GALN VX
Galenica AG
Healthcare
06/27/2014
Presented
| Date | 06/24/2014 |
| Price | CHF864.50 |
| Market Cap | $5.75B |
| Ent Value | $6.33B |
| P/E Ratio | 19.14x |
| Book Value | CHF268.53 |
| Div Yield | 1.68% |
| Shares O/S | 6.48M |
| Ave Daily Vol | 20,000 |
| Short Int | N/A |
Current
| Price | CHF1,185.00 |
| Market Cap | $79.81B |
| Galenica Ltd. develops, manufactures, and markets pharmaceutical products in Switzerland and internationally. Its Pharma segment offers iron replacement products, including Ferinject/Injectafer, Venofer, and Maltofer; immuno-stimulant products, such as Broncho-Vaxom and Uro-Vaxom; infectious diseases/OTX products, over-the-counter products, and herbal remedies; and synthetic and biotech drugs for use in immunology and the treatment of infectious diseases. This segment also provides products for patients suffering from chronic kidney disease; develops and markets CellCept for various applications involving autoimmune diseases; and markets products manufactured by third parties. The company’s Logistics segment offers pre-wholesale logistics services, including storage and distribution of products, and debt collection services to pharmaceutical and healthcare companies; supplies healthcare products to pharmacies, physicians, drug stores, care homes, and hospitals; and handles and coordinates the purchase, sale, warehousing, and distribution of products for third parties. Its Retail segment operates 483 pharmacies, including 312 own pharmacies and 171 partner pharmacies under the Amavita and Sun Store brands in Switzerland. This segment also operates a chain of 55 own pharmacies in partnership under the Coop Vitality brand; MediService specialty pharmacy that offers medication for the treatment of patients in their own homes; and 160 Winconcept partner pharmacies. The company’s HealthCare Information segment provides master data systems for the healthcare market; and publishes printed and electronic technical information on pharmaceutical products. This segment also maintains databases; offers management solutions under the Triamun brand name; TriaPharm total management software solution for pharmacies; TriaMed software for physicians; and TriaOne non-sector specific ERP solution for retail. Galenica Ltd. was founded in 1927 and is headquartered in Bern, Switzerland. |
Publicly traded companies mentioned herein: Galenica AG (GALN VX), Fresenius Medical Care AG & Co KGaA (FMS), Impax Laboratories Inc. (IPXL), KKR & Co LP (KKR), Walgreen Co. (WAG)
Highlights
The presenter is bearish on shares of Swiss pharmaceutical products manufacturer Galenica and believes the risk/ reward profile is attractive in the CHF ~860 range. The company’s Pharma segment generates roughly 73% of profits selling iron replacement products like Injectafer and Venofer, as well as products for CKD patients, and CellCept for autoimmune diseases. They also operate a Retail Pharmacy (with over 300 owned and 100 partner pharmacies; 17% of EBIT) and a small Logistics business. While the company is profitable and its products are widely utilized in dialysis centers, shares are expensive at 18-19x the Street’s 2015 EPS estimate, and 22x the presenter’s 2015 number.
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