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SNS Research Morning Note(Zaanen) 02-11-09
Crucell (Hold): Preview Q309: Net profit maintained
The facts: Crucell will report 3Q9 results Tuesday November 3, 7:45 hours CET. An analyst conference call/webcast will be held at 14:00 hours CET.
Our analysis:. We expect an increase in revenues from EUR 78.6m Q308 to EUR 95.5m Q309 due to an increase in Pediatric sales (we expect the delay of a large delivery of Quinvaxem in Q209 will now take place in Q309) and the start of the seasonal sales of its respiratory vaccine Inflexal. Despite the geographical expansion of its travel vaccine we expect these sales will come in at EUR10.6m due to the economic downturn and the Mexican flu which will have had a negative impact.
The operating profit is expected to improve from EUR 8.9m Q308 to EUR 10.3m Q309. Net profit is expected to come in at EUR 6.8m a decrease of EUR 5.5m compared to Q308, mainly due to increased tax expenses. As a result we expect a decline in EPS to EUR 0.10, which is lower compared to EUR 0.19 Q309.
We believe that Crucell will reiterate its outlook for FY09 ("sales +20% and higher operating income"). Furthermore it is expected that Crucell will elaborate on the future strategy. We expect the company to target acquisitions based on infectious diseases or Antibody drugs with a late stage pipeline and/or marketed products, following the recent proceeds from J&J of EUR 302m.
Conclusion & Action: We believe Crucell will present strong Q309 results based on strong Quinvaxem sales and the sales of Inflexal. In our view Crucell is now hunting itself to acquire a company to spread its risk profile. Based on the deal with J&J, we believe that the chance of a take-over bid (by a third party) has diminished. Furthermore, the value of the new Quinvaxem contract for the period 2010-2012 is disappointing in our view. We have a Hold rating with a target price of EUR 17.40