First Berlin Equity Research Lowers Price Target for Formycon AG to €80

First Berlin Equity Research GmbH has issued an updated report on Formycon AG, maintaining its "Buy" recommendation while reducing the target price from €105 to €80. Analyst Simon Scholes, CFA, cites lower than expected royalty income from the Lucentis biosimilar FYB201 as a key reason for the adjustment.

The stock price of Formycon AG has dropped over 40% since early 2023. The company launched FYB201, its first biosimilar, in 2022 across the EU, UK, and the US. However, FYB201 is just the beginning, with five more biosimilars expected by the decade's end. The upcoming FYB202, a Stelara biosimilar, is anticipated to be significantly more profitable.

FYB202, if approved, aims for a 2025 launch in both the EU and US. Stelara's global sales reached USD10.9 billion in 2023, compared to FYB201's reference product Lucentis, which had USD3.6 billion in sales in 2021. Formycon's royalty on FYB202 sales is projected to be 30-40%, a notable increase from FYB201's 7-8%.

Despite increased competition, FYB202 is expected to generate significant revenue for Formycon. Johnson & Johnson, unlike Roche, does not have an imminent successor to Stelara. Triple-digit royalties from FYB202 are forecasted as early as 2026. The current share price may present an opportunity for investors ahead of the lucrative FYB202 launch.