Broker notes7 Jan 2019 12:49
The recent broker notes from finnCap, Hardman & Co. and Capital Network all provide a flavour of the potential here and are well worth reading:
finnCap
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"With a rich pipeline of interest in the reagent portfolio and ongoing discussions with other pharma companies, we expect further licensing activity."
"We expect this to be the first of many licences, the value of which should increase as data packages build further."
"With probably close to 50 companies that have or are undertaking evaluations we expect further licence deals to be announced in 2018 and onwards, all of which should generate incremental value."
"the potential uplift for Avacta is clearly very significant as it meets this milestone in the next two years."
"We retain a target price of 120p."
"We retain an EV of c.£125m as our target valuation, which is based on a comparable analysis of similar companies and implies a target price of 120p."
"The risk-reward profile at this level is materially skewed to the upside in our opinion."
Hardman & Co
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"[LG Chem] is an excellent and valuable partner for AVCT, and likely paves the way to further major deals."
"The rising number of collaboration deals being discussed and signed is a clear indication of the long-term value of its Affimer technology, which the market is currently only just beginning to recognise."
"This may well be the trigger for many more deals with potential partners that are currently undertaking validation testing of specific Affimer molecules of interest."
"Given the potential size of this first significant deal, we believe that it is time the market started to wake up to the long-term value of AVCT’s Affimer technology."
"this collaboration agreement represents a major step for AVCT and a huge endorsement of the Affimer technology platform by a major pharmaceutical player."
"in the context of this deal, the current value represents an enormous opportunity that the market is totally overlooking. This deal looks set to be a wake-up call for the market."
Capital Network
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"Avacta's market cap is well below comparable peers; key inflexion points over the coming 2-3 years point to significant upside."
"we expect Avacta to announce multiple royalty-bearing deals over the coming months"
"the current stock price may provide an extremely attractive entry point for those who want to maximise their upside, already persuaded by Affimer's strong scientific rationale and pre-clinical evidence"
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