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Crossject

CR
Bloomberg   ALCJ FP
Supergenerics  /  France  Web Site   |   Investors Relation
Things get moving
Target
Upside 114%
Price (€) 4.58
Market Cap (€M) 166
Perf. 1W: 8.27%
Perf. 1M: 32.8%
Perf. 3M: 20.1%
Perf Ytd: 39.0%
10 day relative perf. to stoxx600: 5.19%
20 day relative perf. to stoxx600: 31.9%
Earnings/sales releases13/03/2017

FY16 results - untelling (as expected) and a €4.3m capital increase

Fact

Crossject released its FY16 results. Revenues reached €1.43m vs €2.73m in FY15 (-48%), operating result €-7,291k (vs €-7,013k), and the net result €-6,663k (vs €-5,687k). Net cash at the end of FY16 amounted to €2.6m (vs €5.2m a year before). The company also announced a capital increase (€4.3m at €4.5 per share with subscription rights), which is 75% underwritten by the main shareholder, Gemmes Ventures.


Analysis

The numbers as such are irrelevant, as we previously mentioned, since the story of Crossject is based on the future launch of Zeneo combined with the NTEs the group is targeting. However, we note that the net loss is above our expectation (€-5.8m) on slightly lower revenues and despite rather high operating expenses which are kept under control. The net cash position has significantly decreased (capex of €6m, while our forecasts also included some milestone payments on Zeneo Adrenaline which hasn’t occurred yet).
As a reminder, Crossject has decided to review its strategy, particularly by insisting first on emergency NTEs among its current portfolio of seven NTEs, and more specifically on the products that could lead to early distribution agreements (with upfront fees) in the US and could get market approvals through a “fast-track” procedure (see our comment dated 23 November 2016, with, at that time, the delay in expected product launches vs the group’s initial plans).
As a result, Crossject is launching a capital increase, issuing a maximum number of 963k shares (before a potential 15% extension clause, thus a maximum of 1,107k shares) at a price of €4.50 per share. Eight subscription rights will entitle holders to acquire one share. The subscription period will run from 16-30 March. Gemmes Ventures, Crossject’s main shareholder with c.20%, has committed itself to taking part in the capital increase and is also underwriting the issue, up to 75% of the shares to be issued. At the end of the day, and considering 963k shares will be issued, this will increase the total number of shares from 7.7m to 8.6m.


Impact

We will fine-tune our numbers, mainly due to the capital increase and the dilution stemming from it. However, it is worth mentioning that the move secures the group’s financing, while it is expecting cash inflows (refundable incentives, milestone payments) to fund future developments.


Updates
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