maliqun61 schreef op 12 augustus 2020 15:00:
31 juli 2020 Roth Capital
PHGUF: 2Q20 Recap - Moving Forward
Despite COVID-19 Challenges
Pharming reported 2Q20 results that were at the low end of expectations. The
key takeaways, in our opinion, include 1) soft 2Q20 Ruconest revenues were
likely impacted by COVID-related stocking in 1Q20, 2) Ruconest #'s should
bounce back in 2H20 (although still modestly below our prior targets), and
3) the key pipeline program leniolisib remains largely on track. Maintain Buy
rating with price target of €2.00.
2Q20 results. Pharming reported 2Q20 revenues of €39.3M, which was
down 8% year/over/year and down 20% sequentially. Gross margins for
2Q20 were strong (88.6%) and spending was within expectations. Net,
the EPS of ~€0.013 was below forecast given the revenue shortfall.
Fundamentally, we viewed the quarter at the lower end of expectations.
Takeaway #1 - Ruconest COVID-related stocking likely occurred in
1Q20. Management noted that the sequential decline for Ruconest likely
resulted from unusually high sales levels at the end of 1Q20 - which
likely included some stocking given the COVID-19 pandemic. Thus, 1Q20
strength was likely at the expense of 2Q20 results. The company believes
that the 1H20 overall revenue growth (~14%) is likely more representative
of underlying demand. Further, the company targets "continued growth in
revenues from sales of Ruconest compared to the first half of 2020" and
"maintenance of positive net earnings during the year".
Takeaway #2 - Adjusting #'s given uncertainty. We expect a strong
snapback for the Hereditary Angioedema (HAE) treatment Ruconest in
3Q20, but we are still lowering our yearly targets given the diminished face
to-face ability of reps to detail physicians, which could impact demand and
market share. We target 2020-22 total revenues of €187M, €232M, and
€302M (from €209M, €267M, and €358M).
Takeaway #3 - Pipeline moving along with manageable delays. The
company's key pipeline compound CDZ173 (leniolisib) from Novartis
remains on track for a registration-enabling trial readout possibly by 1H21
(and filing shortly thereafter if positive). This is an ultra-rare orphan drug
candidate (1-2 per million) for the treatment of APDS (immune deficiency
ailment that hinders body's ability to react to infections; genetic test is already
available). We target launch in mid-2022 (no change) with potential peak
sales north of $100M. We pushed out the acute kidney injury and preeclampsia programs by ~6 months each due to COVID-19 delays.
Maintain Buy rating, PT of €2.00. Pharming is benefiting from growing
Ruconest into a significant product that is driving profitability despite
manageable setbacks from COVID-19. Further, the pipeline continues to
advance forward. We maintain our Buy rating with a price target of €2.00
(based off 2021 #'s).