Shares Magazine - May 24, 2018

GREAT IDEAS

12 | SHARES | 24 May 2018

A

company which provides

important services

ƚŽƉŚĂƌŵĂĐĞƵƟĐĂů

ĐŽŵƉĂŶŝĞƐŚĂƐƚŚĞƉŽƚĞŶƟĂůƚŽ

become a much bigger name in

the future, thanks to the way the

drugs industry is going.

Ergomed (ERGO:AIM) may

ŽŶůLJďĞǁŽƌƚŚάϭϬϮŵĂƚƚŚĞ

moment, yet a recent strategy

ƐŚŝŌƉůĂĐĞƐƚŚĞĐŽŵƉĂŶLJŝŶĂ

ŵƵĐŚƐƚƌŽŶŐĞƌƉŽƐŝƟŽŶĂŶĚ

ĂŶĂůLJƐƚƐĐĞƌƚĂŝŶůLJďĞůŝĞǀĞ

ĞĂƌŶŝŶŐƐĂƌĞŐŽŝŶŐƚŽĞdžƉůŽĚĞ

over the coming years.

,ĂǀŝŶŐŵĂĚĞĂůŽƐƐŝŶϮϬϭϳ͕

Ergomed is now forecast to

ŵĂŬĞάϭŵƉƌĞͲƚĂdžƉƌŽĮƚƚŚŝƐ

LJĞĂƌĂŶĚƐĞĞƚŚĂƚĮŐƵƌĞŝŶĐƌĞĂƐĞ

ďLJŶĞĂƌůLJĞŝŐŚƚͲĨŽůĚƚŽάϳ͘εŵŝŶ

ƚǁŽLJĞĂƌƐ͛ƟŵĞ͕ĂĐĐŽƌĚŝŶŐƚŽ

ĞƐƟŵĂƚĞƐĨƌŽŵƌĞƐĞĂƌĐŚŐƌŽƵƉ

ƋƵŝƚLJĞǀĞůŽƉŵĞŶƚ͘

WHAT DOES IT DO?

Ergomed hopes to become

ƚŚĞůĞĂĚŝŶŐŐůŽďĂůƉƌŽǀŝĚĞƌŽĨ

ƉŚĂƌŵĂĐŽǀŝŐŝůĂŶĐĞƐĞƌǀŝĐĞƐ

ďLJϮϬϮϬ͘/ƚŽīĞƌƐŽƵƚƐŽƵƌĐĞĚ

ƐĞƌǀŝĐĞƐƚŽƚŚĞƉŚĂƌŵĂĐĞƵƟĐĂů

ƐĞĐƚŽƌďLJŵĂŶĂŐŝŶŐĐůŝŶŝĐĂůƚƌŝĂůƐ

ĂŶĚŚĞůƉŝŶŐƚŚĞƐĞĐŽŵƉĂŶŝĞƐ

Profits from small cap stock Ergomed are forecast to soar over the next two years

