Erste cuts target price for Bioton amid ‘mixed signals’ about company’s prospects

2010-02-05

Erste has cut its target price for the shares of Bioton to PLN 0.26 (€0.07) per share from PLN 0.31 (€0.08). At the same time, the stock brokerage upheld a “hold” recommendation on Bioton shares.
In a research note released on 4 February, Erste analysts noted that latest news from the company had a mixed character. On the one hand, the strategic agreement with Polpharma, which envisages the sale to Jerzy Starak’s firm of Bioton’s antibiotics business and its Italian subsidiaries, could unlock the biotech company’s potential and enable it to focus entirely on its core insulin segment and on new biotech projects. But on the other hand, the restructuring process was progressing at a slower pace than previously thought, and delays were not limited to Bioton’s anticipated exit from Bioton Wostok in Russia but also included the vitally important launch of insulin sales in China.
On the day before the advice was made public, i.e. 3 February, Bioton shares closed at PLN 0.2 (€0.05) per share, down 4.8% on the day.