ecofin coverage oasmia pharma 270611

Oasmia Pharmaceutical Blockbuster in the Making…

2 27 June 2011

Oasmia Pharmaceutical

Initial Coverage Report

Snapshot

Recommendation BUY

Target Price (SEK) 64.00

Current Price (SEK) 12.25

Upside Potential (%) 422.4

Key Statistics

Price (SEK) 12.25

Shares O/S (mn) 52.08

Market Cap (SEK’ mn) 637.98

Market Cap (US$’ mn) 104.60

52-week High (SEK) 26.35

52-week Low (SEK) 10.50

P/S 129.94

P/B 2.09

Key Statistics

Sector (P/E) 24.33

Sector (P/B) 3.14

Sector (Price/ Cash flow) 10.30

Company Beta 0.44

Avg. Daily Volume 62,645

Sector Special Pharmaceutical

Exchange Nasdaq Omx

Bloomberg/ Reuters Ticker OASM.F

Stock Price Performance

Months 1 3 6 12 YTD

Price Performance (%) -1.6 -6.5 2.9 -52.9 -25.3

Source: Nasdaq Omx Nordic, Reuters and Bloomberg

3 27 June 2011



Investment Summary

Oasmia Pharmaceutical is a Swedish company focused in human and veterinary cancer market. The two

late-stage pipeline candidates of the company are Paccal® Vet (targeted to treat the most common skin

cancer in dogs - Mastocytoma) and Paclical® (targeted to treat the fifth leading cause of death in women -

ovarian cancer). The main ingredient of both these drugs is Paclitaxel (A Mitotic Inhibitor with Anti-Tumor

Activity) which is one of the widely used anti-cancer agents in the world. The company has developed an

innovative technology called XR-17 to alleviate the drawbacks of existing cancer drugs. The main

advantages of the company’s products are, that they are water soluble (as opposed to existing cancer drugs

that need a high side effect causing solvent), and offers lesser side effect profile.

The worldwide cancer-drug market is growing at the CAGR of 12-15% and the market is expected to grow

to US$ 75-80bn by 2012 as per IMS Health Forecast. The Company aims to gain market approval for both

Paccal® Vet and Paclical® in the near future. We feel that given the improved formulation and reduced side

effect profile of the company’s drugs, the company is well poised to gain a decent amount of cancer market

share, which would further ensure an increase in its share price in future.

The current share price of Oasmia on the Frankfurt Stock Exchange is SEK 14, but we feel that once these

drugs are launched in the market, the share price of Oasmia will take an upward swing. Considering this

fact we have given a valuation of SEK 64 to Oasmia, with an upside potential of 422.4%. We have suggested

this kind of price because we feel that Oasmia’s innovative technology that has made Paclitaxel soluble in

water will be the main anchor behind Oasmia’s growth in the coming years. These drugs are superior to

that of its peer companies because these two anti-cancer drugs have got negligible side effects, even if the

patient takes an overdose by oversight or mistake.

The marketing partners of the Company such as Abbott Laboratories, Orion Corporation and Nippon

Zenyaku Kogyo will help Oasmia to penetrate different regions of USA, Europe and Japan after the launch

of Paccal® Vet. Oasmia has also recently closed a license and distribution agreement with Medison Pharma,

an Israel based company, for selling and distribution of Paclical® in Israel and turkey.

The company by which Oasmia benchmarks itself is US-based Abraxis Bioscience, which is the only

company worldwide with an authorized infusion of 250mg/m2 (2005 FDA). In October 2010, the US-

listed Celgene Corporation acquired Abraxis for US$ 2.9bn, in the process evaluating it to have 9x sales and

as a loss making company (-US$ 104mn). The CEO of Celgene declared that the only produced

drug Abraxane® (breast cancer drug) will achieve a blockbuster status of US$ 1bn by 2015. The stated

reason for paying such an expensive price is the unique formulation of Abraxis. If Oasmia’s pipeline is

approved by the authorities within 2-3 years, as was suggested and assumed in the prospective

outlook, Oasmia will be in the same capital market situation as Abraxis-Celgene was in 2010. Thus, just as

was the case of Abraxis-Celgene in the past, when it got acquired for a huge price even when it was loss-

making, because of its unique formulations, similarly, Oasmia with its formulations is a target for

acquisition for cash-rich pharmaceutical companies. This is so because, these cash-rich Pharma companies

have very poor internal pipelines and their important patents are due for expiration, and thus they need

new steady revenue streams in the coming few years.

4 27 June 2011



Analysts’ stock ratings are defined as follows:

BUY: If the fair value price is 10% or more above the market price, at the time of writing the report.

HOLD: If the fair value price is in the range of [-10% to +10%] with respect to the current market price, at

the time of writing the report.

REDUCE: If the fair value price is 10% or more under the market price, at the time of writing the report.

Disclaimer

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decision is/be first vetted by an independent financial advisor who is equipped or authorized to provide investment

advice.

5 27 June 2011



Content

1. Cytostatic: An Overview 6

2. About Oasmia Pharmaceutical 10

3. Strategy and Business Model 19

4. Investment Positives: Why Oasmia? 20

5. SWOT Analysis 22

6. Investment Concern 23

7. Financial Performance Analysis and Ratios 24

8. Valuation and Recommendation 26

6 27 June 2011



Pet Services

Food

Supplies/ OTC

Medicine

Vet Care

Live Animal

Purchases

28.5 29.5 32.4 34.4 36.3 38.5 41.2 43.2

45.5 48.35 50.84

0

10

20

30

40

50

60

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011E

1. Cytostatic: An Overview

Cytostatic therapies are anti-cancer drugs and are basically designed to deactivate the altered enzymes.

These therapies are designed not to kill the cancerous cells but to simply prevent them from reproducing.

Cytotoxic chemotherapy has been a backbone of medical approaches for the treatment of malignancies by

directly killing the tumor cells. Over the past decade, the research and development of cytostatic therapies

has been the subject of considerable medical debate. The drugs are commonly tested on patients who have

late stage disease by administering optimal dose selection.

1.1 Animal Health – A Growing Market

The market for human medication is still larger than the pet medication market. The market for cancer

therapies in the case of pets is not so huge, but the common view is that the market will take a bullish

trend and expand strongly. Oasmia along with its partners is expected to address and cover a decent

market for animal health care products in the near future. The Company has a license agreement with its

marketing partners and has achieved substantial progress.

Increasingly, people keep pets as additions to their families and it costs them a lot of money when the pets

are detected with cancer and have to be treated for the disease. According to the 2011-2012 APPA

National Pet Owners Survey, 62% of U.S. households own a pet, which equates to 72.9mn homes. The total

size of the U.S. market for companion animals is US$ 50.84bn per year as estimated by APPA for 2012. The

history of the U.S. pet industry expenditure has shown an upward trend. According to APPA, the total

market size in 2001 was US$ 28.5bn. It had reached US$ 45.5bn in 2009 and US$ 48.4bn in 2010 and is

forecasted to increase by 4.5% in 2012. (This includes food, supplies/OTC medications, veterinary care, live

animal purchases and other services such as grooming, boarding, and pet sitting).

