First Berlin – Formycon AG Research Update (23/06/2020)

First Berlin Equity Research has published a research update on Formycon AG (ISIN: DE000A1EWVY8). Analyst Simon Scholes reiterated his BUY rating and maintained his EUR 39.00 price target.

Abstract
Formycon's Q1/20 results were close to our forecasts and the company budget. As in 2019, revenue stemmed from fees for development work on the outlicensed biosimilar candidates FYB201 and FYB203 and also from payments for the provision of development services to the FYB202 joint venture. Q1/20 revenue at €7.2m was 24% below the prior year figure of €9.5m, but revenue will pick up during the remaining quarters of the year in connection with the start of the FYB202 and FYB203 phase III trials. Management is guiding for full year revenue of €35-40m compared with the 2019 figure of €33.2m. Meanwhile, resubmission of the FYB201 Biologics License Application remains on schedule for H2/20, which suggests that the company will enter the royalty phase from 2021/22. We maintain our Buy recommendation and price target of €39.0.