Analysing drug data could

be very lucrative for this

little-known business

tĞďĞůŝĞǀĞƌŐŽŵĞĚ͛ƐƐƚƌĂƚĞŐŝĐ

ƐŚŝŌŝƐƚŚĞƌŝŐŚƚŵŽǀĞĂƐŝƚ

ĨŽĐƵƐĞƐƚŚĞďƵƐŝŶĞƐƐŽŶĂĨĂƐƚͲ

growing market with recurring

ĐŽŶƚƌĂĐƚƐĂŶĚůŽLJĂůĐůŝĞŶƚƐĞĂŐĞƌ

to outsource services to meet

ƌĞŐƵůĂƚŽƌLJŚƵƌĚůĞƐ͘

$8BN OPPORTUNITY

ŚŝĞĨĞdžĞĐƵƟǀĞŽĸĐĞƌ;KͿ

Stephen Stamp says the services

ĚŝǀŝƐŝŽŶŝƐďĞŝŶŐƉƌŝŽƌŝƟƐĞĚŽǀĞƌ

ĐŽͲĚĞǀĞůŽƉŵĞŶƚƉĂƌƚŶĞƌƐŚŝƉƐ

ĂƐƉŚĂƌŵĂĐŽǀŝŐŝůĂŶĐĞďĞŶĞĮƚƐ

ĨƌŽŵŵŽƌĞƐƚĂďůĞĐĂƐŚŇŽǁĂŶĚ

ŶŽh<ͲůŝƐƚĞĚƌŝǀĂůƐ͘

WŚĂƌŵĂĐŽǀŝŐŝůĂŶĐĞŝŶǀŽůǀĞƐ

ĂŚƵŐĞĐŽůůĞĐƟŽŶŽĨĚĂƚĂĨƌŽŵ

ǀĂƌŝŽƵƐƐŽƵƌĐĞƐŽŶƉŽƚĞŶƟĂů

ƐŝĚĞĞīĞĐƚƐ͕ǁŚŝĐŚŝƐƚŚĞŶ

ĂŐŐƌĞŐĂƚĞĚĂŶĚĂŶĂůLJƐĞĚƚŽ

determine any risks.

/ƚĐŽƵůĚďĞƉŽƚĞŶƟĂůůLJ

ůƵĐƌĂƟǀĞĨŽƌƌŐŽŵĞĚĂƐƚŚĞ

ƉŚĂƌŵĂĐŽǀŝŐŝůĂŶĐĞŵĂƌŬĞƚŝƐ

expected to be worth over

ĚĞǀĞůŽƉĚƌƵŐƐ͘

Approved drugs are then

ŵŽŶŝƚŽƌĞĚĂŌĞƌĞŶƚĞƌŝŶŐƚŚĞ

ŵĂƌŬĞƚƚŽĞdžƉůŽƌĞĂŶLJƉŽƚĞŶƟĂů

ƐŝĚĞĞīĞĐƚƐ͘

,ŝƐƚŽƌŝĐĂůůLJƚŚĞŐƌŽƵƉŚĂƐĂůƐŽ

ŚĂĚĂĐŽͲĚĞǀĞůŽƉŵĞŶƚďƵƐŝŶĞƐƐ

where it partners with pharma

ĂŶĚďŝŽƚĞĐŚĮƌŵƐĂŶĚŽīĞƌƐ

ŝƚƐĚƌƵŐĚĞǀĞůŽƉŵĞŶƚƐĞƌǀŝĐĞƐ

ĨŽƌĂĐƵƚŽĨĨƵƚƵƌĞƌŽLJĂůƟĞƐ͕ŝĨ

ƐƵĐĐĞƐƐĨƵů͘ƌŐŽŵĞĚŚĂƐĚĞĐŝĚĞĚ

to stop expanding this business.

At the moment the

ĐŽͲĚĞǀĞůŽƉŵĞŶƚŽƉĞƌĂƟŽŶ

ŽŶůLJĐŽŶƚĂŝŶƐƐŝdžƉĂƌƚŶĞƌƐŚŝƉƐ͕

ŝŶĐůƵĚŝŶŐŽŶĞƐƚƌƵĐŬǁŝƚŚ

ůůĞƌŐLJdŚĞƌĂƉĞƵƟĐƐ;'z͗/DͿ

ŝŶĞĐĞŵďĞƌϮϬϭϳ͘

XXXX È BUY

(xxx) xxxp

Stop loss: xxp

Market value: xxx

ERGOMED È BUY

(ERGO:AIM) 227p

Stop loss: 165p

Market value: £102m

ERGOMED’S FINANCIAL OVERVIEW

2017a 2018e 2019e 2020e

^ĂůĞƐ άκϳ͘ςŵ άρρ͘ϳŵ άςϮ͘κŵ άςΘ͘ϳŵ

WƌĞͲƚĂdžƉƌŽĮƚ ;άκ͘κŵͿ άϭ͘Ϭŵ άρ͘εŵ άϳ͘εŵ

^ŽƵƌĐĞ͗ƋƵŝƚLJĞǀĞůŽƉŵĞŶƚ