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Market: LSE
Sector: Pharmaceuticals & Biotechnology
EPIC: BII
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Biocompatibles
www.biocompatibles.com

Biocompatibles International plc is a leading company in the field of drug-device combination products.  The Oncology Products Division conducts the marketing of Biocompatibles’ approved oncology products.  These include products that are used for the treatment of primary liver cancer (HCC), liver metastases from colorectal cancer and prostate cancer.  Our R&D Facilities are engaged in licensing and in new product development for oncology, stroke, and diabetes and obesity.  We have collaborative agreements with AstraZeneca, Bayer Healthcare Pharmaceuticals Inc. and Medtronic Inc.

Full Biocompatibles profile here
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Edison Investment Research values Biocompatibles at 360p, awaits results from CM3 AstraZeneca trial

9th Feb 2010, 1:48 pm Edison Investment Research values Biocompatibles at 360p, awaits results from CM3 AstraZeneca trial

Edison Investment Research issued a note on Biocompatibles (AIM: BII), saying the currently ongoing clinical trials of the medical technology group’s diabetes product were ignored by the market, while significantly enhancing the research house’s indicative value estimate, which currently stands at a roughly 30% premium to the stock’s market value.

The full year results for 2009 showed sales of £26.6 million, marking a year-on-year improvement of 48% with revenue guidance of £28-32 million for 2010. The note said that the current EV (enterprise value) was £64.9 million and the EV/sales ratio of 2.4x looked “unadventurous” given a yield of 2.6%, the net £30.5 million in cash and marketed products.

Edison expects stronger growth in 2011 onwards as data from Phase I of the ongoing trial of the CM3 diabetes product with AstraZeneca (LSE: AZN) is reported. Edison said the CM3, which it dubbed a possible diabetes blockbuster, was unrecognized by the market, while adding 120 pence to its indicative value estimate of 360 pence. The valuation was based on a 10-15% probability associated with the clinical development of CM3.

Should AstraZeneca license CM3 after the planned four clinical studies, Biocompatibles will receive a £25 million payment.

The group also has handheld GP device to diagnose melanoma, MoleMate, which it acquired for £200 million in November, and cosmetic dermal filler bead Novabel developed by partner Merz Pharmaceuticals GmbH, which is expected to start selling in the US in 2012 with a £25 million investment set to be made in 2012 to build capacity.

Edison forecasts revenues of £29.3 million for 2010 and £33 million for 2011, expecting pre-tax losses of £2.7 million and £0.2 million with losses per share of 6.3 pence and 0.4 pence respectively.

Back in January, Biocompatibles said it had an “excellent year in 2009”, and that revenue and year-end cash levels came in ahead of its previous guidance.

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