Canaccord Genuity have a BUY $2.50
Investment Perspective:
With sales of Axiron for CY13 having triggered a US$25M (A$28M)
milestone payment from Eli Lilly to ACR, the company has declared a
special, unfranked dividend of $0.12. Including the milestone payment,
product revenues for H1 were $43.3M of which $42.5M came from Axiron.
The company has reported NPAT of $24.6M for H1 which equates to
$0.15cps. Based on its current FY14 growth expectations for Axiron sales,
the company believes it will be eligible for an additional US$50M (A$55M)
milestone payment at the end of this year. While growth of sales of
transdermal testosterone replacement therapies (TRTs) have declined
significantly in the last 12 months (from ~30% in 2012 to 6% in 2013), ACR
believes there are a number of potential drivers that will lift Axiron sales
during 2014. What remains to be seen is the extent that healthcare
concerns that have been highlighted by recent issuance of a Drug Safety
Communication will impact on all US TRT sales across the board. We
have upgraded our price target to $2.50 (previously $2.10) and our
recommendation to BUY (previously HOLD) based on these latest
results and an expectation that safety concerns will have limited impact.
ACR Price at posting:
$2.15 Sentiment: LT Buy Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)