In mid April 2021 I wrote about XBrane for the first time. I recomended the investment based on the below thesis. At that time Xbrane was trading around 78 SEK. I sold again part of my holdings at 160 SEK. The idea generated more than 100% return over less than two months, which is over 600% annualised return.
The reason for the share price growth was the imminent announcement of Phase 3 results. These shares always perform well prior to such important announcements. It traded so well that I started reducing my position, because I am concerned, that the stock went up so much, that we may have a sell the fact situation. The share price could drop significantly even on the positive announcement. Even if it does not fall, the company may raise additional capital, which may push the share price down. So if you have generated good return, it may be a time to consider taking some money off the table.
There is a very similar situation boiling. Biovica International. It is due to announce the FDA approval during the 3Q21 – within three months or so from now. As with Xbrane, the share price should start reacting before the announcement. My base case is that the share price should double by that time.
Biovica is starting to move today. UP 12% based on Reday research published today. The research is available for download here (from Biovica website):
Research headline below:
With Biovica offering significant upside potential over the next six to 18 months, Redeye raises our base case fair value to SEK 95 (46). DiviTum’s FDA approval will reduce risk and bring commercial clinical sales, while subsequent private use and public reimbursement should propel volumes and clinical support. The case is bolstered by potential expansion beyond the core market of advanced metastatic breast cancer (mBC).
US launch nearing
As FDA approvals are still not back to normal after the COVID pandemic, DiviTum is now likely to be approved sometime between August and October. Still, this exceptional period has been a reminder of the importance of innovation, screening and diagnostics – especially as screening has been impaired since the pandemic. This should increase
demand for cancer therapy monitoring and, potentially, for advanced cancer care.
Expanding clinical support
Biovica’s prepares for the US launch supported with a substantial body of evidence. This will be essential both in ensuring private insurance cover and for the pending reimbursement process. The prospective study support is about to increase substantially.
Higher market potential
Our base case now takes a more positive view of Biovica’s ability to protect its significant long-term market share and weather price pressure. We factor in higher EBIT margins during the peak sales period (2028-30). Our more positive view of the core mBC market in
the US and increased support from additional markets such as advanced breast cancer (ABC) remain very conservative versus our bull case (SEK 325).