A warrant exercise reduces the financial risk of ProMetic Life Sciences (TSX:PLI), says Echelon Wealth Management analyst Doug Loe.
This morning, ProMetic announced that California Capital Equity LLC had exercised 44,791,488 share purchase warrants at a price of 47 cents per share for total proceeds of $21,051,999.36 to ProMetic.
“Our increased equity position in ProMetic represents a long-term and strategic investment for us,” said Dr. Patrick Soon-Shiong, CEO of California Capital Equity LLC. “ProMetic has robust proprietary therapeutic platforms, promising growth potential and several plasma derived therapeutics expected to reach commercialization stages, starting in 2017 with plasminogen. We, through other investment vehicles, also have an ongoing partnership with ProMetic in relation to IVIG and anticipate further collaborations going forward.”
Loe says this development indicates a substantial reduction in the financial risk around ProMetic Life Sciences.
“Near-term, the proceeds comes at a time when ProMetic is expected to begin ramping up its commercial activities associated with its plasma protein programs,” notes the analyst. “Specifically, PLI’s plasminogen program in patients with congenital plasminogen deficiency could be part of a final BLA filing expected in FH117, in line for formal FDA review in FH217. Further ahead, we expect the IVIG program to complete Phase III trials by H217, in line for a BLA filing submission by FQ417-FQ118.”
In a research update to clients today, Loe maintained his “Buy” rating and one-year price target of $4.00 on ProMetic Life Sciences, implying a return of 90 per cent at the time of publication.
Loe thinks ProMetic will generate negative EBITDA of $63.6-million on revenue of $38.1-million in fiscal 2017. He expects the company will generate negative EBITDA of $66.5-million on a topline of $48.5-million the following year.