finnCap Research Company Notes - 26 July 2018

Jul 26, 2018 / Research Notes

Read our regular corporate finance notes featuring updates from the finnCap Research team's sector experts.

Download the full research note here

Sector: Life Sciences

Destiny Pharma (DEST): Positive Phase I safety data

Key data                              

  • Share price (p): 109.0
  • Target price (p): 250.0
  • Market cap (£m): 47.5
  • Enterprise value (£m): 30.8

The first of two planned Phase I safety studies, agreed with the FDA, before Destiny starts the larger Phase IIb study in the US, confirmed the safety profile seen in all all other XF-73 clinical studies conducted to date. Not only does it de-risk Destiny’s lead XF-73 programme (prevention of post-surgical staphylococcal infections) but it supports the potential for the XF platform to be used in treating difficult skin infections, such as XF-70, which is in preclinical development. We await a second safety study, using the planned commercial nasal gel formulation, later in the year. Destiny remains on track to have Phase IIb data in H2 2019. Our risk-adjusted DCF valuation of 250p currently only values the lead clinical programme XF-73.

Mark Brewer | mbrewer@finncap.com

Sector: Support Services

discoverIE (DSCV): Positive trading momentum continues

Key data                              

  • Share price (p): 424.0
  • Target price (p): 487.9
  • Market cap (£m): 300.2
  • Enterprise value (£m): 355.6

In a positive Q1 trading statement discoverIE has confirmed that the positive trading momentum seen last year has continued, Group sales are up +12% CER (+3% organically) against a strong comparator, orders are up +16% CER (+7% organically) and the order book up +20% CER (+13% organically). With the growth in orders and order book ahead of sales growth the outlook for continued strong trading is very good. We make no changes to our numbers and reiterate our view that discoverIE remains a strong play on technological change, a clear and long-term structural driver.

Guy Hewett | ghewett@finncap.com