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Crossject

CR
Bloomberg   ALCJ FP
Supergenerics  /  France  Web Site   |   Investors Relation
Things get going
Target
Upside 199%
Price (€) 3.88
Market Cap (€M) 142
Perf. 1W: -6.17%
Perf. 1M: -27.6%
Perf. 3M: -9.57%
Perf Ytd: -22.0%
10 day relative perf. to stoxx600: 13.0%
20 day relative perf. to stoxx600: -30.1%
Other news/comments29/08/2016

When apparent threats are also opportunities

Fact

Mylan’s EpiPen was subject to fierce criticism from politicians including “President-to-be” Hillary Clinton after the generics maker raised the price of its emergency allergy injector by some 500% (!) in the past five years to over US$300 per unit (i.e. over US$600 for a pack of two, sold for €76 in France for instance).


Analysis

At first glance, the news could seem as negative for the sector as a whole (and Crossject more particularly) since the news stresses again the growing worries on the American health system, still the most profitable (by far) for all pharma companies, and the constraints that are weighing more and more on it, not to mention the political dimension only weeks before the presidential election. This said, the news is in fact positive, we argue: first, because in the field of pharma as well as in any other sector, the best way of putting pressure on players and reducing costs is to increase competition. In other words, and even if regulatory approvals are or should be mainly based on criteria such as efficiency and lack of side-effects, we believe the economic side is gaining ground and should prompt authorities to promote competition, a much needed factor of efficiency in a free economy. This may be an opportunity for Crossject’s own device to get access to the American market earlier rather than later. Second, concerning the economics, the price of Mylan’s injector is well above Crossject’s. As a reminder, and this is the number we use in our model, the company plans to sell its needle-free device for US$120 in the US as far as Epinephrin and Naloxone are concerned, a fraction of Mylan’s price (i.e. a 60% discount). We are not saying that the political willingness to reduce health spending is good news as such but, in this particular case, it may well turn out to be positive for Crossject, a new entrant on the market which will be able to offer lower prices and put pressure on the market leader which, so far, enjoys an almost monopolistic position.


Impact

No impact on our numbers as such since Xeneo is unlikely to enter the US market before FY18 at the earliest, but the need for more competition in the US market is undoubtedly positive for Crossject.


Updates

25 Sep 17 Earnings/sales releases
H1 17: a new NTE in the pipeline...and further d...

06 Apr 17 Financing issue
The capital increase was successful

13 Mar 17 Earnings/sales releases
FY16 results - untelling (as expected) and a €4....

20 Sep 16 Earnings/sales releases
H1 16 results: not very telling as expected

29 Aug 16 Other news/comments
When apparent threats are also opportunities

25 Feb 16 Initiation cov.
Initiating coverage of Crossject.

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