Spending on Pets in U.S. (US$’ bn) Breakdown of U.S. Expenditure on Pets

Source: APPA, 2011

Veterinary care has the largest anticipated growth of 8.5% that would result in an estimated US$ 14.11bn

in spending at the end of 2011 as per APPA in 2009.

The total size of the

U.S. market for

companion animals

is US$ 50.84bn per

year as estimated

by APPA for 2012

7 27 June 2011



Consumer Spending on Veterinary Services in U.S. (US$’ bn)

Source: American Pet Products Association, 2009

According to Manimalis, the market size of veterinary services in Sweden was SEK 400mn in 1993 and it

increased to SEK 2bn in 2008.

Costs for Veterinary Procedures in Sweden (SEK’ mn)

Source: Manimalis report 2004 & 2009

The differences between different countries as regards the ratio between dog and human populations are

huge. The penetration rate is impressive in the U.S. and it accounts for 24 dogs per 100 people as per APPA.

Germany accounts for 6, France 11, Japan 10, Sweden 8 and U.K 14 dogs per 100 people. If a comparative

analysis for the population of dogs is made for the U.S and U.K, for the U.S there has been an increase by

35% in the last ten years and in the U.K, the dog population has been more or less stable.

4.9 5.6 5.3 5.7

6.4 6.6 7.2 7.1

8 8.6 8.3 8.7

9.2 9.8

11.1

0

2

4

6

8

10

12

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

8 27 June 2011



Market Outlook for Companion Animal Cancer Products

The European countries have 56mn dogs, Japan has 13mn, U.S. has 75mn and in the U.K. there are 10.5mn

dogs. 20-25% of dogs are affected by cancer during their lifetime. Around 1.5% of dogs are affected by

cancer in an average life span of 13 years. About 50% of dogs over 10 years of age will likely die of cancer.

Number of Vets Referring Cancer Cases to Oncologist Trends in Referring Cancer Cases

Source: Vetnosis

The population of dogs having cancer in the U.S. is around 1mn and it is 600,000 in EU. Chemotherapy

could be an alternative treatment for 30-50% of these dogs. The number of dogs treated with different

kinds of cancer drugs is about 10%.

The first product to be launched by Oasmia is called Paccal® Vet. The drug basically targets Mastocytoma

(skin cancer) in dogs, representing 21% of cancers in dogs. The test drug was submitted for market

authorization to the FDA (U.S.) and EMA (E.U.) in late 2010. Paccal® Vet is used for a broad range of

tumors. Paccal® Vet will not address 100% (i.e. all) of the chemotherapy market for dogs, but it is true that

the number of dogs with cancer administered chemotherapy is expected to increase even as new products

tested and approved for dogs reach the market. There are several approved chemotherapy treatments for

dogs, including Masivet® (AB Science) and Palladia™ (Pfizer Animal Health). Both of these drugs were

approved in 2009. Paccal® Vet has been used with impressive results on a larger number of dogs in clinical

trials, as compared to Masivet® and Palladia™.

1.2. Human Health – An Improved Market

Cancer: The Global Scenario

The diagnosis and treatment of cancer has undergone several developments and improvements. As per

Oasmia, the 5-year survival rate for men in Sweden has practically doubled over thirty years, from 36% to

67%. In the case of women, the survival rate has increased from 42% to 67%. The latest additions to the

repertoire of cancer treatment and the use of targeted drugs in combination with cytostatics are the

reasons for the increase in the survival rate. There were 7.6mn deaths, globally, due to cancer in 2007 and

this is expected to increase between 13mn and 17mn, by 2030. In the U.S., 25% of all deaths are caused by

cancer. This shows that cancer is the second leading cause of death after heart disease. About 50,000 new

cases of cancer are diagnosed each year in Sweden. The reason attributed for the increase of cancer

patients in Europe and Sweden is primarily due to the aging population, means that the demand for new

and effective treatments will increase constantly.

About 50% of dogs

over 10 years of age

will likely die of

cancer as per APPA

The first product to

be launched by

Oasmia is called

Paccal® Vet

Cancer is the second

leading cause of

death after heart

disease

9 27 June 2011



The Five Most Common Cancers in the World

Lung Cancer

According to American Cancer Society, Lung cancer remained the leading cause of cancer-related deaths in

2010 and it accounted for an average of 1.6mn new cases in 2008. It accounts for about 13% of total cancer

diagnoses. In the case of men, the highest lung cancer incidence rates were in North America, Europe,

Eastern Asia, Argentina and Uruguay and the lowest rates were in sub-Saharan Africa. The highest lung

cancer rates were in North America, Northern Europe, Australia, New Zealand and China among the

women.

As per the estimates of American Cancer Society, in 2008, a total of 215,020 people were diagnosed and

161,840 people died from lung cancer.

Breast Cancer (in Women)

Every year, 1.3mn women world-wide are diagnosed with breast cancer as per American Cancer Society.

The most frequently diagnosed cancer in women worldwide is breast cancer, and in 2008 there were an

average of 1.4mn new cases. The incidence rate varied internationally by more than 13-fold in 2008,

ranging from 8.0 cases per 100,000 in Mongolia and 109.4 per 100,000 in Bhutan. In 2008, the global

patient population of breast cancer was 458,400. It is one of the most common diseases after lung

cancer, among women.

Colorectal Cancer

Colorectal cancer develops in the colon or the rectum. Colorectal cancer is the third most commonly

diagnosed cancer and the third most common cause of death in men and the second most common cause

in women. In 2008, an average of 1.2mn cases of colorectal cancers occurred. The highest incidence rates

were in North America, Australia, New Zealand, Europe and Japan. This type of cancer accounts for 8% of

all the cancer deaths (608,700 in numbers) worldwide, in 2008 according to American Cancer Society.

Ovarian Cancer

American Cancer Society’s fact says that there were 225,000 new cases of ovarian cancer worldwide in

2008 and it accounts for around 4% of all cancers diagnosed in women. The rate for the disease in the

developed regions of the world in 2008 was 9 per 100,000 and in the less developed regions, 5 per 100,000.

Globally, around 200,000 women are diagnosed with ovarian cancer, each year.

Prostate Cancer

Prostate cancer is the most commonly diagnosed disease in the U.S. and the second most common cause

of cancer death among men. As per the estimation of American Cancer Society, about 1 in 6 men in the

U.S. will be diagnosed with prostate cancer during their lifetime and 1 in 36 will die from this disease. In

2010, approximately 32,050 men died from prostate cancer in the U.S.

Lung cancer accounts

for about 13% of total

cancer diagnoses.

