16.5 |
(128.1) |
(0.2) |
0.00 |
N/A |
N/A |
12/22e** |
46.8 |
(139.1) |
(0.3) |
0.00 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. **New reporting period from 1 January 2021.
Apealea EU launch in 2022, US route under review
In our view, Apealea (Cremophor-free paclitaxel) remains the primary value driver for Oasmia over the near term. European launch is expected in early 2022 (Germany and the UK) by commercial partner Inceptua, enabling the first flow of royalties to Oasmia. Ultimately, the United States remains the key market for Apealea and partner Elevar is currently reviewing the previously planned clinical and regulatory path. We expect an update in the coming months, but understand that Elevar’s overarching goal is to maximise Apealea's commercial potential and shorten timelines. For now, we maintain our assumptions.
Stringing together a diversified oncology pipeline
We expect Oasmia can continue to make progress on several fronts with the underlying strategy to diversify its oncology pipeline. The company’s scientific advisory board met to discuss the clinical pathway for recently in-licensed asset Cantrixil. The planned initiation of the Phase IIa trial for advanced ovarian cancer will be delayed slightly until a new manufacturing partner(s) is secured. Docetaxel micellar recently started a Phase Ib trial for advanced prostate cancer and recruitment is expected to complete by end 2022. Oasmia will continue to evaluate opportunities to further diversify its pipeline through in-licensing or M&A, although we believe this will likely be contingent on additional financing or divestment of its animal health business.
Valuation: SEK2.89bn or SEK6.45/share
Rolling forward our model and updating for net cash, our valuation is unchanged at SEK2.89bn or SEK6.45/share. Our rNPV is largely driven by our forecast $282m WW peak sales for Apealea contributing SEK3.41/share (c 53%), of which US assumptions form a substantial component (SEK1.17/share) and would be subject to revisions should Elevar’s strategy substantially change.
Valuation and financials
We have rolled our model forward and include net cash of SEK149.7m at 30 September 2021, less SEK24.5m net payment as a result of settling outstanding legal disputes in October with MGC Capital, former board members and former management. We have updated our forecasts to remove the short-term liability relating to the claim made by MGC Capital (SEK80m) which stemmed from it not being able to subscribe for shares by warrants. Likewise, we have removed the receivable relating to a counterclaim held by Oasmia (book value SEK40m). The settlement has a positive effect on our FY21 earnings forecasts of SEK32.5m, relating to the adjustment to fair value for the booked value of the counterclaim (non-cash). Management has guided that monthly cash burn reached c SEK9m during Q321 and cash levels provide a 12-month runway. We believe additional financing will likely be required before end 2022, hence we now include SEK100m of illustrative debt in FY22e.
Our valuation does not include Oasmia’s proprietary technology platform and unconfirmed candidates at an early stage in preclinical development. Consequently, additional indications for Apealea and docetaxel micellar, plus advancing new candidates into the clinic would provide further upside. Oasmia’s valuation is sensitive to the contribution from Apealea (c 53%) and Elevar has notified Oasmia that it is reviewing the previously communicated strategy to commercialise Apealea in the United States. We note that accelerating timelines (expected launch 2025) or expansion into indications beyond advanced ovarian cancer could potentially present upside to our current assumption. For example, as previously illustrated, if we assume $350m peak sales from ‘another cancer indication’ with launch in FY25, 15–20% tiered royalties on sales and cumulative $100m milestones (development, regulatory approval and sales milestones), discounted at 75% probability of success, we yield an additional risk-adjusted NPV of SEK1.53bn or SEK3.42/share.
Exhibit 1: Oasmia SOTP NPV
Product |
Indication |
Launch |
Peak sales ($m) |
Value (SEKm) |
Probability of success |
rNPV (SEKm) |
NPV/share (SEK/share) |
Apealea US |
Ovarian cancer |
2025 |
128 |
700.2 |
75% |
525.1 |
1.17 |
Apealea EU5 |
Ovarian cancer |
2020/22 |
62 |
590.8 |
100% |
590.8 |
1.32 |
Apealea RoW |
Ovarian cancer |
2020 |
92 |
489.2 |
90% |
440.2 |
0.98 |
Docetaxel micellar Global |
Prostate cancer |
2025 |
239 |
1,497.3 |
25% |
385.0 |
0.86 |
Cantrixil Global |
Ovarian cancer |
2027 |
302 |
1,131.6 |
35% |
327.3 |
0.73 |
Animal health |
Multiple cancers |
2024 |
163 |
995.8 |
50% |
497.9 |
1.11 |
Net cash* |
|
125.2* |
100% |
125.2 |
0.28 |
||
Valuation |
|
|
5,530.1 |
2,891.6 |
6.45 |
||
Source: Edison Investment Research. Note: *SEK149.7m as of 30 September 2021 less net payment of SEK24.5m relating to legal settlements due in Q421.
