thrombogenics - bolero
TRANSCRIPT
HEALTHCARE CONFERENCE
13 March 2013
1
THROMBOGENICS Detect, inject, resolve PHARMACEUTICALS & BIOTECHNOLOGY CURRENT PRICE € 40.99 BUY BELGIUM TARGET PRICE € 48.00 RATING UNCHANGED
FY/e 31.12 2012 2013E 2014E 2015E Sales (€ m) 75 133 110 238 REBITDA (€ m) 30 72 38 145 Net earnings (€ m) 30 74 42 150 Diluted adj. EPS (€) 0.87 2.08 1.18 4.20 Dividend (€) P/E 30.93 19.71 34.62 9.75 EV/REBITDA 28.42 17.75 32.12 7.40 Free cash flow yield 2.7% 6.0% 2.4% 10.7% Dividend yield
Source: Thomson Reuters Datastream Source: KBC Securities Bloomberg THR BB ThromboGenics is a biopharmaceutical company focused on the
development and commercialization of innovative ophthalmic medicines. The transition to sustained profitability is underway.
• Jetrea for VMA. In October this first-in-class product for the treatment of symptomatic vitreous macular adhesion (VMA) received FDA clearance and received a positive CHMP opinion for Europe. The single intravitreal injection has shown to be safe and effective in avoiding the need for eye surgery in 2 phase III studies.
• Launched in US: Given the small number of retinal specialists, Thrombogenics is marketing the product at own strength in US, launched in January 2013. For the European and RoW market, the company closed a lucrative partnership with ophthalmology leader Alcon (Novartis) in 1H12. Launch is foreseen in April 2013.
• Global peak sales: assuming a single injection per eye, peak sales for the sVMA indication could reach over € 750m. However, if multiple injections and use in large back-of-the eye diseases become a reality, sales could be substantially higher.
• Financials. The company is well financed (€ 148m at YE12) and is transitioning from a cash-burning R&D organization to a cash-generating commercial enterprise. Already in 2012 and 2013, Alcon milestone payments (€ 90m in 1H13) should put the accounts in the black, while 2014 should see Jetrea sales generate profits.
• Valuation. We value Thrombogenics with a risk-adjusted SOTP that points to € 48/share, supporting our Buy rating. The company is focussed on the commercialization of Jetrea in the US, which is deploying according to plan. A European CHMP opinion is expected in 1Q13. First Jetrea sales data is expected at the 1H13 update.
Reuters THR.BR www.thrombogenics.com Market Cap € 1,463m Shares outst. 35.7m Volume (Daily) € 5.95m Free float 79.15% Next corporate event
Results FY12: 14 March 2013 Performance 1M 3M 12M Absolute 9% 0% 68% Rel. BEL20 5% -7% 46% 12-m Hi/Lo € 47.17/19.50
Jan De Kerpel, PhD
Financial Analyst - Brussels
KBC Securities NV
+32 2 429 84 67
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Share performance BEL20 performance
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PIPELINE AND EXPECTED NEWS FLOW
THROMBOGENICS PRODUCT OF PIPELINE
Drug candidate Indication Status Next event
Jetrea (ocriplasmin) Symptomatic Vitreomacular adhesion EMA review European approval Diabetic macular edema Phase IIb ready Initiation phase IIb before YE13 Age-related macular degeneration (MIVI-5) Phase IIa Results by April ‘13
Anti-PlGF AMD and diabetic retinopathy Preclinical Phase I/II
Staphylokinase Acute myocardial infarction with Barath Biotech Phase III Results by YE11
Source: KBC Securities research and Thrombogenics EXPECTED NEWS FLOW
Timing Item Geography Comment
