Calliditas Therapeutics - Amazon S3 · 2020-04-15 · ongoing trials for already enrolled patients....

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Update

Equity Research 15 April 2020

KEY STATS

Ticker CALTX Market Mid Cap

Share Price (SEK) 72.6 Market Cap (MSEK) 2810 Net Debt 20E (MSEK) -421 Free Float 62 %

Avg. daily volume (‘000) 100

BEAR BASE BULL 60

140

260

KEY FINANCIALS (SEKm)

2018 2019 2020E 2021E 2022E 2023E Net sales 0 185 0 0 239 797 EBITDA -132 -28 -330 -445 -296 1 EBIT -132 -28 -330 -445 -296 1 EPS (adj.)

2018 2019 2020E 2021E 2022E 2023E EPS (adj.) -3.8 -0.8 -8.5 -11.5 -7.7 0.0

ANALYSTS Ludvig Svensson [email protected] Niklas Elmhammer [email protected]

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OMXS 30Calliditas Therapeutics

Blockbuster potential Redeye strongly reiterates its positive stance on Calliditas, a high-quality biotech whose

longer-term blockbuster potential should be highlighted this autumn by positive Phase III trial

data for its key drug Nefecon. The recent sentiment-driven downturn has pushed the share

into bear territory that underestimates Nefecon’s decent likelihood of launch.

Limited expectations

At current levels investors are pricing in only a 35% likelihood of Nefecon reaching the

market. This is despite its solid Phase IIb data, de-risked regulatory pathway and good

prospect of strong Phase III data this autumn. We put the potential for approval at 65% –

higher than historical averages in the sector.

Study success

With the trial’s primary endpoint, a reduction in proteinuria at 9 months, we argue investors

should view a 20%+ reduction from baseline as a trial success. Nefecon 16mg daily

achieved 27% in Phase IIb (30% delta compared to placebo). Phase III top-line numbers are

a key catalyst for the case: positive data would increase our base case value to SEK 205.

Budenofalk factored in

We now include the in-licensed project Budenofalk in our sum-of-the-parts valuation, where

it contributes SEK 16 per share. A Phase III trial in AIH patients could be initiated next year

with US launch in 2024, we judge.

H urt by sentiment

Like other late-stage biotechs, the share has been hurt by negative sentiment over the last

month. To reflect the increased short-term risks associated with the coronavirus, we have

increased our WACC to 13% (12%).

We reiterate, though, that Calliditas longer-term prospects is relatively unaffected by

coronavirus and highlight our new base case valuation of SEK 140. The stock should

realise some of its considerable upside as sentiment improves and Phase III top -line

readout approaches.

Calliditas Therapeutics Sector: Biotech

REDEYE RATING

CALTX.ST VERSUS OMXS30

FAIR VALUE RANGE

Financials

People

Business

REDEYE Equity Research Calliditas Therapeutics 15 April 2020

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Investment Thesis Clear path to market success

The FDA’s decision to accept reduction in proteinuria as a surrogate endpoint for a

registration Phase III IgAN program is a clear positive for Calliditas as Nefecon displayed a

statistically significant and clinically relevant reduction in proteinuria in a 150-patient Phase

IIb study. With an identical design for the 360-patient Phase III study, Nefecon has an above-

average likelihood (65%) of showing positive data and subsequently reaching the market. We

expect top-line results by late 2020, setting the company up for a potential 2022 launch.

B lockbuster potential

Nefecon is a well-positioned late-stage asset that could fill a large unmet clinical need. There

are no approved drugs for IgAN and development has been slow historically, though the

landscape is starting to change as the new clinical endpoints have shortened lead times. As

Calliditas is at the forefront of R&D efforts in this area, we look for Nefecon to be the first

approved IgAN drug targeted to the disease origin. This profile has already attracted interest

among key opinion leaders in the field.

Nefecon is being positioned to target the up to 50% of IgAN patients in the US and EU at risk

of progressing to ESRD (~170,000 patients). Untreated, they would eventually require costly

dialysis and transplantation. Given the unmet clinical need, the vast number of patients and

the promising drug profile, Nefecon has potential for a strong market launch: we forecast

peak US/EU/China sales of USD 647m/181m/224m, respectively.

