Nobel increases target to 9
Putting Recent Developments Into Perspective
Rating: OUTPERFORM
Friday, May 10, 2019
Positioned in a rapidly growing market. The biologics market remains one of the most rapidly growing segments of the pharmaceutical industry, expected to grow to $1.2 billion in sales in 2022. Dyadic has expanded its collaboration and licensing portfolio to assess C1's potential to manufacture vaccines, gene therapy, monoclonal antibodies and others in human disease and in animal health.
More deals appear likely. Following two recently announced licensing agreements for its C1 technology, management indicated on an investor call that more licensing agreements and research collaborations are likely. These agreements will potentially generate revenues with upfront payments.
First Quarter Earning Update. The company reported $0.4 million in revenues, $0.7 million in R&D expenses and $1.4 million of G&A expenses. Net loss was $2.2 million, or $0.08 per share. The reported numbers are in line with our estimates.
Adjusting Price Target. We are reiterating our Outperform rating, while increasing our price target from $4 to $9 to reflect the current potential of C1 technology in the biologics market. In our previous valuation, we had only included Cimzia biosimilar sales in our estimates. However, we believe the recent licensing and research agreements provide value expansion for the company beyond Cimzia and the biosimilar market. We now forecast F2029 sales of $525 million. We are using discounted cash flow (DCF) analysis with a 15% discount rate.
