Acerus Pharma has 155% upside: Mackie Research Capital

A new financing and a stock that is looking weak of late have Mackie Research Capital analyst André Uddin thinking now is a great time for investors to buy Acerus Pharmaceuticals (Acerus Pharmaceuticals Stock Quote, Chart, News: TSX:ASP).

This morning, Acerus announced it had closed a $6.61-million bought deal. The company said it intends to use the cash to pay $1.75-million to Mattern Pharma AG to settle a 2013 intellectual property matter, to pay $2.87-million to an affiliate of Endo International, and for general working capital.

Uddin says Acerus is seeing solid revenue growth and improving margins for Natesto and believes that new product launches should add new layers of growth.

“We expect Acerus to launch Gynoflor (an OTC product for vaginal infections), Elegant (an OTC product for vaginal dryness) and Stendra (a drug candidate for erectile dysfunction) in Canada in 2019,” the analyst said. “SHACT (a pain reliever candidate) should be launched in Canada in 2020. Acerus may in-license/acquire other products going forward as well. We also expect ASP to announce new developments with its medical marijuana nasal delivery formulation.”

In a research update to clients today, Uddin maintained his “Speculative Buy” rating and one-year price target of $0.65 on Acerus Pharma, implying a return of 155 per cent at the time of publication.

Uddin thinks Acerus will lose $0.06 a share on revenue of $9.0-million in fiscal 2018. He expects those numbers will improve to a loss of $0.01 on a topline of $18.7-million the following year.

“We view Acerus as a fast-growing Canadian specialty pharma company,” the analyst adds. “We believe the recent share price weakness provides investors with a good buying opportunity.”