Amryt Pharma Holdings Ltd

Amryt Pharma Holdings Ltd (LON: AMYT) is a FTSE AIM All-Share listed commercial-stage biopharmaceutical company, which is dedicated to developing and commercializing novel therapeutics for patients with rare life-threatening diseases.

On 4 March 2021, the Company will announce the FY2020 results.

Rationale for Valuation – Hold at GBX 190.00

• In July 2020, Amryt Pharma Holdings Ltd got listed on Nasdaq, signed a distribution agreement for Lojuxta® with Swixx BioPharma AG across 17 jurisdictions in Central and Eastern Europe, and received positive top-line Phase 3 results for FILSUVEZ® EASE study.
• It has increased the 2020 revenue guidance from US$170-US$175 million to US$180-US$182 million.
• In the last year, the Company has delivered a sparkling return of ~60%, which was higher as compared to the FTSE AIM All-Share Index.
• From the perspective of valuation multiples, Price/Earnings, and EV/Sales multiples are significantly lower as against the corresponding multiples of the Healthcare industry.
• From the technical standpoint, shares are trading well above the short-term support level of 200-day (GBX 168.37) simple moving average price, which reflects an uptrend in the stock.

Key Risks

• There is a liquidity risk as the company has been incurring losses since its inception.
• Also, the adverse US federal income tax regimes and fluctuating exchange rates can affect the financial condition further.
• Moreover, there is an emerging risk to preclinical studies and clinical trials with the outbreak of Covid-19.

Recent News

On 23 December 2020, the Company announced that the U.S. FDA (Food and Drug Administration) had granted orphan drug designation for AP103. This is for the treatment of DEB (Dystrophic Epidermolysis Bullosa).

On 17 December 2020, the Company announced that Ministry of Health reimbursement approval had been granted for Lojuxta® in the Kingdom of Saudi Arabia.

Trading Update (as on 5 November 2020)

(Source: Company Website)

• In the third quarter ended 30 September 2020 (Q3 FY20), the revenue increased by 19% year-on-year (YoY) to US$49.3 million, while it has 7% quarter-on-quarter (QoQ) revenue growth.
• As per the operating segment, the Myalept® / Myalepta® (metreleptin) revenues surged by 31% YoY, and Juxtapid®/Lojuxta® (lomitapide) revenues increased by 4% YoY.
• In September 2020, the Company showed a positive top-line data from the pivotal EASE Global Phase 3 trial in EB, and European Medicines Agency (EMA) Committee has also adopted a positive opinion for the use of AP103 in EB.
• At September 30, 2020, the Company had unaudited cash of US$75.4 million, with cash generated from operating activities of US$11.4 million and legacy fines will be fully discharged by the end of Q1 FY21.

One Year Share Price Chart

 (Source: Refinitiv, chart created by Kalkine Group)

Valuation Methodology: EV/Sales Approach (NTM) (Illustrative)

Conclusion

In FY20, the company expects to report revenues in the range of US$180 - US$182 million, which was above from the prior guidance of US$170 million - US$175 million. The latest update demonstrates the positive performance and growth for the future as well as showing achievement in the development pipeline of new therapeutic drug candidates. It has experienced positive momentum during H1 FY20 and Q3 FY20, with both the revenue growth and positive cash momentum.  AMYT is also encouraged by the opportunities lying with FILSUVEZ® for high unmet medical needs. In a nutshell, the Company has a revenue-generating commercial portfolio, financial flexibility to pursue anticipated development plans, a pipeline of new therapies to serve high unmet needs and global commercial infrastructure to support the long-term growth. The stock made a 52-week low and high of GBX 80.00 and GBX 250.00, respectively.

Considering the uncertainties and market dynamics, we are currently maintaining the “Hold” stance on Amryt Pharma Holdings Ltd at the closing price of GBX 190.00 (as on 7 January 2021) and will recommend fresh buying at the right time.

Atalaya Mining Plc

Atalaya Mining Plc (LON: ATYM) is a mining and development Company, which produces copper concentrates and silver by-product at its wholly-owned Proyecto Riotinto site in southwest Spain.

Rationale for Valuation – Hold at GBX 260.00

• The copper production was above 13,000 tonnes in the last three quarters and reached a new record of 14,695 tonnes.
• Overall, the Board remain confident in the outlook with the annual guidance and production ranges being maintained.
• As per valuation metrics, EV/EBITDA, Price/Earnings and Price/Cash Flow multiples are currently lower than the Metals & Mining industry.
• The debt/equity ratio was 0.02x in September 2020, lower than the industry median. Hence, the Company is less leveraged as compared to the industry.
• In the last six months, the Company has delivered a sparkling return of ~46%, which is higher as compared to the FTSE AIM 100 Index.
• From the technical standpoint, shares are trading well above the short-term support level of 50-day (GBX 209.63) simple moving average price, which reflects an uptrend in the stock.

Key Risks

• The Company’s operational performance is exposed to the global macroeconomic environment and industry conditions such as global demand and supply imbalance, which could affect product volumes and prices across markets.
• The Company operates in multiple geographies, and profits can be impacted negatively due to foreign exchange rate fluctuations.

Recent News

On 17 December 2020, the Company announced that it had issued 801,583 ordinary shares to an exercise of share options.

On 15 December 2020, the Company announced that Mr. Jonathan Lamb, as a Non-Executive Director, has stepped down from the Board of Atalaya, with immediate effect.

Q3 FY20 Trading Update (for the period ended 30 September 2020, as on 19 November 2020)

(Source: Company Website)

• Led by higher concentrate sales volumes in the period, the revenues increased to €65.8 million in Q3 FY20 as compared with the corresponding period of the last year.
• In Q3 FY20, EBITDA increased to €22.3 million against the €9.9 million in Q3 FY19, due to higher copper concentrate sold in the period, in addition to higher copper prices.
• During Q3 FY20, All-in Sustaining Costs (AISC) amounted to US$2.29/lb of payable copper, which was slightly higher than Q3 2019.
• On 30 September 2020, the unrestricted cash balances were €29.8 million.

One Year Share Price Chart

 (Source: Refinitiv, chart created by Kalkine Group)

Valuation Methodology: Price/Earnings Approach (NTM) (Illustrative)

Conclusion

The Company confirmed that it is well-positioned to meet the 2020 production guidance of 55,000 - 58,000 tonnes of copper, with successfully managed operating challenges. The annual guidance range is currently being maintained, with US$1.95/lb-US$2.05/lb and US$2.20/lb-US$2.30/lb for cash costs and AISC, respectively. It has also consistently delivered record production and strong cash operating cost performance, with future growth opportunities in and around the mining properties. Meanwhile, the Company delivered another strong quarter, with copper production at Proyecto Riotinto reaching record levels. The stock made a 52-week low and high of GBX 77.00 and GBX 242.00, respectively.

Considering the uncertainties and market dynamics, we are currently maintaining the “Hold” stance on Atalaya Mining at the closing price of GBX 260.00 (as on 7 January 2021) and will recommend fresh buying at the right time.

*All forecasted figures and Peers information have been taken from Refinitiv, Thomson Reuters.

*Dividend Yield may vary as per the stock price movement.

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