Free to access research and investor meetings in a post-MiFID2 world
Kuros Biosciences AG (KURN-CH): Differentiated orthobiologics for spinal fusion
Target Price: CHF29
Current Price: CHF9.02 (COB on 11th May 2018)
2017 was an eventful year during which Kuros closed the acquisition of Dutch orthobiologics company Xpand Biotechnology, received US approval for synthetic bone graft substitute ("BGS") MagnetOs, and appointed a new CEO, Dr. Joost de Bruijn. Following a strategic review, Kuros will focus on its potentially best-in-class orthobiologics portfolio for spinal fusion, the largest BGS market. In the next 12-18 months, the focus will be on launching MagnetOs in the US to obtain clinical and commercial validation and starting a Phase II trial for growth factor-based BGS KUR-113 in early 2019, paving the way for launch in 2024E. We forecast peak sales of $195m for MagnetOs (2027E) and $660m for KUR-113 (2032E), based on their differentiated profiles, underlying market growth, and the continued shift from the gold standard autograft to BGS. We set a new target price of CHF29 per share and maintain our OUTPERFORM recommendation.
Spinal fusion the largest segment within the c.$3.2bn orthobiologics market
Orthobiologics include bone grafts harvested from the same patient (autograft) or obtained from a donor cadaver (allograft), and BGS, such as synthetics, growth factors, stem cells and others. They are used in c.2.2 million orthopaedic procedures p.a., with BGS used in nearly 40% of these. The orthobiologics market reached c.$3.2bn in 2017 and is growing at 4% - 6% p.a. Spinal fusion procedures in particular have experienced very high growth in the last two decades, particularly in the US, more than doubling between 1998 and 2011, due to advances in technology, continued adoption of BGS, the ageing of the population, and increased quality of life expectations.
Synthetic MagnetOs has been approved in the US and Europe
Acquired through the purchase of Xpand, MagnetOs has been approved for posterolateral spinal fusion in the US and orthopaedics, craniomaxillofacial and dental procedures in Europe. It will be positioned as best-in-class synthetic as a replacement for autograft, differentiated by (1) its unique surface structure, (2) robust preclinical data in clinically relevant animal models, and (3) clinical data from a post-market clinical trial expected to start this year.
Growth factor-based KUR-113 (fibrin/PTH) to enter Phase II in early 2019E
KUR-113 has shown comparable efficacy and robust safety compared to autograft / InFuse in a highly relevant preclinical model, and has successfully completed a Phase II trial in open tibial shaft fractures, generating strong safety and efficacy data in 200 patients. A dose-finding Phase II trial in lumbar interbody fusion comparing KUR-113 to autograft is due to start enrolling patients in early 2019E. We conservatively forecast launch by YE2024E and expect KUR-113 to take share both from other growth factor-based products including market leader InFuse, as well as autograft.
Brigitte de Lima, PhD, CFA | Analyst
goetzpartners Healthcare Research Team | Research Team
goetzpartners securities Limited
The Stanley Building, 7 Pancras Square, London, N1C 4AG, England, UK.
T +44 (0) 203 859 7725 | email@example.com / firstname.lastname@example.org
Registered in England No. 04684144.
Managing Directors: Dr Stephan Goetz, Martin Brunninger and Ulrich Kinzel.
GPSL publishes and distributes "Investment" Research and "Corporate Sponsored" Research. Our Corporate Sponsored Research and investor meetings (e.g. NDRs, 1 to 1 meetings) are free to access and attend and is not classified as an inducement in a post-MiFID2 world. GPSL does not offer any execution or market making services. This is a marketing communication as defined by the Financial Conduct Authority ("FCA"). The information herein is considered to be an acceptable minor non-monetary benefit as defined under FCA COBS 2.3A19(5).
In accordance with the General Data Protection Regulation ("GDPR") - if you would like to be removed / unsubscribed from our CRM (also please note that you are free to contact GPSL at any time in the future to have your e-mail subscription amended), please e-mail:
About GPSL: goetzpartners securities Limited is a member of the goetzpartners group, and a leading pan European investment bank and research company. We bring together a wide range of expertise, insights and innovations to advance the interests of our clients around the world. The fast-changing environment brings challenges for businesses and investors. Research innovation, digital transformation and disruptive business ideas reshuffle the corporate world at a relentless pace. Our sector knowledge and our global footprint bring together corporate intelligence and a deep understanding of the industry with a wide network of top decision makers. These collective insights help our clients to stay at the leading edge of change.
This research report is intended for use only by persons who qualify as professional investors or eligible counterparties (institutional investors) in the applicable jurisdiction, and not by any private individuals or other persons who qualify as retail clients.
This e-mail (including any attachments) from goetzpartners securities Limited ("GPSL") is confidential and may contain information which is proprietary, privileged or otherwise legally protected against unauthorised use or disclosure. If you receive this e-mail in error or are not the intended recipient of this e-mail, please delete and destroy all copies in your possession, notify the sender that you have received this e-mail, and note that any review or dissemination of, or the taking of any action in reliance on this e-mail is expressly prohibited. GPSL shall not be liable for the improper or incomplete transmission of the information contained in this e-mail nor for any delay in its receipt or damage to your system. GPSL does not guarantee that the integrity of this e-mail has been maintained nor that this e-mail is free of viruses, interceptions or interference and makes no warranties in relation to these matters. This is not an offer or a solicitation to buy or sell securities or investment products, or an official confirmation. GPSL record electronic and phone communications in accordance with FCA and MiFID2 regulations, they will be monitored for regulatory and training purposes. GPSL is authorised and regulated by the Financial Conduct Authority of the United Kingdom (Firm Reference Number: 225563).
Click on the following link for the GPSL MiFID2 Investor Guidance Notice
GPSL Equity Research publications are available on the following aggregators and via news distribution circuits (For Institutional Use Only): AlphaSense, Bloomberg (GOET), Capital IQ, EQS, FACTSET, RNS Reach and Thomson Reuters.
If you cannot click on the above hyperlink please copy the below link and paste it into your browser for the full pdf version of the equity research report:
Dissemination of a CORPORATE NEWS, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.