flosz schreef:
SNS Flash note, Marcel Wijma.
Let the bidding begin
Yesterday, Crucell announced that is it preliminary talks with Wyeth about a take
over of the company. Wyeth is already an important partner of Crucell in the
development of vaccines using Crucell’s PER.C6 technology. It is believed that
Wyeth wants to offer USD1.35bn for the company. In our view this is only a first
offer that could trigger the interest of other pharmaceutical companies as well.
We believe a higher price to be validated.
As one of the few larger still independent vaccine companies left, Crucell is named
as a possible take over candidate for some time. However, the timing comes for us
as a surprise. The company is on the brink of becoming profitable and has a strong
balance sheet with an estimated cash level of more than EUR 170m. Its main
vaccine Quinvaxem already was awarded contracts by Unicef and other
supranational organisations of up to USD 500m till the end of 2009 and is
increasingly profitable. Also with the development of its vaccines against infectious
diseases like influenza, tuberculosis and malaria, the company has made good
progress. We therefore believe that Crucell is perfectly capable to continue
independently. This should give management a strong negotiation position.
Nevertheless, we think that with take over talks started, it will be difficult for Crucell
to maintain its independent position.
Wyeth is one of Crucell’s most important partners and also a global Top-5 player in
the vaccine market. The negotiations will probably attract the interest of other key
partners of Crucell as well, being Sanofi Aventis and Novartis. With both companies
Crucell has partnerships on important products in Crucell’s portfolio. Also Sanofi
and Novartis belong to the Top-5 vaccine players. Especially Sanofi should gain
from a take over of Crucell as it partners key products like Crucell’s influenza
vaccine and the antibody cocktail against rabies. Both products are developed on
Crucell’s unique human cell line PER.C6. This cell line is well on its way to become
an industry standard for the more efficient production of vaccines and proteins.
Next to that, all important vaccine players including Wyeth, Novartis and Sanofi
have said that they seek acquistions to strengthen their position in vaccines.
In all, we believe that with the take over talks with Wyeth, the bidding process for
Crucell only started. Considering prices that have been paid sofar for late stage
biotech companie and our underlying valuation of Crucell, we think that the
company has a considerably higher value than the suggested offer of USD 1.35bn.
We advice investors to hold on to their stock as a higher price is definitely feasible.
We reiterate our BUY recommendation.
Product Stage Market Growth Price per Peak Royalty/ Discount Valuation R
patients patient Market share Margin factor EUR (m)
Quinvaxem Market 50 million 10% + 3.2 40% 35% 10% 300-350m
Dukoral Market 10 million 5% 10 10% 35% 10% 15-20m
Vivotif Market 10 million 5% 10 10% 35% 10% 15-20m
Inflexal Market 20 million + 5% 10 5% 30% 10% 20-25m
Hepaxal Market 20 million + 3% 15 5% 30% 10% 20-25m
Influenza vaccine Phase II 1 billion 15% 5 40% 10% 18% 350-400m
Ebola vaccine Phase I 4 million 2% 10 100% 50% 20% 20-25m
TB vaccine Phase I 50 million + 5% 5 25% 35% 18% 40-50m
Rabies antibody Phase II 50 million 5% 30 40% 20% 18% 80-100m
Malaria vaccine Phase I 100 million + 10% 4 25% 25% 20% 60-80m
HIV vaccine Phase I 100 million + 3% 500 20% 40% 25% 20-40m
PER C6 Technology EUR 10bn+ 10% 50-250k 15% 2.5% 350-400m
STAR Technology EUR 10bn+ 10% 250k 10% 2.5% 50-80m
Total 1340-1615m
Cash 170m
1510-1785m
Per share 23-27.50