POLYPEPTIDE: We are buying anticyclically!

Knowing full well that not all is well at the moment for the specialized active ingredient manufacturer POLYPEPTIDE - the profit warning of December 2, 2022, in particular, has once again put pressure on the company - we believe that a great deal of negativity - if not everything - has been factored into the share price. After all, the share lost around four-fifths of its value last year. At the IPO just under two years ago, the paper cost CHF 64, only to climb to over CHF 140 in December 2021. Now we see the "exaggeration" to the downside! With expected sales of CHF 284 million in 2022, growth would be modest, but especially in terms of margin, the guidance of around 30% is far from being met; around 15% is now expected. This decline is due to a sharp increase in input costs, ramp-up costs for the new plant in Braine (Belgium) and one-off problems in certain manufacturing processes. In addition, the significant shrinkage of the Novavax vaccine is putting pressure on the business. However, we expect most - if not all - of the issues to be resolved in the current year 2023! Certain sales will be shifted from 2022 to 2023; in total, we expect sales growth in the upper single digits in the transition year 2023 (trend)... and general improvements.

However, we are more focused on the product pipeline, where 218 active customer projects were recently reported, and of which the high number of 30 have already entered Phase III clinical development. In December, POLYPEPTIDE, the specialist for peptide- and oligonucleotide-based active pharmaceutical ingredients, already reported the signing of a commercial contract from one of the aforementioned projects; starting in 2024, this represents an annual order value of around EUR 100 million. We will provide you with further details on POLYPEPTIDE in the coming weeks. For the moment, we set a buy limit at max. CHF 27!