First Berlin Equity Research has published a research update on Formycon AG (ISIN: DE000A1EWVY8). Analyst Simon Scholes reiterated his BUY rating and increased the price target from EUR 89.00 to EUR 97.00.

Abstract
The UK regulator approved Formycon’s Lucentis biosimilar FYB201 in May, and the EMA’s Committee for Medicinal Products for Human Use (CHMP) recommended approval of the drug in late June. The European Commission is now expected to grant central marketing authorisation at the end of August. The FDA decision date is 2 August. Teva is preparing to launch FYB201 in Europe, while Coherus is managing the US marketing effort. Samsung Bioepis‘ competing drug, BYOOVIZ, is approved in the EU and the US, but the company has not yet announced launch plans in the EU. BYOOVIZ is currently approved for 3 out of 5 Lucentis indications in the US, whereas FYB201 is seeking approval for all 5 indications. On this basis, we have moved our market share forecast for FYB201 from 10% to 20%. FYB207 is an antiviral drug candidate for patients hospitalised with SARS-CoV-2 and its variants. It is a fusion of the human protein ACE2 and the constant part of a human antibody. Here too, the competitive environment is moving in favour of Formycon. In our most recent April 2022 note, we assumed that the recently introduced Paxlovid (Pfizer) would substantially reduce COVID-19 hospitalisation rates. This assumption now looks premature as recent weeks have seen reports of relapses suffered by COVID-19 patients after taking Paxlovid. In our first study of FYB207 (7January 2021), we identified three potential ACE2 fusion protein-based competitors to FYB207. Only one of these drugs is still under development. Our valuation model now includes 2025 royalties from FYB207 of €128m (previously: €55m). We have also adjusted our model to reflect the initiation of two new biosimilar projects – FYB208 and FYB209 – for which the reference molecules have been identified (but not disclosed) and development activities started. These upward revisions to our valuation model outweigh a downward adjustment due to the requirement for an additional pharmacokinetics study of the Stelara biosimilar candidate, FYB202. We had previously modelled a 2023 launch for FYB202, but have now pushed this back to 2024. Our new price target is €97.00 (previously: €89.00). We maintain our Buy recommendation.