In this report, we highlight a recent diabetes deal: Sanofi’s acquisition of Provention Bio for USD 2.9bn – equivalent to just over SEK 30bn. Provention’s TZIELD drug is the first approved disease-modifying treatment for type 1 diabetes. There are both similarities and differences between TZIELD and Diamyd, but in this update we consider what a potential deal with Diamyd could be worth.

Possible acquisition value for Diamyd

We have applied the required rate of return (16%) and risk assessment (40%) we use in our DCF valuation of the company to our calculations. After discounting and risk adjustment, we have arrived at a possible acquisition value of SEK 5.2bn at present, corresponding to a share price of SEK 68 with the current shareholdings. It is important, however, for investors to recognise that acquisitions of Swedish research companies have historically been quite rare, and we thus do not believe this should be seen as a base case, but instead as an option.

Data from Remygen – next clear trigger