Destiny Pharma (DEST) : Corp

Reinforcing the value of XF-73

Key data

  • Share price (p) 40.0
  • Target price (p) 250.0
  • Market cap (£m) 17.4
  • Enterprise value (£m) 8.3

The results from a Phase I study of XF-73, which was independently conducted and sponsored by the National Institute of Allergy and Infectious Diseases (NIAID), part of the US National Institutes of Health (NIH) in the US, have been published in a peer-reviewed journal – The Journal of Global Antimicrobial Resistance – that focuses on the global spread of antibiotic-resistant microbes. Whilst the data were announced originally in 2016, the publication of this study serves as a reminder of the potential value of Destiny’s XF-73 endorsed by the NIH. Not only was XF-73 reported to be safe, well tolerated and with minimal side effects, the same nasal formulation used in the study is being used in the currently enrolling Phase IIb study, thus de-risking the study further. A positive Phase IIb trial outcome offers a material value inflection point. The current EV in our view does not reflect the risk reward profile and ignores the value of additional drugs emanating from the XF platform. We reiterate our target price.

Mark Brewer 020 7220 0556 mbrewer@finncap.com

Tristel (TSTL) : Corp

FY 2019 results: new three-year financial plan

Key data

  • Share price (p) 293.5
  • Target price (p) 325.0
  • Market cap (£m) 130.8
  • Enterprise value (£m) 126.6

Full-year results were in line with July’s trading update. Revenues grew by 18% CER, with a stronger-than-expected UK performance (+9% vs +2% in FY 2018), driven in part by the launch of new products, supporting the continued expansion in international markets (+26%) that now account for 55% of group revenues. The expected response to Tristel’s pre-submission request to the FDA, expected in December, should help determine the next steps for US registration. We maintain our FY 2020 adjusted pre-tax profit forecasts (+16%) with changes to reflect IFRS16 and introduce FY 2021 forecasts for 10% and 7% revenue and EPS growth. These are towards the bottom of Tristel’s newly set three-year financial plan, which bodes well for potential upside given the strong delivery over the past three years. Our unchanged 325p target price implies a 4% FY 2020 FCF yield.

Mark Brewer 020 7220 0556 mbrewer@finncap.com

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