Amryt Pharma plc

AMYT Details

Amryt Pharma plc (NASDAQ: AMYT) is a UK-based commercial-stage biopharmaceutical company dedicated to acquiring, developing, and commercializing breakthrough medicines to treat patients with orphan disorders. Metreleptin (Myalept/ Myalepta), Octreotide (Mycapssa), and Lomitapide (Juxtapid/ Lojuxta) are the three medicines in its commercial division. In addition, through its Transient Permeability Enhancer (TPE) technology platform, AMYT also plans to produce oral medicines that are presently only available as injectable treatments. As of September 16, 2021, AMYT has 63.30 million American Depository Shares (ADS) listed and outstanding, with each ADS representing five ordinary shares.

Acquisition of Chiasma: On August 05, 2021, AMYT closed the all-stock corporate acquisition of Chiasma, Inc., a commercial-stage biopharmaceutical firm focused on discovering and commercializing oral medicines to treat severe chronic illnesses. As part of the consideration, AMYT issued 127,740,695 new ordinary shares (including 7,015 shares issued post rounding up upon converting to ADS using the exchange ratio of 0.396), distributed to former Chiasma Shareholders in the form of 25,548,139 AMYT ADS tradeable on NASDAQ.

H1FY21 Results: The company reported a 22.52% increase in revenues to USD 111.19 million during H1FY21 (ended June 30, 2021) compared to USD 90.76 million during H1FY20, due to an increase in revenues across all segments. It also witnessed a decline in net losses (attributable to its equity holders) to USD 23.34 million during H1FY21 vs. USD 47.07 million during H1FY20. As of June 30, 2021, the company's cash and cash equivalents amounted to USD 142.95 million, with a total debt of USD 198.96 million.

Key Risks: One customer accounted for 42% and 45.7% of AMYT's revenues in Q1FY21 and  H1FY21, respectively. It also accounted for 42% of the total accounts receivable balance in H1FY21. Such over-reliance on a single customer for revenue could harm the company's financial status in the long term.

Outlook: On September 13, 2021, AMYT raised its FY21 revenue estimates to a range of USD 220 to 225 million, representing a YoY growth of 20-23%.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

(Analysis by Kalkine Group)

• % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

AMYT Daily Technical Chart (Source: REFINITIV)

Stock Recommendation: AMYT' stock price surged 11.19% in just the past week and is currently close to the mid-point of the 52-week range of USD 9.55 to USD 15.44. It is currently trading below its 200 DMA level, and its RSI Index is at 63.42. We have valued the stock using the EV/Sales-based relative valuation methodology and arrived at a target price of USD 10.88. Considering the stock price's significant uptick and loss-making status, we believe the business fundamentals are adequately reflected at the current trading levels. Hence, we recommend a "Sell" rating on the stock at the current price of USD 11.86, up 4.71% as of September 16, 2021, 11:12 AM ET.

* The reference data in this report has been partly sourced from REFINITIV.

*All forecasted figures and industry information have been taken from REFINITIV.   

Disclaimer - This report has been issued by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and prepared by Kalkine and its related bodies corporate authorised to provide general financial product advice. Kalkine.com.au and associated pages are published by Kalkine.

Any advice provided in this report is general advice only and does not take into account your objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your objectives, financial situation and needs before acting upon it.

There may be a Product Disclosure Statement, Information Statement or other offer document for the securities or other financial products referred to in Kalkine reports. You should obtain a copy of the relevant Product Disclosure Statement, Information Statement or offer document and consider the statement or document before making any decision about whether to acquire the security or product.

You should also seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice in this report or on the Kalkine website. Not all investments are appropriate for all people.

The information in this report and on the Kalkine website has been prepared from a wide variety of sources, which Kalkine, to the best of its knowledge and belief, considers accurate. Kalkine has made every effort to ensure the reliability of information contained in its reports, newsletters and websites. All information represents our views at the date of publication and may change without notice.

Kalkine does not guarantee the performance of, or returns on, any investment. To the extent permitted by law, Kalkine excludes all liability for any loss or damage arising from the use of this report, the Kalkine website and any information published on the Kalkine website (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine hereby limits its liability, to the extent permitted by law, to the resupply of services.

Please also read our Terms & Conditions and Financial Services Guide for further information.

On the date of publishing this report (referred to on the Kalkine website), employees and/or associates of Kalkine and its related entities do not hold interests in any of the securities or other financial products covered on the Kalkine website.

Kalkine Media Pty Ltd, an affiliate of Kalkine Pty Ltd, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.