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 82.00 price target.

Abstract
Nine months results were in line with our expectations showing a 31.7% decline in revenue to €41.1m (9M/23: €60.2m) due to lower income from milestones, and reduced revenue from development of FYB201 (Lucentis biosimilar) and FYB203 (Eylea biosimilar) as planned work on these programs wound down. FYB201 was launched in 2022, and following FDA approval in June 2024 and expected EMA approval in January 2025, the launch of FYB203 is scheduled for next year subject to the outcome of ongoing litigation with Regeneron. Meanwhile, adjusted EBITDA (includes the at-equity accounted result of Bioeq AG) fell only slightly to €2.9m (9M/23: €3.5m). Formycon’s most important near-term launch will be the Stelara biosimilar, FYB202, which was approved by both the FDA and the EMA in September 2024. Stelara generated worldwide sales of USD10.9bn in 2023. This compares with USD3.6bn of sales for Lucentis in 2021, the last year before the launch of biosimilars of the drug. Furthermore, Formycon will earn a royalty of 30-40% on FYB202 sales. The current royalty on FYB201 sales is 7-8%. There will be more competition on the Stelara biosimilar market than on the Lucentis biosimilar market. But critically, unlike Roche, whose 2022 launch of the Lucentis successor product, Vabysmo, coincided with the introduction of Lucentis biosimilars, Johnson & Johnson do not have a near-term successor product to Stelara. We expect Formycon to generate triple digit €m royalties from FYB202 as early as 2026. This compares with our total 2026 royalty forecast for FYB201 (including both top-line and at-equity revenues) of ca. €15m. We think the current share price level represents a good opportunity to pick up Formycon stock ahead of the lucrative FYB202 launch. We maintain our Buy recommendation with an unchanged price target of €82.