Around 200,000

women are diagnosed

with ovarian cancer,

each year

10 27 June 2011



2. About Oasmia Pharmaceutical

2.1. Introduction: A Brief History

Oasmia Pharmaceutical AB is a Swedish pharmaceutical company located in Uppsala, in the north of

Stockholm. The Company is mainly focused on drug development by using new forms of technology

involving nanoparticles, which are patented till 2023. At present, the Company is developing drugs in the

fields of human and veterinary oncology. The Company initiated in early 1990 and was registered in the

year 2000 in Uppsala, Sweden. Oasmia’s shares are traded at the NASDAQ OMX Stockholm and at the

General Standard of the Frankfurt Stock Exchange, in a dual listing since June 2010. This makes Oasmia the

first Swedish company to be listed on the regulated German market.

In the year 2004, the R&D of Oasmia attained a remarkable milestone by successfully completing its

research in the specialty area of oncology, based on the XR-17 technology. By the end of 2004, clinical trials

were initiated on the Company's promising product Paclical®.

The Company has also developed a veterinary drug candidate called Paccal® Vet to prevent Mastocytoma (a

form of skin cancer) among dogs. The drug candidate is currently in the registration phase with both the

EMA (Europe) and FDA (U.S.) and the Company is expecting an approval in H1 2012. There will be a

subsequent marketing launch in H1 2012 in both Europe and the US. Oasmia has signed the marketing

agreement for Paccal® Vet with strong partners such as Abbot Laboratories in the U.S. and Canada, Orion

Corporation in Europe and Nippon Zanyaku Kogyo in Japan.

Solubility is the main factor, which actually separates Oasmia’s drug candidate from the anti- cancer drug of

the other companies. Oasmia’s new technology makes it possible to enhance the solubility of poor soluble

active compounds by enhancing their properties thus increasing the potential for the treatment of patients.

Snapshots of Oasmia’s History

Source: Oasmia Annual Report

Clinical Phase I/II studies with Doxophos®

Vet commences

Positive Phase III results for Paccal ® Vet

A Distribution agreement is signed with

Nippon Zenyaku Kogyo Co. Ltd for Paccal®

Vet in Japan

A SEDA – agreement of MSEK 75 is signed

with Yorkville Advisors Global LLC.

FDA grants Paccal® Orphan Drug designation

for treatment of ovarian cancer in USA

A License agreement is

signed with Abbott

Laboratories. USA,

concerning Paccal® Vet. In

USA and Canada

FDA Grants Paclical® Orphan

Drug Designation for

treatment of Ovarian cancer

in USA

Clinical Phase III trials

with Paccal® Vet and

Paclical® commences

The Company expands

the corporation with

Orion Pharma

concerning Paccal®

Vet to include all of

Europe

The company changes stock

list from NGM Nordic to

NGM Equity

A marketing and distribution

agreement is signed with

Orion Corporation, Finland,

Concerning Paclical® in the

Nordic countries

Parallel imports in Qdoxx

Pharma is initiated

The company obtains SME

status from EMEA

The company acquires 51% of

GlucoGene Pharma AB

Clinical Trials with Paccal® Vet

in dogs with cancer begins

The company is listed on

NGM Nordic

Clinical Trials with

Paclical® in cancer

patients begins

Oasmia Pharmaceutical AB is

founded under its current

name

Private Research Project

about the ageing of the

cell is initiated

1990 1999 2004 2005 2006 2007 2008 2009 2010

Oasmia is a dual listed

stock in NASDAQ OMX

Stockholm and at the

General Standard of

the Frankfurt Stock

Exchange

11 27 June 2011



XR-17 technology has the

ability to form micellar

nanoparticles without

the presence of

solubilizers

CEO is an economist by

profession rather than a

medical doctor with a

research background

2.2. Management: Key Persons behind Oasmia’s Success

Oasmia Pharmaceutical has an impressive management team with several years of experience in the

Pharmaceutical Sector. One of the most interesting facts about Oasmia’s management is that the CEO of

the Company Mr. Aleksov is an economist by profession rather than a medical doctor with a research

background. This is different from how it is with most of the start-up pharmaceutical and biotech

companies. We feel that this could be a distinct advantage as Mr. Aleksov can take account of financial

information and related facts rather than just medical information etc. at the time of decision making

regarding the Company’s financials. A brief introduction about the Management of the Company is

provided below:

Julian Aleksov (CEO): Mr. Julian Aleksov was born in the year 1965 and is the CEO as well as the co-founder

of the Company. He has an extensive background in project management of research activities as well as

strategic management. He also serves as the chairman of the board of Qdoxx Pharma AB and Gluco Gene

AB.

Weine Nejdemo (CFO): Born in 1948, Mr. Weine Nejdemo has extensive international experience at the

corporate management level in companies in the life sciences arena, mostly in stock listed companies. He

has also worked as a management consultant since 1997, mostly in companies dealing with life sciences

disciplines, catering to both suppliers and customers.

Hans Sundin (Executive Vice President Operations): Born in 1945, Mr. Hans Sundin has more than 30 years

of experience in pharmaceutical development, quality assurance and project management. He also has

extensive international experience in upper management positions in Swedish pharmaceutical companies.

Annette Ljungmark (Head of Accounting and HR): Born in 1950, she has previously worked in the

Pharmaceutical Industry dealing with and handling monthly and annual reports, financial analyses, and

VAT, pensions and personnel issues.

2.3. Technology: Innovative Technology Leading to an Upcoming Blockbuster Drug

The drugs that exist today in Oasmia’s portfolio are all based on the Company’s unique technology, XR-17,

and protected by patents in various markets and pending patents in additional markets. This

nanotechnology offers a new treatment alternative in Oncology and other therapeutic areas. The main

characteristic of Oasmia’s drug formulation based on XR-17 technology is its ability to form micellar

nanoparticles without the presence of solubilizers. This leads to fewer side effects as compared to currently

marketed drug products which contain Active Pharmaceutical Ingredients (API). Less severe side effects

also imply that a high dosage of the drug may be tolerated by the patient, which can be advantageous from

a treatment point of view.

12 27 June 2011



Hydrophilic polar head

Hydrophilic non-polar chain

Active Pharma Ingredients

Micelle Consist of XR-17 and Paclitaxel.

Paccal® Vet is going to be

launched in H1 2012 for

the treatment of

Mastocytoma

Source: Company Annual Report

Oasmia’s XR-17 technology can be applied to a number of substances to enhance their profile and effect,

especially those substances that are difficult to dissolve. The drug candidates that are in the Company’s

portfolio today are based on Oasmia’s unique derivate-based excipient XR-17, it’s a vitamin A based set of

compounds that encapsulates the active substance and forms nanoparticles when reconstituted. With the

use of nanoparticles, a controlled release of the active substance can be achieved when it is administered

into the body. The formulation XR17 is already patented up to 2028.

