Edison Investment Research Limited
London, UK, 9 September 2020
Edison issues initiation on Oasmia Pharmaceutical (OASM)
Oasmia is a specialty pharma company focused on developing improved formulations of well-established cancer drugs through its proprietary XR-17 platform technology. Its technology has received validation though a global partnership deal for lead asset Apealea (Cremophor-free paclitaxel) with Elevar Therapeutics across a variety of cancer indications. Apealea's initial indication is ovarian cancer (approved in Europe), and Elevar is in discussions with the FDA for the pathway to US approval (we forecast launch in FY23). Oasmia's newly appointed management has defined a strategy to realign the business, further leverage on its platform competencies and expand its pipeline through acquisitions as it moves to the ultimate goal of sustainable profitability. We value Oasmia at SEK2.82bn or SEK6.29/share.
We initiate coverage with a valuation of SEK2.82bn or SEK6.29/share including net cash of SEK274m, based on a risk-adjusted model of the future royalties and milestones we expect for Apealea (ovarian cancer only), docetaxel micellar (prostate cancer) and an indicative value for the animal health business. We do not include the XR-17 platform, or other cancer indications in our valuation.
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