Specialty pharmaceutical company Medicure (TSX:MPH) has only begun to realize the potential of cardiovascular drug Aggrastat, says PI Financial analyst Sheila Broughton.
In a research report to clients yesterday, Broughton initiated coverage of Medicure with a “Buy” recommendation, and one year target price of $5.75. The analyst’s risk rating is “Speculative”.
Aggrastat belongs to a class of drugs known as glycoprotein IIb/IIIa inhibitors (GP IIb/IIIa inhibitors). These drugs are commonly used in hospitals to prevent clotting in patients presenting with acute cardiovascular symptoms, generally myocardial infarctions (heart attacks) or unstable angina. The drug was originally developed by Merck but was losing U.S. market share to the other two drugs in the class, ReoPro and Integrillin, when it was acquired by Medicure. A key turning point happened in October 2013, when Medicure was successful in attaining FDA approval for HDB Aggrastat. Outside the U.S., a dosing regimen known as high dose bolus (HDB), was the most common way to use the drug, but prior to October, 2013 the FDA had only approved Aggrastat for a more conservative dosing regimen in the U.S., limiting its utility relative to the other drugs in the class.
Brougton notes that Aggrastat revenue has since risen sharply, a trend she expects to continue.
“Aggrastat revenue has increased rapidly from $2.6M in 2013 to $5.3M in a seven month stub year in 2014 and to $7.1M in the first half of 2015 as hospitals have switched from more expensive competitive therapeutics to Aggrastat. Based on sales growth in the first half of the year and continued growth in market share, we are forecasting full year 2015 sales to increase to $15.4M,” she said.
Broughton points out that Aggrastat’s primary target market is the acute coronary syndrome market, which is estimated to be worth more than (U.S.) $270-million. She notes that Medicure has increased the drug’s market share to more than 20% from less than 1% in 2013.
Broughton says she also sees potential in Apicore, a niche private manufacturer of active pharmaceutical ingredients and developer of selective generic products for pharmaceutical companies. Medicure currently owns 5% of and has an option to by the remaining 95% of Apicore, which Broughton says has the potential to be a “transformational” acquisition.