2.4. Product Pipeline

Oasmia – Product Range

Test Product (Human Health) Indication Clinical Phase Expected Launch

Paclical® Ovarian Cancer Phase 3 2012/13

Docecal® Prostate Cancer Pre-clinical 2014/15

Doxophos® Breast Cancer Pre-clinical 2014/15

Carbomexx® Comb. Therapy Pre-clinical 2015/16

Test Product (Animal Health) Indication Clinical Phase Expected Launch

Paccal® Vet Mastocytoma Phase 3 2011

Doxophos® Vet Lymphoma Pre-clinical 2013-14

Docecal® Vet Mammary tumor Pre-clinical 2014/15

Carbomexx® Vet Osteosarcoma Pre-clinical 2015/16

Source: Oasmia Report

Animal Drug: Pipeline Details

We know that the real driver of Oasmia’s growth will accelerate when the human anti-cancer drug

candidate ‘Paclical®’ will introduce in the market, because the human drug market is much larger in terms

of patient population. But, currently, the Company is trying to penetrate the animal drugs market because

this market has been, so far, less competitive and also because, gradually, the roles of companion animals

are also becoming prominent within their owner’s family.

The new drug candidate which is going to be launched in H1 2012 is Paccal® Vet for the

treatment of Mastocytoma (skin cancer) among dogs. The other candidates, who are currently in the

pipeline for animals are Doxophos® Vet for the treatment of Lymphoma, which is currently in the pre-

clinical stage and Carbomexx® Vet, which is aimed for the treatment of Osteosarcoma among dogs. Since

all these drugs are in the pre-clinical stage, it is hard to predict whether the treatment benefits from these

drugs will be validated and get the regulatory approval of the concerned authorities in various markets

down the line.

13 27 June 2011



Classification of Canine Cancers among Dogs

Source: Oasmia’s report

Product Description: Animal Health

Paccal® Vet

Until now, it has been difficult to give Paclitaxel (A Mitotic Inhibitor with Anti-Tumor Activity) to pets due to

its severe side effects, caused by Excipient Cremophor EL. In Oasmia’s formulation, Paclitaxel has been

made water soluble by Oasmia using the technology XR-17. In a water solution, XR-17 forms micelles with

Paclitaxel. With Paccal® Vet, dogs can be treated with higher Paclitaxel doses, with a shorter infusion time.

This is accomplished without administering any prior medication and without the risk of hypersensitive

reaction associated with Cremophor EL.

Doxophos® Vet

Doxophos® Vet is a new form of Doxorubicin, an extremely effective and well used substance for the

treatment of various cancer forms within veterinary medicine. The medicine Doxophos® vet is aimed at the

treatment of Lymphoma among dogs. Treatment with Doxophos® vet has shown reduced cardiac side

effects as compared to standard treatments with Doxorubicin, in pre-clinical studies on rats. Currently,

Doxophos® is at the pre-clinical stage.

Docecal® Vet

Docecal® Vet is a new formulation of a well-known active substance called Docetaxel that is structurally the

same as Paclitaxel and blocks Mitosis in a similar manner.

Carbomexx® Vet

Carbomexx® Vet has the potential to become the most used pharmaceutical drug for the treatment of

skeletal cancer (osteosarcoma) in dogs. Osteosarcoma is extremely common among dogs. Without

chemotherapy in combination with surgery, it leads to death within three months. Oasmia hopes that

Carbomexx® Vet will create new therapeutic possibilities with an improved safety profile

Mammary 1%

Lymphoma 27%

Mastocytoma 21%

Osteosarcoma 8%

SCC 6%

Fibrosarcoma 6%

Melanoma 6%

Hemangioma 5%

Others 20%

14 27 June 2011



Competitive Landscape of Paccal® Vet

Product Company Description Mode of

Administration Indication Dosage Status

Palladia® Pfizer Tyrosine Kinase Inhibitor

Oral Canine Mast Cell Tumor

Every Day

FDA/CVM and Canadian Approved, Pending EU

Masivet® Kinavet™

AB Science

Tyrosine Kinase Inhibitor

Oral Canine Mast Cell Tumor

Every Day EU-approved, Pending FDA-CVM

Oncept® Merial DNA-based Vaccine

Subcutaneous Injection

Canine Oral Melanoma

Monthly for 4 Doses Plus 6 Months Booster

USDA Approved

Paccal® Vet

Oasmia Anti-microtubule

Infusion Canine Mast Cell Tumor

4 Infusions, Every 3 Weeks

Pending FDA/CVM & EU

Source: Oasmia Company Presentation

Human Drugs: Pipeline Details

Apart from the canine cancer drugs for dogs, the Company is also targeting the human market. Oasmia

currently focuses on improving chemotherapeutic drugs for human consumption, especially for those

patients who are suffering from ovarian cancer. The upcoming test drug of Oasmia for the ovarian cancer

market is Paclical® which is currently in the phase 3 trial. The other drugs in the pipeline of Oasmia are

Docecal® for the treatment of prostate cancer, Doxophos® for breast cancer and Carbomexx® which is

aimed for the treatment of combination therapy, using XR-technology. All the upcoming drugs which are in

the pipeline incorporate different chemotherapeutic agents. But apart from Paclical®, all the other human

chemotherapeutic drugs are also in the pre-clinical stage, and hence, we have not included revenues from

these drugs in our model.

Product Description: Human Health

Paclical®

Paclical® is aimed at the treatment of ovarian cancer among patients. Paclical® is a new formulation of the

active substance Paclitaxel which is practically insoluble in water. In most of the drugs such as Taxol®

(manufactured by Bristol-Myers Squibb), Cremophor EL and ethanol are used as solvents for Paclitaxel,

which actually creates hypersensitive side effects among the patients. But Oasmia has made Paclitaxel

soluble in water by using its innovative XR-17 technology. The number of hypersensitive effects is also

expected to be less in number with Paclical® because the drug does not contain Cremophor EL.

Doxophos®

Doxophos® is a new formulation of doxorubicin aimed at the treatment of breast cancer. In Doxophos®,

doxorubicin is encapsulated in the form of nanoparticles each of a size of 30-40 nanometers. These

nanoparticles were developed to optimize therapeutic potential and increase doxorubicin’s applicability of

use for cancer treatment.

The upcoming test drug

of Oasmia for the

ovarian cancer market is

Paclical® which is

currently in the phase 3

trial

15 27 June 2011



Docecal®

Docecal® will be used for the treatment of prostate cancer. It is a formulation of Taxane Docetaxel. The

substance is poorly soluble in water but Oasmia has made it soluble with the help of XR-17.The product is

expected to have the same benefits as Paclical®.

Carbomexx®

The formulation consists of a new active substance in combination with XR-17. The new substance is

closely related to the so-called alkylating agents such as carboplatin, cisplatin and oxaliplatin, which

comprise an extremely important group of cytostatics. Oasmia hopes that Carbomexx® will provide

additional benefits with the inclusion of XR-17 and will create new therapeutic possibilities for patients and

physicians.

Competitive Scenario: Human Health

Oasmia is coming out with human medication, which will enhance its cash flows and revenue at the same

time. The filing of the patent for Paclical® drug in the European and U.S. markets is anticipated during

2012-13. Competition in the Taxane market is extensive and is made up of Taxol®, Taxotere®, Abraxane®

and Paclitaxel-based generics. The details of the competitors of Paclical® are given below.

