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Research: Healthcare
Paion has gained approvals in the US, China and Japan for its fast-onset, short-recovery anaesthesia product remimazolam. In the US, partner Acacia is expected to launch it in Q420 for procedural sedation (PS). In Japan, Mundipharma launched it in Q320 for general anaesthesia (GA). In China, Yichang Humanwell launched it for PS in August with GA trials ongoing. Initial European PS approval is expected by H121. European marketing will be either direct or by using regional partners. Paion indicates that it has cash until H221. Our valuation is €283m.
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Paion |
Commercialisation of remimazolam underway
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Pharma & biotech |
Deutsches Eigenkapitalforum 2020
15 October 2020 |
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Paion is a research client of Edison Investment Research Limited |
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Paion has gained approvals in the US, China and Japan for its fast-onset, short-recovery anaesthesia product remimazolam. In the US, partner Acacia is expected to launch it in Q420 for procedural sedation (PS). In Japan, Mundipharma launched it in Q320 for general anaesthesia (GA). In China, Yichang Humanwell launched it for PS in August with GA trials ongoing. Initial European PS approval is expected by H121. European marketing will be either direct or by using regional partners. Paion indicates that it has cash until H221. Our valuation is €283m.
Three approvals so far
The FDA approved remimazolam for PS in Q320. In the US, it is branded as ByFavo and licensed to Acacia. Acacia states that the US procedural colonoscopy market is 25m procedures with marketing targeted to hospitals where ByFavo use can be supervised. However. most colonoscopies are carried out in private clinics. Launch is expected in Q420 as Drug Enforcement Agency classification has completed. We expect a price of about $25 per 20mg vial with royalties of 20–25% from H221. In Japan it is approved for GA; Mundipharma instigated launch in July (branded as Anerem) with Paion receiving royalties of 16–18%. In China, branded as Ruima, it is approved for PS and was launched in August by Yichang Humanwell; a GA trial is ongoing.
Europe – a staged approval and market uncertainty
Remimazolam is undergoing a European Medicines Agency review for PS with the outcome likely by H121. The European GA Phase III closed with 424 patients enrolled (of 500 planned), potentially allowing a follow-on, faster, abbreviated EMA GA application. Currently, the European sales strategy is unclear. Paion might sell direct, but the market is too small to support a salesforce unless additional marketed products can be sourced. The major European market is seen as GA. A more likely strategy will be using one or more regional marketing partners to generate royalties; this remains our current valuation assumption.
Valuation: Potential profitability within five years
Paion aims to become profitable within five years. Our indicative value remains at €283m. Paion expects strong 2020 revenues from approval milestones but royalties will be under €1m. COVID-19 might limit the number of procedures carried out in 2021. Paion had €12.4m in cash on 30 June, gained a H220 US approval milestone of €15m and has an EIB loan facility of €20m.
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Edison estimates
Source: Paion reports, Edison forecasts |
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Research: TMT
H120 sales of €1.3m (up 43% from H119) represented a resilient first-half performance for artec, given the impact of the COVID-19 pandemic. Management also announced a number of attractive multi-year contracts across both security and broadcast customers, with €0.25m of revenue secured in Q320 and €0.25–0.30m expected in Q420, typically the company’s strongest quarter. artec’s positive trading highlights the benefits of a flexible, diversified business and leaves the group well placed for FY20 despite the uncertain macroeconomic outlook. With cash and undrawn facilities of €0.8m, artec offers potential share price upside if management can deliver on its guidance of significantly increased sales and positive profitability in FY20.