Edison issues research review on Abzena (ABZA)

London, UK, 22 June 2016

Edison issues research review on Abzena (ABZA)

FY16 results were strong, with 28% like-for-like total revenue growth reported (74% growth including the £2.7m contribution from its acquisitions late 2015). It has been a pivotal year for Abzena as it has expanded its business to provide a broad range of services from antibody discovery through to GMP manufacturing for Phase I/II trials. Alongside this, its clinical Abzena inside pipeline continues to grow, with 11 products now in the clinic and progressing toward commercialisation, most notably GS-5745 in gastric cancer. We have increased our valuation to £133m (from £130m) but expect upside to this as the portfolio progresses and further licensing deals are announced.

Our fair value has increased to £133m (from £130m) or 98p per share (vs 96p). We have included £56m for the services business, based on our new forecasts (including a 12-month contribution from the acquisitions) and risk-adjusted royalties from licensed products of £64m, (adding an 11th clinical Abzena inside product and including the Halozyme ADC deal). Abzena is well poised to grow its integrated service offering and also offer a potential valuation uplift as its Abzena inside products move through the clinic and to the market. 

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