ProMetic Life Sciences is still too risky, Echelon Wealth Partners says

This morning, PLI announced it had been granted rare pediatric disease designation to for its small molecule drug candidate, PBI-4050, which is meant to treat Alstrom syndrome (AS).

“This is the first pediatric designation granted by the FDA to our small molecule drug candidate PBI-4050 and the third overall, following the previous two granted for our plasma-derived therapeutics candidates. This highlights the depth and value of our two drug discovery platforms,” CEO Pierre Laurin said. “We look forward to discussing the potential regulatory approval pathway to bring this innovative therapy to pediatric patients with Alstrom syndrome during our upcoming meeting with the FDA.”

Loe today summarized the development and explained why he is maintain his “Hold” rating and one-year price target of $1.00 on PLI.

“ProMetic Life Sciences (ProMetic) received yet another special designation from the US FDA for its derivatized phenylacetate derivative drug PBI-4050, this time receiving Rare Pediatric Disease Designation for the drug’s potential use in the ultra-orphan indication Alstrom syndrome,” the analyst explained. “Receiving such a designation, while certainly indicating to us that the FDA sees a pressing need for novel therapies to target this medical market, it of course does not on its own guarantee that ‘4050 will actually perform well in future Phase III pivotal studies or be approved thereafter. But it does enhance the probability that FDA intends to be cooperative in working with ProMetic on designing future Phase III studies and the designation both enhances the probability that ‘4050 could be eligible for a priority review voucher once approved. The drug was granted orphan drug status for this indication back in Mar/17. For now, we will still maintain our HOLD rating and $1.00 PT on PLI, mostly to reflect our view that the firm’s financial risk remains high and regulatory risk for flagship affinity-purified plasma product Ryplazim (plasminogen) still modestly high at least until CMC-related challenges to the filed BLA are fully resolved and until new FDA review timelines are established.”

Loe thinks ProMetic will generate EBITDA of negative $92.8-million on revenue of $18.0-million in fiscal 2018. He expects those numbers will improve to EBITDA of negative $66.4-million on a topline of $18.6-million the following year.