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Research: TMT
CentralNic delivered FY20 revenues of US$241.2m, a 121% y-o-y increase (FY19: US$109.2m). Adjusted EBITDA rose 71% to US$30.6m (FY19: US$17.9m), supported by the acquisitions completed in FY19 and FY20 and led by growth in Monetisation. On a pro forma basis, adjusting for the Codewise acquisition, the group delivered 9% organic revenue growth in FY20. In FY21, the group has already completed two acquisitions (SafeBrands and Wando) and secured €60m of additional bond headroom from shareholders, of which €15m has been placed to fund Wando and future M&A deals. On the basis of the strong FY20 results, with the group trading in line with management’s expectations ytd, we have updated our forecasts. The valuation continues to look attractive versus peers.
CentralNic Group |
Strong FY20, carrying momentum into FY21 |
FY20 results |
Software & comp services |
5 March 2021 |
Share price performance
Business description
Next events
Analysts
CentralNic Group is a research client of Edison Investment Research Limited |
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CentralNic delivered FY20 revenues of US$241.2m, a 121% y-o-y increase (FY19: US$109.2m). Adjusted EBITDA rose 71% to US$30.6m (FY19: US$17.9m), supported by the acquisitions completed in FY19 and FY20 and led by growth in Monetisation. On a pro forma basis, adjusting for the Codewise acquisition, the group delivered 9% organic revenue growth in FY20. In FY21, the group has already completed two acquisitions (SafeBrands and Wando) and secured €60m of additional bond headroom from shareholders, of which €15m has been placed to fund Wando and future M&A deals. On the basis of the strong FY20 results, with the group trading in line with management’s expectations ytd, we have updated our forecasts. The valuation continues to look attractive versus peers.
Year end |
Revenue (US$m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/19 |
109.2 |
16.1 |
9.24 |
0.0 |
12.4 |
N/A |
12/20 |
241.2 |
19.8 |
10.25 |
0.0 |
11.2 |
N/A |
12/21e |
323.4 |
26.7 |
9.71 |
0.0 |
11.8 |
N/A |
12/22e |
350.0 |
30.1 |
10.70 |
0.0 |
10.7 |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items, share-based payments and non-core operating expenses.
Monetisation growth rebalances business mix
CentralNic delivered FY20 revenues of US$241.2m, a 121% y-o-y increase (FY19: US$109.2m) following the acquisitions completed in FY19 and FY20. Adjusted EBITDA rose 71% to US$30.6m (FY19: US$17.9m), with margins falling to 12.7% (FY19: 16.4%) as the business mix has changed, with the acquisition of Codewise and the continuing growth and outperformance of the lower-margin Monetisation segment. Operating cash flow rose to US$18.1m in FY20, with cash and cash equivalents rising to US$28.7m. FY20 net debt increased by US$10m to US$85m.
Organic growth, recurring revenues, cash conversion
Revenues in the Indirect segment grew by 41% to US$85.8m, increasing by 7% on a pro forma basis. In the Direct segment, revenues fell 7% to US$43.4m, as certain businesses were reallocated to other segments. On a pro forma basis, Direct revenues were flat year-on-year at US$44.4m. Monetisation was the fastest growing segment, with revenue growth of 35% to US$103.4m (excluding Codewise), and 13% on a pro forma basis. Recurring revenue increased to c 99% in FY20 (typically 90%+), with adjusted cash conversion of c 106% (typically c 100%), in line with the long-term trend. Our revised estimates reflect the stronger than expected revenue growth and rebalanced business mix.
Valuation: Undemanding FY21e P/E of 11.8x
On our updated estimates, CentralNic trades on a P/E of 11.8x normalised FY21e earnings an FY21e EV/adjusted EBITDA of 8.9x, markedly lower than its global peers, despite a five-year revenue CAGR of 78% to FY20 and strong growth estimates. As CentralNic consolidates a fragmented market of sub-scale, cash-generative businesses, we would expect earnings accretive M&A to bring these multiples down further.
FY20 results
Strong top-line growth driven by Monetisation
CentralNic delivered FY20 revenues of US$241.2m, a 121% y-o-y increase (FY19: US$109.2m). Gross profits increased by 78% y-o-y to US$76.3 (FY19: US$42.8m) and adjusted EBITDA rose 71% to US$30.6m (FY19: US$17.9m), supported by the five acquisitions completed in FY19 and FY20 and led by the growth in Monetisation. On a pro forma basis, adjusting for the two acquisitions completed in FY20, the group delivered 9% organic growth in FY20, despite the impact of COVID-19.
