Biotech Stocks: WSE - Bioton (BIO) 2Q22 Report
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Bioton – (Last valuation: 7.15 PLN/share as of 19.04.2022)
2Q22 results – relatively good quarter
Revenue in 2Q22 was PLN 48.1 million (+32% y/y), EBITDA was PLN 15.2 million (+45% y/y), EBITDA adjusted for the balance of other operating activities was PLN 15 million (+80% y/y), net result was PLN 1.5 million (vs. PLN 3.7 million in 2Q21). The net result was negatively affected by foreign exchange losses. Domestic sales in 2Q22 amounted to PLN 30.1 million (+40% y/y), and export sales amounted to PLN 27.1 million (+30% y/y). In terms of export growth, it is worth noting the increases in China and Vietnam. Gross margin on sales increased slightly in 2Q22, but is lower y/y in 1H22 as a whole. Keeping selling and general and administrative expenses under control allowed the company to improve EBIT and EBITDA in 2Q22 year-on-year. Also noteworthy was strong operating cash flow, which was +25.2 million in full 1H22. CAPEX increased and amounted to PLN 16 million in full 1H22 (vs. PLN 9 million in 1H21). Net debt at the end of 1H22 was PLN 83 million (vs. PLN 86 million at the end of 1Q22). The company indicated that the production facility is currently being upgraded to accommodate the new production process for the long-acting analog. In the context of the short-acting analog, Bioton is not currently working on this project and is awaiting the final Yifan study report and the preparation of an IND application.
Revenues
Revenues in 2Q22 amounted to PLN 48.1 million (+32% y/y) thanks to strong sales in Poland (including market hedging due to the geopolitical situation in Ukraine) and exports (mainly China, Vietnam, but also Bangladesh, Libya). Sales of diabetes tablets and other goods amounted to PLN 5.8 million (+24% y/y), and sales of services (settlement of the analog contract with Yifan) amounted to PLN 3.8 million (-57% y/y).
Operating profit and costs
Gross profit on sales in 2Q22 amounted to PLN 23.1 million (+37% y/y), and the margin improved slightly, but in the context of the whole half-year it is lower y/y due to a higher share of export sales and higher raw material and energy costs. Selling and general and administrative expenses totaled PLN 15.8 million and were on a similar level to a year ago. EBITDA in 2Q22 amounted to PLN 15.2 million (+45% y/y), EBITDA adjusted for the balance of other operating PLN 15 million (+80% y/y), net result PLN +1.5 million. The net result was negatively impacted by high financial expenses, which in the entire H1 2022 included interest of PLN 2.8 million, foreign exchange losses of PLN 3.1 million and other expenses of PLN 1 million.
Analog project
The company said that with regard to the insulin analog Lispro, Bioton is not currently working on this project and is awaiting the final Yifan study report and the preparation of an IND application. On the other hand, with regard to the long-acting insulin analog, Glargine, the company has moved to the early stage industrialization phase. The company is currently undertaking lab-scale trials with the intention of completing a batch of the drug substance at clinical scale in Q4 2022 - Q1 2023. The manufacturing facility is currently being upgraded to accommodate the new process. The company expects the commercialization phase of the analogs in 2025-2026, which is in line with the company's previous assumptions.
Last valuation: 7.15 PLN/share as of 19.04.2022. Price on the day of issue 4.12 PLN.
Krzysztof Radojewski Deputy Head of Research and Advisory Department krzysztof.radojewski@noblesecurities.pl