Pipeline 1Q13 Jetrea launch US US launch in January 2013 March/April 13 Jetrea EMA Europe Formal approval by EMA, triggering € 45m milestone from Alcon 2Q13 Jetrea AMD Phase II results of resolving VMA in AMD patients 2Q13 C-Code US Assignment of C-code for hospital reimbursement 3Q13 Jetreat AMD Phase II results : impact on VEGF treatment and AMD read-out Mid 2013 Jetrea EMA Europe Launch in open pricing countries Germany and UK 2H13 Jetrea Global Start of phase IIb study in diabetic macular edema patients 1Q14 J-Code US Assignment of J-code for physician reimbursement Reporting 16 May 2013 1Q13 business update – no Jetrea sales numbers to be reported 27 Aug 2013 1H13 update: First formal sales numbers 7 Nov 2013 3Q13 business update
Source: KBC Securities research and Thrombogenics
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SWOT ANALYSIS – COMPANY DASHBOARD
STRENGTHS WEAKNESSES
• Unique, innovative product that can prevent surgery • Strong approval support by FDA advisory committee • No competitors, strong selling/pricing power • Cheap production of active ingredient, long patent life • Small group of target prescribers keeps
sales & marketing costs low • Huge cash position cushions against regulatory
setbacks • Strong national and international investor base
• VMA is a rare disease requiring physicians’ education • Referral patterns from general ophthalmologists and
optometrists not yet established • Thrombogenics is not an established brand in US
and Jetrea is the company’s first commercial product • -20°C distribution requires refrigerated handling • Lack of J-code (only available as of January 2014) • Sales-team too small to address general
ophthalmologists to optimize referral process • No way to track US prescription trends
OPPORTUNITIES THREATS
• Label extension in large diseases such as DME, AMD • Off-label use by surgeons to liquefy gel and other
surgery-facilitating usage • Company can bank on experience of Alcon • US approval may lower investment risk and increase
M&A scenario
• Initial sales ramp-up not meeting market expectation • Single product company, need for follow-up products • underestimation of market demand for reporting
transparency and increased investor nervousness on short-term US prescription trends
THROMBOGENCS SHAREHOLDERS (MARCH 2013) SHAREPRICE PERFORMANCE
Public81%
Oppenheimer4%
Landon Clay3%
Biggar6%
Thomas Clay6.1%
Source: KBC Securities research and Thrombogenics Source: Thomson Reuters Datastream, 13 March 2013 REVENUES, NET RESULT AND OPERATIONAL CF (€ m)
1.5
30.4
4.2 6.22.5
75.2
0
20
40
60
80
2007 2008 2009 2010 2011 2012
€ m
-16.0 -14.1
37.4
-21.6
12.1
-13.9
-30
-20
-10
0
10
20
30
40
50
2007 2008 2009 2010 2011 2012
€ m
31.0
-19.6-16.8-12.1
12.0
-14.8
-30
-20
-10
0
10
20
30
40
2007 2008 2009 2010 2011 2012
€ m
Source: KBC Securities research and Thrombogenics
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BUSINESS DESCRIPTION
In October 2012 Thrombogenics lead product Jetrea received FDA approval for the treatment of symptomatic vitreomacular adhesion (sVMA). The decision was based on strong efficacy and safety results demonstrated in 2 phase III studies. sVMA is a condition in which the vitreous gel adheres in an abnormally strong manner to the retina. It can lead to loss or distortion of visual acuity. The product received a positive CHMP opinion in January 2013.
NORMAL VITREOUS REMODELING WITH AGE NORMAL SEPARATION INCOMPLETE (VMA/VMT)
Source: KBC Securities research and Thrombogenics MARKET ACCESS STRATEGY US MARKET AT OWN STRENGTH Jetrea to be commercialized by Thrombogenics in US and via partner Alcon in ex-US territory $ 3,950 per injection
Given the small but clearly-defined audience of retinal specialists (around 2800 retinal surgeons, retinal specialists and opthalmologists specialised in retina), Thrombogenics is commercializing the product at own strength in US. A sales force of 28 reps and 16 reimbursement specialists is operational, and started the US launch in January 2013. The price of the product in the US is set at $ 3,950 per injection.
