Xbrane is a leading Swedish biosimilar with a 1.9 billion SEK market capitalization and 1.6 billion SEK enterprise value. Xbrane has an EU approval for launch of Ximluci, a Lucentis Biosimilar. The product lunch is scheduled for 1Q2023. Expect material re-rating as the sales come in. 3-4x times return candidate over 2 years horizon.
Norweigan brokers are bullish on Xbrane:
- DNB has a price target of 160-180 SEK. DNB forecasts 2023 Revenues of 349 million SEK and EBITDA of 100 million SEK.
- Pareto has a price target of 245 SEK. Pareto forecasts 2023 Revenues of 898 million SEK and EBITDA of 550 million SEK.
Pareto summary of their case for Xbrane:
- the European launch of Ximluci ahead in Q1 2023,
- a differentiated platform,
- outstanding partners,
- a growing pipeline without growing costs (due to partners),
- 5-10x undervalued compared to peers Formycon and Alvotech and
- a good cash position, we see green times ahead for Xbrane’s share price.
We thus reiterate our Buy rating on XBRANE with a target price of SEK 245.
Summary from recent presentations/Capital markets day:
Xbrane product launch strategy for Ximluci (Lucentis biosimilar)
- Stada is doing all the sales, marketing, and Sales support in Europe
- Xbrane supports Stada and ensures Stada prepares and invests adequately in the lunch
- Stada is PE owned, its owners are very commercial. Communication is very good.
- Xbrane is responsible for the production
- Xbrane started production already in July (post-patent expiry)
- The launch is in Q1 next year
- By then, Xbrane will be in a position to supply Stada with the quantity they require
- Stada will not start selling in all countries at the same time – the product will be available gradually in all EU countries
- Lucentis is reimbursed; therefore, its biosimilars are automatically reimbursed in all EU countries where Lucentis is reimbursed
- Xbrane presentations include graphs of biosimilars market share penetration in time
- In general, biosimilars reach market share 60-70% market share within three years
- Xbrane believes Lucentis will lose 40% of its volumes to biosimilars within 12 months of the launch (as has happened in recent launches of biosimilars in Europe)
- Xbrane’s base case is that Biosimilars will have 75% share of Lucentis volumes within 3 years. Xbrane believes they will have 1/3 of that = 25% share of Lucentis volumes
- Xbrane will file the US application before end of this year. It will take 12 months to get it approved. Start of US sales expected in early 2024.
- Xbrane has a very strong partner for the US – Bausch and Lomb.
We are very bullish on Xbrane. We have a small position now. We will build a material position by the end of Q1. We have made material profits on trading Xbrane in 2021. I believe we will make more significant profits in 2023/24.
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