Xbrane Biopharma |
Mammalian movement |
Strategic update |
Pharma & biotech |
29 April 2019 |
Share price performance
Business description
Next events
Analyst
Xbrane Biopharma is a research client of Edison Investment Research Limited |
Xbrane, a leading innovative biosimilar development company, is moving into mammalian cell culture with announced plans for Xdivane, a biosimilar of the immunoncology blockbuster Opdivo (nivolumab, BMS). The company plans to launch Xdivane from 2026. Xbrane has issued guidance that its share of revenues from Xlucane, partnered with STADA and due for launch by Q122, could reach €100m. The XPLORE Phase III trial has enrolled its first patient, with its primary endpoint due in mid-2020. Our valuation remains SEK581m pending further information on Xdivane.
Year |
Revenue* (SEKm) |
PBT** |
EPS** |
DPS |
P/E |
Yield |
12/17 |
20.77 |
(44.16) |
(8.14) |
0.0 |
N/A |
N/A |
12/18 |
20.49 |
(13.12) |
(2.13) |
0.0 |
N/A |
N/A |
12/19e |
20.00 |
(146.95) |
(19.27) |
0.0 |
N/A |
N/A |
12/20e |
20.00 |
(240.41) |
(28.96) |
0.0 |
N/A |
N/A |
Note: *Revenue includes other income. **PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Ambition to become a leading biosimilar company
Xbrane has moved decisively away from the previous focus on delivery systems (Spherotide) towards becoming a leading biosimilar company. The lead product, Xlucane, a monthly biosimilar of Lucentis (ranibizumab, Roche (US), Novartis (Eur); 2018 sales: $3.6bn) treats wet age-related macular degeneration. Xlucane is produced (by a contract manufacturer) using Xbrane’s proprietary high yield bacterial fermentation system. Xbrane is now adding a high-yield mammalian fermentation technology; no details are available. Most bio-pharmaceuticals, like monoclonal antibodies, need mammalian cell production so this new technology vastly expands the range of potential biosimilars and partners. Xbrane’s initial mammalian product, Xdivane, is a biosimilar of the immunoncology blockbuster Opdivo (nivolumab, BMS; 2018 sales: $2.9bn). The company plans to launch Xdivane from 2026.
Xlucane revenues guided to start in Q122
Xlucane is partnered with STADA, a private, €2.3bn sales German company. Costs and profits are split 50:50. Xbrane has guided to a revenue share target of €100m based on global sales of €300m by STADA; STADA had no US salesforce in 2018. The global Phase III (NCT03805100, XPLORE) aims to recruit 580 patients and enrolled its first patient on 19 April. Primary endpoint data are due in May 2020 with the first profit share expected by management in Q122. There are two advanced competitors: bioeq – Formycon and Samsung Bioepis; Roche is adding products.
Valuation: Adjusted value per share of SEK68
We maintain our indicative valuation of SEK581m until further details of the proposed mammalian technology and on Xdivane are disclosed; these could add substantially to the value but immunoncology is very competitive. The March rights issue raised SEK59.3m gross at SEK30/share before expenses and a loan repayment of SEK8.1m. Our new post-rights value per share is SEK68/share (formerly SEK92/share). We expect that further funds will be needed in 2020.
