T. Montana schreef op 22 november 2016 00:13:
Jefferies, November 21, 2016/part 1
uniQure N.V. (QURE)
November 21, 2016
Execution Risks & Lack of Major Near-term Catalysts; Downgrading to HoldKey Takeaway
Once viewed as the most advanced gene therapy platform company (& landmark gene therapy deal w/ BMY in 2015), today QURE's position is overshadowed by lack of progress, competition & poor execution. Its strategic review & prioritization announced last wk comes up short in providing confidence in strategy/execution. In addition, with no apparent NT key catalysts, we move to Hold until we see a turnaround in execution.
Reduction/delays in its gene therapy programs no longer support our prior valuation; downgrading QURE to Hold & reducing PT to $8 from $28. Following its strategic review, QURE pared down clinical programs & outlined general, but delayed timelines for key programs last wk. Our downgrade (D/G) is based on (1) disappointing progress to date; (2) overshadowing competition; (3) execution risk; & (4) no apparent key catalyst to offer meaningful upside in next ~12mo. Risks to our D/G include buyout by partner BMY/other or significant partnership. Cash at end-2Q16 of €166M sufficient into 2019, per QURE.
Significant reduction in our PT stems from (1) lowered technology value (62% of our PT reduction); (2) delayed timeline for S100A1 (23%) & (3) AMT-110 discontinuation (15%). For biotech companies, the longer it takes to make a successful/ timely transition from platform to products, the further diminishing platform value there is, in our view. While quite subjective, our prior QURE tech value was largely on probability- adjusted potential milestones from partner BMY on up to 10 targets ($217M per target #2-10). In the absence of data, lack of apparent progress/extended timelines has lowered our confidence in BMY collaboration. Thus, we're basing tech value on BMY initial fee alone, reducing by 62% to $3.50/sh (vs. $16/sh prior).
We view BMY collaboration in S100A1 for CHF is key to share appreciation; human proof-of-concept data unlikely until ~2018+. When QURE formed the landmark gene therapy partnership with BMY on 4/6/15, first pt dosing for lead S100A1 was expected potentially in 2016; but now, it would be unlikely until ~2018+. Thus, we're pushing out previously anticipated BMY milestone payments in our projections (~$245M in total), resulting in NPV of $4.50/sh for S100A1 (vs. $9/sh prior).
Valuation/Risks
Our PT of $8 is based on a NPV analysis of ~$4.50/sh for S100A1 & ~$3.50/sh for technology, discounted at 14% annually. Risks include: (1) yet-to-be proven clinical utility/commercial potential of gene therapy & (2) pipeline delays/failure.