Xbrane has commissioned Nordea Markets to produce a research report with the aim of providing investors with quality research on the company.
(Bio)Similar, yet different – Updated 6 April 2018
Challenging the biopharmaceutical market
Xbrane is a biotechnology company focused on developing biosimilars and complex long-acting injectable generics. The company was founded after developing a protein production technology which enables it to produce biosimilars eight times more efficiently than other standard systems, at a cost of up to 85% lower.
Structural growth opportunity
In our view, there are three market drivers which create a strong structural growth opportunity for Xbrane and other biosimilar developers: 1) The biopharmaceutical market is undergoing a “patent cliff”, as originator products with sales of SEK ~1,000bn are approaching patent expiration towards 2025; 2) Regulations have been created by medical agencies in recent years to ease the way for biosimilars to enter the market; 3) Several governments have become more focused on obtaining savings in health care spending.
All about EU and US regulatory approval
With Spherotide launched in Iran during 2017, and distribution partners signed in China, South Korea and Israel, Xbrane is on the verge of establishing a solid position in the market. Signing of distribution partners and regulatory acceptance in the US and Europe offers the largest potential valuation triggers. We use a sum-of-the-parts (SOTP) DCF model to value Xbrane, and derive an equity value range of SEK 77-96 per share, based on different scenarios regarding regulatory approvals and market launches for the company’s products.
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Conflict of interest
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This report has been reviewed, for the purpose of verification of fact or sequence of facts, by the issuer of the relevant financial instruments mentioned in the report prior to publication. The review has led to changes of facts in the report. Completion date: 6 April 2018, 08:15 CET