Tuesday, 21 August 2012

Burrill & Company Initiates Coverage On Neptune - Sets A $7 Price Target

Neptune Technologies & Bioressources
Basic Shares: 48.2 million
Fully diluted: 53.9 million
In his initiating report on Neptune, Senior Biotechnology Analyst Elemer Piros, Ph.D. at San Francisco based, Burrill & Company, utilizes a “sum of the parts” model in determining his “Market OutPerform” rating. This is comprised of Neptune’s projected growth on the nutraceutical side in combination with Acasti’s efforts to develop a pharma grade answer to address cardiovascular disease.

His report projects $26 million in sales for the current Fiscal 2013 (Feb. 28) year, growing to an estimated $75 million by Fiscal 2016.

In the report titled “Healthy Living: “Krilled”, Not Fried”, Mr. Piros lays out a very detailed case for the $7 target. Here are some key points:

  • We believe Neptune’s differentiated product NKO® has the potential to capture a significant share in the vastly expanding omega-3 fatty acid nutraceutical and pharmaceutical markets.
  • The company plans to take advantage of the higher absorption and potential superior efficacy of krill omega-3 compared to fish oils.
  • Preclinical and initial clinical trials have demonstrated that NKO® decreases LDL and triglycerides, while increasing HDL (the perfect lipid trifecta - critical in the management of chronic cardiovascular disorders).
  • Acasti - Neptune’s subsidiary - is in Phase 2 trials with the clinical candidate CaPre® targeting the large hypertriglyceridemia market.
  • Lovaza™, an omega-3 fatty acid approved for lowering triglycerides, recorded 2011 sales of ~$1.1B in the U.S. alone. The company that initially introduced Lovaza™ was acquired for $1.7B in 2007. Amarin (AMRN, Not Rated), with recent FDA approval for the same indication (Vascepa), is valued at ~$1.7B. In our view, CaPre® could become an important value driver for Neptune.

At the time of this writing we had not obtained permission to post the research report.

About Burrill & Company

Founded in 1994, Burrill & Company is a diversified global financial services firm focused on the life sciences industry. With $1.5 billion in assets under management, the firm's businesses include venture capital/private equity, merchant banking, and media. By leveraging the scientific and business networks of its team, Burrill & Company has established unrivaled access and visibility in the life sciences industry. This unique combination of resources and capabilities enables the company to provide life sciences companies with capital, transactional support, management expertise, insight, market intelligence, and analysis through its investments, conferences, and publications. Headquartered in San Francisco, the company oversees a global network of offices throughout the United States, Latin America, Europe, and Asia.

Burrill's technical and venture investing competence spans the entire spectrum of life sciences. The expertise of the firm's investment team, strategic partners and Advisory Boards is unparalleled in depth and breadth. In addition, Burrill is a leader in life science strategic partnering, an invaluable practice to build value in portfolio companies and to accelerate their growth and development. 

Burrill is also the sponsor and facilitator of several leading annual industry conferences and publishes the seminal annual report on the state of the biotechnology industry. This combination of resources and capabilities has helped Burrill develop a unique and highly effective platform for finding and making outstanding life science investments.

G. Steven Burrill founded Burrill & Company as a logical extension of his 40-year involvement in the growth and prosperity of the biotechnology industry. Mr. Burrill has been an active advisor and catalyst in some of the industry's most notable companies and transactions. Mr. Burrill's close involvement and respected position within the industry has positioned the firm as a prominent deal-maker and facilitator of industry partnerships and alliances, all of which fosters a robust deal flow. Further contributing to this deal flow are: the scientific and business networks of its investment team; the Advisory Boards; the strategic and financial network of its limited partners; and the close relationships developed with numerous life science companies and management as a result of Burrill's visibility, reputation, and the firm's partnering and alliance work.