Tribe Technologies
Trending >

Merus Labs financing gets thumbs up at Laurentian

Merus Labs

Merus LabsMerus Labs’ (Merus Lab Stock Quote, Chart, News: TSX:MSL, Nasdaq:MSLI) bought deal will put the company in a position to execute on acquisitions, says Laurentian Bank Securities analyst Joseph Walewicz.

Yesterday, Merus Labs announced it had close a previously announced bought-deal financing. Merus issued 19,672,200 common shares at a price of $3.05 per share for gross proceeds of $60,000,210. A greenshoe clause means the deal could come in at just over $69-million.

Walewicz says the financing could be something of a game changer for the company.

“With the completion of this financing, Merus now has a very strong balance sheet available to execute on new deals,” he said. “By our estimates, using only cash and debt, the company could increase the size of the business by 50% and maintain its Net Debt/EBITDA below 2.0x, and it could more than double the size of the business while staying below 3.0x. We believe that the company is now very well positioned to execute on new transactions in 2015.”

Founded in 2011, Toronto-based Merus Labs is a specialty pharma with a portfolio of three products, Sintrom, Enablex, and Vancocin, it markets in Canada.

Walewicz says he isn’t yet factoring any new deals into his outlook on Merus and says he prices the company at a discount to its peers, based on it current portfolio. But the analyst says he sees “considerable upside” if it can execute on new deals.

In a research update to clients yesterday, Walewicz maintained his “Buy” rating and one year target of $3.25 on Merus Labs, implying a return of 24.5% at the time of publication.

More Cantech Life Sciences

We Hate Paywalls Too!

At Cantech Letter we prize independent journalism like you do. And we don't care for paywalls and popups and all that noise That's why we need your support. If you value getting your daily information from the experts, won't you help us? No donation is too small.

Make a one-time or recurring donation

About The Author /

Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.
insta twitter facebook


Leave a Reply