Intervacc
Intervacc - Breathe easy: Strangvac is on the way (ABG Sundal Collier)
2019-04-23 06:40
Strangvac: a clear improvement over alternative therapies
Good niche and risk profile
Ample upside to earnings forecast if mgmt. executes well
Strangvac to ride a high unmet need to SEK 814m peak salesStrangvac is the lead clinical stage asset of Intervacc AB, a Swedish veterinary vaccine company founded in 2001. Strangvac is a multicomponent subunit vaccine that has been clinically demonstrated to prevent equine Strangles, an infection by the bacterium, Streptococcus equi that is highly contagious and has a high economic burden, including c. 10% mortality. Antibiotics are ineffective against Strangles, and currently available vaccines have poor efficacy and/or poor safety and ease of administration. In our view, Strangvac provides strong, durable efficacy with an excellent safety profile and simple administration (intramuscular injection). We forecast peak sales of SEK 814m from Strangvac by 2030e, of which SEK 176m comes from licensing royalties, based on a net price of EUR 15 per dose. We forecast that Strangvac will launch in 2021e.
Strong platform, strong team, right niche
Intervacc has a strong platform for future vaccine development, based on the expertise of its R&D team and the strength of its vaccine design strategy, so we are optimistic that its two additional pipeline assets, INV274 and INV412, will also eventually reach the market. With its lower regulatory burden and hence lower cost of development, we see the veterinary vaccines market as an attractive, low-risk niche compared to human therapeutics.
Risk-adjusted valuation range of SEK 720-865m
We arrive at a risk-adjusted valuation range of SEK 720-865m for Intervacc, based on a 30-40% aggregate risk-adjustment on Strangvac for likelihood of approval and likelihood of commercial success for Strangvac in partnered sales territories. As a vaccine with a regular booster schedule and the potential to prevent an economically costly disease, we believe that Strangvac has the potential to turn Intervacc into a pro
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