While we continue to expect a potential licence deal in 2020, which would be in line with the company’s guidance of 1-2 new licence deals per year (no deal YTD), we argue that the risk has increased because there is now only one quarter left, and with counterparties likely dedicating much focus to handle the COVID-19 situation. On the Zimmer Biomet deal, we believe Zimmer Biomet is likely to push to reach the European market in early 2021 based on the one-year postponement of the European regulatory framework (MDR), creating the opportunity to use the already granted CE-mark. Whilst this is positive, it is likely to cause the USD 1m milestone, based on 510(K) filing, to arrive in 2021.
Updated estimates yield a valuation range of SEK 143-164 per share
Ahead of Q3, we have cut our 2020-22E adj. EBITDA by 6-12%, mainly reflecting lower assumptions on catheter volumes and FX movements. We have also moved the expected upfront payment of USD 1m from Zimmer Biomet into 2021.
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