new oasmia pharmaceutical ab oasmia pharmaceutical ab … · 2016. 3. 21. · oasmia pharmaceutical...

Market Data

Fiscal Year April

Industry Biotech

Market Cap $108.7M

Price/Earnings (ttm) N/A

Price/Book (mrq) 2.0x

Price/Sales (ttm) 143.2x

Insider Ownership 52.2%

ADS Outstanding 35.2M

Equity Float 16.8M

Avg. Volume (3 mo.) 7,574 As of March 18, 2016

Income Statement Snapshot

TTM

Revenue $0.8M

Net Loss ($16.8M)

Balance Sheet Snapshot LFY

Cash* $19.0M

Debt $10.4M

*Adjusted for $9.6 million in net proceeds from 10/28/15 equity offering

Company Website www.oasmia.com/

March 21, 2016 Target Price: $6.87 Recent Price: $3.09

Oasmia Pharmaceutical AB (NASDAQ: OASM, NASDAQ Stockholm: OASM.ST, Frankfurt: OMAX.GR)

Company Overview

Oasmia Pharmaceutical AB (“Oasmia,” “OASM,” or the “Company) develops new

cancer drugs for use in humans and animals. The Company’s technology is a drug-

delivery system that, in comparison with current alternatives, improve care, reduce

side-effects, and reduce patient treatment times. OASM’s lead drug Paclical/Apealea

is a chemotherapy drug that demonstrates equal efficacy to chemotherapy drugs

Taxol and Abraxane while providing a superior risk profile. Paclical/Apealea has

completed a successful phase 3 clinical trial. Paclical has been launched in Russia,

and is expected to receive European approval in 2H16 and U.S. approval in 2017.

Valuation

Based on a NPV analysis, we are valuing OASM at $6.87 per ADS.

Investment Highlights

XR-17 is a novel technology platform applicable across a wide variety of APIs

regardless of therapeutic area

Successful phase 3 trial completed comparing Paclical, in combination with

carboplatin, to Taxol

Taxol peaked at $1.6 billion in revenue before becoming generic and is approved

for a dozen cancer indications

Pharmacokinetic study shows that Paclical and Abraxane have nearly identical

concentration curves of both total and unbound paclitaxel

Paclical does not require additional chemicals to improve its solvency and is

more cost effective than Abraxane

Paclical is expected to be approved in the EU in 2H16, and in the U.S. in 2017

OASM received market approval in Russia and CIS in April 2015

Paclical has completed a study showing it to be bioequivalent to Abraxane;

OASM is currently finalizing a study comparing treatment regimens of Paclical

vs. Abraxane in metastatic breast cancer

OASM’s Docecal, which is based on chemotherapy API Docetaxel, has initiated

two in-man studies

Doxophos is based on doxorubicin, the active ingredient in Doxil; Doxil supply

shortages create market need and potential near-term revenue in Russia

Launched Paccal Vet-CA1 in July 2014 for mammary and squamous cell

carcinoma; potential near-term revenue

Doxophos Vet is in a phase 2 trial to treat lymphoma in dogs

OAS-19 combines two different chemotherapies in a single dose

$10.4 million in gross proceeds from U.S. share offering provides funds to

advance the commercialization of Paclical and other clinical trial programs

OASM has patent protection until 2028 and onwards

http://www.oasmia.com/

Investment Highlights

XR-17 is a novel technology platform applicable across a wide variety of APIs regardless of

therapeutic area. XR-17 is a novel, broadly applicable technology platform. XR-17 can encapsulate

individual APIs along with combining multiple APIs with different solubility profiles. This is evidenced by

the five drug candidates (in three different APIs) that the Company is developing to treat cancer in both

humans and animals.

OASM’s three candidates make up approximately 80% of the standard of care chemotherapy treatments for

the most common cancer types. Additional indications and new drugs built around other APIs are

potentially on the horizon.