Taxol® – Manufactured by Bristol – Myers Squibb

Taxol® is another type of medication for ovarian cancer. It is made up of Paclitaxel dissolved in ethanol and

Cremophor. Taxol® has various side effects when it is administered and used in patients. Because of its

serious side effects, patients were even losing their healthy working cells. The patent for Taxol® has expired

and it has many generic versions.

Comparison of Taxol® vs. Paclical®

Properties Paclical® Taxol®

Excipient XR-17 Cremophor EL

Dilution Ratio 1:1.3 1:88

Max. Dosage 250mg/m^2 175mg/ m^2

Hypersensitivity 0% 34%

Infusion Time 1 hour 3 hour

Pre-medication No Yes

Indication Ovarian Cancer Lung, Ovarian, Breast, Head & Neck etc.

Source: Oasmia Pharmaceutical Ltd

Paclical® is superior to Taxol® in the treatment of cancer patients as it does not have hypersensitive effects

even if the dosage is high.

Abraxane® – Manufactured by Abraxis Bioscience

The existing drug candidate for breast cancer in the Taxane market is Abraxane®, a block buster drug

introduced by Abraxis Bioscience, which is taken over by Celgene for US$2.9 bn in 2010.

16 27 June 2011



Taxotere® – Manufactured by Sanofi-Aventis

This well established brand is based on Taxane docetaxel. It consists of docetaxel dissolved in polysorbate

80 and is primarily used for the treatment of patients having breast cancer and lung cancer. The patent of

Taxotere® in the US and EU has expired in 2010, and the generics for this drug are expected to be

introduced in the market.

2.5. Clinical Studies: Paccal® Vet

Phase I/II Study: Safety and Efficacy

In an initial Phase I/II study, the safety of Paccal® Vet was studied among 32 dogs. Micellar Paclitaxel in

Paccal® Vet showed a rapid and extensive distribution with a pattern close to that for human subjects. The

efficacy was complete or partial in 67% of the dogs.

The first dog to be treated was Bella, which lived for three years after treatment, without any new tumors.

She died of old age.

Phase III study: Safety and Efficacy

This phase, Phase III for the study of safety and efficacy was undertaken after the convincing results

obtained in the initial phase I/II study on solid tumors and lymphomas with a Cremophor-free Nano-

particle solution of Paclitaxel (Paccal® Vet).

The Company implemented this Phase III study on Mastocytoma grade 2 and 3 condition. The study was

undertaken in eight sites; six in Sweden, one in Austria and one in Germany.

International Multi-center Phase III Study: Safety and Efficacy

In this study, 26 of the most renowned clinics, specializing in veterinary oncology in Europe and US

participated. The study included 243 patients. This documentation formed the basis for the registration

application that has been filed with EMA and FDA.

Clinical Studies: Paclical® for Ovarian Cancer

Phase I/II

The primary objective was to define the Maximum Tolerable Dose (MTD) of Paclical® in patients with

recurrent solid tumors. The other main objectives were to investigate the pharmacokinetic pattern, safety

and tolerability. Thirty four patients with malignant tumors, for which no standard palliative therapy was

available, were enrolled.

Paclical® was given without any premedication as a one-hour infusion every 3 weeks. The treatment was

well tolerated by most patients. The MTD was 250 mg/m2. Pharmacokinetic data showed a rapid

distribution of Paclitaxel into the tissues. No hypersensitivity reactions could be observed and no

unexpected adverse effects were noted after repeated administrations.

17 27 June 2011



Phase III

The primary objective was to investigate the efficacy and safety of Paclical® in ovarian cancer patients. The

trial was an open, randomized and controlled multi-center study.

In the trial, Paclical® was compared to the well-known pharmaceutical drug Taxol®. 650 patients were

involved in that phase 3 trial.

Advantages of Paclical® Found at the Time of Clinical Study:

No premedication is required

Higher doses were tolerated

Short infusion time

No hypersensitive reactions

2.6. License Agreement: Paccal® Vet

Oasmia has signed its license agreement for its sales rights in the United States and Canada, Europe and

Japan.

North America

In July 2009, Oasmia had signed a license agreement to market its product Paccal® Vet with Abbott

Laboratories in the North American market. The agreement contains an initial contract term of 15 years

from the date on which Oasmia obtains the marketing license. Under this agreement, Abbott Laboratories

will buy the product from Oasmia at a pre-determined price.

The snapshots of the license agreement with Abbott Laboratories are given below:

Licensing of sales rights in the US and Canada for Paccal® Vet

Initial contract term of 15 years

Total payment of US$ 19.0mn from the marketing partners

o US$ 5.0mn received in up-front payment

o US$ 5.0mn to be received on market authorization

o US$ 9.0mn to be realized when sales commence

Europe

In 2008, Oasmia signed an agreement with a Finnish company, Orion Pharmaceuticals to market its product

in the European zone. The initial contract term was 15 years with a total payment of € 10.25mn.

18 27 June 2011



The snapshots of the license agreement with Orion Corporation are given below:

Licensing of sales rights in Europe for Paccal® Vet


Total payment of € 10.25mn

o € 4.0mn received in up-front payment

o € 2.0mn to be received on market authorization

o € 4.25mn to be realized when sales commence

Orion Corporation will bear all the expenses for sales and marketing

Japan

Oasmia has also signed an agreement with Nippon Zanyaku Kogyo in Japan for licensing the sales rights of

Paccal® Vet there.

The snapshots of the contract are given below:

Licensing of sales rights in Japan for Paccal® Vet


Total payment on the achievement of a target of € 3.25mn

Nippon Zanyaku Kogyo responsible for clinical development

License Agreement: Paclical®

The only agreement that Oasmia has signed so far for Paclical® is with Orion Corporation for selling the

human ovarian cancer drug in the Nordic region. Oasmia has signed the agreement in 2007 after agreeing

on a payment of € 4mn, of which Oasmia has received € 2mn as down payment.

The snapshots of the license agreement of Oasmia related to Paclical® are given below:

Licensing the sales rights of Paclical® in the Nordic countries

Total payment of € 4mn

o € 2mn received in up-front payment

o € 2mn to be realized on market authorization

Orion Corporation will bear all the expenses for sales and marketing

Oasmia has recently expanded their portfolio by signing a license agreement with

Madison Pharma to penetrate the oncology market of Israel and Turkey for their

upcoming ovarian drug candidate Paclical®. The company received an amount of

€400,000 in upfront and milestone payment and additional royalties on sales in those

regions. Medison Pharma receives exclusive sales and marketing rights.

19 27 June 2011



3. Strategy and Business Model

Oasmia is developing a new generation drug candidate by using its unique and innovative XR-17 technology

on the oncology platform. In addition to the strategic focus in the area of oncology, the Company is also

conducting and following up on basic research in other therapeutic areas such as infection, asthma and

neurology.

