First Berlin Equity Research has initiated coverage on BioXXmed AG (ISIN: DE000A0KFRJ1). Analyst Christian Orquera’s rating is BUY with a price target of EUR 3.10.

Abstract
BioXXmed AG (former CytoTools) is a German holding company with a focus on the biotech and medtech sectors. BioXXmed’s core holding in the company DermaTools GmbH is an attractive asset. DermaTools has completed development of its medical device candidate, DermaPro solution, and is preparing it for registration in Europe and the US. This product has the potential to significantly improve treatment of chronic wounds, particularly difficult-to-heal diabetic foot ulcers (DFU). In clinical trials, DermaPro has demonstrated statistically significant superior efficacy compared to standard of care (saline wound dressings). Results of a European multicentre, double-blind, randomised, comparative phase IIb study in 72 DFU patients showed that DermaPro delivered 67% wound area reduction vs 30.5% in the control group and complete wound closure in 38.2% of patients vs 23.7% in the control group receiving standard of care. The company is currently finalising marketable primary packaging and completing the upscaling of the manufacturing process and documentation required for DermaPro’s certification according to ISO 13485 and registration as medical device. The goal is to obtain the CE-mark in Europe and 510(k) in the US. The company is also raising awareness of the product among specialists and potential distributors at wound care conferences. If DermaPro is approved and assuming the company can secure a marketing partner for commercialisation, we anticipate DermaTools will generate sales with DermaPro of >€25m in Europe and the US within 5 years of launch. We expect positive news flow on this product to trigger stock appreciation within the next 12-18 months. This news flow is likely to include filing and CE-registration in Europe, submission of the 510(k) application and FDA response in the US, announcement of a deal with (a) commercialisation partner(s) for the EU and potentially the US. We initiate coverage of BioXXmed with a Buy rating and a price target of €3.10.