550,000 patients would be considered as eligible for ocriplasmin treatment ‘VMA’ as concept has dramatically increased over the last 3 years
Market research indicated that ~250,000 patients in each market could be considered as eligible for sVMA treatment with Ocriplasmin. Thrombogenics has been working to educate prescribers and patients on sVMA. Over 80% of target prescribers were already aware of the benefits of the product prior to its recent approval.
INITIATIVES TO PREPARE US LAUNCH
Medical education Reimbursement activities Sales force initiatives to cover US retina MDs
Medical science liaisons Reimbursement of business managers 30 sales reps and 16 reimbursement mngrs 40 podium presentations at US meetings New ICD-9-CM disease code for VMA/VMT US divided in to 4 regions headed by director
Symposia at major US conferences Q-coding for 2013, J-code as of 2014 Launch www.symptomaticvma.com
Source: KBC Securities research and Thrombogenics Focus on high chance of positive doctor experience: macular hole
The launch strategy is focussed on making sure that physicians who use the product for the first time have a high chance of positive results. Therefore, the sales team recommends in particular the recruitment of patients who have macular holes and traction, as these have shown in clinical studies to have the highest rate of success (up to 60%).
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REIMBURSEMENT PLATFORM FOR PROVIDERS AND PATIENT ASSISTANCE PROGRAMS
REIMBURSEMENT SUPPORT PATIENT ASSISTANCE
• Benefit verification • Prior authorization • Denials and appeals • Billing and coding information • Claims tracking
• Web-based application portals • Alternate coverage • Research and triage foundation
CO-PAY ASSISTANCE REIMBURSEMENT SUPPORT
• Credit/debt card • Triage & referral management
• Spillage • Spoilage • Mishandling
Source: Thrombogenics EX-US MARKET PARTNERED WITH ALCON Ex-US market partner is Alcon The ex-US market was partnered with ophthalmology leader Alcon in
March 2012. The deal terms are as follows: • Territory represents ~300,000 patients on an annual basis
• Represents – according to Thrombogenics – 40% of Jetrea’s value • € 75m upfront and received payment • € 90m in approval and first-patient-treated milestone (by 1H13) • € 210m in commercial milestone payments • ‘above industry-standard’ royalty (>25%) on net sales • Co-invest to expand label into AMD and diabetic indications.
€ 90m in milestones expected in the coming weeks
After the positive CHMP was obtained in January, formal European Commission marketing approval seems highly likely by the end of 1Q13 or early 2Q13. Such approval should trigger a € 45m milestone payment from Alcon and a second payment will follow the use of the product in the first commercial patient (expected in 2Q13).
European price per vial to be disclosed at launch
The price in Europe is not yet known but will be disclosed at launch. In Europe, reimbursement discussions have to be held on a country by country basis. What is sure it that the US price is at the upper level.
QUALITY STAMP FROM NICE UK STA granted by NICE In November 2011 Jetrea was selected to receive a Single Technology
Appraisal (STA) from the UK’s National Institute for Health and Clinical Excellence (NICE). NICE guidance on the use of Jetrea within the National Health Service (NHS) is expected later in 2013, following the launch of the drug in the UK.
An STA is only given to innovative and unique products and allows
faster market access versus the standard NICE procedure. Hence, by granting an STA to Jetrea, NICE provides a quality stamp.
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JETREA SALES FORECASTS
US sales starting in January 2013 European approval: G+UK in 2013, Fr+S+It+B in 2014
We have made detailed forecasts on the revenue potential of ocriplasmin for the sVMA treatment. This is built on the assumption that US sales started in January 2013 and that European launch will follow by 2Q13. In Europe, reimbursement decisions typically take 6 to 12 months. Germany and UK will probably be the first European countries to start selling the product.
