Analytical Study on Artgen Biotech from MKB Investments

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MKB Investments broker has published an analytical review of Artgen Biotech (MOEX: ABIO) with a ‘Buy’ recommendation and a target price of RUB 165.9 per share.

The broker identifies several key growth opportunities for the company, including:

  • Promising genetic diagnostics markets
  • Inclusion of NIPT and PGT genetic tests in MHI
  • State support and tax incentives
  • Synergies within the group of companies
  • Company's entry into foreign markets
  • Lack of significant competition within the Russian Federation for key growth companies within the holding company
  • Additional development support from the group’s mature businesses
  • Reduction of discount in biotech company valuation when going through R&D stages
  • Post-Covid vascular pathologies and improving the quality of diagnostics in the Russian Federation
  • Inclusion of subsidiaries in open-end and exchange traded mutual funds of companies that have recently completed IPO

MKB Investments highlights the Artgen Biotech Group’s business model as a key advantage, with existing fast-growth subsidiaries generating increasing cash flow to fund R&D. In the coming years, the company plans to make large-scale investments in the development and production of first-in-class drugs for rare diseases. If these investments are successful, they will result in a substantial increase in the company’s stock price. Additionally, the company’s growth is supported by a rise in domestic demand, a lack of significant competitors, and government assistance.

Analysts have identified Artgen as a distinctive company with considerable growth potential, particularly in the event of blockbuster drugs entering the market. Additionally, they have highlighted its attractive debt burden and free cash flow growth as key factors. The phased IPO of the subsidiaries, while maintaining control, will significantly enahnce R&D financing opportunities and stimulate greater interest from retail and institutional investors in the biotechnology sector.

MKB Investments anticipates an increase in the value of Artgen Biotech shares up to 2030.

The report is available here.

MKB Investments Analytical Review