OssDsign: On a promising trajectory in the US - ABG

Better sales as US grew 144% on Catalyst success Underlying estimates relatively unchanged Fair value range of SEK 8-21 unchanged Recently launched bone graft continues to outperform OssDsign continues to perform well in the challenging hospital environment. It managed to grow 96% y-o-y and beat ABGSCe by 4% on sales. The US grew by 144%, and this strength was solely driven by Catalyst (bone graft), which had sales of SEK 6.6m in the quarter. It now represents 38% of group sales, and likely 50% of gross profit considering the higher margins. We are encouraged by the initial adoption rate, as there is normally high growth potential in same surgeon sales. Most only change bone graft material in a small share of surgeries to begin with, and we view this as highly supportive for continued growth. Cranial PSI was relatively flat in the US, likely as OssDsign is shifting sales efforts to Catalyst, but showcased high growth of 47% in Europe. We think this is mostly based on penetration in France post- the AP-HP contract win. France is the third-largest market in the Europe, and we see good potential for continued high growth considering low penetration. There were no major surprises on the cost side, and EBIT beat ABGSCe by 14%, showcasing that OssDsign scales well with Catalyst. We think it can achieve a sales CAGR of 66% ’21-25e The performance witnessed in Q3 is supportive of the long-term trajectory depicted by our current estimates. Hence, we only update FX, cutting sales by 2% ’23-24e, and nudge the cost base slightly higher. We now expect a sales CAGR of 66% for ’21-’26e. Given this and the cash position, which is now at SEK 89m, we think a modest cash injection is likely in 23e, supporting a path to positive cash flow in ‘25e. Easing conditions allow for continued momentum We leave our fair value unchanged at SEK 8-21 per share, using a WACC of 11%. We think the company is executing well according to plan and that the setup for continued strong operational performance lo ... Läs mer på ABG Sundal Collier