Attractive risk/reward

Our risk-adjusted cash flow model for valuing Calliditas is based on Nefecon in the US, EU

and China, and Budenofalk in the US. We assign a 65% likelihood for Nefecon to reach the

market and arrive at a Base Case of SEK 140 per share. We assume that Calliditas will out-

license Nefecon in European markets and receive 30% sales royalties. Our SEK 260 Bull Case

assumes that very positive clinical data commands better pricing and higher market

penetration. In contrast, our SEK 60 Bear assumes less attractive pricing and market

penetration.

dsfdsf REDEYE Equity Research Calliditas Therapeutics 15 April 2020

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Valuation We use a sum-of-the-parts (SOTP) analysis to value Calliditas. After risk-adjusting the

Nefecon and Budenofalk assets, we derive a base case valuation of SEK 140 per share. We

have also increased our long-term EBIT margin assumption to 55% (50%), reflecting synergy

effects related to leveraging the US sales force with Budenofalk sales.

Our valuation of Calliditas are very sensitive to key assumptions such as the WACC and

Nefecon’s likelihood of approval. Below we provide a sensitivity analysis to shed some light

on how different levels of these key parameters affect our Base case valuation.

Scenario analysis

To provide a further dynamic view of our valuation, we model pessimistic bear case and

optimistic Bull case scenarios alongside our base case. The following assumptions apply to

all three scenarios:

- WACC of 13%

- Tax rate of 20.6%

- 38.7 million shares outstanding

- Nefecon launch in 2022

Bear case SEK 60 Base case SEK 140 Bull case SEK 260 - Nefecon-naïve US

penetration: 10%

- US Nefecon pricing: USD 55,000

- LoA 50%

- Nefecon-naïve US penetration: 20%


- LoA 65%

- Nefecon-naïve US penetration: 30%


- LoA 80%


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Calliditas has performed strongly over the last year, peaking some 120% above last year’s

low. The positive sentiment around the share has been fueled by strong news flow from the

company. The share’s decline over the past month stems from investors’ risk-off stance in

view of the coronavirus’s impact on all areas of the global economy.

Calliditas has an increasingly encouraging ownership structure. In recent months it has

attracted international specialist investors like BVF Partners, Sofinnova Partners, and Vivo

Capital. In our view, this validates the case and will be important when Calliditas wants to

raise additional capital to commercialize its assets in the US.

Corona virus impact

During the last weeks, many cases of terminated clinical trials due to the coronavirus have

been reported. One example being big pharma company Eli Lilly who have chosen to delay

the start of most of its trials and pause enrollment in most its trials that are ongoing.

However, we believe it’s important to emphasize that Eli Lilly intends to continue currently

ongoing trials for already enrolled patients.

As this situation escalates, we see a clear risk that recruitment for Nefecon’s ongoing phase

III trial will slow. While this is likely to affect the timeline for Part B of the trial, we view it as

positive that Calliditas has managed to recruit the last patient for Part A (n=200), which will

be the basis for accelerated market approval in the US and EU.

In our view, the Nefecon once-daily oral approach, which patients can administrate at home

should lead to patients already recruited to the study being likely to continue the treatment,

and we do not expect any significant dropouts among these 200 patients. Instead, we believe

other drugs within clinical development for IgAN with an intravenous approach administrated

at clinics/hospitals will have a harder time recruiting patients in current environment.

Adherence to treatment among patients already recruited to trials with intravenous

medicines should also be lower compared to drugs with an oral approach, as these patients

may have trouble getting to the clinic/hospital under current circumstances.

