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Abezena PLC (LON:ABZA) offers a one-stop shop for the bio-pharma industry, according to a City broker which initiated coverage of the stock with a ‘buy’ recommendation earlier Friday. Numis Securities set a price objective of 90p a share, meaning the stock would have to advance 165% to hit that target. “It earns high margin service revenues helping companies develop and manufacture bio-pharmaceutical drugs such as antibodies with the added upside of royalties on products - the Abzena Inside portfolio - in which its technology is embedded,” said analyst Stefan Hamill. He said the recent interim results revealed the business was really “hitting its stride” with revenue growth of 157% to £9mln, fuelled by acquisitions. The organic rate of expansion was a none-too-shabby 46%. The 48-page initiation note from Numis shows number cruncher Hamill is expecting Abzena to post sales of £19.5mln for the full-year, rising to £23.8mln and then £26.6mln. The company’s revenues come from providing antibody research and engineering services and creating drug conjugates (targeted treatments for diseases such as cancer). It also manufactures antibodies and proteins for clinical studies. Where Abzena applies its technology to re-engineer a partner’s product it might earn licence fees, milestone payments and even royalties if a drug makes it to the market. Where its technology is embedded, the firm calls these ‘Abzena Inside’ products. “Abzena has been building out an integrated business model, with a strong reputation in biology and chemistry research services and growing manufacturing capability that has been stepped up through acquisition and is the focus of its capex investment,” said Hamill. He added that customers were “responding well” to Abzena’s broader offering, which was reflected in the level of repeat business. The Numis note chimes with recent research put out by N+1 Singer, which has a 93p price target. “The extension of Abzena’s services offering has continued to drive customer demand, with new services acquired by existing customers representing a significant proportion of the 185 projects undertaken during the first half,” said analyst Jens Lindqvist.
Original Article: Abzena a one stop shop for bio-pharma industry, says NumisNEXT ARTICLE
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