First Berlin – Formycon AG Research Update (26/03/2020)

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.

We believe that the 25% decline in Formycon's share price since late February when covid-19 began to affect financial markets greatly overstates the impact of the virus on the company's prospects. In fact one could argue that recent news that Lucentis' successor product Beovu has caused serious side effects among 14 patients means that newsflow over the past six weeks is on balance positive for Formycon's ophthalmology franchise (FYB201 and FYB203). The company's general position remains excellent with three late stage products whose remaining development is fully funded by strong and stable partnerships. The balance sheet has a cash position of ca. €25m and no debt. Cash burn and funding requirements relate only to the early stage pipeline which consists of further biosimilar candidates for blockbuster reference products. We maintain our Buy recommendation and price target of €39.00.