Given the unmet medical need in the IgAN patient population and absence of treatment

options, we believe FDA and other regulators will continue to take a lenient stance towards

Nefecon. All in all, we judge the launch of Nefecon in the US and EU markets will not be

affected by the coronavirus, but we choose to postpone Nefecon launch in China until 2024


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Budenofalk for autoimmune hepatitis (AIH) Since our last update, Calliditas has announced an exclusive in-licensing deal with Dr. Falk

Pharma GmbH on the Budenofalk 3mg oral capsule for the treatment of autoimmune

hepatitis (AIH) in the US. We regard the deal as a logical step for Calliditas in its strategy to

self-commercialize orphan assets in the US market, leveraging its US sales force.

The deal with Dr. Falk Pharma on Budenofalk involves:

- An upfront payment of USD 1.7 million

- Development, regulatory, and commercial milestones up to a total value of USD 43

million.

- Royalties on net sales (rate undisclosed).

The agreement covers all indications for the US market, excluding orphan indications beyond

liver targets. Budenofalk is today approved in Europe for the treatment of AIH, Crohn's

disease, and collagenous colitis. We believe this significantly reduces the development risk in

the US.

Opportunities within the field of AIH

Autoimmune hepatitis (AIH) is a chronic autoimmune disease of the liver that occurs when

the body’s immune system attacks liver cells, causing inflammation in the liver. Left

untreated, AIH can lead to liver failure.

There is no robust epidemiological data on AIH in the US, but based on studies conducted in

Norway and Sweden, the prevalence of the disease ranges from 11 to 17 per 100,000. We

believe similar prevalence can be assumed for the Caucasian population of the US. This

would translate into roughly 50,000 people suffering from the disease in the US.

AIH is the first liver disease for which pharmacological treatment has been shown to improve

chances of survival. According to the guidelines on the management of AIH by the American

Association for the Study of Liver Diseases, the six-month survival rate in untreated patients

is about 60%.

Current management of AIH consists of prednisone alone or in combination with

azathioprine, which induces remission in approximately 80% of patients.1 Patients are started

on high-dose induction therapy, and once remission is achieved, they are kept on

individualized low-dose maintenance therapy.

Most patients respond well to prednisone at a high enough dose, but there is an unmet need

in the treatment paradigm to reduce the long-term side effects caused by systemic steroids.

Second-line therapies are needed if patients fail to achieve complete remission or if they are

intolerant to immunosuppressive medication.

1 Manns, et al, 2010


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Rationale for Budenofalk in AIH

Budesonide, the active ingredient in Budenofalk, has a 90% first-pass effect in the liver and

has been reported to improve liver function in patients with AIH. Budesonide therapy offers

the advantage of fewer steroid-specific side effects than prednisone therapy. Budesonide is

also a treatment option for patients with contraindications to conventional corticosteroid

therapy.

Because budesonide acts via the same corticosteroid receptor as prednisolone, we believe it

will not be prescribed to patients who do not respond to prednisolone. Instead, we believe

budesonide will be an alternative to prednisolone in first-line therapy for AIH to achieve better

long-term tolerability.

Phase II/III trial with Budenofalk

The phase II/III trial with Budenofalk conducted in Europe including 208 patients with AIH

showed complete response (defined as serum levels of ASAT and ALAT within normal

ranges) in 47% of Budenofalk-treated patients compared to 18.4% of prednisone-treated

patients at the six-month mark. Budenofalk therapy was further shown to induce a lower

incidence of steroid-specific side effects compared to prednisone. 72.0% of those in the

budesonide group did not develop steroid-specific side effects versus 46.6% in the

prednisone group.

At six months, complete biochemical remission occurred in 60% of the patients given

budesonide versus 38.8% of those given prednisone. We are somewhat surprised by these

results as they imply complete remission rates for both groups significantly below the

remission rates achieved with standard treatment in clinical practice and other trials (~80%).

We believe this suggests limitations in the study design.

Nevertheless, we are encouraged by the safety data for Budenofalk + azathioprine and

believe this regime has the potential to capture a portion of patients who experience severe

side effects from systemic steroids. In addition, we argue that the barriers for physicians to

prescribe Budenofalk will be low since budesonide is a well -known substance that has been

used in pharmacological therapy for decades.