The group’s strong growth resulted in an adjusted EBITDA margin of 12.7% (FY19: 16.4%), lower than our forecast of 14.1% as a result of the continuing growth and outperformance of the lower margin Monetisation segment, together with increased investment in technology and personnel in FY20. Management has previously stated that it is not primarily focused on margin enhancement, but will consider acquisitions that deliver growth in absolute profitability even if this is at the cost of lower margins. The FY20 reported loss before tax increased to US$9.4m, from US$6.6m in FY19, a 38% rise largely due to a US$6.0m increase in financing costs to US$9.8m (FY19: US$3.9m), with the FY19 comparator benefiting from a US$3.9m gain from FX movements, resulting in a reported EPS loss of 4.60 cents, a 24% increase on the FY19 loss of 3.72 cents.
For clarity, given the c US$29m difference between reported earnings and adjusted earnings in FY20, we note that adjusted earnings exclude non-cash charges and non-core operating expenses related primarily to acquisitions, integration and other related costs not incurred as part of the underlying trading performance of the group. The company provides a reconciliation of this calculation as part of the accounts, but in descending order, the primary adjustments relate to amortisation of intangibles, non-core operating expenses, share-based payments and foreign exchange.
Operating cash flow was US$18.1m in FY20, rising from US$16.3m in FY19, leading to cash and cash equivalents increasing to US$28.7m in FY20 (FY19: US$26.2m). With gross interest-bearing debt of US$113.6m, net debt increased by US$10m from US$75m in FY19 to US$85m in FY20 largely due to the appreciation of the euro (the currency of the company’s debt) against the dollar (reporting currency).
Management reported that recurring revenue increased to 99% in FY20 (typically 90%+), with adjusted cash conversion of 106% (typically c 100%), in line with the group’s long-term trend.
Organic growth: 9% pro forma growth in FY20
Given the transformation of the business following major acquisitions in FY19 and FY20, alongside its preliminary results the group provided a pro forma breakdown reflecting a full contribution from acquisitions made during the year (ie Codewise). The pro forma analysis indicates a group annual revenue run-rate of US$289.7m for FY20 and highlights organic revenue growth of 9% y-o-y, growth in gross profits of 8% to US$96.6m and adjusted EBITDA growth of 4% to US$35.6m.
Segmental analysis: Indirect, Direct and Monetisation
The group’s three segments are: 1) Indirect, which incorporates CentralNic’s wholesale and registry business, selling to domain name retailers; 2) Direct, which incorporates the Small Business and Enterprise segments, retailing domain names and value-added services direct to businesses; and 3) Monetisation, the domain monetisation and performance advertising business for domain investors, established with the acquisition of Team Internet in December 2019.
|
Exhibit 1: FY20 revenues |
Exhibit 2: FY20 pro forma revenues |
|
|
|
Source: CentralNic |
Source: CentralNic |
|
Exhibit 1: FY20 revenues |
|
|
Source: CentralNic |
|
Exhibit 2: FY20 pro forma revenues |
|
|
Source: CentralNic |
■
Indirect: revenues increased by 41% to US$85.8m (FY19: US$60.7m) reflecting the contribution from the FY19 acquisitions, with revenue increasing by 7% to US$89.1m (FY19: US$83.3m) on a pro forma basis.
■
Direct: revenue fell 7% to US$43.4m (FY19: from US$46.6m), principally reflecting the reallocation of the data centre business to the Indirect segment and the monetisation activities to the Monetisation segment. On a pro forma basis, FY20 revenue was little changed year-on-year at US$44.4m (FY19: US$44.3m). Management expects the segment to return to growth in FY21.
■
Monetisation was the fastest growing segment of CentralNic’s business. Excluding the acquisition of Codewise (for which revenue growth was sacrificed in FY20 to raise margins, resulting in higher absolute profits), revenue would have increased by 35% to US$103.4m (FY19: US$76.5m). On a pro forma basis, including a full contribution from Codewise, revenue increased by 13% to US$156.2m (FY19: US$138.3m).