SALES POTENTIAL OCRIPLASMIN FOR VMA ONLY
2013 2014 2015 2016 2017 2018 2019 2020
Eligible US patients (th) 207 214 222 231 239 248 257 267 Ocriplasmin penetration (%)* 8% 15% 30% 45% 50% 50% 50% 50% Number of US patients (th) 16 32 67 104 120 124 129 133 Ocriplasmin VMA revenues US (€ m) 38 99 205 319 368 382 396 411
Eligible EU patients (th) 310 322 334 346 359 372 386 400 Ocriplasmin penetration (%)* 3% 6% 12% 24% 36% 40% 40% 40% Number of EU patients (th) 9 19 40 83 129 149 154 160 Ocriplasmin VMA revenues EU (€ m) 21 46 96 199 310 357 371 384 Total Ocriplasmin VMA sales (€ m) 59 145 301 519 678 739 767 795
Source: KBC Securities research *% of eligible patients actually being prescribed ocriplasmin MARKET RESEARCH DATA FOR OCRIPLASMIN USAGE
Indication Macular Hole VMA/VMT Macular Pucker Total eligible sVMA
Total patients US* 128,459 111,478 456,940 ~270,000 Total patients EU-5° 132,258 114,695 470,124 ~280,000 % Ocriplasmin eligible 52% 70% 28% Total eligible for sVMA ~135,000 ~155,000 ~260,000 >550,000
Source: Thrombogenics market research *CMS Claims data (SAF and PSPS), °US prevalence extrapolated to EU-5 population P&L ASSUMPTIONS FOR OCRIPLASMIN FOR VMA ONLY* (€ m)
2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E
Revenue 133 111 240 369 477 471 489 549 US sales revenues 38 99 205 319 368 382 396 411 European & Row revenues 95 12 35 50 109 89 93 138
Royalty Alcon 5 12 24 50 78 89 93 96 upfront 0 0 0 0 0 0 0 0 milestones 90 0 11 0 32 0 0 42
COGS (incl. distribution + royalty out) -10 -15 -32 -50 -60 -61 -63 -67 Gross Profit 124 95 208 319 418 410 426 482 Operational costs 46 53 61 77 88 94 100 106
S&M 20 24 28 35 39 40 41 43 G&A 6 7 9 16 20 22 23 24 R&D 20 22 24 27 29 32 35 39
EBIT 78 42 146 242 329 316 326 376 Margin as % of revenues 59% 38% 61% 66% 69% 67% 67% 69%
Source: KBC Securities research *does not include additional sales from DME or wet-AMD
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WHY JETREA, AND BY EXTENSION THROMBOGENICS, COULD BE ATTRACTIVE ACQUISITION TARGETS
Item Rationale
Jetrea is a unique product • The unique selling points of Jetrea are listed in the SWOT analysis. • The long patent life (>12y) and the clear benefit to patients allow for strong pricing levels • Several label extensions are possible, which provide ample room for sales upside
Ophthalmology is lucrative niche business
• Ophthalmology is known to benefit from high profit margins • The eye-care market is expected to grow faster than other pharmaceutical markets • Several big pharma and a handful of strong ophthalmology specialist players dominate the market • The number of true innovations for back-of-the-eye diseases, after VEGF therapy, is limited while
demand for increased quality of life and aging population requires new solutions
Single product company • Thrombogenics is single-product company with limited overheads and social passive and no debt, making it an easy-to-integrate target
• The substantial deferred tax-assets can be added to the NPV assessment of the buyer • Risk for Jetrea is low because it is launching an innovative pharmaceutical product in an
uncompetitive market
Accessible price tag • Because Jetrea is a niche product and the current enterprise value of the company is still only ~€ 1bn, the company is accessible to many mid-to-large pharma and biotech players
• The sector is hot. Many players trade at all-time high valuations and sit on huge cash piles. • Several big pharma/biotech CEOs expressed ambitions for ‘single-digit billion’ add-on acquisitions
Source: KBC Securities research SENSITIVITY ANALYSIS FOR JETREA FOR VMA ONLY
Sensitivity analysis demonstrates that substantial upside is possible Not surprisingly, the key value drivers are: Number of injections per patient Pricing Market size Our model is: Least sensitive to the Alcon royalty
rate (suggested between 25-30%) Most sensitive to number of
injections per patients
20 25 30 35 40 45 50 55 60
Smaller eligible marketPrice / patient : -20%
Ramp-up slower (-2y)USD/EUR : 1.4
Price / EU patient : € 2,100Royalty alcon : 27%
Price / patient : € 2,700Royalty alcon : 30%
WACC : 11%USD/EUR : 1.2
WACC : 10%Price / EU patient : +20%
Average injection/patient : 1.3Larger eligible market
Average injection/patient : 1.5
∆ Ιmpact versus base case (€ / share)
Source: KBC Securities research
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FINANCIALS
FY12 topline dominated by Alcon milestone
The company booked the entire € 75m Alcon upfront in 1H12, which is virtually the only income for 2012.