Budenofalk – commercial outlook

As Calliditas can leverage existing clinical data on Budenofalk from Europe and there is also a

generally higher level of regulatory leniency towards orphan drugs, we foresee a good chance

that the FDA will require a single phase III trial for market approval in the US.

Calliditas will meet with the agency during the spring to discuss the clinical pathway for

Budenofalk in AIH, and we believe a pivotal phase III trial could be initiated in 2021. We expect

the trial to have a similar design to the phase II/III trial conducted in Europe. In total, we

estimate phase III trial costs of SEK 300 million and believe Budenofalk could be launched in

the US market during 2024.

Given that the current treatment paradigm in AIH (prednisone (+ azath ioprine)) is relatively

cheap and most patients are well-controlled on this regime, we believe Budenofalk will be

subscribed primarily to patients experiencing severe side effects, as well as those with

contraindications to steroids with a high systemic exposure (obesity, osteoporosis, diabetes,

hypertension, or emotional instability).

We estimate annual pricing for Budenofalk of USD 70,000 in this population. This is in line

with the pricing of Ocaliva (USD ~70,000) for the treatment of primary biliary cholangitis

(PBC), another orphan indication with roughly the same number of patients in the US.


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Severe complications have been reported in cirrhotic patients on budesonide, including portal

vein thrombosis and Budd-Chiari syndrome, indicating that AIH patients with cirrhosis at

diagnosis (at least one-third of the total) should not be treated with budesonide.2

Consequently, we remove AIH patients with cirrhosis from our sales model for Budenofalk.

We forecast Budenofalk will reach peak penetration of 10% in its niche patient population. We

believe it will be a chronic treatment and the compliance rate will amount to 80%. Given a

pricing of USD 70,000 per year, we derive peak sales of USD 154 million for Budenofalk in the

US.

We use a high likelihood of approval for Budenofalk (80%), reflecting a low development risk

since the drug is already approved in Europe.

In our view, the lack of substantial clinical data demonstrating budesonide’s superiority over

the standard treatment (prednisone) currently remains the major hurdle for Budenofalk in

capturing a higher share of first-line AIH patients.

2 Beretta-Piccoli, et al, 2017


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Market landscape research – IgA nephropathy

At Calliditas’s CMD 2019, Andrew Udell, Vice President North America Commercial, presented

results from US market research conducted with IQVIA. The research included both

qualitative interviews with payers and nephrologists, and a survey of more than 100

nephrologists from across the US.

The most important points, in our view, are:

- 68% of the nephrologists surveyed would prescribe Nefecon in its first year on the

market

- The majority of the nephrologists would prescribe Nefecon as the first agent after,

or in conjunction with, blood pressure medicines

- A possible pricing interval would be USD 55,000-85,000 per year for Nefecon in the

US, according to payers

- Assuming no tolerability issues, half of the nephrologists indicated an interest in

continuing use of Nefecon past its initial nine-month course.

We have a positive view on the research, and it confirms our view of Nefecon as an appealing

proposition to both nephrologists and payers. It has the potential to be included early in the

treatment paradigm for IgAN. We are particularly encouraged by the pricing potential

indicated by US payers, making our earlier assumption of USD 40,000 per year seem

conservative.

Based on this survey, we raise our price assumption for Nefecon in IgAN to USD 65,000 per

year. We leave our price assumptions for Europe and China unchanged at USD 25,000 and

USD 10,000 per year, respectively.

We have also factored in higher peak penetration in Nefecon-naïve patients (20%) owing to an

increasingly favorable market environment in the US. In 2019, the US Department of Health &

Human Services established aggressive targets to reduce the number of Americans

developing end-stage renal disease by 25% by 2030. We believe a drug with Nefecon’s profile

would be attractive to help facilitate these aggressive targets.

Our understanding of the discussions with the FDA is that the agency is not willing to

establish a clear cut-off for the level of proteinuria reduction required for approval. However,

given the lack of treatment options for IgAN patients and regulators positive feedback on

Nefecon’s Phase IIb results, we believe regulators would be encouraged by a 20%+ reduction

in proteinuria from baseline during the treatment period. As a reminder, Nefecon 16mg daily

showed a 27% reduction from baseline and 30% delta compared to placebo in the Phase IIb

trial, results that we believe will be viewed very positively by regulators if replicated in the

phase III study.