XR-17 is a nanotechnology platform, based on a Vitamin A derivate, that improves drug solubility without

adding toxic solvents. Drugs that are not water soluble cannot be easily delivered through the bloodstream

to targeted tissues. Essentially, XR-17 takes APIs that are water-insoluble and makes them water-soluble,

without adding additional toxicity. This leads to a number of advantages over competing drugs, including:

- Higher drug doses

- Shorter infusion times

- No pre-medication

- Lower costs, both in drug production and clinic costs

The Company’s formulation may result in improved safety, efficacy, and ease of use as compared to

existing drugs. Nanoparticle drug delivery in oncology has been validated, with an example of this in

successful chemotherapy drug Abraxane.

Successful phase 3 trial completed comparing Paclical, in combination with carboplatin, to Taxol.

Phase 3 trials have been completed which compared Paclical, in combination with carboplatin, to Taxol in

epithelial ovarian cancer. According to the National Cancer Institute, 185,000 women have ovarian cancer

in the U.S. It is estimated that 22,280 women will develop ovarian cancer in 2016 and 14,240 women will

die from ovarian cancer in 2016 in the U.S. (source: American Cancer Society). Epithelial ovarian cancer is

the most aggressive sub-type, and accounts for 85%-90% of all U.S. ovarian cancers. Current therapies

offer limited long-term efficacy, and there are high rates of drug resistance. The U.S. market size for

ovarian cancer is estimated at $366 million.

The phase 3 trial showed, at a minimum, at least equal efficacy when compared to Taxol, and showed an

improved safety and tolerability profile as compared to Taxol. The solvent Cremophor EL is used to deliver

Taxol. However, the toxicity of Cremophor EL limits the dose of Taxol that can be delivered.

As the following charts indicate, Paclical shows a longer progression free survival (PFS) as compared to

patients receiving Taxol (as defined by the median time to event):

Additionally, patients with more frequent CT (every 3rd month during follow-up), showed even more

improvement in the median PFS, with Paclical having a median PFS of 12.0 months, as compared to 10.2

months for Taxol (p=0.0357). The same pattern was seen when using the CA 125 test for measurement,

with Paclical having a median PFS of 9.1 months, as compared to 8.7 months of Taxol (p=0.1324).

Safety profiles between Paclical and Taxol (aside from minor differences in neutropenia and peripheral

sensory neuropathy) are similar. Paclical’s risk/benefit profile is superior due to the fact that it does not

require pre-medication; Paclical also gives patients a higher dose of paclitaxel (250mg/m2 of Paclical vs.

175 mg/m2 of Taxol):

Hypersensitivity reactions were the same for patients with Paclical without pre-medication as compared to

Taxol with pre-medication. Pre-medication (steroids and antihistamines) is required to reduce the toxicity

of the Taxol/Cremophor EL combination. This is critical, as hypersensitivity reactions to chemotherapy

represent a serious complication. Overall, Paclical met its primary endpoint of progression-free survival,

while showing a positive risk/benefit profile as compared to Taxol.

Taxol peaked at $1.6 billion in revenue before becoming generic, and is approved for a dozen cancer

indications. Paclical has a number of advantages over Taxol, including a shorter infusion time (1 hour for

Paclical vs. 3-72 hours for Taxol), a higher dose (250 mg/m2 of Paclical vs. 175 mg/m2 of Taxol), and no

need for premedication to reduce the incidence of hypersensitivity. Taxol is currently approved for a dozen

cancer indications; we believe that Paclical has the potential to be approved for many of these same cancer

indications, giving the drug the potential to build a platform across a broad range of cancers.

Taxol peaked at $1.6 billion in annual sales before becoming generic. Taxol and Abraxane (paclitaxel is the

API in both) currently generate $1.7 billion in combined annual sales.