Business Concept

Oasmia’s main business mission is to develop pharmaceuticals that will improve the treatment of severe

diseases in the oncology, infection, asthma and neurological areas. The Company is aware of the fact that it

requires a lot of time to penetrate the different product markets and that is why, currently, the Company is

more focused on the oncology market. In order to access various therapeutic markets across the globe, the

Company has entered into and established marketing contracts with various renowned companies.

Strategy

The main strategy of Oasmia is to extend the life cycle of the existing drug candidate by developing new

formulations and using new technologies that will improve the properties of the drug or broaden its area of

use. Oasmia’s production strategy for large scale manufacturing involves the use of a contract

manufacturer. Oasmia Pharmaceutical AB has closed an agreement with Baxter Oncology for contract

manufacturing. The agreement involves commercial volume manufacturing of the tested products Paclical®

and Paccal® Vet for the global market.

Business Model: Oasmia Pharmaceutical

Source: Annual Report

From Oasmia’s business model, we can ascertain that the Company has set its main focus on research and

development. To execute the envisaged large scale production, the Company will enhance its capacity

through a contract manufacturer.

The Company will also sign selling and distribution agreements with global pharmaceutical companies to

penetrate different pharmaceutical markets across the globe in the near future for its product in the

pipeline.

Goals and Objectives

Oasmia's objective is to improve and facilitate the treatment of severe diseases in order to contribute to

improving the quality of life for both humans and animals.

Global Pharmaceutical

Contract Manufacturing

Oasmia

Research and Development Large Scale Manufacturing Sales and Distribution

Research and Development Large Scale Manufacturing Sales and Distribution

Customers in the Human market

Customers in the veterinary market


AB has closed an

agreement with Baxter

Oncology for contract

manufacturing.

20 27 June 2011



Both Paccal® Vet and

Paclical® are soluble in

water and do not need

Cremophor EL etc. as

solvents, which have

hypersensitive side effects

4. Investment Positives: Why Oasmia?

Oasmia Pharmaceutical AB develops a new generation of drugs within human and veterinary oncology.

Product development is based on in-house research in the area of nanotechnology and the Company

expects to obtain many new patents. In addition to strategic investments in research in the field of

oncology, Oasmia conducts research in the areas of infection, asthma and neurology.

Oasmia Pharmaceutical is a very good pick for any investor with a short-term as well as a long-term

outlook. This is because the two upcoming drugs of Oasmia, Paccal® Vet and Paclical® are expected to be

launched in the market within 18 months. This will surely enhance the value of Oasmia in the near term.

We expect that the initial revenue generator of Oasmia will come from the veterinary drug called Paccal®

Vet. This is because the veterinary market in US, Europe and Japan is very lucrative and also less

competitive. There are currently approximately 140mn dogs in the USA, EU and Japan together. The

number of dogs and cats is growing much faster than the number of inhabitants in these countries. Just as

in the case of humans, the frequency of cancer in dogs increases with age. An estimated 40% to 50% of

dogs older than 8 years suffer from cancer. But the real revenue driver of Oasmia will come from the

human Oncology market after the introduction of Paclical® -- which is currently in the phase 3 trials -- for

ovarian cancer patients and is expected to be in the market by 2012 -2013.

An investor of a pharmaceutical company has to be somewhat different from the investor in other sectors,

and this is because apart from many aspects of the financial domain, there are other important facets

which are also to be considered by the investor. Some of these important non-financial factors are given

below:

Product Potential - We feel that the company has one of the most advanced products in the oncology

therapeutic platform. The candidates, both Paccal® Vet and Paclical® are new formulations of a well-known

active substance called Paclitaxel, a natural product which induces anti-tumor activity. But it is also true

that Paclitaxel is insoluble in water and that is why most of the pharmaceutical companies in the oncology

market use special kinds of solvents such as Cremophor EL (polyethoxylated castor oil) and ethanol to make

Paclitaxel soluble in water. But the new products of Oasmia, both Paccal® Vet and Paclical® are soluble in

water and do not need Cremophor EL etc. as solvents, which have hypersensitive side effects. Oasmia

makes this possible through its innovative and advanced technology called XR-17.

Innovative Technology - The Company is using a very advanced technology called XR-17 which is a new

form of semi-synthetic retinoid that is used as an excipient with active compounds. This technology helps

Paclical® to dissolve easily in water, without the need for any kind of special solvents.

21 27 June 2011



Oasmia has recently

signed a selling and

distribution agreement

with Medison Pharma for

Paclical®

Marketing Partners - The Company has also signed marketing deals with some of the big players such as

Abbott Laboratories, Orion Corporation and Nippon Zanyaku Kogyo to sell their products in USA, Europe

and Japan. The Company has also signed a deal with Baxter for large-scale manufacturing. Recently Oasmia

has signed a selling and distribution agreement with Medison Pharma of Israel to sell their upcoming

Ovarian cancer drug candidate, Paclical® in Israel and Turkey.

The company is also discussing with different big players in India and Middle East as their marketing

partners to sell their products in the Oncology therapeutic market of these regions. However, since those

discussions are not yet finalized, on a conservative basis, we have not factored this in our valuation

exercise.

From the financial point of view, we feel that Oasmia will be able to capture at least 15% of the veterinary

as well as the Human Nano-Taxane market by 2015. We feel that the two upcoming drug candidates,

Paccal® Vet and Paclical® can surely become block-buster drugs like Abraxane® (a breast cancer drug of

Abraxis Bioscience, the company acquired by Celgene, in October 2010, at a price of US$ 2.9bn).

After the introduction of both the new drug candidate of Oasmia, our estimation is that the revenue

generated from royalty along with the growing market share will increase the value per share of Oasmia,

from SEK 14 to SEK 64, with an upside potential of 422.4%.

So, we feel that there is a high probability of earning a substantial capital gain from this Company even if

the investor has a short-term target, because both the drug candidate will very soon hit the market. There

is also a prudent opportunity for the long-term investor, as well, because the Company has a very strong

product pipeline with an ambition to diversify itself on to different therapeutic platforms.

22 27 June 2011



5. SWOT Analysis

Strengths

The Company’s technology, XR-17, a new nanotechnology method, eases the risk/limitation of drugs

used in standard chemotherapeutic treatment

The Company’s product portfolio is based on the Paclitaxel compound, which is the most effective and

common chemotherapeutic cancer drug and possesses huge potential in the oncology

pharmaceuticals market

Strategic alliances are with the leading marketing companies in the U.S, Europe and Japan

Agreement with Baxter Oncology, a leading player in the oncology market for the commercial

production of Oasmia's candidates, Paccal® Vet and Paclical®

Modern and fully equipped production plant for chemical synthesis and pharmaceutical

manufacturing

Presence of a strong internal R&D department/team

Limited competition for the Company’s products

Experienced management team

Weaknesses

The Company’s drug candidates are still not in the market, limiting the awareness about the Company

Products are based on the same technology, offering limited diversification

All but two of the Company’s products still under clinical trials

Opportunities

Increase in cancer-related ailments in both humans and veterinary markets

Two of the company’s high potential drug candidate Paccal® Vet and Paclical® are likely to get an

approval and hit the market in the near future

The Company’s products, which are based on the latest technology (XR-17) are expected to grab a

handsome share in the cytostatic market

Increase in the number of pet/companion dogs in target markets such as U.S and Europe augurs well

for the Company’s veterinary candidate Paccal® Vet, where it has no competition as such

The products which are in the clinical trial phase may add to the growth in the long run

Big market in India and also in the Middle East along with Israel and Turkey.