Estimates updated: Higher revenue growth, business mix
The balance of strong organic growth with a significant contribution from acquisitions left revenue well ahead of our FY20 estimates (US$241.2m vs US$217.8m), with adjusted EBITDA in line (US$30.6m vs US$30.7m), reflecting a fall in blended EBITDA margin from 16.4% in FY19 to 12.7% in FY20.
Exhibit 3: Edison’s revised estimates
Year end 31 December US$'000 |
Actual |
Change |
Old |
New |
Change |
Old |
New |
Change |
Revenue |
241,212 |
10.7% |
295,345 |
323,428 |
10% |
313,424 |
349,953 |
12% |
Gross profit |
76,318 |
8% |
98,645 |
108,348 |
10% |
104,684 |
117,234 |
12% |
Adjusted EBITDA |
30,594 |
(0)% |
40,321 |
39,458 |
(2)% |
43,774 |
43,744 |
(0)% |
Normalised operating profit* |
28,510 |
(6)% |
36,027 |
36,664 |
2% |
37,534 |
40,721 |
8% |
Operating profit (IFRS) |
360 |
19,145 |
22,187 |
20,317 |
25,078 |
|||
Profit before tax (norm)* |
19,817 |
14% |
27,747 |
26,737 |
(4)% |
29,658 |
30,069 |
1% |
Profit Before Tax (IFRS) |
(9,395) |
10,865 |
11,261 |
12,440 |
10,476 |
|||
EPS - basic normalised (c)* |
10.25 |
84% |
8.67 |
9.71 |
12% |
9.18 |
10.70 |
17% |
Revenue growth (%) |
120.9 |
35.6 |
34.1 |
6.1 |
8.2 |
|||
Gross margin (%) |
31.6 |
33.4 |
33.5 |
33.4 |
33.5 |
|||
Adjusted EBITDA margin (%) |
12.7 |
13.7 |
12.2 |
14.0 |
12.5 |
|||
Normalised operating margin (%) |
11.8 |
12.2 |
11.3 |
12.0 |
11.6 |
|||
Capex |
(4,259) |
86% |
(3,839) |
(4,972) |
29% |
(4,075) |
(5,380) |
32% |
Closing net debt/(cash) |
84,985 |
8% |
61,663 |
80,038 |
30% |
41,061 |
63,579 |
55% |
Source: CentralNic accounts, Edison Investment Research. Note: *We have slightly amended our historical earnings methodology to align with the adjusted earnings approach and disclosure set out in CentralNic’s accounts.
As a result, we have revised our estimates, reflecting the following principal changes:
■
Revenue growth – taking the FY20 pro forma revenue figure (US$289.7m) as a basis, we have assumed organic revenue growth of 9%, before adding revenue contributions from the acquisitions of SafeBrands and Wando. This leads to our new FY21 revenue estimate of US$323.4m, 10% higher than our previous estimate. Our US$350.0m FY22 estimate assumes a further 8% organic revenue growth in FY22. Our estimates do not take account of future M&A.
■
Gross margin – with a stronger relative performance expected from the higher-margin Direct and Indirect segments in FY21, we have left our gross margin assumptions for both FY21 and FY22 essentially unchanged at 33.5%.
■
Adjusted EBITDA and adjusted EBITDA margins – we have chosen to leave our adjusted EBITDA estimates for FY21 and FY22 broadly unchanged, reflecting a lower margin assumption for each year than previously. Our FY21e EBITDA margin correspondingly falls from 13.7% to 12.2%, rising marginally to 12.5% in FY22 (previously 13.7% and 14.0%, respectively).
M&A: Strong pipeline, debt headroom
CentralNic completed one major acquisition in FY20, Codewise (Monetisation), which follows the four acquisitions in FY19: TPP Wholesale, Hexonet and Ideegeo (Indirect), and Team Internet (Monetisation). In FY21, CentralNic has already completed the US$3.7m (plus a US$0.7m earn-out) acquisition of SafeBrands (Direct), a French-based brand protection software provider, and Wando Internet Solutions (Monetisation), for US$13.0m in cash (including a US$6.5m earn-out).
■
SafeBrands (January 2021): an online brand protection software provider and corporate registrar, based in Paris, acquired for up to €3.6m (0.9x FY19 revenue) in cash, with €3m payable upfront and €0.6m payable in FY20 subject to performance criteria. SafeBrands was approximately break-even in FY19. Strategically, SafeBrands’ presence in France complements CentralNic’s German-based brand services business and helps to position CentralNic as the European leader in corporate domain portfolio management and online brand protection.
