PharmaMar hits the boards running .
PharmaMar, the restructured Zeltia, has commenced trading amid positive newsflow, following the recent approvals of anti-cancer drug Yondelis in the US and Japan for the treatment of soft tissue sarcoma.
Phase III data for Aplidin in multiple myeloma, expected early in the New Year could be another significant catalyst for the stock.
We lift our valuation slightly to €1.07bn or €4.82 per share (from €4.65 per share) ahead of this catalyst .
The company has been restructured to become primarily a pharma company ahead of a potential US Initial Public Offering (IPO) in the first half of 2016. The structure was achieved by a reverse merger where the oncology division PharmaMar absorbed the former parent company Zeltia. One PharmaMar share was exchanged for each Zeltia share.
The firm recently was given US and Japanese approval for its anti-cancer drug Yondelis (trabectedin) for soft tissue sarcoma, and Phase III data for Aplidin (plitidepsin) in multiple myeloma is expected in the new year. Investment research firm Edison to raise its valuation slightly to 4.82 euros ($5.17) from 4.65 euros per share, and an overall value of 1.07 billion euros ahead of the Aplidin data which could be a significant catalyst for PharmaMar’s stock.
Although the Yondelis approval milestones that had such a positive impact on income in 2015 will not be repeated next year, they are expected to be replaced by recurring royalties from 2016 onwards due to the recent approval of Yondelis in the USA and Japan. Research and development spend is largely in the biopharma business and is expected to increase from 47 million euros to 58 million euros for the full year of 2015. Lower milestone payments and higher research and development expenditure means earnings in 2015 and 2016 are expected to be below 2014’s but to be followed by a sharp rise in 2017.