Exhibit 1: Financial summary
SEK 000s |
2017 |
2018 |
2019e |
2020e |
||
Year end 31 December |
GAAP |
GAAP |
GAAP |
GAAP |
||
PROFIT & LOSS |
|
|
|
|
||
Revenue |
|
|
20,771 |
20,485 |
20,000 |
20,000 |
Cost of Sales |
(15,829) |
(15,907) |
(15,800) |
(15,800) |
||
Gross Profit |
4,942 |
4,578 |
4,200 |
4,200 |
||
Other income |
2,515 |
99,742 |
0 |
0 |
||
EBITDA |
|
|
(40,871) |
(7,993) |
(140,527) |
(233,986) |
Operating Profit (before amort. and except.) |
|
(43,939) |
(11,415) |
(143,949) |
(237,408) |
|
Intangible Amortisation |
(779) |
(525) |
(525) |
(525) |
||
Other |
0 |
0 |
0 |
0 |
||
Operating Profit |
(44,718) |
(11,940) |
(144,474) |
(237,933) |
||
Net Interest |
(217) |
(1,700) |
(3,000) |
(3,000) |
||
Exceptionals |
0 |
0 |
0 |
0 |
||
Profit Before Tax (norm) |
|
|
(44,156) |
(13,115) |
(146,949) |
(240,408) |
Profit Before Tax (FRS 3) |
|
|
(44,935) |
(13,115) |
(147,474) |
(240,933) |
Tax |
0 |
(121) |
0 |
0 |
||
Profit After Tax (norm) |
(44,156) |
(13,236) |
(146,949) |
(240,408) |
||
Profit After Tax (FRS 3) |
(44,935) |
(13,236) |
(147,474) |
(240,933) |
||
Average Number of Shares Outstanding (m) |
5.4 |
6.2 |
7.6 |
8.3 |
||
EPS - normalised (öre) |
|
|
(814) |
(213) |
(1,927) |
(2,896) |
EPS - normalised fully diluted (öre) |
|
|
(814) |
(213) |
(1,927) |
(2,896) |
EPS - FRS 3 (öre) |
|
|
(828) |
(213) |
(1,934) |
(2,903) |
Dividend per share (öre) |
0 |
0 |
0 |
0 |
||
Operating Margin (before GW and except.) (%) |
N/A |
N/A |
N/A |
N/A |
||
BALANCE SHEET |
||||||
Fixed Assets |
|
|
82,861 |
91,227 |
83,532 |
81,610 |
Intangible Assets |
63,657 |
65,611 |
59,838 |
59,838 |
||
Tangible Assets |
18,569 |
16,745 |
14,823 |
12,901 |
||
Investments |
635 |
8,871 |
8,871 |
8,871 |
||
Current Assets |
|
|
28,101 |
161,658 |
63,370 |
44,885 |
Stocks |
3,065 |
5,525 |
5,525 |
5,525 |
||
Debtors |
8,072 |
10,489 |
10,494 |
10,494 |
||
Cash |
7,903 |
100,972 |
2,684 |
8,439 |
||
Other current assets |
9,061 |
44,672 |
44,667 |
20,427 |
||
Current Liabilities |
|
|
(17,029) |
(160,439) |
(152,339) |
(152,339) |
Creditors |
(17,029) |
(114,878) |
(114,878) |
(114,878) |
||
Short term borrowings |
0 |
(45,561) |
(37,461) |
(37,461) |
||
Long Term Liabilities |
|
|
(4,664) |
(8,434) |
(19,171) |
(259,578) |
Long term borrowings |
(1,119) |
(4,118) |
(4,159) |
(224,159) |
||
Other long term liabilities |
(3,545) |
(4,316) |
(4,316) |
(4,316) |
||
Net Assets |
|
|
89,269 |
84,012 |
(24,607) |
(285,423) |
CASH FLOW |
||||||
Operating Cash Flow |
|
|
(36,848) |
46,707 |
(143,016) |
(212,238) |
Net Interest |
0 |
0 |
0 |
0 |
||
Tax |
0 |
0 |
0 |
0 |
||
Capex |
(3,347) |
(1,598) |
(1,500) |
(1,500) |
||
Acquisitions/disposals |
0 |
0 |
0 |
0 |
||
Financing |
20,004 |
48,238 |
46,737 |
220,000 |
||
Dividends |
0 |
0 |
0 |
0 |
||
Other |
(2,637) |
(278) |
(508) |
(508) |
||
Net Cash Flow |
(22,828) |
93,069 |
(98,288) |
5,754 |
||
Opening net debt/(cash) |
|
|
(29,612) |
(6,784) |
(51,293) |
38,936 |
HP finance leases initiated |
0 |
0 |
0 |
0 |
||
Other |
0 |
(48,560) |
8,059 |
(220,000) |
||
Closing net debt/(cash) |
|
|
(6,784) |
(51,293) |
38,936 |
253,181 |
Source: Edison Investment Research, Xbrane Biopharma 2018 annual report
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