P&L FY12 (€ m)
1H11 2H11 FY11 1H12 2H12 FY12 % change
Revenue 2.4 0.0 2.5 75.1 0.0 75.1 2933% Royalties 0.0 -0.0 0.0 0.0 0.0 0.0 licenses 2.4 0.0 2.4 75.0 0.0 75.0 3027% others 0.0 0.1 0.1 0.0 0.0 0.0 -71%
Gross profit 2.2 0.0 2.3 71.9 0.0 72.0 3084% Operating expenses -14.7 -16.4 -31.1 -19.0 -27.8 -46.8 51%
R&D expenses -10.5 -9.2 -19.7 -10.4 -9.6 -20.1 2% G&A expenses -2.1 -3.8 -5.9 -4.2 -5.4 -9.7 65% Selling expenses -2 -3 -6 -4 -13 -17 208%
Other income -0.4 -1.1 -1.5 -2.0 -11.1 -13.1 789% Operating profit -10.7 -14.1 -24.8 55.3 -26.2 29.1 -217% Net financial result 0.4 2.7 3.1 0.9 0.5 1.3 -57% Net profit -10.2 -11.4 -21.6 56.2 -25.7 30.4 -241% End of period cash position 96.4 80.4 186.1 148.2
Source: KBC Securities research and Thrombogenics € 3m cash outflow from Alcon payment A € 3m cash outflow under 'cost of sales' was recorded. This is a
royalty payment of the Alcon milestone to LSRP (the foundation run by Thrombogenics’ founder and chairman) and the KULeuven (normally the royalty payment should be ~0.5% of the ocriplasmin income). Similar to previous periods, Thrombogenics recorded € 4m in 'other income', which is the repayment by Bioinvent of half of the TB-402 development costs.
Sales & Marketing increased in anticipation of US launch
R&D costs were flat y/y at € 20.4m, and € 35m ocriplasmin costs were capitalized versus € 11m in 2011. S&M costs rose sharply to € 17m vs € 6m in 2011 in relation to Jetrea’s launch in the US. G&A increased by almost 65% y/y to € 10m driven by the increase in corporate functions in Belgium and the new US facilities.
2012 net profit of € 30m Including a small amount of financial income, Thrombogenics booked
a 2012 net profit of € 30m, driven by the Alcon payment. This compares to a loss of € 22m in FY11.
FY12 cash burn of € 85m At YE12, Thrombogenics’ cash position stood at € 148m. Excluding
the 1H12 capital increase (net of € 76.5m of costs) and cash flows on the Alcon deal, the net cash burn for the full year was around € 85m, versus € 29m in FY11. 70% of this burn was booked in the first half, representing € 59m, of which € 22m related to the acquisition of additional IP investments with third parties (Talecris, Nuvue, etc).
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VALUATION
For the NPV calculation we use our standard WACC value of 15% for clinical development stage products and 12% for Ocriplasmin. We do not attribute any value to TB-403 until it starts clinical eye studies.