If Nefecon could replicate its encouraging phase II data in its ongoing phase III trial –showing

a reduction in proteinuria by >20%, implying preserved kidney function and delayed

progression to ESRD – we believe many nephrologists would prescribe the drug.

Given the typical steroid treatment model of going off medication for a period, we assume an

18-month break after treatment. We expect that patients with proteinuria >0.75g will get an

additional benefit from multiple cycles of Nefecon, and we factor in that 80% of Nefecon -

naïve patients are retreated after two years, following a nine-month treatment cycle.

All in all, we forecast peak sales of USD 647 million for Nefecon in the US. Our peak sales

assumptions for Europe and China are USD 181 million and USD 224 million, respectively. In

total, we estimate Nefecon will reach blockbuster sales (USD 1 billion in peak sales).


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Financials We estimate Calliditas will see revenues starting from 2022, stemming from Nefecon sales in

the US. An upside potential lies in an upfront payment related to a deal with a major partner

involving the European market, which could provide non-dilutive financing ahead of a 2022

launch.

Calliditas will continue to have a high cash burn from the ongoing Phase III trial with Nefecon

and commercial preparations in the US. However, once Nefecon is launched in the major

markets, we believe Calliditas will become profitable very quickly. Looking at single-product

orphan companies, the majority has became profitable 1-3 years after launch. We estimate

Calliditas will be cash flow positive already in 2023.


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Summary Redeye Rating The rating consists of three valuation keys, each constituting an overall assessment of several factors that are rated

on a scale of 0 to 1 points. The maximum score for a valuation key is 5 points.

Rating changes in the report

People: 4

The management team is led by CEO Renee Aguiar Lucander, who joined Calliditas in 2017 and is backed by people with

experience from both the medical and financial sectors. They are supported by an experienced board and network of key opinion

leaders.

Business: 4

Nefecon is still a few years from market, but the drug has attracted interest among key opinion leaders in the field and coul d enter

a largely unpenetrated market with a targeted sales force. We believe this could render a strong launch and high operating

margins over time.

F inancials: 1

The company is not profitable and many steps remain until recurring revenues can be incurred. The company raised roughly SEK

750 million in their June 2018 IPO. The cash should be enough to bring the company to a potential filing in the US/EU by H1-2021.


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PROFITABILITY 2018 2019 2020E 2021E 2022E

ROE -41% -5% -53% -189% 0% ROCE -41% -4% -53% -180% -644% ROIC 559% 100% -954% -1200% -799% EBITDA margin -

3310775% -15% -

8250000%

-11125000

%

-124% EBIT margin -

3312050% -15% -

8250000%

-11125000

%

-124% Net margin -

3301225% -18% -

8250000%

-11125000

%

-124%

Please comment on the changes in Rating factors……

INCOME STATEMENT 2018 2019 2020E 2021E 2022E

Net sales 0 185 0 0 239 Total operating costs -132 -213 -330 -445 -535 EBITDA -132 -28 -330 -445 -296 Depreciation 0 0 0 0 0 Amortization 0 0 0 0 0 Impairment charges 0 0 0 0 0 EBIT -132 -28 -330 -445 -296 Share in profits 0 0 0 0 0 Net financial items 0 -4 0 0 0 Exchange rate dif. 0 0 0 0 0 Pre-tax profit -132 -32 -330 -445 -296 Tax 0 0 0 0 0 Net earnings -132 -32 -330 -445 -296