■
Wando Internet Solutions (February 2021): a social marketing, display and SEM advertising company based in Berlin, acquired for up to US$13.0m in cash (2.2x revenues, 9.0x EBITDA), with 50% payable upfront and a 50% performance-based deferred cash consideration in H222. In FY20, Wando generated revenue of €4.9m and EBITDA of €1.2m, deriving more than half its revenues through CentralNic’s network.
Outlook: Continuing growth supported by M&A
In FY20, CentralNic delivered 9% organic growth on a pro forma basis and record revenue growth of 121%, taking the group’s five-year revenue CAGR to FY20 to 78%. In FY21, the group has already completed two acquisitions (SafeBrands, Wando) and placed €15m of bonds (with outstanding approval for €45m more) to fund Wando and future M&A deals. With the group trading in line with management’s expectations in FY21 and scope for further M&A from a strong pipeline of future deals, we have updated our forecasts. The net debt position appears sustainable given the profitability of the group, continuing organic growth, its high recurring revenues and strong cash conversion. The valuation continues to look attractive.
Valuation: Persistent discount to peer group
It is hard to identify a direct peer group for CentralNic. Verisign (US), GoDaddy (US) and R22 (Pol) remain the core peers, but with the increasing emphasis on Monetisation and programmatic advertising (for which there are few quoted European stocks), we are considering companies such as Trade Desk (US), Magnite (US), Criteo (Fra), Quinstreet (US) and Catena Media (Swe) – although the business models and valuations of these comparators vary materially.
Exhibit 4: Peer group table
Name |
Current price |
Quoted |
EV |
Sales Growth |
Gross margin 1FY (%) |
EBITDA margin 1FY (%) |
EBIT margin 1FY (%) |
EV/Sales |
EV/Sales |
EV/EBITDA 1FY (x) |
EV/EBITDA 2FY (x) |
P/E 1FY (x) |
P/E |
Trade Desk Inc |
695.9 |
USD |
32,349 |
34.3 |
79.0 |
33.9 |
29.3 |
28.8 |
22.0 |
85.1 |
63.0 |
126.8 |
99.1 |
Verisign Inc |
190.5 |
USD |
22,165 |
3.8 |
86.0 |
69.1 |
64.5 |
16.9 |
15.7 |
24.4 |
22.6 |
35.7 |
31.0 |
Magnite Inc |
44.3 |
USD |
4,995 |
29.6 |
66.7 |
22.1 |
15.1 |
17.4 |
14.8 |
78.6 |
60.1 |
170.3 |
97.3 |
GoDaddy Inc |
78.6 |
USD |
15,722 |
11.7 |
65.3 |
22.8 |
10.2 |
4.2 |
3.9 |
18.6 |
16.2 |
50.1 |
38.6 |
Criteo SA |
33.9 |
USD |
1,611 |
4.1 |
74.0 |
30.8 |
20.8 |
1.9 |
1.8 |
6.1 |
6.0 |
15.7 |
15.6 |
Quinstreet Inc |
23.6 |
USD |
1,157 |
14.1 |
12.6 |
8.6 |
N/A |
2.1 |
1.9 |
23.9 |
19.2 |
38.5 |
32.4 |
iomart group |
310.0 |
GBp |
554 |
2.1 |
60.9 |
37.3 |
20.2 |
3.5 |
3.3 |
9.3 |
8.8 |
20.6 |
19.3 |
Catena Media |
43.2 |
SEK |
435 |
14.6 |
35.0 |
49.0 |
39.1 |
3.0 |
2.7 |
6.1 |
5.4 |
12.3 |
10.4 |
R22 SA |
43.6 |
PLN |
209 |
23.9 |
21.6 |
27.4 |
20.8 |
3.3 |
2.9 |
11.9 |
10.4 |
N/A |
N/A |
Mean (ex Trade Desk, Verisign, Magnite) |
11.8 |
44.9 |
29.3 |
22.2 |
3.0 |
2.7 |
12.6 |
11.0 |
27.4 |
23.2 |
|||
Mean |
15.4 |
55.7 |
33.4 |
27.5 |
9.0 |
7.7 |
29.3 |
23.5 |
58.8 |
43.0 |
|||
Median |
14.1 |
65.3 |
30.8 |
20.8 |
3.5 |
3.3 |
18.6 |
16.2 |
37.1 |
31.7 |
|||
Source: Refinitiv, priced as at 4 March 2021
Disregarding Trade Desk, Verisign and Magnite, which we include for completeness, the peer group trades at average EV/sales multiples of 3.0x for FY1 and 2.7x for FY2, with EV/EBITDA multiples of 12.6x for FY1 and 11.0x for FY2. In terms of P/E, the peer group trades at 27.4x for FY1 and 23.2x for FY2. CentralNic is displaying the strongest growth in the group and yet trades on a P/E multiple of 11.8x normalised FY21e earnings and 10.7x normalised FY22e earnings, a material discount to the peer group.
