AlphaValue Corporate Services Fundamental Analysis FR
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AlphaValue Corporate Services
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Crossject

CR
Bloomberg   ALCJ FP
Supergenerics  /  France  Web Site   |   Investors Relation
Some patience still required
Target
Upside 302%
Price (€) 2.58
Market Cap (€M) 65.4
Debt

At year-end 2020, the group had a net debt position of €17m. The bulk of the capex has been spent (i.e. the industrial investment needed for the production of c.1.5m Zeneo devices).This includes €3.8m in capex in 2014-15, €3.2m in FY18, €4.4m in FY19 and another €6m in FY20. Looking onwards, we have considered a recurring capex (€2m) to which is added an “expansion” capex of €3m for each additional 3m units sold (which is probably not the way capex will be spent since these “thresholds” do not necessarily require such high levels of investment). Another important issue before first sales are booked is the amount needed to finance the clinical studies. According to management, the full development of each NTE costs c. €2-3m (including clinical studies) and is spent in the two years preceding market approval. This comes on top of the “normal” cash-burn of the company before its products are on shelves. However, Crossject will also benefit from upfront fees once partnership agreements are signed, on top of the benefit for tax credits and the remaining part of the “PIAVE” financing. At the end of the day, our view is that the group is self-financed provided it is able to sign partnerships in the short term. Otherwise, Crossject may have to resort to the financial markets or find another financial solution to raise cash (for instance, by “selling” future royalties to a financial partner). The group, which has already resorted to capital increases to finance its short-term needs (first through an equity line in place since FY16 and a €5m capital increase in March 2017), has issued a €5.3m convertible bond in March 2018 and another €2.5m in July. A €3.9m capital increase was announced on 28 November 2018, at a price of €1.16, with the new 3.4m shares listed before the year-end (28 December 2018). The conversion of convertible bonds in FY19 has reduced bond debt by c. €5m. At the end of FY19, the group issued a new convertible bond worth €5.7m. Lastly, the group issued two bonds (each worth €5.24m, of which is a convertible) in December 2020.

Funding - Liquidity
  12/20A 12/21E 12/22E 12/23E
EBITDA €M -6.69 -5.81 27.8 57.1
Funds from operations (FFO) €M -6.05 -3.26 19.3 38.9
Ordinary shareholders' equity €M -1.13 -7.50 8.69 44.4
Gross debt €M 17.3 31.2 56.0 66.0
   o/w Less than 1 year - Gross debt €M 3.70 0.64
   o/w 1 to 5 year - Gross debt €M 0.64 0.60 1.00 1.00
   of which Y+2 €M 0.64 1.00
   of which Y+3 €M 1.00
   of which Y+4 €M 0.60
   of which Y+5 €M 0.60
   o/w Beyond 5 years - Gross debt €M 13.0 30.0 55.0 65.0
 + Gross Cash €M 0.61 10.9 0.96 4.51
 = Net debt / (cash) €M 16.7 20.3 55.0 61.5
Bank borrowings €M 8.00 25.0 40.0 40.0
Issued bonds €M 5.80 5.80 5.80 5.80
Other financing €M 3.54 0.44 10.2 20.2
Gearing (at book value) % 434 131
Equity/Total asset (%) % -5.20 -39.5 12.4 39.7
Adj. Net debt/EBITDA(R) x -2.50 -3.50 1.98 1.08
Adjusted Gross Debt/EBITDA(R) x -2.61 -5.40 2.02 1.16
Adj. gross debt/(Adj. gross debt+Equity) % 107 131 86.6 59.8
Ebit cover x -19.7 -13.1 35.0 76.7
FFO/Gross Debt % -34.6 -10.4 34.4 58.8
FFO/Net debt % -36.1 -16.0 35.1 63.2
FCF/Adj. gross debt (%) % -61.4 -11.4 -61.9 -9.76
(Gross cash+ "cash" FCF+undrawn)/ST debt x -2.74 11.4
"Cash" FCF/ST debt x -3.02 -5.59
Credit Risk
Covenants
Changes to Story : 02/09/2021, Changes to Forecasts : 02/09/2021.