|
Exhibit 2: Financial summary |
||||||
Accounts: IFRS, year-end: 31 December, SEK000s |
2019 |
2020 |
2019 (8M) |
2020 (8M) |
2021e |
2022e |
|
01/05/18– 30/04/19 |
01/05/19– 30/04/20 |
01/05/19– 31/12/19 |
01/05/20– 31/12/20 |
01/01/21– 31/12/21 |
01/01/22– 31/12/22 |
PROFIT & LOSS |
|
|
|
|
|
|
Operating revenues |
1,980 |
201,843 |
565 |
482 |
16,500 |
46,780 |
Other operating income |
755 |
427 |
12 |
2,489 |
39,904 |
2,904 |
Total operating expenses* |
(121,966) |
(212,324) |
(109,641) |
(105,536) |
(153,548) |
(156,142) |
EBITDA (reported) |
(119,231) |
(10,054) |
(109,064) |
(102,565) |
(97,144) |
(106,458) |
Depreciation and amortisation |
(31,005) |
(20,032) |
(8,193) |
(28,930) |
(23,336) |
(22,953) |
Reported operating Income |
(150,236) |
(30,086) |
(117,257) |
(131,495) |
(120,480) |
(129,411) |
Operating margin % |
N/A |
N/A |
N/A |
N/A |
N/A |
N/A |
Finance income/(expense) excluding lease expense |
(18,240) |
(12,267) |
(8,829) |
(8,777) |
(7,120) |
(9,151) |
Leasing expense |
0 |
(1,003) |
0 |
0 |
(502) |
(502) |
Exceptionals and adjustments |
0 |
0 |
0 |
0 |
0 |
0 |
Reported PBT |
(168,476) |
(43,356) |
(126,086) |
(140,272) |
(128,101) |
(139,064) |
Income tax expense (includes exceptionals) |
(32,822) |
32,822 |
32,822 |
0 |
0 |
0 |
Reported net income |
(201,298) |
(10,534) |
(93,264) |
(140,272) |
(128,101) |
(139,064) |
Basic average number of shares, m |
253.3 |
398.4 |
260.4 |
448.4 |
448.4 |
448.4 |
Year-end number of shares, m |
294.6 |
448.4 |
447.4 |
448.4 |
448.4 |
448.4 |
Basic EPS (SEK) |
(0.8) |
(0.0) |
(0.4) |
(0.3) |
(0.3) |
(0.3) |
Adjusted EPS (SEK) |
(0.7) |
0.0 |
(0.3) |
(0.2) |
(0.2) |
(0.3) |
Dividend per share (SEK) |
0 |
0 |
0 |
0 |
0 |
0 |
BALANCE SHEET |
|
|
|
|
|
|
Property, plant and equipment |
14,701 |
28,014 |
36,322 |
17,630 |
16,067 |
14,887 |
Intangible assets |
10,497 |
9,759 |
10,040 |
9,197 |
47,545 |
51,705 |
Capitalised development costs |
433,130 |
433,357 |
433,507 |
420,334 |
400,901 |
381,468 |
Other non-current assets |
2,002 |
2,002 |
2,002 |
302 |
302 |
302 |
Total non-current assets |
460,330 |
473,132 |
481,871 |
447,463 |
464,815 |
448,362 |
Cash and equivalents |
116,272 |
201,018 |
325,658 |
40,128 |
13,568 |
84,041 |
Short-term investments |
0 |
234,080 |
0 |
247,277 |
97,277 |
0 |
Inventories |
7,420 |
28,837 |
15,833 |
51,496 |
16,850 |
17,535 |
Trade and other receivables |
6,545 |
43,907 |
50,634 |
44,552 |
10,487 |
14,325 |
Other current assets |
14,472 |
24,372 |
19,863 |
32,628 |
32,628 |
32,628 |
Total current assets |
144,709 |
532,214 |
411,988 |
416,081 |
170,810 |
148,529 |
Non-current loans and borrowings |
0 |
0 |
0 |
0 |
0 |
100,000 |
Long-term leasing liabilities |
0 |
8,845 |
10,183 |
6,545 |
6,545 |
6,545 |
Other non-current liabilities |
32,822 |
0 |
0 |
0 |
0 |
0 |
Total non-current liabilities |
32,822 |
8,845 |
10,183 |
6,545 |
6,545 |
106,545 |
Trade and other payables |
17,666 |
22,524 |
22,570 |
10,678 |
8,111 |
8,440 |
Current loans and borrowings |
139,568 |
80,000 |
80,000 |
80,000 |
0 |
0 |
Short-term leasing liabilities |
0 |
5,320 |
5,296 |
4,204 |
4,204 |
4,204 |
Other current liabilities |
