Intervacc caseThe vaccine candidate/product
Intervaccs vaccine candidate for horses is on time and responses to EMA DAY 120 questions have been submitted regarding the Company's Marketing Authorization on 12 january this year.
Application (MAA) for Strangvac has been submitted on this day to the European Medicines Agency (EMA). Intervacc is seeking approval for Strangvac as a vaccine
against equine strangles, a highly contagious infectious disease that affects horses globally.
Decision expected in (early?) Q2 this year.
After validating the submission and reviewing the responses, a second list of questions and outstanding issues is expected from the Committee for Medicinal
Products for Veterinary Use (CVMP). The Company estimates that it is on track for a positive opinion from the CVMP during Q2 2021.
The vaccine has been developed with an innovative technology and is based on recombinant fusion proteins. The research behind the vaccine's technical platform
has been done together with researchers at Karolinska Institute and the Swedish University of Agricultural Sciences, SLU.
The MAA for Strangvac is based on a successful series of clinical studies demonstrating the safety, immunogenicity, efficacy and DIVA capability of this
exciting vaccine. DIVA (Differentiation of Infected from Vaccinated Animals) capability is a key feature for prevalent endemic diseases such as equine strangles
in order to distinguish vaccinated animals from those that have been exposed to the bacteria Streptococcus equi
Business model
I believe the business rollout/model going through existing vaccine programmes has a lot of potential to be succesfull.
I also belive there is a high probability the vaccine will go through. The company have been working on this for 16 years, it's not like the covid vaccine.
Today there is no good solution for the very dangerous and costly decease. The whole stable will need to be put into quarantine if one horse is infected.
I believe insurance companies will more or less demand that insured horses and stables take the vaccine.
Pricing believed to be around 300 kr per vaccine. 2-3 needed first year and then refills.
Gross margins above 90%.
Modelling value and price
doses
- there are 60 million horses in the world. The company calculate with 20 million in their target area, Europe, US, Australia and the Mid East. Intervaccs graph suggest around 16-17 million horses within main area with 6 million in their first market Europe, and 10 million in the second, the US, as well as 1 million in Australia. The US rollout can be expected first in second part of 2021.
- 30-60% meets vets and are in vaccination programs
- Intervacc recommend 2-3 doses per year, CEO calculates with around 1,5 dose per year
- Intervacc suggest the first doses will work for "at least 12 months" in their presentation.
- some known investors in Sweden believe there's a need for 3 doses the first year
price
- 100 kr for vaccine against influenca
- the comapany as well as investors had early estimates of around 120 kr (in 2018)
- but in 2020 the CEO says he believe they can set a price of 300 kr (september 2020) per dose and he believes the customers are willing to pay this price.
my napking sketch
- year 2021–2023: 7,5 million horses x 35% x 1-1,5 dose = 2,6–3,9 million doses per year x a price of 200 kr/dose: 520–780 miljoner kr/year
- year 2024–2025: 15 million horses x 45% x 1-1,5 dose = 6,8–10,1 million doses per year x price of 230 kr/dos: 1 564–2 323 million kr/year*
*I actually have come to believe the 300 kr per dose is a good price and perhaps there will be a faster rollout than calculated. However you look at it, enterprise value, given the vaccine is approved and that business model and price has a product market fit, coudl or should have a very nice expansion.
I expected an upside between 2-3x in 2020-09-13 but now I've come to expect an 2,5 x upside from here, not counting optionality.
Enterprise value per 2020-09-13: 1,76 billion kr (at time of napkin sketch)
Enterpise value per today 2021-01-29: 2,54 billion kr
Technical
Looking for breakout above 52, cheat, followed with interest points at 54,5 and later 58.
