finnCap Research Company Notes - 28 January 2020
Jan 28, 2020 / News
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Sector: Life Sciences
Avacta (AVCT) : Corp
TMAC – proof of concept for novel Affimer conjugate
Key data
- Share price (p) 20.3
- Target price (p) 76.0
- Market cap (£m) 35.6
- Enterprise value (£m) 26.9
The news that Avacta’s first TMAC™ resulted in a significant reduction in tumour growth in animal studies compared with Merck/Pfizer’s Bavencio (avelumab) is a further significant step in the development of its two proprietary platforms that should be able to generate multiple clinically differentiated products that address the lack of a durable response to current immunotherapies in patients: the Affimer® antibody mimetic platform and a tumour-targeted chemotherapy platform (pre|CISION). Given the interest already shown by pharma/biotech, these data should add to the discussions that Avacta is having. No change to forecasts and we reiterate our target price of 76p (implying an EV of c.£125m).
Mark Brewer
020 7220 0556
Sector: Technology & Telecoms
Sopheon (SPE) : Corp
Positive trading update
Key data
- Share price (p) 700.0
- Target price (p) 1 200.0
- Market cap (£m) 71.2
- Enterprise value (£m) 56.5
Following the pre-close trading update in December, Sopheon has provided further reassuring clarity for FY19, guiding revenue of $30m (FY19E: $30m), translating to EBITDA and PBT, all in line with expectations ($6.0m and $2.7m respectively). As anticipated, Q4 experienced its typical seasonality, delivering nearly half of the full year’s licence transactions (23 out of a total 47) within the 3-month period to December, equivalent to over $9m in revenue. The company continues its strategic transition to SaaS, completing a number of SaaS contracts prior to year-end, including a notable order from Hain Celestial, a leading global organic and natural products company, delivering greater visibility of higher levels of recurring revenue. As such, Sopheon enters FY20 with ARR of $15.9m (FY19: $14.8m), the key metric going forward as it converts an increasing proportion of SaaS deals. We reiterate forecasts and target price (1,200p), and look forward to further detail at prelims on 19 March.
Andrew Darley
020 7220 0547
Sector: Industrial Technology
LPA Group (LPA) : Corp
Full-year results: a year of recovery ahead
Key data
- Share price (p) 96.0
- Target price (p) 156.0
- Market cap (£m) 12.1
- Enterprise value (£m) 14.5
Full-year results are slightly ahead of expectations, but highlight the challenging market conditions experienced in the last year. Momentum now looks to be recovering (boosted by a recent prestigious five-year framework agreement with Siemens) with a strong improvement in order intake. Production has already started to increase, with a good recovery in profits expected. We maintain our profit expectations, with a small increase in EPS to 8.0p. The rating currently looks compelling and the boost to confidence levels should be reflected in a higher valuation. We raise our price target from 131p to 156p, based on peer average valuations and offering significant upside to current levels in this recovery year. Scope for further contract wins could also be a potential catalyst for the shares.
David Buxton
020 7220 0542