10.09.2019 MagForce AG DE000A0HGQF5
Original-Research: MagForce AG (von GBC AG): BUY
Original-Research: MagForce AG - von GBC AG
Einstufung von GBC AG zu MagForce AG
Unternehmen: MagForce AG
Anlass der Studie: Research Report (Anno)
USA approval underway, Roll-out plan in Europe is currently being implemented, Sound financial base following capital increase
MagForce AG has made a significant in obtaining approval for prostate treatment in the USA. Following FDA approval for a registration trial at the beginning of 2018, MagForce AG enrolled its first patients in mid-2018. With the announcement dated 27.08.2019, the company announced the successful completion of the first phase of study. During this study phase, the treatment processes were successfully established with only minor side effects in the treated patients. In the next stage of the study the technology aims to be tested on up to 110 patients in three urological centres by the next financial year. The aim of the registration trial is to demonstrate that prostate cancer patients are able to remain in the Active Surveillance programmes for longer periods of time. A longer stay in such a programme would imply that the progression of the disease is stable, which means that there is no need for treatments with a large number of side effects. According to our expectations, market approval should be complete by Q3/Q4 2020 and, accordingly, should ensure an increase in treatment revenues in this area from the end of 2020.
MagForce AG reached further milestones in the 2018 financial year in its efforts to promote its self-developed technology and to obtain approval for medical device commercialisation in the USA. Expansion plans continued in Europe with NanoTherm(R) technology, which has been approved for the treatment of malignant brain tumours. Following the development of the mobile NanoTherm(R) system in the past financial year, two cooperation agreements have now been concluded with treatment centres. The mobile treatment system was installed for the first time in April 2019 at the Independent Public Clinical Hospital No. 4 in Lublin, Poland. Another cooperation was concluded with the Paracelsus Clinic in Zwickau, Germany, with a further mobile treatment centre to be installed in the second half of 2019.
At the same time, the Company should be in a position to increase its commercial treatment revenues in Europe too, which now are at a very low level. The basis for this should partly be the recently opened treatment centres and partly the continued expansion plans. The mobile system allows new cooperations to be implemented quickly as there is no need for a fixed installation within the hospital infrastructure. In addition to expansion in Germany, the company intends to gain the initial market entry in Spain and Italy in the near future.
Our forecasts indicate a significant increase in commercial treatment revenues for Europe, particularly from the 2020 financial year on. We have assumed in our forecasts that the development of the much larger segment in the USA will take effect from the end of the 2020 financial year. This should enable MagForce AG to achieve a larger number of treatments quite quickly. Accordingly, the volume of sales should rise significantly from 2021 onwards, reaching a sustainable EBITDA break-even point.
We have calculated a new stock price target of EUR13.50 (previously: EUR15.30) using the updated DCF valuation model. The reduced stock price target is due in part to the delay in market approval for the treatment of prostate cancer in the USA. Partly though, we have set a slightly more conservative revenue and earnings target for Europe. We have also taken into account a dilution effect as a consequence of the recent capital increase (1.18 million new shares at EUR4.25 per share). We continue to assign a BUY rating.
Die vollständige Analyse können Sie hier downloaden: http://www.more-ir.de/d/18977.pdf
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