On Monday, KeyBanc provided insights into the impact of Novo Nordisk (NYSE:NVO)'s Phase 3 results for its obesity treatment, CagriSema, on the GLP-1 market. The analysis suggests that the potential of the GLP-1 market remains largely unchanged through 2030 for companies like West Pharmaceutical Services (NYSE:WST), Gerresheimer (GXIG), and Stevanato Group (STVN).
According to InvestingPro data, STVN maintains a solid financial health score, though its stock has experienced an 11.87% decline over the past week. Despite the possibility of CagriSema affecting the market dynamics post-2027, current GLP-1 sales for Gerresheimer are primarily linked to existing therapeutics, with the company citing over €100M in sales for the fiscal year 2024, not yet reaching the forecasted potential of €300M-€350M.
Gerresheimer has indicated a strong demand for its production capabilities in the GLP-1 market, implying that the company is not dependent on CagriSema for its current operations. Furthermore, market evaluations by Evaluate Pharma estimate GLP-1 sales to reach $116 billion by 2030, excluding CagriSema contributions. This figure suggests a compound annual growth rate (CAGR) of approximately 25% until 2028.
For investors seeking deeper insights, InvestingPro reveals that STVN currently trades at an EV/EBITDA multiple of 24.66x, with analysts maintaining positive expectations despite recent market volatility. InvestingPro subscribers have access to 7 additional exclusive ProTips and comprehensive valuation metrics for STVN. In the event of CagriSema's approval, its peak sales are expected to be distributed between Eli Lilly (NYSE:LLY) and Novo Nordisk (NVO), without any single player monopolizing the market share.
The weight-loss segment of GLP-1 drugs, currently represented by Wegovy and Zepbound, comprises about $14 billion of the $54 billion market. KeyBanc's 2025 outlook predicts marketed GLP-1 drug sales, excluding CagriSema, to grow at a 25.2% CAGR through 2028, reaching over $115 billion by 2030. Should CagriSema face approval delays or not receive approval, its potential sales are expected to benefit existing treatments like Wegovy and Zepbound.
In terms of production and injection leaders, Gerresheimer appears to have the largest exposure to potential gains from CagriSema, though the current risk is considered low due to the high demand for GLP-1 drugs. The company is well-positioned with contracted projects expected to generate revenue of €350M by 2026.
West Pharmaceutical (TADAWUL:2070) Services and Stevanato Group are also preparing for increased GLP-1 demand, with facilities in Grand Rapids, Michigan, and Dublin, Ireland, for LLY and NVO respectively. Stevanato Group's significant investment in its Fishers, Indiana site, suggests a strategic positioning to serve a key customer, likely Eli Lilly.
Overall, the analysis by KeyBanc points to a robust GLP-1 market with or without the inclusion of CagriSema, with companies like Gerresheimer, West Pharmaceutical Services, and Stevanato Group well-equipped to cater to the growing demand for GLP-1 based treatments. STVN's revenue grew by 3.53% in the last twelve months, with a current market capitalization of $5.6 billion.
Based on InvestingPro's Fair Value analysis, the stock appears overvalued at current levels, though analysts maintain price targets ranging from $21 to $37. For a complete analysis of STVN's valuation and growth prospects, investors can access the detailed Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Stevanato Group has reported a modest growth in their third quarter of 2024 earnings, with revenues reaching €277.9 million, marking a 2% increase year-over-year. This growth was largely driven by its Biopharmaceutical and Diagnostic Solutions Segment. Despite facing challenges in the Engineering Segment, Stevanato maintains its 2024 revenue guidance between €1.090 billion to €1.110 billion.
Wolfe Research has initiated coverage on Stevanato shares with an Outperform rating and a price target of $28.00, while Morgan Stanley (NYSE:MS) has given it an Equalweight rating with a price target of $23.00. Both firms have noted Stevanato's potential for double-digit growth in revenue.
Stevanato is implementing a business optimization plan, particularly in the Engineering Segment, and is expecting a gradual recovery in vial orders starting late 2024. The commencement of commercial production at the Fishers facility and the profitability of the Latina facility at the gross profit level are among the recent developments expected to drive future growth.
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