Exhibit 5: Financial summary
US$'000 |
2018 |
2019 |
2020 |
2021e |
2022e |
||
Year ending 31 December |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
INCOME STATEMENT |
|||||||
Revenue |
|
|
55,991 |
109,194 |
241,212 |
323,428 |
349,953 |
Cost of Sales |
(30,080) |
(66,419) |
(164,894) |
(215,079) |
(232,719) |
||
Gross Profit |
25,911 |
42,775 |
76,318 |
108,348 |
117,234 |
||
Adj. EBITDA |
|
|
9,146 |
17,921 |
30,594 |
39,458 |
43,744 |
Normalised operating profit |
|
|
8,820 |
16,615 |
28,510 |
36,664 |
40,721 |
Amortisation of acquired intangibles |
(5,600) |
(8,299) |
(12,508) |
(14,477) |
(15,643) |
||
Exceptionals |
(5,619) |
(8,259) |
(10,529) |
- |
- |
||
Share-based payments |
(469) |
(2,878) |
(5,113) |
- |
- |
||
Reported operating profit |
(2,868) |
(2,821) |
360 |
22,187 |
25,078 |
||
Net Interest |
(1,430) |
(3,869) |
(9,834) |
(9,927) |
(10,652) |
||
Joint ventures & associates (post tax) |
45 |
74 |
79 |
- |
- |
||
Profit Before Tax (norm) |
|
|
7,507 |
16,144 |
19,817 |
26,737 |
30,069 |
Profit Before Tax (reported) |
|
|
(4,996) |
(6,616) |
(9,395) |
11,261 |
10,476 |
Reported tax |
(1,428) |
39 |
348 |
(4,046) |
(5,049) |
||
Profit After Tax (norm) |
6,079 |
16,183 |
20,165 |
22,691 |
25,020 |
||
Profit After Tax (reported) |
(6,424) |
(6,577) |
(9,047) |
7,215 |
5,427 |
||
Minority interests |
5 |
64 |
- |
- |
- |
||
Discontinued operations |
- |
- |
- |
- |
- |
||
Net income (normalised) |
6,084 |
16,247 |
20,165 |
22,691 |
25,020 |
||
Net income (reported) |
(6,419) |
(6,513) |
(9,047) |
7,215 |
5,427 |
||
Basic average number of shares outstanding (m) |
127,515 |
175,084 |
196,680 |
233,738 |
233,738 |
||
EPS - basic normalised (c) |
|
|
4.77 |
9.24 |
10.25 |
9.71 |
10.70 |
EPS - diluted normalised (c) |
|
|
4.54 |
8.97 |
9.85 |
9.39 |
10.35 |
EPS - basic reported (c) |
|
|
(5.04) |
(3.72) |
(4.60) |
3.09 |
2.32 |
Dividend (c) |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
||
Revenue growth (%) |
75.3 |
155.9 |
120.9 |
34.1 |
8.2 |
||
Gross Margin (%) |
46.3 |
39.2 |
31.6 |
33.5 |
33.5 |
||
Adj. EBITDA Margin (%) |
16.3 |
16.4 |
12.7 |
12.2 |
12.5 |
||
Normalised Operating Margin |
15.8 |
15.2 |
11.8 |
11.3 |
11.6 |
||
BALANCE SHEET |
|||||||
Fixed Assets |
|
|
132,321 |
217,544 |
275,431 |
285,789 |
272,502 |
Intangible Assets |
127,267 |
206,055 |
260,569 |
269,227 |
257,083 |
||
Tangible and Right-of-use Assets |
931 |
6,427 |
8,677 |
11,038 |
9,895 |
||
Investments & other |
4,123 |
5,062 |
6,185 |
5,524 |
5,524 |
||
Current Assets |
|
|
51,378 |
67,433 |
76,904 |
111,597 |
134,551 |
Stocks |
3,906 |
491 |
1,011 |
809 |
1,050 |
||
Debtors |
24,382 |
40,760 |
47,239 |
59,187 |
65,441 |
||
Cash & cash equivalents |
23,090 |
26,182 |
28,654 |
51,601 |
68,060 |
||
Other |
- |
- |
- |
- |
- |
||
Current Liabilities |
|
|
(62,443) |
(78,767) |
(97,956) |
(107,497) |
(115,832) |
Creditors |
(59,719) |
(75,683) |
(90,791) |
(99,870) |
(108,061) |
||
