Jefferies downgrades Orion on Nubeqa 'over-reliance'

Orion Oyj

26/02/2024 12:33

** Jefferies downgrades Orion  ORNBV.HE  to "underperform"
from "hold", citing the Finnish drugmaker's "over-reliance" on
the sales of its prostate cancer drug Nubeqa
    ** The broker estimates 2024-2028 sales CAGR of 5.9% for
Orion, but only 3.2% when excluding Nubeqa
    ** Jefferies flags headwinds from competing drug Xtandi's
generics entry in 2028 and U.S. patent expiration in 2033 that
could mean further downside for Nubeqa growth
    ** The broker says the Orion shares are overvalued, with
2023 dividend yield of 4.1% below the local index
    ** While Orion plans to increase its dividend annually,
Jefferies notes this is often paid using short-term debt, which
could lead investors to question the sustainability of the
dividend
    ** Out of seven analysts covering Orion, four rate the
company "strong buy" or "buy", one rates "hold" and two rate it
"sell" or "strong sell"

 (Reporting by Elviira Luoma)
 ((Elviira.luoma@thomsonreuters.com))