Pharmacokinetic study shows that Paclical and Abraxane have nearly identical concentration curves

of both total and unbound paclitaxel. Abraxane is currently the highest grossing paclitaxel drug on the

market. Analysts are projecting Abraxane’s revenue at approximately $1.1 billion in 2016 and over $1.3

billion in 2017. Abraxane received approval for metastatic breast cancer in 2005 and added lung cancer in

2012 and pancreatic cancer in 2013. A recent pharmacokinetic study, which used intravenous infusion of

260 mg/m2 for both drugs, showed that Paclical and Abraxane have nearly identical concentration curves of

both total and unbound paclitaxel. Unbound paclitaxel is what gives the drug its effect in the clinic. The

study was in 28 women with metastatic breast cancer. The nearly identical concentration curves are

indicated by the nearly identical overlap in the charts below:

The nearly identical concentration curves imply that the efficacy of the two drugs are equal. There were no

serious adverse events; 11 grade 3 adverse events were reported for Paclical and 10 grade 3 adverse events

were reported for Abraxane.

Paclical does not require additional chemicals to improve its solvency and is more cost effective than

Abraxane. Abraxane is paciltaxel suspended in human albumin. Paclical does not contain human albumin.

Paclical is projected to be more cost effective than Abraxane. Paclical is expected to sell for approximately

$1,000 per vial in the U.S. and $300 per vial in Europe. The margins in Europe are estimated to be 15%,

and will likely be higher in the U.S. This could be crucial for gaining market share, particularly when

considering skyrocketing health costs.

Paclical is expected to be approved in the EU in 2H16, and in the U.S. in 2017. We expect the

Company to commence commercialization efforts shortly after approval. OASM has submitted a Market

Authorisation Application in Europe. OASM has rebranded Paclical in Europe with the name Apealea.

Paclical will be approved through the 505(b)(2) regulatory pathway in the U.S. The 505(b)(2) pathway

allows for an NDA in which some of the information for the NDA is not provided by the applicant. OASM

has also received an orphan designation in the U.S. and EU for epithelial ovarian cancer. Due to this,

OASM will have seven years of market exclusivity within the U.S. and ten years of market exclusivity

within Europe.

OASM is following patients in the phase 3 trial to measure overall survival, and results from this are

expected in 1H16. This data is expected to provide the information needed for full global approval of

Paclical. Abraxis, the original inventor/producer of Abraxane, shows a successful commercialization

roadmap that can be used by a smaller biotech company like Oasmia. The following chart shows the

increase in sales from Abraxane since its approval in 2005. Additional approvals for lung cancer in 2012

and pancreatic cancer in 2013 greatly increased the revenue received from Abraxane:

OASM will use a direct commercialization strategy similar to that employed by Abraxis to market

Abraxane in 2005. OASM also anticipates a direct commercialization strategy in some areas in the EU.

OASM owns the global rights to Paclical, excluding Israel, Turkey, Russia, the CIS, Ukraine, Georgia, and

Turkmenistan. This gives OASM the ability, if it chooses, to obtain full revenue and profits from the

world’s largest drug markets.

OASM received market approval in Russia and CIS in April 2015. Paclical will be marketed by

Pharmasyntez in Russia. So far, the end user sales value for orders in Russia have totaled $9 million. These

orders happened within the first week of approval. The chemotherapy market in Russia totals over $2

billion annually, and is growing at 36% per year. Additionally, cancer death rates in Russia are higher than

in other developed countries, with Russian citizens having a cancer death rate of 60%, as compared to 40%

in the United Kingdom and 33% in the United States. This demonstrates the significant need for improved

chemotherapy treatment in Russia.

Paclical has completed a study showing it to be bioequivalent to Abraxane; OASM is currently

finalizing a study comparing treatment regimens of Paclical vs. Abraxane in metastatic breast

cancer. Breast cancer is one of the world’s most prevalent and deadly cancers. The World Health

Organization (WHO) estimates that 1.38 million women are diagnosed with breast cancer each year, and

458,000 women die from the disease annually. OASM has completed a phase I, dose-finding study of

weekly administration in metastatic breast cancer patients.

Abraxane was originally approved for use in metastatic breast cancer. As stated above, Paclical was shown

to be bioequivalent in metastatic breast cancer patients. In 2011 (the last year metastatic breast cancer was

Abraxane’s sole indication), Abraxane generated $426 million in sales. This indicates the potential for

strong sales if Paclical is approved for metastatic breast cancer.