Threats

The development of new technologies and drugs by competitor companies may lead to a decreasing

demand for the Company’s products

High health awareness in target markets leading to a decrease in cancer cases in the future

The pricing of the products may get affected by a decrease in health spending and regulatory

pressures

Delays in approvals may have an impact on the future revenue generation capacity as the marketing

contracts of the Company with the partners may get affected

23 27 June 2011



6. Investment Concerns

High R&D Expenditure

The Company has to incur high R&D expenditure in the development of new products/drugs. These are at

various stages of development and testing, the outcome of which is uncertain and might lead to

unfavorable results.

Dependence on Paccal® Vet and Paclical®

A large part of Oasmia’s estimated asset value is attributable to the development, market approval and

commercialization of Paccal® Vet and Paclical®. This kind of more or less exclusive dependence could result

in a risk, if development and commercialization of these two product candidates do not go as planned.

Ongoing Developments in the Field of Oncology

The oncology market is witnessing constant developments and new research being undertaken which may

have an effect on the Company, if some competitors come up with a better product and a new technology

in the future.

Availability of Finance

The Company might face a situation of a lack of funding for the development of new products in the future,

due to the presence of adverse market conditions.

Government Legislation

The drugs developed by the pharmaceutical companies have to go through strict trials and regulatory

compliances/permits, requirements etc. of various regulatory bodies/agencies, before being granted the

necessary approvals. This may have a bearing on the Company’s results.

24 27 June 2011



7. Financial Performance: Royalty, the Major Driver of Revenue

Oasmia’s Revenue and Net Profit Trend

Source: Ecofin Research and Company Reports

Oasmia witnessed net sales in 2008-09 amounting to SEK 79mn consisting mostly of revenue from license

agreements. The total revenue in the fiscal year 2009-10 witnessed a massive decline, mainly due to the

reduction of imported pharmaceuticals from its subsidiary Qdoxx Pharma AB, which Company’s main

operation was to import pharmaceuticals from other European Union countries, for sale in Sweden. The

basis for such a business was price differences within EU, but due to changes in the currency values, this

business was terminated and which resulted in a substantial fall of revenue in the fiscal year 2009-10. Since

in current fiscal year, Oasmia has signed a license agreement with Medison Pharma to sell their phase 3

candidate Paclical® in the oncology market of Israel and Turkey, we expect the revenue of Oasmia to reach

SEK 42mn at the end of 2011 out which SEK 3.6mn was already received by the company as an upfront

payment from Medison Pharma. We believe that the revenue will jump to SEK 386mn in 2012, due to the

launch of Paccal® Vet in the veterinary oncology market with an expected market share of 4%. But the real

surge in revenue will be experienced by the Company, after the introduction of Paclical® and this will be

due to the increase in the royalty streams from both the Veterinary and Human Medicine candidates, with

a royalty level of 40% from their licensing partners. By 2013 to 2015, we expect the total revenue of

Oasmia to reach SEK 1.54bn to SEK 4.37bn respectively, with an annual CAGR of about 68%.

We are also looking forward to the initial response of the product in the market. We expect Oasmia

Paclical®’s phase 3 results to come in the fiscal year 2012-13 and these will be very important for the

company and also for the investors to understand the expected potentiality of the upcoming drug

candidate.

79 31 141 42 386

1,544

2,980

4,374

(7) (17) 6 (74) 90

673

1,308

1,924

(500)

0

500

1,000

1,500

2,000

2,500

0

1,000

2,000

3,000

4,000

5,000

2008 2009 2010 2011 2012 2013 2014 2015

Pro

fit

(SEK

' mn

)

Re

ven

ue

(SE

K'm

n)

Revenue Net Profit

Revenue is expected to

jump to SEK 386mn in

2012, due to the launch of

Paccal® Vet in the

veterinary oncology

market with an expected

market share of 4%

25 27 June 2011



Profitability

Return

Source: Ecofin Research and Company Reports

We expect that the Company’s gross profit margin will maintain a consistent growth due to the high

expected revenue from Royalty, after the launch of the veterinary drug candidate Paccal® Vet. Although

the COGS will also increase along with the top line, the growth of COGS is expected to be lower than the

growth of revenue, leading to a high gross profit margin in the coming years.

The EBITDA margin is expected to maintain an upward trend from 44.1% in 2012 to 61% in 2015, mainly

because of an anticipated fall in capitalized development costs, which will reduce from SEK 108mn in 2012

to SEK 17mn in 2015, after the introduction of Paccal® Vet in 2011-12.

The EBIT margin will increase from 44.1% in 2012 to 61.1% in 2015 along with an increase in net profit

margin from 23.4% in 2012 to 44% in 2015, due to a consistent decrease in the financial expenses, from

2012 to 2015.

The total assets of the Company will reach a level of SEK 4.11bn in 2015, due to an expected increase in

inventories from SEK 116mn in 2012 to SEK 1.31bn. The equity level of the Company is also expected to

increase from SEK 369mn in 2012 to SEK 3.95bn in 2015, with an increase in revenue in the coming years.

This will lead to an increase in ‘return on assets’ from 14.2% in 2012 to 46.8% in 2015, along with an

increase in ‘Return on Equity’, from 24.5% in 2012 to 55.7% in 2015.

-350

-250

-150

-50

50

150

2008 2009 2010 2011 2012 2013 2014 2015

%

Gross Profit Margin EBITDA Margin EBIT Margin Net Profit Margin

-50

0

50

100

150

200

2008 2009 2010 2011 2012 2013 2014 2015

%

Return on Assets Return on Capital Employed Return on Equity

26 27 June 2011



8. Valuation and Recommendation

We initiate the coverage of Oasmia Pharmaceutical with a BUY recommendation. Based on the discounted

cash flow, we have arrived at a target price of SEK 64, with an upside potential of 422.4%. Given that

Oasmia is currently not generating significant revenue, apart from an upfront payment from Medison

Pharma of Israel amounting to SEK 3.6mn (€ 0.4mn) in H1 2011, we anticipate that the Company will make

profit from H1 2012, after the introduction of Paccal® Vet.

We consider our DCF method as the most appropriate valuation method to derive the enterprise value of

Oasmia (which is SEK 3.4bn).

Discounted Cash Flow

In our discounted cash flow method, we have considered only the prospective revenue from the two

upcoming drug candidates Paccal® Vet and Paclical®, and we have not considered the other drugs in the

pipeline because all those other drugs are currently in the pre-clinical stage. As the first drug to hit the

market is Paccal® Vet, we expect the initial market share for the animal drug to be 4% in 2012, because the

competition is estimated to be less in the animal oncology market. But the real growth of Oasmia will start

when both the drugs hit the market within the coming 18 months, and that can lead Oasmia to a market

share of 15%, in both the animal and human oncology markets, by 2015.

