Original-Research: MagForce AG (von GBC AG)

Original-Research: MagForce AG - von GBC AG

Einstufung von GBC AG zu MagForce AG

Unternehmen: MagForce AG

Anlass der Studie: Research Note
Empfehlung: BUY
Kursziel: 15.80 EURO
Kursziel auf Sicht von: End FY 2018
Letzte Ratingänderung: 
Analyst: Cosmin Filker, Marcel Goldmann

On 10 February 2018, MagForce AG made public the FDA's approval for a
clinical study (Investigational Device Exemption, IDE) on focal tumour
ablation for the treatment of intermediate risk prostate cancer. This is a
major milestone for the development of the company, especially due to the
fact that the American approval authorities now define MagForce technology
as a medical device. Compared to the approval of medication, the approval
for medical devices can be achieved at significantly lower cost over a
shorter period of time.
120 male patients are to be included in the registration study. Due to the
relatively high number of cases in this indication area (230,000 new
prostate cancer cases in the United States every year), MagForce AG expects
it will be able to recruit the required number of patients very quickly. We
expect the treatment phase to be completed by the fourth quarter of the
current financial year. After the subsequent evaluation period, the FDA
should grant approval during the fourth quarter of 2019, approximately one
year later than we had anticipated.
At the same time, the company is continuing the rollout stage for the
treatment of brain tumours (glioblastoma) in Europe. The MagForce
technology has already been approved in Europe and the opening of further
treatment centres will bring it closer to patients, particularly in Poland,
Italy and Spain. With the means from the financing measures taken in 2017,
the company has sufficient financial power to open new treatment centres in
Europe and to install the required NanoActivator(R) devices. Another
important aspect of the future development of the company is its obtaining
of cost reimbursement by insurance companies, as this relatively costly
treatment is currently still being financed privately. For this purpose,
MagForce AG was able to bring in an experienced manager from the medical
technology sector in Dr. Lutz Helmke. In his role as Executive Vice
President and Managing Director Europe, he will further develop cost
reimbursement in Europe in particular. He gained his expertise in this area
in long-term management positions, in which he was responsible for the
implementation of accounting systems and cost reimbursements.
For the coming financial years, MagForce AG will continue to report low
levels of revenue. We expect approval in the United States to be granted in
late 2019, pushing the first noteworthy proceeds from the treatment of
prostate patients into 2020. The glioblastoma treatment in Europe will
continue to be dominated by the planned rollout in Poland, Spain and Italy.
Besides the installation of NanoActivator(R) devices in these countries,
the company will carry out reimbursement studies with up to 20 patients. In
addition, marketing activities will be ramped up in order to raise the
profile of MagForce technology and thereby create a foundation for
increased demand.
We previously reported a forecast reduction for the next three financial
years but consider the approval risk in the United States to be
significantly lower due to the FDA approval of the clinical study. To
account for this situation, we reduced the beta to 1.77 (previously: 2.04)
and thereby the discounting rate to 9.76% (previously: 11.01%). This had
over-compensated our forecast reduction until the year 2020. The resulting
fair value per share at the end of the 2018 financial year corresponds to
the stock price target of EUR15.80 (previously: EUR 15.00) and we maintain
the Rating BUY.

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