OASM’s Docecal, which is based on chemotherapy API Docetaxel, has initiated two in-man studies.

OASM is expected to commence a First Patient in Study for Docecal in 1Q16. Following this, OASM is

expected to begin a Phase I pharmacokinetic study comparing Docecal to Taxotere in 2Q16. Docetaxel is

the most active ingredient in chemotherapy treatment Taxotere, which is marketed by Sanofi-Aventis.

Taxotere (now generic) earned $2.8 billion in revenue for Sanofi-Aventis in 2010 (representing its final

year before patent expiration). Taxotere is used to treat prostate cancer, breast cancer, lung cancer, gastric

cancer, and head & neck cancer.

Advantages of Docecal as compared to Taxotere include that it is solvent free, requires no pre medication

to prevent hypersensitivity, and has a much better carrier to API ratio (Docecal - 2.25:1.00 vs. Taxotere –

26.00:1.00). This gives Docecal advantages over Taxotere. We believe that Docecal, relative to Taxotere,

will have less hypersensitivity, better uptake, shortened infusion times, and better long-term efficacy, due

to the ability to give higher doses of Docetaxel in Doecal. In vitro studies across six different cancer cell

lines showed that Docecal is as effective as Taxotere in inhibiting cell growth.

Much like with Paclical, Docecal has the potential to gain approval in the cancers that Taxotere is used for

(breast, prostate, lung, gastric, and head & neck cancer). This gives Docecal broad long-term potential.

OASM has worldwide rights for Docecal.

Doxophos is based on doxorubicin, the active ingredient in Doxil; Doxil supply shortages create

market need and potential near-term revenue in Russia. Doxorubicin is the API in Adriamycin, Caelyx,

and Doxil. Doxil had sales of $600 million in 2013. Doxorubicin has treated leukemia, Hodgkin’s

lymphoma, bladder cancer, stomach cancer, lung cancer, ovarian cancer, and thyroid cancer.

A global shortage of Doxil was created due to the closing of a plant which was Johnson and Johnson’s only

supplier of Doxil. Supply shortages for Doxil have existed since 2011, generating a strong need for new

chemotherapies based on the API doxorubicin. This need led to the Company applying for market approval

for Doxophos in Russia, and the Company expects approval by the end of 2016. Market approval would

earn the Company revenue from Doxophos in the short-term while Doxophos undergoes clinical trials for

U.S. and EU approval.

In other markets, the Company is currently preparing to commence a phase I clinical trial in Doxophos for

breast cancer. Prior to commencing this trial, OASM is waiting to evaluate safety data from using

Doxophos in a study in dogs. To date, no safety problems in dogs have been observed. We believe that

Doxophos could have utility in other cancers that are presently treated by Doxorubicin.

Launched Paccal Vet-CA1 in July 2014 for mammary and squamous cell carcinoma; potential near-

term revenue. Paccal Vet would be the first chemotherapy treatment for dogs on the market.

Chemotherapy treatment currently available for dogs are off-label uses of chemotherapy intended for

human use. OASM received conditional approval in the U.S. for Paccal Vet on February 7, 2014, for

mammary carcinoma and squamous cell carcinoma in dogs. These conditions were granted the Minor Use

and Minor Species designation in the U.S. This is similar to receiving an orphan drug designation in

humans. OASM believes that Paccal Vet can be on the market for five years, and extended through annual

renewals, until Paccal Vet generates the required data for full FDA approval. There is potential for near-

term sales from Paccal Vet.

OASM also plans to introduce a lower dose Paccal Vet that can be used to potentially access a wider

market of veterinarians. This lower dosage would be expected to carry less severe side effects, and thus

could be used across a wider variety of indications.

A phase 3 trial for Paccal Vet was initiated in 4Q14. The trial includes 165 dogs with mammary carcinoma

and 165 dogs with squamous-cell carcinoma. Successful results from this trial would likely lead to full

approval.

