Crossject

Our short-term EPS forecasts have little meaning given the fact Crossject will not launch any product on the market before 2024 according to our assumptions. The main changes in the latter refer to the launches of products in FY24 and thereafter, thus one should not pay too much attention to the very short-term earnings profile of the company, which only captures the expenses incurred to develop the future portfolio of products.

Despite the fact we have quite significantly changed our assumptions after extensive talks with management, our target price does not move much. On the one hand, it is boosted by the NAV valuation based on future sales multiples of the products to be launched from FY24 onwards but, on the other, it is penalised by short-term losses. Actually, the peer-based comparison is very unfavourable for Crossject, considering that it will not generate any turnover, thus results, before FY24.

We have reviewed our assumptions regarding the future launches of the seven NTEs (New Therapeutic Entities) that the group is currently working on. This has translated into significant changes in the mid-term revenues we expect for FY24 and beyond. Since our NAV is based on sales multiples (3x) of the FY25-26 revenues, it is quite significantly impacted by this change in assumptions and translates into a higher valuation of the group.

Despite the fact we have changed our mid-term estimates (from FY25-26 on), the DCF valuation does not move much since we have been rather cautious on the cash flows that the group will be able to generate in the short to mid-term, in particular due to the build-up of working capital. This valuation nonetheless results in a very significant upside, which confirms our view that the current pipeline is very promising in terms of potential share price performance over the mid-term.