Valbiotis supported by encouraging forecasts – 15.09.2022. at 10:55

(AOF) – Valbiotis rose 1.4% to 5.72 euros after announcing its half-year results. At the end of June 2022, the biotech had cash of 15.4 million euros. This cash allows the company to calmly cover the operational costs related to the execution of its development plan and to comply with the repayment plan of its current financial debt, thus benefiting from financial visibility until the last quarter of 2023, excluding potential additional revenues.

This cash horizon does not take into account additional milestones Nestlé Health Science may achieve, nor additional revenues that may come from new strategic partners.

Valbiotis says it is approaching the coming months with confidence, aiming to continue clinical studies of all active substances in its portfolio and prepare for future marketing.

In the first half of 2022, Valbiotis generated revenue of €635,000, including revenue from the partnership signed in February 2020 with Nestlé Health Science, which resulted in the recognition of €148,000 for an initial payment of €4,679 million spread over the life of the license agreement . To this amount is added a payment of 487,000 euros after the first visit of the first patient in a clinical study of the mode of action of Totum-63, a treatment for prediabetes.

The operating loss was 4.929 million compared to a loss of 6.386 million in the first half of 2021.

Following this publication, Midcap Partners confirmed its buy recommendation and price target of 12.1 euros for the shares.

The broker revised its estimates after new hypotheses about the marketing of Totum-63 and Totum-070, treatments for “bad cholesterol.”

Invest Securities, for its part, notes that the group lowered its financial visibility forecast, which was previously forecast until the first half of 2024.

According to the broker, this delay of several weeks can be explained by a faster than expected reinforcement of teams, more sustainable R&D expenditure to finalize the employment of its phase 2/3 study Totum-63 and probably the global inflationary context.

In terms of news flow, the group now expects the results of this study to be published in the first half of 2023, compared to the previous first quarter of 2024.

This delay was expected considering the duration of the study (24 weeks), the time needed for its finalization and data analysis, given that the recruitment was completed at the end of July, the design office points out.


The inevitable race for new blockbusters

The patent for Merck’s star product, the cancer drug Keytruda, which accounts for more than 35% of its sales, expires in 2028. Despite the loss, as of 2019, of the patents for its three stars (Avastin, Herceptin, Rituxan) Roche managed to renew its portfolio by bringing new molecules to the market. However, discovering and launching new drugs is increasingly expensive. AstraZeneca spends about $6 billion a year on research and development in a pharmaceutical industry where the patent life lasts only ten to fifteen years. This causes laboratories to withdraw from certain activities. Thus J&J, Pfizer, GSK and, no doubt, Novartis soon prefer to shift to specialty drugs and abandon any ancillary activity.

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