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Admedus receives $0.18 price target from broker

Admedus has received an Add rating from broker Morgans, with a target of $0.18. Based on the last price of $0.074, the target implies the potential for a 140.9% upside.

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Admedus (ASX:AHZ) has received an Add rating from broker Morgans, with a target of $0.18.

Based on the last price of $0.074, this implies the potential for a 140.9% upside.

The following is an extract from the report.


Looking for the catalysts

AHZ posted a FY15 result behind our forecast with a tax adjustment the main reason.

The key catalysts to drive the share price higher include growth in CardioCel ® sales and the release of interim HSV-2 results.

AHZ appears in a solid cash position to achieve key milestones. Add.


FY15 result below forecast

AHZ posted a net loss of A$26.8m, which was higher than our forecast of a net loss of A$19.5m. Product revenue of A$9.9m was generated representing A$7.3m from medical products and A$2.6m from CardioCel®.

The main reasons for the difference were:

1) A tax expense of A$$2.9m arising from the reversal of a prior period temporary difference;

2) A loss from non-controlling interest of A$1.5m;

3) Lower revenue from medical products of A$0.9m resulting from some product life cycle management and move to more consumable based operations;

4) Lower interest receipts of A$0.3m;

5) A$0.5m in higher share based payments; and

6) $0.3m in higher amortisation charges.

AHZ has A$24.0m in cash reserves, which we think is sufficient to drive sales in the key regenerative medicines division (CardioCel® is lead product).


Changes to forecasts

We have made a number of changes to our forecasts, moving FY16 to a net loss of A$8.2m (from NPAT of A$1.5m) and reducing our FY17 NPAT to A$11.2m from A$21.0m.

The main changes include:

1) Lower medical products revenue to A$7.8m (was A$8.8m);

2) Lower CardioCel® revenue to A$7m (was A$10m) reflecting a more moderate sales ramp than forecast; and

3) An increase in the cost base to A$23.3m (was A$19.8m) to bring the base in line with FY15, reflecting a higher spend to build the regenerative medicines division and research spend on the vaccines project.


Investment view remains positive

As a result of changes to forecasts our DCF valuation has been revised to A$0.18 (from A$0.20).

The key catalysts we expect in the next six months include growing quarterly sales of CardioCel® and the interim results from the HSV-2 vaccine trial.

The downside risk includes failure of the vaccine trial to achieve its clinical outcomes of safety and lowering viral outbreaks.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX emerging companies with distribution in Australia, UK, North America and Hong Kong / China.

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Admedus CEO in New York to update on recent key milestones

Admedus Ltd (ASX:AHZ) CEO Wayne Paterson visited the Proactive Investors New York studio to update on key milestones the company has achieved in the past few months, including receiving European approval on two of its products.

on 03/17/2019

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