BALANCE SHEET 2018 2019 2020E 2021E 2022E Assets Current assets Cash in banks 646 754 421 0 0 Receivables 0 0 0 0 36 Inventories 0 0 0 0 18 Other current assets 2 68 68 68 68 Current assets 648 821 489 68 121 Fixed assets Tangible assets 0 6 7 7 7 Associated comp. 0 0 0 0 0 Investments 0 2 2 2 2 Goodwill 0 0 0 0 0 Cap. exp. for dev. 0 0 0 0 0 O intangible rights 0 16 18 18 17 O non-current assets 0 0 0 0 0 Total fixed assets 0 24 27 27 26 Deferred tax assets 0 0 0 0 0 Total (assets) 648 846 515 94 147 Liabilities Current liabilities Short-term debt 0 0 0 24 338 Accounts payable 29 24 24 24 60 O current liabilities 1 29 29 29 29 Current liabilities 30 53 53 77 427 Long-term debt 0 0 0 0 0 O long-term liabilities 0 4 4 4 4 Convertibles 0 0 0 0 0 Total Liabilities 30 57 57 81 431 Deferred tax liab 0 0 0 0 0 Provisions 0 0 0 0 0 Shareholders' equity 618 788 458 13 -283 Minority interest (BS) 0 0 0 0 0 Minority & equity 618 788 458 13 -283 Total liab & SE 648 845 515 94 147

FREE CASH FLOW 2018 2019 2020E 2021E 2022E Net sales 0 185 0 0 239 Total operating costs -132 -213 -330 -445 -535 Depreciations total 0 0 0 0 0 EBIT -132 -28 -330 -445 -296 Taxes on EBIT 0 0 0 0 0 NOPLAT -132 -28 -330 -445 -296 Depreciation 0 0 0 0 0 Gross cash flow -132 -28 -330 -445 -296 Change in WC 4 -43 0 0 -18 Gross CAPEX 0 -24 -2 0 1 Free cash flow -128 -95 -332 -445 -314 CAPITAL STRUCTURE 2018 2019 2020E 2021E 2022E Equity ratio 95% 93% 89% 14% -192% Debt/equity ratio 0% 0% 0% 183% -119% Net debt -646 -754 -421 24 338 Capital employed -28 35 37 37 55 Capital turnover rate 0.0 0.2 0.0 0.0 1.6 GROWTH 2018 2019 2020E 2021E 2022E

Sales growth 0% 4,619,900%

-100% 0% 5,963,886% EPS growth (adj) -28% -78% 919% 35% -33%

DATA PER SHARE 2018 2019 2020E 2021E 2022E EPS -3.75 -0.84 -8.53 -11.50 -7.66 EPS adj -3.75 -0.84 -8.53 -11.50 -7.66 Dividend 0.00 0.00 0.00 0.00 0.00 Net debt -18.36 -19.47 -10.88 0.62 8.74 Total shares 35.20 38.70 38.70 38.70 38.70 VALUATION 2018 2019 2020E 2021E 2022E

EV -646.2 -753.5 2,388.6 2,833.6 3,147.7 P/E 0.0 0.0 -8.5 -6.3 -9.5 P/E diluted 0.0 0.0 -8.5 -6.3 -9.5 P/Sales 0.0 0.0 702,405.0 702,405.0 11.8 EV/Sales -161,543.8 -4.1 597,151.4 708,401.6 13.2 EV/EBITDA 4.9 26.9 -7.2 -6.4 -10.6 EV/EBIT 4.9 26.9 -7.2 -6.4 -10.6 P/BV 0.0 0.0 6.1 214.5 -9.9

SHARE INFORMATION

Reuters code CALTX.ST List Mid Cap Share price 72.6 Total shares, million 38.7 Market Cap, MSEK 2809.6 MANAGEMENT & BOARD CEO Renee Aguiar-Lucander CFO Fredrik Johansson IR Mikael Widell Chairman Elmar Schnee FINANCIAL INFORMATION

ANALYSTS Redeye AB Ludvig Svensson Mäster Samuelsgatan 42, 10tr [email protected] 111 57 Stockholm Niklas Elmhammer [email protected]

SHARE PERFORMANCE GROWTH/YEAR 18/20E

1 month -29.4 % Net sales 0.0 % 3 month -2.7 % Operating profit adj 57.8 % 12 month 66.9 % EPS, just 50.8 % Since start of the year -4.1 % Equity -13.9 %

