AroCell Q4: Entering exciting 2021
Redeye Research Note 2021/02/19
Sales in the last quarter amounted to SEK 20t (120t) with an operating result of some SEK 6.01m (-6.03m). For the year, sales reached SEK 84t (443t) with an operating result of SEK -24.05m (-20.74m). By the end of the year, AroCell’s cash position amounted to SEK 42m after an operating cash flow of SEK -18.9m (-15.05m). Increased preparations for the US launch should affect costs and we expect the negative cash flow to accelerate somewhat during the year and, of course, when the US launch is fully underway. We see no immediate need for a capital raise during the year, though an equity issue to fuel its growth prospects for 2022 should not be ruled out, nor necessarily considered a negative. If this were to happen during 2021, we judge it to be most likely towards the end of the year, where an FDA approval might be in place.
After the period, changes have taken place in management. Former CFO, Anders Hultman, became CEO and former CEO, Michael Brobjer, will remain in the company as CCO until April 30th. After this date he will continue on a consultant-basis for AroCell and continue to play a part in its coming US launch. Additional changes in the form of recruitment of a Global Medical Lead and the interim CMO now in a permanent role, took place in the quarter. We are encouraged by its increased efforts in building its organization and are confident in Anders Hultman’s position as the new CEO, having worked alongside Michael Brobjer since December 2018.
We reiterate our Base Case of SEK 5 per share, with a Bull and Bear Case of SEK 10 and 2, respectively.