CO.DON is a leading manufacturer of autologous cell therapies for the treatment of cartilage defects. The company’s main product, Spherox, is based on the core spheroid technology and can repair cartilage defects of the knee of up to 10cm2 in a minimally invasive procedure. The Phase III clinical trial allowed CO.DON to obtain marketing authorisation from the European Medicine Agency (EMA) in July 2017, which opened access to all European markets. The company is preparing for the roll-out of Spherox and has already received a green light from the UK’s National Institute for Health and Care Excellence (NICE).
CO.DON |
Green light for Spherox from the EMA
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Pharma & biotech |
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15 November 2017 |
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CO.DON is a leading manufacturer of autologous cell therapies for the treatment of cartilage defects. The company’s main product, Spherox, is based on the core spheroid technology and can repair cartilage defects of the knee of up to 10cm2 in a minimally invasive procedure. The Phase III clinical trial allowed CO.DON to obtain marketing authorisation from the European Medicine Agency (EMA) in July 2017, which opened access to all European markets. The company is preparing for the roll-out of Spherox and has already received a green light from the UK’s National Institute for Health and Care Excellence (NICE).
Autologous cell-based transplants for cartilage repair
CO.DON specialises in the regenerative treatment of articular cartilage defects. During a biopsy procedure healthy cartilage cells are taken from the patient’s own cartilage as well as a blood sample. This is cultivated in a laboratory outside the body using CO.DON’s innovative biological techniques to create cartilage, which is then transplanted back into the defect area. Following the EMA approval, Spherox is currently the only authorised advanced therapy medicinal product (ATMP).
EMA’s approval opens multiple European markets
Although CO.DON’s products have been sold in Germany since 1997, the EMA authorisation was required for EU-wide distribution. The efficacy and safety of Spherox from a Phase III trial (n=102) are expected later this year. Meanwhile, three-year follow-up interim data from the Phase II trial (n=75) have shown significant improvements across two outcomes (patient-reported and imaging-based). Accumulated data from the trials supported the EMA’s approval in July 2017.
Valuation: EV of €183m
H117 revenues of €3.0m were flat y-o-y, while operating loss was €2.4m vs -€1.2m a year ago due to product roll-out and regulatory expenditure. Consensus estimates are for positive EBIT of €2.1m on sales of €20.7m in 2020. In October, CO.DON raised €15.5m gross and will invest in the expansion. Current estimated net cash is €20.1m, resulting in an EV of €183m; this appears undemanding given the opportunity to expand into multiple European markets. Especially encouraging is the recommendation of the method by the UK’s NICE and a wholesale licence granted by the UK Medicines & Healthcare products Regulatory Agency (MHRA).
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Consensus estimates
Source: Company data, Thomson Reuters |
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Mensch und Maschine Software provides CAD/CAM software to the industrial and construction sectors to support the digitisation of their design, manufacture and build processes. The company has enjoyed strong growth over recent years, with revenues and EBITDA growing at CAGR 8.8% and 101% in 2012-2016. The ongoing transition to accommodate Autodesk’s shift to a subscription-based model is nearing completion, which should see VAR return to growth in FY18. This is coupled with continued strength in the high margin proprietary software division, which grew 8% y-o-y in 9M17. The shares trade in line with peers on a consensus FY18e P/E basis.