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 97.00 to EUR 103.00.
On 26 August Formycon announced the approval of its Lucentis biosimilar, FYB201, by the European Commission. The news was expected as the EMA’s Committee for Medicinal Products for Human Use (CHMP) recommended approval of the drug in late June. EU approval of FYB201 follows approval of the drug by the FDA on 2 August and by the UK’s MHRA in mid-May. The US launch is scheduled for early October. Teva, the marketing partner for FYB201 in the EU, plans to launch the drug as soon as possible. We gather that the likely timing is also early October. The Formycon share price has retreated 12% since the all-time high of €87 on 16 August. The peak at €87 coincided with the announcement that FYB202 phase 3 topline results had demonstrated the drug candidate’s efficacy to be comparable to its Stelara reference product. We expect Formycon to generate a steady flow of further positive news over the next few months. This includes the strong probability that initial FYB201 sales figures in the US and EU will demonstrate leadership over the main competing Lucentis biosimilar, Samsung Bioepis‘ BYOOVIZ . In addition, before the end of this year, we expect topline results from the phase 3 trial of FYB203 (reference product Eylea), the disclosure of the FYB206 reference product, as well as the announcement of marketing partners for FYB202 and FYB203. FYB202 and FYB206 are both fully owned by Formycon. This means that the announcement of the FYB202 licensing partner is likely to be accompanied by an upfront payment to Formycon. Meanwhile, the royalty on FYB206 sales is likely to be nearer that on FYB202 (ca. 33%) than on FYB201 (ca. 15%), which is still 50% controlled by Bioeq AG. We advise investors to make use of the recent recoil in the Formycon share price to add to positions. We have raised our price target from €97 to €103 to reflect the approval of FYB201 in both the US and EU and the positive FYB202 topline phase 3 results. We maintain our Buy recommendation.
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