Previous studies in mammary cell carcinoma and squamous-cell carcinoma have shown an effect for Paccal

Vet. Overall, 10 dogs have been treated for mammary cell carcinoma, and six dogs showed a response to

treatment. In 18 dogs with squamous-cell carcinoma, six dogs showed the best overall response rate

(BORR) and two dogs had a prolonged stable disease.

50% of mammary carcinoma tumors are malignant, and this typically leads to death once the cancer has

metastasized. Early detection of squamous cell carcinoma is critical, and fewer than 20% metastasize.

The Company estimates that the total market for Paccal Vet-CA1 in the U.S., EU, and Japan is 900,000

dogs per year. If 100,000 dogs were treated in year five (price of $3,500-$4,000, market penetration of

about 11.1%) this would lead to annual sales of approximately $350-$400 million.

There are approximately 80 million dogs in the U.S., and 25% of these dogs will die of cancer. More dog

owners have been treating their dogs with medications. According to the American Pet Products

Association, 78% of U.S. dog owners treated their dogs with medications in 2010, as compared to 50% of

U.S. dog owners in 1998. These figures provide justification for the potential of Paccal Vet-CA1 to

possibly obtain 11% market share by year five.

Oasmia is launching its own platform and sales network to market Paccal Vet-CA1. Paccal Vet has been

licensed for sale in Japan, Russia, and the CIS. Paccal Vet-CA1 was previously marketed/distributed by

Zoetis, a global veterinary drug company.

Potential competition for Paccal Vet and Doxophos Vet include Palladia, made by Zoetis, Inc., Masivet,

made by AB Science S.A., and AT-004 and AT-005, made by Aratana Therapeutics, Inc. Off-label human

chemotherapy drugs could provide additional competition. Masivet, or Kinavet as it is named in the US

was withdrawn from the market in Dec 2015 due to awaiting for additional clinical results.

The Company is also running a study involving at least 50 dogs with mast cell tumors. The results of this

study are expected to provide the basis for a clinical trial in Europe. Mast cell tumors are common

malignant tumors in dogs.

Doxophos Vet is in a phase 2 trial to treat lymphoma in dogs. Lymphoma is one of the most common

cancers in dogs and occurs about 2 to 5 times more frequently in dogs then in people. Given this, the

market opportunity for lymphoma in dogs could be significant. Doxophos Vet is currently in a phase 2 trial

for lymphoma.

OAS-19 combines two different chemotherapies in a single dose. Combination therapies have become

more common in cancer. Chemotherapies are combined by taking into account different mechanisms of

action and different toxicity profiles. By combining two different chemotherapies, a more complete kill of

cancer cells occurs. Dosing two chemotherapies in a single infusion could decrease infusion times, the

number of visits to the clinic, and lower overall treatment costs. OAS-19 is currently in preclinical studies.

OASM owns the global rights to OAS-19.

$10.4 million in gross proceeds from U.S. share offering provides funds to advance the

commercialization of Paclical and other clinical trial programs. Proceeds from the capital raise are

allocated for the following:

- $4.3 million to fund new clinical trials and fulfill other regulatory requirements ($1.5 million for

animal, $2.5 million for human, $0.3 million for XR-17 pharmcokinetic)

- $1.0 million for Paccal Vet phase 3 trial for mammary carcinoma and squamous cell carcinoma –

this is estimated to get the trial to 15%-20% completion

- $0.5 million for Doxophos Vet to continue a phase 2 study to assess the response rate in treated

dogs for lymphoma – this is estimated to get the trial to 60% completion

- $1.5 million for phase 1 study for Docecal in breast cancer – this is estimated to get the trial to

50% completion

- $0.2 million for phase 1 study for Doxophos in breast cancer – this is estimated to get the trial to

15% completion

- $0.3 million for phase 1 study for Paclical in breast cancer – this is estimated to get the trial to

under 10% completion

- $2.0 million to fund production development, including validation batches

- $1.0 million for general corporate purposes

We estimate the Company’s monthly burn rate at $1.4 million, although this could vary depending on trial

requirements and sales in Russia.