Since the Swedish benchmark interest rate is 1.8% and the equity risk premium is 5, using the CAPM model

the cost of equity of Oasmia is arrived as 6.8%. We considered a post-tax cost of debt as 4.4% which leads

to a WACC of 6.5%. To derive our value we have considered the terminal growth rate as 3% and the

company’s Beta as 1 (One) because Oasmia is an upcoming R & D company.

We think that the new and upcoming news regarding Oasmia will keep the investment interest active.

Thus, there will be a series of announcements in the market for Paccal® vet, followed by the news

regarding Paclical® in the upcoming months which can create a positive sentiment among the investors.

we have arrived at a

target price of SEK 64,

with an upside potential

of 422.4%.

27 27 June 2011



Sensitivity Analysis

WACC

GR

OW

TH

4.50% 5.50% 6.50% 7.50% 8.50%

1% 64 56 50 47 44

2% 79 64 56 50 47

3% 115 79 64 56 50

4% 292 115 79 64 56

5% -249 292 115 79 64

The results of the sensitivity analysis as regards two important inputs for our DCF valuation model, which are

the weighted Average Cost of Capital and the Perpetual Growth Rate, used in computing the terminal value,

are shown above.

Snapshots of the Financial Statements

Income Statement

(In SEK’ mn)

Income Statement 2008 2009 2010 2011 2012 2013 2014 2015

Revenue 79 31 141 42 386 1,544 2,980 4,374

Cost of Goods Sold (57) (19) (71) (5) (54) (232) (536) (875)

Gross Profit 23 12 71 37 332 1,313 2,444 3,499

SG&A (27) (23) (58) (99) (162) (344) (610) (830)

EBITDA (4) (11) 13 (62) 170 969 1,834 2,669

Depreciation and Amortization (3) (4) (3) (31) (41) (51) (57) (60)

EBIT (7) (15) 9 (93) 129 918 1,777 2,609

Net Interest Income 0 (2) (1) (3) (7) (6) (2) 1

Profit Before Tax (7) (17) 9 (100) 123 913 1,775 2,610

Tax 0 0 (2) 26 (32) (240) (467) (686)

Net Profit (7) (17) 6 (74) 90 673 1,308 1,924

Balance Sheet

(In SEK’ mn)

Balance Sheet 2008 2009 2010 2011 2012 2013 2014 2015

Net Property, Plant and Equipment 20 21 22 23 24 24 23 22

Capitalized Development Cost 60 141 248 328 399 440 428 391

Other Intangible Assets 8 8 8 8 8 8 8 8

Financial Assets 0 0 0 0 0 0 0 0

Inventories 3 0 0 11 116 463 894 1,312

Trade Receivables 3 2 0 3 27 108 208 306

Derivative Instruments 0 0 0 0 0 0 0 0

Prepaid Expenses and Accrued Income 2 2 11 3 31 124 238 350

Liquid Assets 1 5 41 14 31 74 657 1,724

Total Assets 97 180 331 391 636 1,241 2,457 4,113

Liabilities to Credit Institutions 7 4 5 5 250 150 5 5

Short-term Borrowings 19 11 10 100 0 0 0 0

Trade Payables 3 2 8 1 6 26 59 96

Other Current Liabilities 2 1 4 0 3 15 34 56

Accrued Expenses and Pre-paid Income 4 4 5 6 8 9 9 9

Other Non-current Liabilities 0 15 0 0 0 0 0 0

Deferred Tax Liabilities 0 0 0 0 0 0 0 0

Total Liabilities 36 38 32 112 267 199 107 166

Minority Interest 0 0 0 0 0 0 0 0

Share Holders’ Equity 61 142 298 279 369 1,042 2,350 3,946

Total Liabilities & Share Holder's Equity 97 180 331 391 636 1,241 2,457 4,113

28 27 June 2011



Cash Flow Statement

(In SEK’ mn)

Cash Flow Statement 2008 2009 2010 2011 2012 2013 2014 2015

Net Income Before MI (Reported) (7) (15) 9 (93) 129 918 1,777 2,609

Depreciation and Amortization 3 4 3 31 41 51 57 60

Change in Working Capital 18 2 3 (17) (146) (489) (593) (568)

Other Adjustments, Net 0 (1) (3) 23 (39) (246) (469) (685)

Cash Flow from Operations 14 (11) 13 (59) (15) 234 772 1,415

Capitalized Development Cost (36) (82) (107) (108) (108) (86) (39) (17)

Capital Expenditure (3) (4) (5) (5) (5) (5) (5) (5)

Other Investing Cash Flow (0) 0 0 0 0 0 0 0

Cash Flow from Investments (40) (85) (112) (113) (113) (91) (44) (22)

Liabilities to Financial Institution 2 (3) 1 0 245 (100) (145) 0

Loans 14 20 (1) 90 (100) 0 0 0

Share Capital 0 69 150 55 0 0 0 0

Dividend and Others 0 15 (15) 0 0 0 0 (327)

Cash Flow from Financing Activities 16 101 135 145 145 (100) (145) (327)

Net Change in Cash and Equivalents (9) 4 36 (27) 18 43 583 1,066

Key Ratios

Key Ratios 2008 2009 2010 2011 2012 2013 2014 2015

Per Share Data (SEK)

Shares Outstanding (mn) 34 36 50 55 55 55 55 55

EPS -0.21 -0.48 0.13 -1.33 1.63 12.13 23.59 34.68

Book Value per Share (O/S Shares) 1.81 3.96 5.93 5.03 6.66 18.78 42.37 71.15

Valuation Ratios (x)

EV/Revenue 10.0x 25.7x 5.6x 18.9x 2.0x 0.5x 0.3x 0.2x

EV/EBITDA NM NM 61.0x NM 4.6x 0.8x 0.4x 0.3x

P/E NA NA 107.1x NA 8.4x 1.1x 0.6x 0.4x

Performance Ratios (%)

Return on Assets (7.3) (9.5) 2.0 (18.9) 14.2 54.2 53.2 46.8

Return on Capital Employed (11.6) (10.9) 5.0 (24.8) 32.4 182.2 125.6 81.9

Return on Equity (11.6) (12.0) 2.2 (26.5) 24.5 64.6 55.7 48.7

Gross Profit Margin 28.7 38.7 50.0 89.0 86.0 85.0 82.0 80.0

EBITDA Margin (5.0) (36.9) 9.2 (148.9) 44.1 62.7 61.5 61.0

EBIT Margin (9.0) (48.7) 6.7 (223.4) 33.4 59.5 59.6 59.6

Net Profit Margin (9.0) (55.5) 4.6 (193.7) 23.4 43.6 43.9 44.0

ecofin coverage oasmia pharma 270611

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