Ann: Launch of Lenzetto, page-14

Gedeon Richter will pay Acrux US$2m in milestone payments to celebrate recent European approvals for Lenzetto (Acrux’s transdermal estradiol spray for treating menopausal symptoms). The product is expected to be launched next year in the European markets, where this category is worth c.€80m in annual sales, collectively. Our initial royalty forecasts are modest, but provide small (4-7%) upgrades to our profit forecasts. The milestone payment boosts this year’s profit by 18% and makes us more confident about the dividend this year, which offers a 10% tax-free yield. We have revised our price target to 75 cps and maintain a HOLD rating.