A post from the yahoo finance board (credit goes to the rightful owner)
SNS comments 28/09/2006 (Reiterates Buy - EUR 30)
The prequalification from the WHO has melted away the uncertainty that surrounded the stock the last period.
The ongoing news flow concerning its pipeline, the development of its STAR technology and the start of clinical trials of Factor V, are drivers for the share.
We reiterate our BUY rating
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The best has yet to come
• As we already expected in our update of 25 September, Crucell announced this week that it
got a positive prequalification from the WHO for its pentavalent vaccine Quinvaxem for
DTPw-Hep B-Hib. With this prequalification, Crucell now can participate in the running
tenders for pentavalent vaccines from UNICEF and PAHO. The tenders will close at the end
of October. The demand for pentavalent vaccines is expected to rise to 150-200 million
doses in the next few years. We believe Crucell to get a market share of 30-35%. Quinvaxem
is the only fully liquid pentavalent vaccine on the market, which is an important advantage in
developing countries.
• Next to the news from the WHO, the company stated that it has started clinical trials in Ebola
and seasonal influenza in the US. The trials for Ebola can be quite short because only one
vaccine shot is necessary. We believe this vaccine to be the first product of Crucell produced
on its technology PER.C6 on the market. In our model we estimate this product to be on the
market already in 2008.
• Very significant in the news on the start of Phase I in influenza is the fact that the scale-up of
PER.C6 to a bioreactor of 20,000 litres has been successful. This shows that a large scale
production using PER.C6 on a commercial scale is effective which is a major achievement.
• Within the next 1-2 weeks we expect Crucell to announce the start of clinical trials in
tuberculosis and malaria. Especially the latter vaccine is of importance because of its market
potential (USD 600-1000 million) and the strong support from organizations like WHO and
the Bill and Melinda Gates foundation in developing a vaccine against this disease. Last year
the Bill and Melinda Gates foundation donated USD 258 million to research on malaria.
• Revenues in Quinvaxem are a vital cornerstone for Crucell’s sales outlook for this year and
achieving cash break even in 2007. Together with the good progress of its pipeline in
vaccines we believe that this is reducing the risk profile for the company as a whole. We
expect that this will attract a new type of investor into the stock.
• For the coming months we expect the company to announce more licenses on its STAR
technology. The STAR technology can have an important impact on a much more efficient
and thus cheaper production of proteins. Currently, Genentech is the most important
company that is testing STAR in high production volumes for one of its major cancer drugs. A
positive evaluation report from Genentech is expected to have a big impact on the value of
STAR and the subsequent issue of more licenses on STAR.
• We reiterate our BUY recommendation and share price target of EUR 30. The
prequalification from the WHO has melted away the uncertainty that surrounded the
stock the last period. The ongoing news flow concerning its pipeline in vaccines, the
development of its STAR technology and the start of clinical trials of blood product
Factor V, are drivers for the share in the coming period.
SittingDuck
AI
