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Croda International PLC could see opportunity in mRNA vaccine growth, says broker


Analysts at Berenberg flagged up the firm’s sales of lipids used in COVID-19 mRNA vaccines as well as comments from BioNTech co-founder Ugur Sahin that “a third of all newly approved medications could be based on mRNA in 15 years’ time”

() could see “longer-term opportunities” in the growing market for mRNA vaccines and therapies, according to analysts at Berenberg.

In a note on Wednesday, the broker upped its target for the chemicals firm to 9,400p from 7,800p and retained their ‘buy’ rating, saying the growth of the mRNA market is “clear, as is Croda’s leading position” while also flagging comments from Ugur Sahin, the co-founder of BioNTech who developed an mRNA COVID-19 vaccine alongside () Inc, that “a third of all newly approved medications could be based on mRNA in 15 years’ time”.

“Shares are likely to go through a period of consolidation as the market weighs the potential for any post- 2022 decline in the close to US$200mln [per year] sales of lipids to COVID-19 vaccines against the wider, although longer-term, opportunities in mRNA therapies and other vaccines”, Berenberg said.

The broker also said that Croda’s interim results on Tuesday had given the impression of a “full-blooded recovery” at the firm and that the robustness of the group’s performance tech business “bodes well for any divestment”, estimating Croda could receive £1bn for selling 75% of the segment.

The assessment followed results for the six months to June 30 yesterday when Croda reported a 42% rise in operating profit to £218.5mln, a record performance that was boosted by demand for ingredients connected to COVID-19 treatments and vaccines.

Shares in the firm were up 0.8% at 8,332p in late afternoon trading.



Read More: Croda International PLC could see opportunity in mRNA vaccine growth, says broker

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