Medios – Away from large pharmaceutical stocks

In times of the worldwide corona pandemic, the fight against other diseases seems to have taken a back seat. However, this does not mean that it will not be continued. For example, the Berlin company Medios, a provider of “specialty pharmaceuticals”, is involved in the fight against rare or chronic diseases such as cancer, HIV and hepatitis.

“Specialty pharmaceuticals” are drugs for such patients with rare or chronic diseases. Their often personalized therapy is lengthy and costly because of the individual requirements. Medicines can already have unit prices of more than 1000 euros. The combination of wholesaler and manufacturer makes Medios unique in the pharmaceutical industry. Therefore, the Berliners are likely to have a lot to do even after COVID-19.

Important takeover completed

In order to prepare for the future, Medios recently took over the NewCo Pharma Group. Although investors did not like the capital increase carried out for this purpose, the takeover should hold some potential in the long term. The successful completion of the acquisition was announced on January 11, 2022.

Christoph Scherbaum

Image: Christoph Scherbaum

With the takeover, Medios will significantly expand its market position in the patient-specific therapies segment. This is particularly gratifying, as this Medios division has been particularly profitable in the past. According to Medios CEO Matthias Gärtner, the attractive business with patient-specific therapies for the treatment of rare and chronic diseases will even be tripled with the takeover of NewCo Pharma. Because with the deal, Medios increases the number of partner pharmacies and achieves better regional coverage.

The NewCo Pharma Group is a national network with five regional manufacturing companies and wholesalers, the regional focus is on northern, western and southern Germany. As a rule, patient-specific infusion solutions are produced on behalf of specialized pharmacies. With the takeover, Medios’ partner network will grow from currently 550 to around 600 specialized pharmacies.

Ambitious goals

The higher number of manufacturing companies ensures, among other things, that pharmacies throughout Germany can be supplied with patient-specific infusion solutions much more quickly, which is ultimately also of great benefit to patients. The aim is to roughly triple production across the group to more than 300,000 in 2022.

The latest takeover has also ensured that Medios has set itself ambitious sales and earnings targets. The 1.5 billion euro sales mark is to be cracked in the 2022 financial year. In addition, the EBITDA margin adjusted for special expenses for stock options, M&A activities and depreciation on the customer base is to be increased to well over 3 percent.

The Medios share could be of interest to investors with a focus on the pharmaceutical and biotech sectors – even if the share has to take into account major setbacks in the meantime. At least that’s what recent history shows.

Volatile but steep upward movement

After the so-called reverse IPO at the end of 2016, in which the operating business of the Medios Group was brought into an existing shell, the Medios share started a volatile but steep upward movement. The price more than quintupled in the following three and a half years and reached its all-time high of 42 euros in May 2020. This was followed by a sharp drop in price by October 2020 to EUR 23.70.

After another steep rise by January 2021 to around 41 euros, the Medios share went sideways, which continues to this day. In terms of the chart, it will be exciting again when the high from May of last year at 42 euros is overcome. In the medium term, the next milestone is then 50 euros.

Despite the aforementioned exchange rate volatility, the balance sheet for the past few years has been very positive overall. Since the IPO in 2016, the small cap has achieved an average price gain of 37 percent per year, which would have almost quintupled an investment. A non-existent dividend yield and a rather high price-earnings ratio (P / E) should be reasons for very few pharma-savvy investors not to focus more closely on the Berlin stock.

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