Intervacc: Continued positive reception for Strangvac - ABG

Signs of first Strangvac sales in Q2 UK launch, first Dechra order in the books Q2 EBIT of SEK -16m, SEK 76m in cash Strangvac is moving forward Sales in Q2 increased by SEK 0.8m y-o-y (or +46%), which we interpret as an indication of meaningful Strangvac volumes (implies 4,000 doses). While this is a modest figure, it should be seen in the light of the launches in late March (Sweden) and late May (Denmark). We currently estimate SEK 9m in Strangvac sales from the Nordics in FY’22e and we believe that Q4 will be an important quarter, as it is when newborn foals typically enter vaccination programmes for the first time (e.g. equine influenza). We note that Menhammar, Sweden’s leading breeder for harness racing, intends to vaccinate all this year’s newborns. In addition to Sweden, Strangvac has also been received well in the UK, where it launched on 17 August. Dechra also placed its first order during July (SEK 3m), with vials labelled for the UK, Germany, and France, which we see as an indication of what markets are to come. Initially targeting SEK >1bn annual opportunity The company continues to highlight the that it expects uptake development to take the form of an S-curve where it currently is in the early stages. It will likely take some time before we can assess the trajectory of this curve, but we find the continued positive reception observed thus far to be promising. Intervacc’s first aim is to vaccinate a third of horses in its “primary markets” (Europe, USA, Oceania), which at 100 SEK per dose, 2x per year, corresponds to SEK 1.2bn in annual sales. Roughly SEK 450m of this is in Europe, where it has received regulatory approval, and it is working on the US as its next market. Q2 financials Q2 sales were SEK 2.6m (+46% y-o-y) and EBIT was SEK -15.7m (-6.5m). The higher costs were driven by the start of amortisation of the Strangvac intangible assets (SEK -4.4m in Q2), as well as costs relating to the launch. Operating cash flow before changes in WC was SEK -9. ... Läs mer på ABG Sundal Collier