Canaccord Genuity lowers price target on ProMetic Life Sciences

Slipping timelines have Canaccord Genuity analyst Neil Maruoka lowering his price target on ProMetic Life Sciences (TSX:PLI).

On Monday, ProMetic reported its Q2, 2017 results. The company lost $31.5-million on revenue of $3.6-million, a topline that was up 9.1 per cent over the same period a year earlier.

“We are extremely pleased with the longer-term clinical performance of our plasminogen drug candidate in patients with plasminogen deficiency. Proving sustained efficacy in 100 per cent of these patients in the trial also bodes well for the health economics profile of Ryplazim,” said CEO Pierre Laurin. “The performance of PBI-4050 in our IPF phase 2 clinical trial and the efficacy also observed in other phase 2 trials with even longer treatment exposure support our chosen clinical indications and regulatory pathways, and the initiation of our forthcoming phase 2/3 pivotal clinical trials in IPF.”

Maruoka says that approval of Ryplazim is unlikely in 2017, leaving the door of an admittedly lessened financing overhang slightly ajar.

“The company ended the quarter with pro forma cash of ~$89.5M , which represents approximately 12 months of cash at projected burn,” the analyst notes. “While the financing overhang is not gone, we believe the company has some breathing room as it works to gain approval for Ryplazim. The growing uncertainty here remains a primary concern for investors as the regulatory pathway for Ryplazim remains hazy and we still see no indication that the FDA has accepted the BLA filing. While we continue to believe that Ryplazim has a high chance of approval, we believe it is unlikely the drug will have a PDUFA date before the end of the year. Although timelines have slipped, we continue to see a number of potential catalysts lined up for ProMetic in the coming months including data from PBI-4050 in Alström syndrome, the initiation of clinical studies for PBI-4050 in IPF and DKD and, ultimately, the expected FDA approval of Ryplazim.”

In a research update to clients today, Maruoka maintained his “Buy” rating on ProMetic, but lowered his one-year price target on the stock from $4.50 to $4.25, implying a return of 210.2 per cent at the time of publication.

Maruoka thinks ProMetic will generate EBITDA of negative $93.9-million on revenue of $32.5-million in fiscal 2017. He expects those numbers will improve to EBITDA of positive $16.0-million on revenue of $150.4-million the following year.