Tax and social security |
(452) |
- |
- |
- |
- |
||
Short term borrowings |
(2,272) |
(3,084) |
(7,165) |
(7,627) |
(7,772) |
||
Other |
- |
- |
- |
- |
- |
||
Long Term Liabilities |
|
|
(43,188) |
(129,206) |
(137,867) |
(165,127) |
(168,115) |
Long term borrowings |
(22,933) |
(102,799) |
(113,024) |
(132,798) |
(133,370) |
||
Other long term liabilities |
(20,255) |
(26,407) |
(24,843) |
(32,330) |
(34,745) |
||
Net Assets |
|
|
78,068 |
77,004 |
116,512 |
124,761 |
123,105 |
Minority interests |
(5) |
69 |
- |
- |
- |
||
Shareholders' equity |
|
|
78,063 |
77,073 |
116,512 |
124,761 |
123,105 |
CASH FLOW |
|||||||
PBT |
(4,996) |
(6,616) |
(9,395) |
11,261 |
10,476 |
||
Depreciation and amortisation |
5,926 |
9,605 |
14,592 |
17,271 |
18,667 |
||
Share-based payments |
469 |
2,878 |
5,113 |
- |
- |
||
Working capital |
7,783 |
8,963 |
309 |
(2,667) |
1,695 |
||
Exceptional & other |
2,650 |
3,795 |
9,413 |
9,927 |
10,652 |
||
Tax |
(3,015) |
(2,309) |
(1,957) |
(4,046) |
(5,049) |
||
Net operating cash flow |
|
|
8,817 |
16,316 |
18,075 |
31,745 |
36,440 |
Capex |
(4,920) |
(15,497) |
(4,259) |
(4,972) |
(5,380) |
||
Acquisitions/disposals |
(27,568) |
(63,840) |
(42,532) |
(11,900) |
(3,950) |
||
Net interest |
(682) |
(1,970) |
(9,512) |
(9,927) |
(10,652) |
||
Equity financing |
30,869 |
2,133 |
37,287 |
- |
- |
||
Dividends |
- |
- |
- |
- |
- |
||
Other |
- |
- |
2,296 |
- |
- |
||
Net Cash Flow |
6,516 |
(62,858) |
1,355 |
4,947 |
16,459 |
||
Opening net debt/(cash) |
|
|
8,667 |
2,115 |
74,998 |
84,985 |
80,038 |
FX |
(1,374) |
(6,730) |
(7,958) |
- |
- |
||
Other non-cash movements |
1,410 |
(3,295) |
(3,384) |
- |
- |
||
Closing net debt/(cash) |
|
|
2,115 |
74,998 |
84,985 |
80,038 |
63,579 |
Source: Company accounts, Edison Investment Research. Note: FY19 figures have been restated to reclassify FX on borrowings and administrative expenses to finance costs and other income respectively. * Historic earnings have been aligned to Company disclosure
|
|
Research: Healthcare
Basilea has successfully brought two anti-infective drugs to the market. Lead product Cresemba continues to benefit from ongoing launches by multiple partners including Astellas (US) and Pfizer (ex-US). Longer-term value creation is dependent on crystallising the mid-/late-stage oncology portfolio. Three ongoing Phase II trials (FIDES-01/02/03) will define lead R&D asset derazantinib’s utility in intrahepatic cholangiocarcinoma (iCCA; bile duct cancer), urothelial cancer and gastric cancer. Lisavanbulin, a unique, internally developed asset, has progressed into a proof-of-concept Phase II biomarker-driven trial in recurrent glioblastoma (GBM) (interim results expected H221). Our forecast profitability in 2022 is dependent on the late-stage clinical development strategy for derazantinib and lisavanbulin. We value Basilea at CHF1.17bn or CHF99 per share.
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