The publication of clinical trial results usually causes bursatile earthquakess among pharmaceutical companies. This has happened with the Grifols trial, Ambar, conducted in 41 hospitals in the US and Europe, according to which the new treatment would have delayed by 61% the progression of the disease in Alzheimer's patients in a moderate stage; the title rose by 14% in two days. It is not for less. If these results were confirmed, the new treatment would have a transformational effect on Grifols, since it would trigger the sales of Albutein, one of its main plasmatic drugs. Another fact is that Alzheimer's is one of the diseases more orphans of new medicines (almost nothing has been discovered in 15 years). And that the sector has been working in several lines of research for decades, given that it is a gigantic market, an evil that affects 50 million people in the world, which could reach 80 in 2030.
Despite the euphoric reaction of investors, it does not seem that the new treatment will be a reality next year or next. "We have to continue analyzing the data. Specifically, the results related to the secondary objectives of the study, which include the analysis and results of the neuroimaging and neuropsychological tests and the results of the laboratory analyzes, will provide more information ", clarify from the company. The next step, in the second half of 2019, will be the publication of a scientific article. "From there," say the Grifols sources, "we will decide next stages to follow".
So far is the possible arrival on the market of the drug that most of the analysts consulted do not even take into account the new treatment in their valuations of the company. "There are published estimates, but we do not take them into account when it comes to seeing how it affects the action," acknowledges Rodrigo García, XTB analyst. "These studies, although in phase III," says Jesús de Blas, an analyst at Bankoa, "must be taken very cautiously because you do not know if they are going to be commercialized."
Grifols' price rose significantly in the last five years, but market sentiment changed last June and the value started a rapid fall only sustained by its advances in the subject of Alzheimer's. This weakness in the stock market is due to the fact that the market detects a certain slowdown in results, with margins subject to great stress due to the huge investments in R & D. Another major concern is the higher financial costs. This situation worsened last October when several banks, especially UBS, warned that the company's main medicines were in danger due to the possible appearance of drugs based on anti-FcRn antibodies, potential substitutes for immunoglobulin.
The procurement policy and the resulting debt are also worrying. Grifols spent no less than 6,300 million euros on gobbling up three large companies between 2011 and 2016, including the American company Talecris and the diagnostics division of Novartis. While it is true that these purchases have opened the US market and have made it the third in the world in its sector, it is no less than they have shot balance close to the danger zone. "Its net financial debt stands at 5,781.4 million euros, with a debt to ebitda ratio of 4.58 times, which puts us on alert," comments Sergio Ávila, analyst at IG Markets. De Blas abounds in the idea that "the ratios are very high and any fear would entail a punishment on the stock market." In Grifols they assume that the reduction of debt levels and the maintenance of a robust liquidity position "are a strategic priority for the company".
The next step in the investigation of the disease is to publish a scientific article
But nobody questions the strategy of the company, which happens, they say in Grifols, for "expanding the portfolio of products, own and, through investees, continue with acquisitions and moving forward in the process of global expansion with the US. as a priority market ". Equally important for the Catalan group, with 18% share of the world market, is to grow in volume of plasma extraction. "Its objective," explains Ávila, "has been to increase access to plasma and thus ensure long-term sustainable growth."
An attractive sector
The market for medicines and plasma treatments is one of the fastest growing in the industry and companies try to get as many collection centers as possible. "There is a capacity limit when it comes to supplying a global market as extensive as the one that is being generated," says Ana Gómez, of Renta 4 Banco. In Grifols they explain that, in order to have sufficient raw material, "a strategic plan was launched in 2016 to increase the network of plasma donation centers". As a result of this policy, Grifols is already a leader in obtaining plasma with 250 centers, 100 more than three years ago. In addition, according to Gómez, "is immersed in an expansion program with an investment of 1,200 million euros until 2020 to expand capacity."
The high debt, 5,781 million, as a result of purchases made, worries analysts
The blood products are far from having reached maturity. In Grifols the demand for the main plasma proteins has grown to 7% since 2015. "As developing countries increase their health coverage, blood products are incorporated into numerous therapies," they say. Equally decisive is the continuous discovery of new therapeutic applications for blood products or the use of existing ones for the treatment of other diseases: a topic, this one, in which the company is very active. To find new uses for its proteins, Grifols has bought small R & D companies, firms such as GigaGen or Alkahest.
The pharmaceutical company has no need to rush into its new treatment for Alzheimer's. "We value positively the current situation of the company. It is making a significant investment effort to prepare for the expected growth of the industry. The demand for blood products continues to grow at a good pace. In addition, very few pharmaceutical companies have the necessary know-how to play in this market, "concludes Álvaro Arístegui, an analyst at Ahorro Corporación.