Jetrea for VMA: € 40/sh Jetrea for label extension: € 3/sh
We developed a dual valuation for Jetrea (ocriplasmin). On the one hand we made explicit sales forecasts for Jetrea for use in the currently-approved label of VMA and macular hole (Jetrea for VMA). On the other hand, we made assumptions on the additional value the product could gain in a large ophthalmology setting such as AMD and DME, should the product prove to be of added value in a synergistic setting with VEGF therapy or other current standard therapies. Given that the product still needs to demonstrate added value in these indications, we correct our assumptions via probability adjustments.
SOTP BREAKDOWN
NPV (€ m) NPV per share (€) Probability of launch Peak sales estimate (€ m) Product New Old New Old New Old New Old
Staphylokinase 2 2 0.1 01 10% 60% 79 79 Jetrea for VMA 1,435 1,341 40.2 37.6 100% 95% 740 587 Ocriplasmin, DME&AMD 117 108 3.3 3.0 30% 35% 335 315 Anti-PlGF (TB-403) 0 0 0 0% 0% 0 0 Cash YE12 148 158* 4.2 4.4 Total value 1,700 1,609 47.7 35.1
Source: KBC Securities *YE11+1Q12 cash
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FINANCIAL DATA
Income statement (€ m) 2011 2012 2013E 2014E 2015E Sales 2 75 133 110 238 COGS 0 -3 -10 -15 -32 Gross profit 2 72 123 95 206 Operating costs -31 -47 -53 -58 -64 Other income & costs 4 4 0 0 0 EBIT -25 29 71 36 142 Net interest 3 1 4 6 8 Other non-operating - - - - - Pre-tax earnings -22 30 74 42 150 Taxes 0 0 0 0 0 Associates - - - - - Discontinued & other - - - - - Consolidated earnings -22 30 74 42 150 Minority interests 0 0 0 0 0 Net earnings -22 30 74 42 150 Depreciation and amortisation 0 -1 -1 -2 -2 Amortisation other intangibles/ Impairments - - - - - Non recurring elements included in EBIT - - - - - REBITDA -24 30 72 38 145 EBITDA -24 30 72 38 145 REBITA -25 29 71 36 142 EBITA -25 29 71 36 142 Net earnings from continued operations -22 30 74 42 150 Adjusted net earnings -22 30 74 42 150 Balance sheet (€ m) 2011 2012 2013E 2014E 2015E Intangible assets 40 75 75 75 75 Tangible assets 1 3 5 6 9 Financial assets 23 11 11 11 11 Other assets 0 0 0 0 0 Inventories 0 0 0 0 0 Receivables 7 12 20 17 37 Cash & equivalents 58 139 230 271 436 TOTAL ASSETS 129 239 341 379 567 Equity 118 228 304 349 502 Minorities 0 0 0 0 0 Provisions 0 0 0 0 0 LT financial debt - - - - - Other liabilities - - - - - Payables 9 9 33 27 60 ST financial debt 2 2 3 3 6 TOTAL LIABILITIES 129 239 341 379 567 Net working capital -2 2 -13 -11 -23 Capital employed 39 80 67 70 61 Net debt -56 -137 -227 -269 -430 Net debt, incl. off-balance items -56 -137 -227 -269 -430 Cash flow statement (€ m) 2011 2012 2013E 2014E 2015E Consolidated earnings -22 30 74 42 150 Depreciation, amortisation & impairment 0 1 1 2 2 Other cash flow from operations -2 1 -1 -3 -5 Change in working capital 3 -4 17 -3 16 CASH FLOW FROM OPERATIONS -20 28 91 38 163 Net capital expenditure -1 -2 -3 -3 -6 Acquisitions / disposals 0 0 0 0 0 Other cash flow from investments 9 21 -5 -7 -9 CASH FLOW FROM INVESTMENTS -10 -23 1 5 3 Dividend payments - - - - - Shares issues 1 77 0 0 0 New borrowings / reimbursements - - - - - Other cash flow from financing 0 0 -1 -1 -1 CASH FLOW FROM FINANCING 1 77 -1 -1 -1 Fx and changes to consolidation scope 1 0 0 0 0 CHANGE IN CASH & EQUIVALENTS -28 82 91 41 165 Free cash-flow -21 26 87 35 157 Change in net debt 29 -82 -89 -42 -161