OASM has patent protection until 2028. OASM owns 91 patents and has 22 patents pending worldwide.

Valuation Based on a NPV analysis, we are valuing OASM at $6.87 per ADS. Combined, all of the Company’s

therapies that are currently in clinical trials are based on APIs that make up approximately 80% of

chemotherapy usage. These chemotherapies generate significant sums of annual revenue across a variety of

different types of cancers. We believe that the Company’s therapies (Paclical, Docecal, and Doxophos)

could eventually gain approval for some of these indications. This gives the Company’s XR-17 technology

long-term platform potential. Some other points in our model:

- The majority of our value comes from Paclical, as this is already generating revenue in Russia and

has projected near-term approval in the U.S. and EU.

- We expect strong near-term sales in Russia from both Paclical and Doxophos. This should

generate strong cash flow for the Company which can then be used on other clinical programs

and/or to market its drugs in the larger U.S. and European markets.

- We are projecting 15% operating margins on sales. We expect the Company to directly sell the

majority of their therapies (outside of select worldwide licensing agreements).

- As the Company’s drugs are based on currently marketed APIs, the clinical trial timeline should

be shorter versus the majority of other biotech companies.

- Our model currently accounts for therapies in which the Company is currently participating in

human clinical trials. Further platform expansion is not taken into account, which provides further

long-term upside. This expansion could be in a number of areas, including using drugs such as

Paclical in different types of cancer, the development of its dual encapsulation technology, OAS-

19, or in APIs that are different from the chemotherapy APIs the Company is currently

developing.

- We believe that platform potential is significant, given the large amount of indications the

underlying APIs currently treat.

Risks

There is no guarantee that Paclical will be approved in the U.S. or EU for ovarian cancer. There is no

guarantee that the Company will achieve approval in the U.S. or EU for ovarian cancer. However, the

Company has completed a successful phase 3 trial in Paclical, and approval appears very likely.

OASM’s future capital needs are uncertain. OASM has a number of ongoing programs, including

programs built around three different APIs, clinical trial programs in both human and animal indications,

and a promising preclinical technology which combines two different chemotherapies together.

Additionally, the Company has begun making sales in Russia, and is likely to soon commence sales efforts

in the U.S. and EU. Future mid-term capital needs will be determined by how many/which programs the

Company enters into, and sales from Paclical and Paccal Vet.

There is no guarantee that the Company’s drugs will displace entrenched chemotherapies. Other

chemotherapies, such as Abraxane and Taxol, have already generated huge amounts of sales, and many

doctors are using these drugs. However, Paclical has a number of advantages over these therapies,

including cost, infusion times, and no pre-medication.

The Company may not be able to effectively build a direct sales force. OASM is building a direct sales

force to sell Paclical, and eventually other drugs, in the U.S. and EU. There is no guarantee this strategy

will be successful. However, Abraxis used this strategy with Abraxane and it was successful.

Paclical 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Epithelial ovarian cancer patients - U.S. 19,800 20,394 21,006 21,636 22,285 22,954 23,642 24,352 25,082 25,835 26,610 27,408 28,230

Penetration Rate - U.S. 0.0% 0.0% 5.0% 8.0% 11.0% 15.0% 19.0% 19.0% 19.0% 19.0% 19.0% 19.0% 19.0%

Epithelial ovarian cancer patients - Russia 12,035 12,396 12,768 13,151 13,545 13,952 14,370 14,802 15,246 15,703 16,174 16,659 17,159

Penetration Rate - Russia 16.0% 20.0% 24.0% 28.0% 28.0% 28.0% 28.0% 28.0% 28.0% 28.0% 28.0% 28.0% 28.0%

Epithelial ovarian cancer patients - ROW 90,300 93,009 95,799 98,673 101,633 104,682 107,823 111,058 114,389 117,821 121,356 124,996 128,746