SHAREHOLDER STRUCTURE % CAPITAL VOTES

Stiftelsen Industrifonden 14.9 % 14.9 % Bengt Julander 12.5 % 12.5 % Investinor AS 10.7 % 10.7 % Jefferies Llc. 5.5 % 5.5 % Fjärde AP-fonden 5.5 % 5.5 % Gladiator 5.2 % 5.2 % BVF Partners LP 4.8 % 4.8 % Handelsbanken Fonder 4.8 % 4.8 % AFA Försäkring 4.2 % 4.2 % Societe Generale Nantes 3.4 % 3.4 %


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Redeye Rating and Background Definitions Company Quality

Company Quality is based on a set of quality checks across three categories; PEOPLE, BUSINESS, FINANCE. These

are the building blocks that enable a company to deliver sustained operational outperformance and attractive long -

term earnings growth.

Each category is grouped into multiple sub-categories assessed by five checks. These are based on widely

accepted and tested investment criteria and used by demonstrably successful investors and investment firms. Each

sub-category may also include a complementary check that provides additional information to assist with

investment decision-making.

If a check is successful, it is assigned a score of one point; the total successful checks are added to give a score for

each sub-category. The overall score for a category is the average of all sub-category scores, based on a scale that

ranges from 0 to 5 rounded up to the nearest whole number. The overall score for each category is then used to

generate the size of the bar in the Company Quality graphic.

People

At the end of the day, people drive profits. Not numbers. Understanding the motivations of people behind a business

is a significant part of understanding the long-term drive of the company. It all comes down to doing business with

people you trust, or at least avoiding dealing with people of questionable character.

The People rating is based on quantitative scores in seven categories:

• Passion, Execution, Capital Allocation, Communication, Compensation, Ownership, and Board.

Business

If you don’t understand the competitive environment and don’t have a clear sense of how the business will engage

customers, create value and consistently deliver that value at a profit, you won’t succeed as an investor. Knowing

the business model inside out will provide you some level of certainty and reduce the risk when you buy a stock.

The Business rating is based on quantitative scores grouped into five sub-categories:

• Business Scalability, Market Structure, Value Proposition, Economic Moat, and Operational Risks.

F inancials

Investing is part art, part science. Financial ratios make up most of the science. Ratios are used to evaluate the

financial soundness of a business. Also, these ratios are key factors that will impact a company’s financial

performance and valuation. However, you only need a few to determine wheth er a company is financially strong or

weak.

The Financial rating is based on quantitative scores that are grouped into five separate categories:

• Earnings Power, Profit Margin, Growth Rate, Financial Health, and Earnings Quality.


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Redeye Equity Research team

Management Björn Fahlén

[email protected]

H åkan Östling

[email protected]

Technology Team Jonas Amnesten

[email protected]

H enrik Alveskog

[email protected]

H avan Hanna

[email protected]

Kristoffer Lindström

[email protected]

Erika Madebrink

[email protected]

Fredrik Nilsson

[email protected]

Tomas Otterbeck

[email protected]

Eddie Palmgren

[email protected]

Magnus Skog

[email protected]

Oskar Vilhelmsson

[email protected]

Viktor Westman

[email protected]

Linus Sigurdsson (Trainee)

[email protected]

Editorial Eddie Palmgren

[email protected]

Mark Siöstedt

[email protected]

John Hintze

[email protected]

Johan Kårestedt (Trainee)

[email protected]

Life Science Team Gergana Almquist

[email protected]

Oscar Bergman

[email protected]

A nders Hedlund

[email protected]

A rvid Necander

[email protected]

Erik Nordström

[email protected]

K las Palin

[email protected]

Jakob Svensson

[email protected]

Ludvig Svensson

[email protected]


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R e deye Rating (2020-04-15)

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Rating People Business Financials

5p 12 11 3

3p - 4p 94 72 31

0p - 2p 8 31 80 Company N 114 114 114

CONFLICT OF INTERESTS

Ludvig Svensson owns shares in the company : No Niklas Elmhammer owns shares in the company : No Redeye performs/have performed services for the Company and receives/have

received compensation from the Company in connection with this.

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