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Performance criteria 2011 2012 2013E 2014E 2015E
Sales growth -59.9% 2933.3% 77.5% -17.6% 116.6% Gross profit growth -59.9% 3084.1% 71.4% -23.2% 117.6% REBITDA growth 71.4% -222.1% 141.0% -46.6% 277.3% EBITDA growth 71.4% -222.1% 141.0% -46.6% 277.3% REBITA growth 69.0% -217.5% 142.8% -48.6% 291.8% EBIT growth 69.0% -217.5% 142.8% -48.6% 291.8% Pe-tax earnings growth 55.4% -240.7% 143.8% -43.1% 255.0% Net earnings growth 55.2% -240.6% 144.0% -43.1% 255.0% Earnings growth from continued operations 55.2% -240.6% 144.0% -43.1% 255.0% Adjusted earnings growth 55.2% -240.6% 144.0% -43.1% 255.0% Gross margin 91.3% 95.8% 92.5% 86.2% 86.6% REBITDA margin -985.1% 39.6% 53.8% 34.9% 60.8% EBITDA margin -985.1% 39.6% 53.8% 34.9% 60.8% REBITA margin -1000.5% 38.8% 53.0% 33.1% 59.8% EBIT margin -1000.5% 38.8% 53.0% 33.1% 59.8% Net working capital / sales -78.0% 3.0% -9.7% -9.7% -9.7% CAPEX/ Sales 39.7% 2.5% 2.5% 2.5% 2.5% FCF / Sales 829.8% -34.6% -65.4% -32.0% -66.0% Depreciation / Capital Expenditure 38.9% 35.8% 33.3% 73.4% 38.9% Capital expenditure / EBITDA -4.0% 6.3% 4.6% 7.1% 4.1% Net debt / Equity + Minorities -47.3% -60.3% -74.5% -76.9% -85.7% Net debt / EBITDA 2.3 -4.6 -3.2 -7.0 -3.0 EBITDA / net interest 7.8 -22.1 -20.1 -6.5 -19.0 Pay-out ratio - - - - - Net earnings margin -873.9% 40.5% 55.7% 38.4% 63.0% x CE turnover (Sales / avg. CE) 0.1 1.3 1.8 1.6 3.6 x Leverage (avg. CE / avg. equity) 0.3 0.3 0.3 0.2 0.2 = Return on Equity (avg) -16.9% 17.6% 27.9% 12.9% 35.3% Return on Equity - adjusted (avg) -16.9% 17.6% 27.9% 12.9% 35.3% Return on Capital Employed (avg) -71.9% 48.9% 96.2% 53.0% 217.0% Return on Capital Employed - adjusted (avg) -71.9% 48.9% 96.2% 53.0% 217.0% Per share data (€) 2011 2012 2013E 2014E 2015E weighted average # shares (m) 32.41 34.87 35.69 35.69 35.69 weighted average # shares, diluted (m) 32.41 34.87 35.69 35.69 35.69 Basic EPS -0.67 0.87 2.08 1.18 4.20 Adjusted EPS -0.67 0.87 2.08 1.18 4.20 Diluted EPS -0.67 0.87 2.08 1.18 4.20 Diluted, adjusted EPS -0.67 0.87 2.08 1.18 4.20 Diluted EPS: y/y growth - - 138.4% -43.1% 255.0% Diluted EPS: CAGR 3Y - - 68.9% -100.0% -100.0% Adjusted, diluted EPS: y/y growth - - 138.4% -43.1% 255.0% Adjusted, diluted EPS: CAGR 3Y - - 68.9% -100.0% -100.0% REBITDA / share -0.75 0.85 2.01 1.07 4.05 EBITDA / share -0.75 0.85 2.01 1.07 4.05 REBITA/share -0.76 0.83 1.98 1.02 3.99 EBIT/ share -0.76 0.83 1.98 1.02 3.99 Net book value / share 3.64 6.39 8.53 9.78 14.06 Free cash flow / share -0.63 0.75 2.44 0.99 4.40 Dividend (€) - - - - - Valuation data 2011 2012 2013E 2014E 2015E Max share price (€) 22.99 42.05 47.17 - - Min share price (€) 13.25 17.55 37.47 - - Reference share price (€) 19.19 26.98 40.99 40.99 40.99 Reference market capitalisation (€ m) 622 963 1,463 1,463 1,463 Enterprise value (€ m) 565 846 1,273 1,232 1,070 P/E - 30.9 19.7 34.6 9.8 EV/sales 228.0 11.3 9.6 11.2 4.5 EV/REBITDA - 28.4 17.7 32.1 7.4 EV/EBITDA - 28.4 17.7 32.1 7.4 EV/REBITA - 29.1 18.0 33.9 7.5 EV/EBIT - 29.1 18.0 33.9 7.5 EV/Capital employed 14.4 10.6 19.0 17.6 17.5 P/ NBV 5.3 4.2 4.8 4.2 2.9 Free cash flow yield -3.3% 2.7% 6.0% 2.4% 10.7% Dividend yield - - - - - Source: KBC Securities *Historic valuation data are based on historic prices
