Release Date: October 16, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Flerie AB (STU:1NP1, Financial) is optimistic about the potential market entry of Xspray's Dasynoc in the US next year, which could significantly impact their portfolio.
- The company is investing in innovative technologies, such as AnaCardio's heart failure drug and Amarna Therapeutics' gene therapy for type 1 diabetes, showcasing a strong commitment to groundbreaking medical advancements.
- Microbiotica has advanced to the clinical stage with its microbiome treatment for melanoma and ulcerative colitis, indicating progress in Flerie AB's portfolio.
- Flerie AB maintains a diversified portfolio with companies like Geneos Therapeutics and Mendes making significant progress in their respective fields, enhancing the potential for future growth.
- The company has a robust cash balance of over SEK1 billion, providing ample resources for future investments and portfolio expansion.
Negative Points
- Flerie AB's net asset value decreased by SEK118 million in the third quarter, reflecting a negative financial performance.
- The company's net profit for the quarter was a loss of SEK117 million, indicating financial challenges.
- There was a decrease in the fair value of the portfolio by SEK65 million, primarily due to value decreases in certain investments.
- Xspray, a significant part of the portfolio, experienced a decrease in value by SEK173 million, impacting the overall portfolio valuation.
- The share price of Flerie AB is trading at a 30% discount to its NAV per share, highlighting a potential lack of market confidence in the company's valuation.
Q & A Highlights
Q: Can you explain how significant upcoming readouts will impact Flerie's valuation, considering your valuation method primarily relies on the latest financing rounds?
A: Although immediate translation into increased value doesn't occur, successful readouts often lead to financing rounds within 6 to 12 months. Prokarium, AnaCardio, and KAHR are key companies to watch, as their developments could significantly impact our NAV.
Q: With SEK56 million invested this quarter, what are the financing needs for Flerie in the next 12 months, and how confident are you in securing co-investors?
A: We aim to deploy around 10% of NAV annually, though quarterly investments vary. Companies where we are major shareholders and need to expand syndicates will require the most funding. We actively engage with potential investors at conferences to build these syndicates.
Q: How does Flerie's share redemption scheme work, and what are its benefits?
A: The scheme allows up to 5% of shares to be redeemed annually at the latest NAV per share, providing liquidity and aligning share price with NAV. It offers a recurring liquidity option and aims to reduce the discount between share price and NAV.
Q: What is the impact of the valuation methodology on NAV development?
A: NAV development is primarily driven by portfolio valuation changes. Listed companies are valued by share price, while private companies are based on the latest financing round. We adjust valuations for setbacks or delays and can reverse write-downs if progress resumes.
Q: Can you elaborate on the strategic importance of Flerie's diversified portfolio?
A: Our portfolio includes innovative companies across various stages, from preclinical to commercial growth. We support them with funding, expertise, and networking, facilitating collaborations and potential acquisitions by larger pharmaceutical companies.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
