DD: Risky trade Pharming Group – Breakout.
Pharming Group is a Dutch Biotech that currently has only one single rare diseased based product on the market. Currently, the company is awaiting approval from the FDA and EMA for a second rare disease (APDS) product of which there are an estimated 1-2 patients per 1 million people. Price is unknown, but revenue is expected to double by 2024-2025 with the introduction of a second product. The drug has received orphan designation, but this seems to not be priced in with a share price of barely 0,90 euro cents. The cash position is great, and the introduction of the new drug can be entirely financed by cashflows of the first drug.
A breakout seems to occur at this point in time as a result of good quarterly earnings and news about entering and/or preparing approval procedures in the EU, USA, and UK. Japan is considered a future major market for the second product. Volumes have greatly increased.
Valuation Estimates from Simply Wallstreet range above the 4 euro’s. Other valuations estimate the fair price to be arround 2 – 3 euro’s. EUR-USD value is trading at about 1.02 at the time of writing. The addition of a second product greatly reduces risk and increases valuation. Also makes the company a more likely candidate for an acquisition by a major big pharma company.
Pharming group is currently trading on euronext, but there are also ADR’s (10:1) listed in the USA (which trade at lower volumes)
This share seems like its about to go flying. The major down side is that there might a wait for big news. Approval usually takes a couple of months. However, once the (positive) news gets out there will be a major break out. Bad news will put the share price in a dive. However, it is pharma what can go wrong. Gaining 4x your investment according to the simply wallstreet valuation versus losing 1x your investment seem pretty good odds to me.
I would post a picture of my position however, I cant cause i trade with my bank. So here is a picture of the breakout instead on the daily chart from Tradingview. What you guys think?
Submitted August 07, 2022 at 11:37AM by svenz1997
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