ProMetic Life Sciences has 488% upside, Beacon Securities says

With the stock down sharply for much of the year, 2017 was a period of time that shareholders of Prometic Life Science (TSX:PLI) would rather forget. But Beacon Securities analyst Doug Cooper says things are looking up.

In a research update to clients today, Cooper maintained his “Buy” rating and one-year price target of $10.00 on ProMetic Life Sciences, implying a return of 488% at the time of publication.

The analyst says patience from shareholders has a high likelihood of being rewarded in 2018.

“The last 14 months have not been kind to PLI shareholders as longer than expected timelines on key value drivers missed expectations (primarily Pg approval and partnership news) that had been built into the shares in 2016,” the analyst says. Cooper thinks ProMetic will deliver on various milestones, including FDA approval of Plasminogen, a BLA filing for IVIG with Health Canada, commencement of three-armed, placebo-controlled trial for IPF with interim results expected after 26 weeks, and an improvement in its balance sheet.”

Cooper thinks ProMetic will generate EBITDA of negative $93.8-million on revenue of $37.5-million in fiscal 2017.

The analyst broke down the reasoning behind his bullish target on the stock.

“Looking at Prometic as a plasma fractionator, companies such as Grifols and CSL Ltd trade at an average of ~6x sales and 20x EBITDA. Based on assumptions of an exit-rate for FY19, that would value PLI at ~$5.50+/share,” he explains. “Layering on the potential for IPF as noted above, would add an incremental $3.00+/share. If Prometic can achieve the aforementioned milestones in 2018, we will likely look back at the recent price of ~$1.60 and wonder why we did not buy a lot more shares.”