Trinity Delta view: FY18 is a year of transition for Bonesupport. From H218 onwards, the company’s focus on commercial execution should gain traction and begin to accelerate global CERAMENT sales. In the US, growth in end-user demand for CERAMENT BVF bodes well for the direct US sales model; this new model will generate higher margins, target stronger customer relationships, and have an increased focus on trauma (supported by CERTiFy data expected H218).
Importantly, the US commercial platform will be in place ahead of planned launch of antibiotic-eluting CERAMENT G in 2021. In the interim, it will be leveraged though an expanded offering of complementary products (such as those recently acquired from Collagen Matrix) with the aim of capturing a larger share of the overall US bone graft market. This is a critical step in Bonesupport’s transition from being a one-platform company to a global osteobiologics leader.
Greater clarity on US CERAMENT BVF orders removes uncertainty over Zimmer Biomet’s intentions, confirming our expectation that it would run down existing inventory during 2018. Our model already anticipated limited to zero re-ordering in Q318. This, coupled to the ongoing Zimmer Biomet hardware supply issues, underpins our expectation for lower US sales, and hence lower overall Bonesupport revenues in FY18 vs FY17.
We initiated on Bonesupport on 6 June with a fair value of SEK26/share. We make no changes to our valuation. Shares continue to trade near post-IPO lows, ahead of a number of potential value inflection points. Near-term, we highlight the Capital Markets Day in September.
Lighthouse
21 June 2018
| Price (SEK) | 10.0 |
| Market Cap (SEKm) | 508.1 |
| Primary exchange | OMX Stockholm |
| Sector | Healthcare |
| Company Code | BONEX |
| Corporate client | Yes |
Company description
Bonesupport is a Swedish orthobiologics company focused on developing and commercialising a pipeline of unique injectable drug eluting bioceramic bone graft substitutes based on its proprietary CERAMENT technology.
Analysts
Lala Gregorek
lgregorek@trinitydelta.org
+44 (0) 20 3637 5043
Mick Cooper PhD
mcooper@trinitydelta.org
+44 (0) 20 3637 5042
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