Ann: Penthrox approved for sale in Taiwan, page-30

Tanushree Jain 612 8224 2849
Authorisation
TS Lim 612 8224 2810
Expected Return
Capital growth 81.6%
Dividend yield 0.9%
Total expected return 82.6%
Company Data & Ratios
Enterprise value $245.1m
Market cap $250.2m
Issued capital 58.87m
Free float 67%
Avg. daily val. (52wk) $520,504
12 month price range $2.85 - $6.85
GICS sector
Pharmaceuticals & Biotechnology
Price Performance
BELL POTTER SECURITIES LIMITED
ACN 25 006 390 7721
AFSL 243480
DISCLAIMER AND DISCLOSURES
THIS REPORT MUST BE READ WITH THE DISCLAIMER
AND DISCLOSURES ON PAGE 5 THAT FORM PART OF IT.
Page 1
(1m) (3m) (12m)
Price (A$) 5.00 5.18 3.62
Absolute (%) -16.40 -19.31 15.47
Rel market (%) -21.05 -20.27 10.63
Taiwan approves Penthrox, launch expected shortly
Penthrox has received regulatory approval from the Taiwan Food and Drug
Administration (TFDA), with first sales expected to be made within the next few weeks.
MVP notes that the approval in Taiwan is broader than that in other key geographies
like Europe. In Taiwan Penthrox is approved not only for use in patients with trauma
and associated pain, but also for the ‘relief of pain in monitored conscious patients who
require analgesia for surgical procedures’.
At the recent AGM, the company announced its plans to expand the use of Penthrox to
minor surgical procedures for which it would undertake and co-fund a Phase 3 clinical
study with its partner Mundipharma. MVP estimates that the global market for minor
surgical procedures is more than $2bn p.a. MVP estimates that there are ~10.3m
minor surgical procedures in Taiwan each year. At this stage in our valuation, we do
not include any value for Penthrox for expanded indications beyond acute trauma.
We note that demand for emergency care has steadily increased in Taiwan from 190
visits per 1000 persons in 2001 to ~270 visits per 1000 persons in 2010. Importantly
an increase in the ED visit rate for traumatic cases was also seen during the period. It
is estimated that there are ~5 million visits to emergency departments (EDs) annually,
with ~34% of these being traumatic cases. Studies indicate that the majority (~60%) of
all traumatic cases in EDs in Taiwan, were treated for minor or superficial injuries, a
fact which we believe supports use of Penthrox. The increase in volume of visits due to
inappropriate use of EDs by those with non-urgent conditions is one of the factors
contributing to overcrowding in EDs in Taiwan. We believe Penthrox’s attributes
provide it with the ability to help doctors treat patients in EDs more efficiently and
facilitate a faster turnaround, while also being broadly applicable for majority of the
trauma cases. We currently do not include revenue from Taiwan in our model.
Retain Buy and PT of $7.72
No changes to our estimates. We retain Buy on MVP and PT of $7.72 based on a DCF
valuation. Next catalyst: Launch of Penthrox in France & Belgium in early 1QCY17.
Absolute Price Earnings Forecast
Year end 30th June 2015A 2016A 2017E 2018E 2019E
Total Revenue (A$m) 11.6 15.5 21.4 31.6 44.4
EBITDA (A$m) 2.6 4.3 5.9 10.9 16.7
NPAT (reported) (A$m) 1.5 1.6 3.1 6.3 10.0
NPAT (normalised) (A$m) 1.5 2.3 3.1 6.3 10.0
EPS (reported) (cps) 2.6 2.7 5.3 10.7 16.8
EPS (normalised) (cps) 2.6 3.9 5.3 10.7 16.8
EPS -normalised growth (%) 74.5% 47.1% 37.0% 99.6% 57.8%
PER (normalised) (x) 160.5 109.1 79.6 39.9 25.3
EV/EBITDA (x) 93.2 57.6 41.6 22.5 14.7
Dividend (incl. spl div) (¢ps) 0.0 4.0 4.0 4.0 4.0
Yield (%) 0.0% 0.9% 0.9% 0.9% 0.9%
Franking (%) 100.0% 100.0% 100.0% 100.0% 100.0%
ROE (%) 9.2% 12.4% 15.0% 25.1% 31.3%
SOURCE: IRESS SOURCE: BELL POTTER SECURITIES ESTIMATES