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DISCLOSURE & DISCLAIMER SECTION The company disclosures can also be consulted on our website http://www.kbcsecurities.com/disclosures. KBC Securities uses an absolute rating system including terms such as Buy, Accumulate, Hold, Reduce and Sell (see definitions below). Definition
BUY Expected total return (including dividends) of 10% or more over a 6-month period
ACCUMULATE Expected total return (including dividends) between 0% and 15% over a 6-month period
HOLD Expected total return (including dividends) between -5% and 5% over a 6-month period
REDUCE Expected total return (including dividends) between –15% and 0% over a 6-month period
SELL Expected total return (including dividends) of -10% or worse over a 6-month period Due to external factors and in exceptional cases, KBC Securities allows the use of ratings such as Accept the Offer, Black Out, No Recommendation or Suspended. Our analysts assign one of those ratings based on their investment outlook and valuation for the concerned stock. The valuation can be based on different methodologies such as DCF (discounted cash flow), absolute multiples, peer group multiples, sum-of-parts or NAV (Net Asset Value). The valuation is reflected in a 6-month target price. Occasionally, the expected total return may fall outside of these ranges because of price movement and/or volatility. Such deviations will be permitted but will be closely monitored. Investors should carefully read the definitions of all ratings used in each research report. In addition, since the report contains more complete information concerning the analyst’s view, investors should carefully read the entire report and not infer its contents from the rating alone. KBC Securities discloses the recommendations of its reports to the issuers before their dissemination. In case the recommendation has been amended following this disclosure, such amendments will be indicated in the concerned report.
Stock rating % of covered universe % of covered universe with investment banking relationship during last year
BUY 27.00% 0.00%
ACCUMULATE 24.30% 0.00%
HOLD 47.00% 0.00%
REDUCE 0.00% 0.00%
SELL 1.70% 0.00% Thrombogenics is a biopharmaceutical company that develops new therapeutics for eye conditions, cardiovascular diseases and cancers related to abnormalities of the vascular system. The price target for Thrombogenics is based on following parameters: Sum of Parts The risks which may impede the achievement of our price target are: Product candidates can fail in development Market conditions may be difficult when new financing is needed Below is an overview of the stock ratings and target price history in the last 12 months for the stock described in this report.
Date Rating Target price
04-JAN-13
08-OCT-12
10-SEP-12
27-JUL-12
05-JUN-12
16-MAR-12
Buy
Buy
Buy
Buy
Buy
Buy
€ 48.00
€ 45.00
€ 34.00
€ 32.00
€ 31.00
€ 34.00 KBC Securities will provide periodic updates on companies/industries based on company-specific developments or announcements, market conditions or any other publicly available information.
HEALTHCARE CONFERENCE
13 March 2013
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