Bactiguard’s new financial target is 2020-25 sales CAGR of 20% combined with an EBITDA margin of at least 30% by 2025. It also aims to sign 1-2 new licence deals per year. Whilst we continue to model one risk adj. deal per year in our explicit forecast period (the company signed one deal per year in 2017-19), we argue that the risk to a deal in 2020 has increased, due to slowing discussions with counterparties in the wake of the pandemic. However, potential new licence deals remain important triggers in the coming years, and with Zimmer Biomet nearing launch of coated orthopaedic trauma implants in the European market, Bactiguard may have two licence revenue streams from early 2021 onwards.
Updated estimates yield a valuation range of SEK 137-158 per share
After Q3, we have cut our 2020-22 adj. EBITDA estimates by 4-7%, yielding an updated valuation range of SEK 137-158. We also provide a scenario analysis with various 2021E EBITDA and forward-looking valuation multiples.
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