31,485 |
69,268 |
37,321 |
81,919 |
64,668 |
64,668 |
Total current liabilities |
188,719 |
177,112 |
145,187 |
176,801 |
76,983 |
77,312 |
Equity attributable to company |
383,498 |
819,390 |
738,491 |
680,197 |
552,096 |
413,031 |
CASH FLOW STATEMENT |
|
|
|
|
|
|
Operating Profit/(loss) |
(150,236) |
(30,086) |
(117,257) |
(131,495) |
(120,480) |
(129,411) |
Depreciation and amortisation |
6,005 |
13,651 |
0 |
0 |
23,336 |
22,953 |
Share based payments |
0 |
120 |
0 |
0 |
0 |
0 |
Other adjustments |
32,086 |
12,738 |
0 |
0 |
(32,500) |
0 |
Movements in working capital |
(3,657) |
1,065 |
(10,176) |
(33,817) |
25,893 |
(4,193) |
Interest paid/received |
(3,037) |
(4,354) |
(4,125) |
(677) |
(5,120) |
(7,151) |
Income taxes paid |
0 |
0 |
0 |
0 |
0 |
0 |
Other financing charges |
0 |
0 |
0 |
0 |
(2,502) |
(2,502) |
Cash from operations (CFO) |
(118,839) |
(6,866) |
(131,558) |
(165,989) |
(111,373) |
(120,304) |
Capex** |
(12,031) |
(12,873) |
(9,749) |
(4,366) |
(6,500) |
(6,500) |
Acquisitions & disposals net |
0 |
0 |
0 |
0 |
(34,188) |
0 |
Other investing activities |
(2,000) |
(275,251) |
(40,251) |
(10,000) |
150,000 |
97,277 |
Cash used in investing activities (CFIA) |
(14,031) |
(288,124) |
(50,000) |
(14,366) |
109,312 |
90,777 |
Net proceeds from issue of shares |
151,852 |
401,863 |
402,951 |
0 |
0 |
0 |
Movements in debt |
81,648 |
0 |
0 |
0 |
0 |
100,000 |
Other financing activities |
0 |
(22,141) |
(20,616) |
(4,010) |
(24,500) |
0 |
Cash from financing activities (CFF) |
233,500 |
379,722 |
382,335 |
(4,010) |
(24,500) |
100,000 |
Cash and equivalents at beginning of period |
15,580 |
116,272 |
116,272 |
201,018 |
40,129 |
13,568 |
Increase/(decrease) in cash and equivalents |
100,630 |
84,732 |
200,777 |
(184,365) |
(26,561) |
70,473 |
Effect of FX on cash and equivalents |
62 |
15 |
8 |
(5,938) |
0 |
0 |
Cash and equivalents at end of period |
116,272 |
201,019 |
317,057 |
10,715 |
13,568 |
84,041 |
Net (debt)/cash |
56,704 |
435,098 |
325,658 |
287,405 |
110,845 |
(15,959) |
Source: Company accounts, Edison Investment Research. Note: From 1 January 2021, Oasmia will use the calendar year as its financial year. *Includes non-capitalised R&D costs. **Includes capitalised development costs.
|
||||||||||||
|
||||||||||||
Research: Investment Companies
TR European Growth Trust (TRG) is looking to attract a broader investor audience through a range of changes announced after a recent strategic review. The board hopes the change of name (due in January 2022) to The European Smaller Companies Trust will make TRG’s investment focus more explicit, while an eight-for-one share split (due on 13 December) should boost liquidity and help attract smaller regular savers on retail platforms. A reduction in the base management fee (already in place) will benefit existing as well as new investors, while a new benchmark (from 1 July 2022) is more of an administrative issue. The successful investment approach, mainly targeting capital growth from attractive but undervalued growth companies, as well as the management team led by Ollie Beckett at Janus Henderson Investors, remain unchanged.