Zealand: What could be worse from here ?
BUY vs. UNDER REVIEW, Fair Value DKK90 vs. DKK113 (+37%)
With Sanofi announcing that it had decided to withdraw its NDA for Lyxumia in the US, Zealand lost a lot of momentum and, as it comes after the delay of LixiLan earlier this year, it makes the whole story less appealing. Now, it has happened, took everyone by surprise and belongs to the past. Where do we go from here ? In our view, it has a cost (delayed royalties on sales, delayed milestones on approval, tougher competition when launching) but our objective is really to assess the benefit-risk balance from here. Our conclusion is that although there have been many disappointments in 2013, we still see the current valuation as not very demanding. It may take a while to reach our FV but DKK65 per share is more an entry point than anything else.
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