Penetration Rate - ROW 0.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0%

Rev Per Patient - U.S. 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000

Rev Per Patient - Rus/ROW 7,800 7,800 7,800 7,800 7,800 7,800 7,800 7,800 7,800 7,800 7,800 7,800 7,800

Total Revenue 15,019,680 33,847,242 67,324,417 94,125,362 118,247,576 148,323,136 180,096,806 185,499,711 191,064,702 196,796,643 202,700,542 208,781,558 215,045,005

Operating Margin 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15%

Cash Flows 2,252,952 5,077,086 10,098,663 14,118,804 17,737,136 22,248,470 27,014,521 27,824,957 28,659,705 29,519,496 30,405,081 31,317,234 32,256,751

Discount Rate 8%

NPV $147.1M

Metastatic breast cancer patients - U.S. 75,590 77,858 80,193 82,599 85,077 87,630 90,258 92,966 95,755 98,628 101,587 104,634 107,773


Metatstatic breast cancer patients - ROW 150,000 154,500 159,135 163,909 168,826 173,891 179,108 184,481 190,016 195,716 201,587 207,635 213,864




Total Revenue 0 0 0 0 0 0 0 14,389,524 125,397,570 183,876,466 245,751,237 311,173,006 380,298,904


Cash Flows 0 0 0 0 0 0 0 2,158,429 18,809,636 27,581,470 36,862,686 46,675,951 57,044,836

Discount Rate 8%

NPV $78.7M

Prob of Success 70% $55.1M

Doxophos (ex. Russia) 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Breast cancer patients - U.S. 229,060 235,932 243,010 250,300 257,809 265,543 273,510 281,715 290,166 298,871 307,837 317,073 326,585


Breast cancer patients - ROW 400,000 412,000 424,360 437,091 450,204 463,710 477,621 491,950 506,708 521,909 537,567 553,694 570,304



Rev Per Patient - ROW 7,800 7,800 7,800 7,800 7,800 7,800 7,800 7,800 7,800 7,800 7,800 7,800 7,800

Total Revenue 0 0 0 0 0 0 0 19,186,032 408,736,034 641,029,846 886,893,424 1,210,346,412 1,552,408,375


Cash Flows 0 0 0 0 0 0 0 2,877,905 61,310,405 96,154,477 133,034,014 181,551,962 232,861,256

Discount Rate 8%

NPV $76.8M


Doxophos (Russia) 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Breast cancer patients - Russia 60,000 61,800 63,654 65,564 67,531 69,556 71,643 73,792 76,006 78,286 80,635 83,054 85,546

Penetration Rate - Russia 0.0% 5.0% 10.0% 15.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0%

Rev Per Patient - Rus 7,800 7,800 7,800 7,800 7,800 7,800 7,800 7,800 7,800 7,800 7,800 7,800 7,800

Total Revenue 0 24,102,000 49,650,120 76,709,435 105,347,625 108,508,053 111,763,295 115,116,194 118,569,680 122,126,770 125,790,573 129,564,290 133,451,219


Cash Flows 0 3,615,300 7,447,518 11,506,415 15,802,144 16,276,208 16,764,494 17,267,429 17,785,452 18,319,016 18,868,586 19,434,644 20,017,683

Discount Rate 8%

NPV $75.0M


Docecal 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Breast cancer patients - U.S. 229,060 235,932 243,010 250,300 257,809 265,543 273,510 281,715 290,166 298,871 307,837 317,073 326,585


Breast cancer patients - ROW 400,000 412,000 424,360 437,091 450,204 463,710 477,621 491,950 506,708 521,909 537,567 553,694 570,304




Total Revenue 0 0 0 0 0 0 0 19,186,032 408,736,034 641,029,846 886,893,424 1,210,346,412 1,552,408,375


Cash Flows 0 0 0 0 0 0 0 2,877,905 61,310,405 96,154,477 133,034,014 181,551,962 232,861,256

