Skyepharma Trading Update
Danske Markets | Jun 29, 2015 06:57AM ET
Trading update shows momentum maintained
Skyepharma’s Q215 trading update shows progress is continuing as expected. flutiform is growing in-market sales as forecast, with further roll-outs into new, albeit smaller, markets. Royalties from the other key drivers are also on track, with rising contributions from the GSK Ellipta inhaled products, as well as solid Solaraze sales in the US. Pacira’s Exparel is still expected to trigger the $8m sales milestone this year. Our valuation, currently still based on a DCF model, is £354m or 338p a share.
Q215 update shows business remains on track
The trading update highlights how the operating business continues to perform as expected, with the momentum build-up seen in FY14 being maintained. Revenues for flutiform continue to grow, with rising royalty contributions from the new GSK Ellipta inhaled products and Solaraze sales in the US. The performance of Exparel means that, despite some uncertainty following the US judicial enquiry (announced in April 2015), and, based on Pacira analyst consensus, the $8m sales milestone (when Exparel annual sales exceed $250m) should be triggered in FY15.
flutiform, Exparel and Solaraze are key drivers
The flutiform roll-out is continuing, with the launches in four additional countries meaning it is now available in 30 markets. Approvals are under review in a further 14 countries. Importantly, flutiform in-market sales continue to track as expected. Mundipharma has completed recruitment for its 1,700 patient trial to support flutiform’s use in COPD. Although the efficacy is not in doubt, the expected positive outcome will support reimbursement in this important market segment. Pacira is due to start additional US Phase III studies (before end-15) to broaden Exparel’s indications into upper and lower extremity nerve blocks. This supplemental approval would allow Exparel to be indicated for use in the majority of nerve blocks used to provide post-surgical analgesia. Solaraze in the US is also still performing well.
Valuation: DCF model shows £354m, or 338p a share
Over the last 18 months there has been a progressive and material reduction in Skyepharma’s risk profile, which arguably is yet to be fully reflected in the share price. Although the strong operating performance means earnings-based measures are increasingly meaningful and useful as valuation tools, we currently use a DCF model as our main valuation method. The DCF model, based on forecasts of revenue projections through to 2027, model shows £354m or 338p a share.
Get The News You Want
To Read the Entire Report Please Click on the pdf File Below
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.