MagForce AG

28.08.2017 - Equity Research Einzelstudie // kaufen

Research Report (Anno) – MagForce AG - english

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Unternehmen: MagForce AG
Branche: Biotechnologie-Pharma
Rating: kaufen
Kurs bei Erstellung in €: 8,00
Kursziel in €: 15,00
Mögl. Interessenskonflikt gem. §34b Abs.1 WpHG und FinAnv: 5a;5b;6a;11

Commercialisation and approval fully financed, important financing milestone achieved, increase in treatment figures expected, approval in the USA planned

In the past financial year 2016, MagForce AG has advanced its approval and commercialisation strategy. As part of this strategy, the basis for the treatment of glioblastoma patients in Europe was expanded through the inclusion of the Vivantes hospital in Berlin Friedrichshain. A total of six NanoActivator devices are now installed in hospitals in Germany with four being used for commercial treatment.

In a parallel process, the company advanced the approval of its own technology for the treatment of prostate cancer in the USA in 2016. At the recommendation of the American approval authority, the FDA, all the biocompatibility studies already conducted in Germany were conducted again. The trials demonstrated once again that the nanoparticles are non-toxic and that they remain in the region of application.

In addition, MagForce AG laid the foundation for developing its financial base in 2016. This is of great importance in particular given the still low commercialisation income and the resulting liquidity outflow. After the start of discussions, a number of capital measures were successfully concluded after the balance sheet date of 31/12/2016. This includes the issue of a €5.00 million convertible bond, the assumption of various loans as well as the successful placement of a capital increase of €5.00 million. However, the focus was particularly on the recently reported financing agreement with the European Investment Bank (EIB) in the context of which MagForce AG can borrow up to €35.0 million. According to information provided by the company, this credit volume, which can be drawn in several tranches, is enough to finance the approval and commercialisation strategy in full. At the same time, this significantly reduces the financing risk and markedly increases operational flexibility.

After securing the future financing, the company’s focus is on the planned European roll-out of the technology. This is to primarily involve new treatment centres in Germany’s neighbouring countries. In this regard, it is planned to install a NanoActivator® in treatment centres in five further European countries. In addition, after the successful repetition of the toxicology trials, the approval for the treatment of prostate cancer in the USA will be advanced. We expect marketing approval to be received in the second half of 2018. A further upside potential that we have, however, currently not yet included in our forecasts, arises from the planned expansion of the treatment for prostate cancer to Europe. Obtaining cost reimbursements from the health insurance providers will also be a focus in the upcoming reporting periods. In this regard, the plan is to conduct reimbursement studies.

Based on our specific forecasts prepared up to financial year 2024, we have determined a fair value of €15.00 (previously: €13.90) per share. The increase in the target price is, in the first instance, due to a reduction in the weighted costs of capital as a consequence of the recently concluded financing agreement with the European Investment Bank (EIB). The €35 million to be drawn in the next few years leads to an increase in the typically lower interest debt component of WACC, as a result of which the weighted costs of capital are reduced to 11.0% (to date: 11.5%). Based on the current share price of €8.00, there is a considerable potential for a higher valuation and we therefore assign the BUY rating.


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