Discount Rate 8%

NPV $76.8M


Paccal Vet 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Mammary/squamous cell carcinoma dogs - U.S. 30,000 30,900 31,827 32,782 33,765 34,778 35,822 36,896 38,003 39,143 40,317 41,527 42,773

Penetration Rate - U.S. 0% 0.2% 0.5% 0.8% 3% 8% 13% 18% 25% 25% 25% 25% 25%

Mammary/squamous cell carcinoma dogs - ROW 400,000 412,000 424,360 437,091 450,204 463,710 477,621 491,950 506,708 521,909 537,567 553,694 570,304


Rev Per Dog - U.S. 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500

Rev Per Dog - Rus/ROW 1,365 1,365 1,365 1,365 1,365 1,365 1,365 1,365 1,365 1,365 1,365 1,365 1,365

Total Revenue 0 778,680 1,715,475 2,707,778 6,003,464 13,535,684 21,514,434 29,959,727 40,169,279 41,374,358 42,615,588 43,894,056 45,210,878


Cash Flows 0 116,802 257,321 406,167 900,520 2,030,353 3,227,165 4,493,959 6,025,392 6,206,154 6,392,338 6,584,108 6,781,632

Discount Rate 8%

NPV $20.5M


Mast cell dogs - U.S. 40,000 41,200 42,436 43,709 45,020 46,371 47,762 49,195 50,671 52,191 53,757 55,369 57,030

Penetration Rate - U.S. 0% 0% 0% 0% 1% 1% 2% 3% 5% 8% 10% 10% 10%

Mast cell dogs - ROW 400,000 412,000 424,360 437,091 450,204 463,710 477,621 491,950 506,708 521,909 537,567 553,694 570,304


Rev Per Dog - U.S. 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500

Rev Per Dog - Rus/ROW 1,365 1,365 1,365 1,365 1,365 1,365 1,365 1,365 1,365 1,365 1,365 1,365 1,365

Total Revenue 0 0 0 1,055,574 3,104,153 4,787,802 8,558,967 11,880,582 15,783,955 21,737,521 26,152,613 26,937,191 27,745,307


Cash Flows 0 0 0 158,336 465,623 718,170 1,283,845 1,782,087 2,367,593 3,260,628 3,922,892 4,040,579 4,161,796

Discount Rate 8%

NPV $10.1M


Doxophos Vet 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Lymphoma dogs - U.S. 100,000 103,000 106,090 109,273 112,551 115,927 119,405 122,987 126,677 130,477 134,392 138,423 142,576

Penetration Rate - U.S. 0% 0% 0% 0% 0% 0% 0% 3% 5% 8% 10% 15% 15%

Lymphoma dogs - ROW 400,000 412,000 424,360 437,091 450,204 463,710 477,621 491,950 506,708 521,909 537,567 553,694 570,304




Total Revenue 0 0 0 0 0 0 0 16,271,231 29,085,041 43,657,711 54,374,857 80,230,195 82,637,101


Cash Flows 0 0 0 0 0 0 0 2,440,685 4,362,756 6,548,657 8,156,229 12,034,529 12,395,565

Discount Rate 8%

NPV $19.4M


Combined NPV $312.5M

Net Debt -$8.6M

Cash from options/warrants $5.2M

Fully Diluted ADS Outstanding (includes

additional shares to represent potential

future equity raises)

47.5M

Price Per ADS $6.87

Additional Information

Auditor: Ernst & Young AB

Legal: Setterwalls Advokatbyrå AB & Sichenzia Ross Friedman Ference LLP

Company Information

Company Website

About RedChip

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Company Contact Info:

Oasmia Pharmaceutical AB

Vallongatan 1

SE-752 28 Uppsala

Sweden

+46 18 50 54 40

[email protected]

Investor Contact Info:

RedChip Companies, Inc.

1017 Maitland Center Commons Blvd.

Maitland, FL 32751

(407) 644-4256

www.redchip.com

http://www.redchip.com/company/healthcare/OASM/296/oasm

http://www.redchip.com/company/healthcare/OASM/296/oasm



mailto:[email protected]

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