ProMetic Life Sciences is undervalued, says Paradigm Capital

Another milestone for ProMetic Life Sciences (TSX:PLI) has Paradigm Capital analyst Christopher Lam feeling good about the company’s prospects.
This morning, ProMetic announced it had completed the enrollment of the adult patient population of 50 in its pivotal intravenous immunoglobulin (IVIG) phase III clinical trial for the treatment of primary immunodeficiency diseases (PIDD).
“Canadian patients are amongst the largest consumers of IVIG on a per capita basis worldwide and the demand continues to grow at a rapid pace. As a Canadian-based company, we intend to play an important role in facilitating the pursuit of national self-sufficiency by being the first Canadian based provider to locally manufacture and provide access to mainstream plasma-derived therapeutics such as IVIG and orphan drug candidates such as plasminogen,” said CEO Pierre Laurin. “Self-sufficiency for the production and distribution of key plasma-derived therapeutics represent a growing concern in a number of both established and emerging markets around the world. The manufacturing advantages provided by our proprietary PPPS technology can help alleviate dependence on foreign plasma-derived therapeutics and align local production with local demand.”
Lam notes that the completion of enrollment for the adult patient population is five months ahead of schedule. The analyst believes PLI will be the first Canadian-based company to locally produce IVIG. He believes there is “low clinical risk” and says he expects a positive outcome approximately a year from now.
“The completion of patient enrollment is a positive milestone for ProMetic as we begin to gain a clear line of sight into the near-term commercial prospects of PLI’s second plasma protein,” says Lam. “We continue to maintain our low clinical risk perspective on IVIG and expect a positive outcome from this trial in 12 months’ time. We have moved up our expected launch date for IVIG to Q3/18 (from Q4/18) to account for the expedited patient enrolment.
Lam believes ProMetic will lose $0.13 a share in both fiscal 2016 and 2017, with fiscal 2016 revenue of $27.4-million climbing to $33.9-million the following year.
In a research update to clients today, Lam maintained his “Buy” rating and one-year price target of $5.50 on ProMetic Life Sciences, implying a return of 75 per cent at the time of publication.